10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________

FORM 10-Q

_________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _ to _

Commission file number 0-362

FRANKLIN ELECTRIC CO., INC.

(Exact name of registrant as specified in its charter)

Indiana		35-0827455
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
9255 Coverdale Road
Fort Wayne,	Indiana	46809
(Address of principal executive offices)		(Zip Code)

(260) 824-2900

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.10 par value	FELE	NASDAQ	Global Select Market
(Title of each class)	(Trading symbol)	(Name of each exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes	☒	No	☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes	☒	No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐	Non-Accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes	☐	No	☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

	Outstanding at
Class of Common Stock Par Value	July 30, 2021
$0.10	46,432,448 shares

FRANKLIN ELECTRIC CO., INC.

		Page
PART I.	FINANCIAL INFORMATION	Number
Item 1.	Condensed Consolidated Financial Statements	4
	Condensed Consolidated Statements of Incomeforthe Second Quarters and Six Months Ended June 30, 2021 and 2020 (Unaudited).	4
	Condensed Consolidated Statements of Comprehensive Income/(Loss) for theSecond Quarters andSix Months Ended June 30, 2021 and 2020 (Unaudited).	5
	Condensed Consolidated Balance Sheets as ofJune 30, 2021 and December 31, 2020 (Unaudited).	6
	Condensed Consolidated Statements of Cash Flowsfor the Six Months Ended June30, 2021and 2020 (Unaudited).	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Second Quarter Ended				Six Months Ended
(In thousands, except per share amounts)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Net sales	$	437,280	$	308,281	$	770,326	$	575,035
Cost of sales	285,041		201,159		502,541		377,596
Gross profit	152,239		107,122		267,785		197,439
Selling, general, and administrative expenses	100,485		72,314		182,088		147,937
Restructuring expense	153		875		305		1,748
Operating income	51,601		33,933		85,392		47,754
Interest expense	(1,366)		(1,132)		(2,456)		(2,366)
Other income/(expense), net	(430)		(397)		(530)		(599)
Foreign exchange income/(expense)	(1,189)		(906)		(1,246)		56
Income before income taxes	48,616		31,498		81,160		44,845
Income tax (benefit)/expense	9,253		6,696		13,634		9,251
Net income	$	39,363	$	24,802	$	67,526	$	35,594
Less: Net (income)/expense attributable to noncontrolling interests	(222)		(151)		(505)		(300)
Net income attributable to Franklin Electric Co., Inc.	$	39,141	$	24,651	$	67,021	$	35,294
Income per share:
Basic	$	0.84	$	0.53	$	1.44	$	0.76
Diluted	$	0.83	$	0.52	$	1.42	$	0.75

See Notes to Condensed Consolidated Financial Statements.

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Unaudited)

	Second Quarter Ended				Six Months Ended
(In thousands)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Net income	$	39,363	$	24,802	$	67,526	$	35,594
Other comprehensive income/(loss), before tax:
Foreign currency translation adjustments	8,135		1,977		(3,379)		(35,745)
Employee benefit plan activity	1,117		901		2,233		1,802
Other comprehensive income/(loss)	9,252		2,878		(1,146)		(33,943)
Income tax expense related to items of other comprehensive income/(loss)	(232)		(185)		(464)		(370)
Other comprehensive income/(loss), net of tax	9,020		2,693		(1,610)		(34,313)
Comprehensive income	48,383		27,495		65,916		1,281
Less: Comprehensive income/(loss) attributable to noncontrolling interests	243		173		461		327
Comprehensive income attributable to Franklin Electric Co., Inc.	$	48,140	$	27,322	$	65,455	$	954

See Notes to Condensed Consolidated Financial Statements.

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)	June 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	81,597	$	130,787
Receivables, less allowances of $4,136 and $3,999, respectively	226,074		159,827
Inventories:
Raw material	117,503		87,226
Work-in-process	22,518		20,565
Finished goods	210,100		193,141
Total inventories	350,121		300,932
Other current assets	33,474		27,708
Total current assets	691,266		619,254
Property, plant, and equipment, at cost:
Land and buildings	156,480		152,323
Machinery and equipment	292,734		287,840
Furniture and fixtures	48,361		47,890
Other	36,500		33,193
Property, plant, and equipment, gross	534,075		521,246
Less: Allowance for depreciation	(323,652)		(312,225)
Property, plant, and equipment, net	210,423		209,021
Right-of-use asset, net	35,881		31,954
Deferred income taxes	9,507		8,824
Intangible assets, net	244,261		133,782
Goodwill	316,409		266,737
Other assets	3,098		2,735
Total assets	$	1,510,845	$	1,272,307
	June 30, 2021		December 31, 2020
---	---	---	---	---
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	148,862	$	95,903
Accrued expenses and other current liabilities	89,443		89,048
Current lease liability	12,680		11,090
Income taxes	3,592		5,112
Current maturities of long-term debt and short-term borrowings	132,428		2,551
Total current liabilities	387,005		203,704
Long-term debt	91,279		91,966
Long-term lease liability	23,416		20,866
Income taxes payable non-current	11,610		11,965
Deferred income taxes	27,373		25,671
Employee benefit plans	41,386		44,443
Other long-term liabilities	25,145		23,988
Commitments and contingencies (see Note 14)	—		—
Redeemable noncontrolling interest	(209)		(245)
Shareholders' equity:
Common stock (65,000 shares authorized, $.10 par value) outstanding (46,455 and 46,222, respectively)	4,645		4,622
Additional capital	298,944		283,420
Retained earnings	804,047		764,562
Accumulated other comprehensive loss	(206,337)		(204,771)
Total shareholders' equity	901,299		847,833
Noncontrolling interest	2,541		2,116
Total equity	903,840		849,949
Total liabilities and equity	$	1,510,845	$	1,272,307

See Notes to Condensed Consolidated Financial Statements.

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
(In thousands)	June 30, 2021		June 30, 2020
Cash flows from operating activities:
Net income	$	67,526	$	35,594
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	20,535		17,990
Non-cash lease expense	6,471		5,283
Share-based compensation	6,573		7,015
Deferred income taxes	376		(125)
Loss on disposals of plant and equipment	131		448
Foreign exchange (income)/expense	1,246		(56)
Changes in assets and liabilities, net of acquisitions:
Receivables	(62,860)		(17,820)
Inventory	(41,848)		(7,520)
Accounts payable and accrued expenses	50,262		8,561
Operating leases	(6,471)		(5,283)
Income taxes	(4,362)		3,825
Income taxes-U.S. Tax Cuts and Jobs Act	(355)		—
Employee benefit plans	(160)		99
Other, net	(1,534)		(1,010)
Net cash flows from operating activities	35,530		47,001
Cash flows from investing activities:
Additions to property, plant, and equipment	(12,777)		(9,445)
Proceeds from sale of property, plant, and equipment	8		25
Cash paid for acquisitions, net of cash acquired	(180,917)		(5,826)
Other, net	27		3
Net cash flows from investing activities	(193,659)		(15,243)
Cash flows from financing activities:
Proceeds from issuance of debt	150,343		98,234
Repayment of debt	(21,079)		(116,142)
Proceeds from issuance of common stock	8,989		1,520
Purchases of common stock	(11,231)		(17,724)
Dividends paid	(16,320)		(14,446)
Net cash flows from financing activities	110,702		(48,558)
Effect of exchange rate changes on cash	(1,763)		(4,522)
Net change in cash and equivalents	(49,190)		(21,322)
Cash and equivalents at beginning of period	130,787		64,405
Cash and equivalents at end of period	$	81,597	$	43,083
	Six Months Ended
---	---	---	---	---
(In thousands)	June 30, 2021		June 30, 2020
Cash paid for income taxes, net of refunds	$	17,496	$	6,227
Cash paid for interest	$	2,505	$	2,483
Non-cash items:
Additions to property, plant, and equipment, not yet paid	$	492	$	204
Right-of-Use Assets obtained in exchange for new operating lease liabilities	$	5,515	$	4,915
Payable to sellers of acquired entities	$	600	$	—
Accrued dividends payable to noncontrolling interest	$	—	$	830

See Notes to Condensed Consolidated Financial Statements.

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

INDEX TO NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

		Page Number
Note 1.	Condensed Consolidated Financial Statements	11
Note 2.	Accounting Pronouncements	11
Note 3.	Acquisitions	11
Note 4.	Fair Value Measurements	12
Note 5.	Financial Instruments	13
Note 6.	Goodwill and Other Intangible Assets	13
Note 7.	Employee Benefit Plans	14
Note 8.	Income Taxes	15
Note 9.	Debt	15
Note 10.	Earnings Per Share	17
Note 11.	Equity Roll Forward	18
Note 12.	Accumulated Other Comprehensive Income/(Loss)	20
Note 13.	Segment and Geographic Information	20
Note 14.	Commitments and Contingencies	22
Note 15.	Share-Based Compensation	23
Note 16.	Subsequent Event	25

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated balance sheet as of December 31, 2020, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of June 30, 2021, and for the second quarters and six months ended June 30, 2021 and June 30, 2020 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all accounting entries and adjustments (including normal, recurring adjustments) considered necessary for a fair presentation of the financial position and the results of operations for the interim periods have been made. Operating results for the second quarter and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. For further information, including a description of the critical accounting policies of Franklin Electric Co., Inc. (the "Company"), refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

2. ACCOUNTING PRONOUNCEMENTS

Adoption of New Accounting Standards

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate ("LIBOR") and other reference rates which are expected to be discontinues due to reference rate reform. ASU 2020-04 is effective on a prospective basis between March 12, 2020 and December 31, 2022. The Company adopted the standard effective January 1, 2021, and it did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is expected to reduce cost and complexity related to accounting for income taxes. ASU 2019-12 eliminates the need for the Company to analyze whether certain exceptions apply and improves financial statement preparers' application of income tax-related guidance. ASU 2019-12 is effective for interim and annual periods beginning after December 15, 2020 with early adoption permitted. Amendments related to franchise taxes that are partially based on income should be applied on either a retrospective or modified retrospective basis. All other amendments should be applied on a prospective basis. The Company adopted the standard effective January 1, 2021, and it did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

Accounting Standards Issued But Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number of accounting models for various convertible instruments and reduces form-over-substance-based accounting conclusions for the derivatives scope exception for contracts in an entity’s own equity. The FASB also updated Earnings Per Share (“EPS”) guidance under Topic 260 by requiring an entity to consider the potential effect of share settlement in the diluted EPS calculation for instruments that may be settled in cash or shares as well as other amendments. ASU 2020-06 is effective for interim and annual periods beginning after December 15, 2021 with early adoption permitted but no earlier than fiscal years beginning after December 15, 2020. The guidance should be adopted at the beginning of a fiscal year. ASU 2020-06 should be applied on either a retrospective or modified retrospective basis. The Company is planning to adopt on January 1, 2022, but does not expect the ASU to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

3. ACQUISITIONS

During the second quarter ended June 30, 2021, the Company acquired, in separate transactions, 100 percent of the ownership interests of Puronics, Inc. and its wholly owned subsidiaries, headquartered in Livermore, California, and 100 percent of the ownership interests of New Aqua, LLC and its wholly owned subsidiaries, headquartered in Indianapolis, Indiana. Both Puronics and New Aqua are water treatment equipment providers and will be included as a part of the Water Systems segment of the Company. In a separate transaction during the second quarter ended June 30, 2021, the Company acquired all of the assets of Power Integrity Services, LLC, a North Carolina-based company, which will be included in the Fueling Systems segment of the Company.

In another separate transaction during the second quarter ended June 30, 2021, the Company acquired all of the assets of Atlantic Turbine Pump, LLC, a Georgia-based company, which will be included in the Distribution segment of the Company.

As of June 30, 2021, the Company has recorded estimated fair values that exceed the acquisition price by $0.5 million, representing a bargain purchase gain due to favorable market conditions within accrued expenses and other current liabilities in the consolidated balance sheets for the Atlantic Turbine Pump acquisition. Once the determination of fair values is complete in 2022, the Company will recognize the bargain purchase gain in the consolidated statements of income.

The combined purchase price for all acquisitions in the quarter was $184.3 million after working capital adjustments, which were all cash transactions. All acquisitions in the quarter expand the Company's geographical presence and product channels. The fair value of the assets acquired and liabilities assumed for all acquisitions are preliminary as of June 30, 2021 and is classified as Level 3 within the valuation hierarchy.

The identifiable intangible assets recognized in the separate transactions in the second quarter ended June 30, 2021, were $115.6 million, and consist primarily of customer relationships and trade names, which will be amortized using the straight-line method over 12 - 20 years.

The goodwill of $50.1 million resulting from the acquisitions in the second quarter ended June 30, 2021, is expected to be deductible for tax purposes and consists primarily of expanded geographical presence and product channel expansion. Goodwill was recorded in the Water Systems and Fueling Systems segment (see Note 6 - Goodwill and Other Intangible Assets).

For all acquisitions in the second quarter ended June 30, 2021, consolidated annual revenue for the full year 2020 was $97.3 million, which would be incremental to the Company's revenue had the acquisition occurred on the first day of 2020. Since acquisition in the second quarter of 2021, consolidated revenue was $15.6 million. The Company has not presented separate results of operations since closing or combined pro forma financial information of the Company and the acquired interest since the beginning of 2020, as the results of operations for all acquisitions is immaterial.

During the fourth quarter ended December 31, 2020, the Company acquired 100 percent of the ownership interests of Gicon Pumps & Equipment, Inc., a professional groundwater distributor operating seven locations in the state of Texas for a purchase price of $28.1 million after working capital adjustments. Gicon will be included as part of the Distribution segment of the Company. As of June 30, 2021, the Company has recorded estimated fair values that exceed the acquisition price by $3.4 million, representing a bargain purchase gain due to favorable market conditions within accrued expenses and other current liabilities in the consolidated balance sheets. Once the determination of fair values is complete in 2021, the Company will recognize the bargain purchase gain in the consolidated statements of income. In a separate transaction during the fourth quarter ended December 31, 2020, the Company acquired 100 percent of the ownership interests in Waterite Inc. and its affiliate Waterite America Inc., headquartered in Winnipeg, Manitoba, Canada, for a purchase price of $21.9 million after working capital adjustments. Waterite will be included as a part of the Water Systems segment of the Company. The fair value of the assets acquired and liabilities assumed for both acquisitions are preliminary as of June 30, 2021 and is classified as Level 3 within the valuation hierarchy. In addition, the Company has not presented separate results of operations since closing or combined pro forma financial information of the Company and the acquired interest since the beginning of 2020, as the results of operations for both acquisitions is immaterial.

Transaction costs were expensed as incurred under the guidance of FASB Accounting Standards Codification Topic 805, Business Combinations. There were $0.8 million and $0.9 million of transaction costs included in the "Selling, general, and administrative expenses" line of the Company's condensed consolidated statements of income for the second quarter and six months ended June 30, 2021, respectively. Transaction costs were immaterial in the second quarter and six months ended June 30, 2020.

4. FAIR VALUE MEASUREMENTS

FASB ASC Topic 820, Fair Value Measurements and Disclosures, provides guidance for defining, measuring, and disclosing fair value within an established framework and hierarchy. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard established a fair value hierarchy which requires an entity to maximize the use of observable inputs and to minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value within the hierarchy are as follows:

Level 1 – Quoted prices for identical assets and liabilities in active markets;

Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

As of June 30, 2021 and December 31, 2020, the assets measured at fair value on a recurring basis were as set forth in the table below:

(In millions)	June 30, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs<br>(Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	5.9	$	5.9	$	—	$	—
	December 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	20.2	$	20.2	$	—	$	—

The Company's Level 1 assets consist of cash equivalents which are generally comprised of foreign bank guaranteed certificates of deposit.

The Company has no assets measured on a recurring basis classified as Level 2 or Level 3.

Total debt, including current maturities, have carrying amounts of $223.7 million and $94.6 million and estimated fair values of $233.6 million and $107.3 million as of June 30, 2021 and December 31, 2020, respectively. In the absence of quoted prices in active markets, considerable judgment is required in developing estimates of fair value. Estimates are not necessarily indicative of the amounts the Company could realize in a current market transaction. In determining the fair value of its debt, the Company uses estimates based on rates currently available to the Company for debt with similar terms and remaining maturities. Accordingly, the fair value of debt is classified as Level 2 within the valuation hierarchy.

5. FINANCIAL INSTRUMENTS

The Company’s non-employee directors' deferred compensation stock program is subject to variable plan accounting and, accordingly, is adjusted for changes in the Company’s stock price at the end of each reporting period. The Company has entered into share swap transaction agreements (the "swap") to mitigate the Company’s exposure to the fluctuations in the Company's stock price. The swap has not been designated as a hedge for accounting purposes and is cancellable with 30 days' written notice by either party. As of June 30, 2021, the swap had a notional value based on 210,000 shares. For the second quarter and six months ended June 30, 2021, the swap resulted in a gain of $0.6 million and a gain of $3.3 million, respectively. For the second quarter and six months ended June 30, 2020 the swap resulted in a gain of $1.3 million and a loss of $1.5 million respectively. Gains and losses resulting from the swap were largely offset by gains and losses on the fair value of the deferred compensation stock liability. All gains or losses and expenses related to the swap are recorded in the Company's condensed consolidated statements of income within the “Selling, general, and administrative expenses” line.

6. GOODWILL AND OTHER INTANGIBLE ASSETS

The carrying amounts of the Company’s intangible assets are as follows:

(In millions)	June 30, 2021				December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizing intangibles:
Patents	$	7.4	$	(7.3)	$	7.5	$	(7.3)
Technology	7.5		(7.3)		7.5		(7.2)
Customer relationships	246.7		(83.4)		165.1		(78.5)
Trade names	37.2		(0.4)		$	3.4	(0.2)
Other	3.1		(2.8)		2.9		(2.8)
Total	$	301.9	$	(101.2)	$	186.4	$	(96.0)
Unamortizing intangibles:
Trade names	43.6		—		43.4		—
Total intangibles	$	345.5	$	(101.2)	$	229.8	$	(96.0)

Amortization expense related to intangible assets for the second quarters ended June 30, 2021 and June 30, 2020 was $3.5 million and $2.3 million respectively, and for the six months ended June 30, 2021 and June 30, 2020, $6.0 million and $4.7 million respectively.

Amortization expense for each of the five succeeding years is projected as follows:

(In millions)	2021		2022		2023		2024		2025
	$	12.6	$	14.4	$	14.3	$	14.1	$	13.3

The change in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2021, is as follows:

(In millions)
	Water Systems		Fueling Systems		Distribution		Consolidated
Balance as of December 31, 2020	$	161.5	$	67.7	$	37.5	$	266.7
Acquisitions	47.5		2.6		—		50.1
Adjustments to prior year acquisitions	0.1		—		—		0.1
Foreign currency translation	(0.5)		—		—		(0.5)
Balance as of June 30, 2021	$	208.6	$	70.3	$	37.5	$	316.4

7. EMPLOYEE BENEFIT PLANS

Defined Benefit Plans - As of June 30, 2021, the Company maintained two domestic pension plans and three German pension plans. The Company used a December 31, 2020 measurement date for these plans. One of the Company's domestic pension plans covers one active management employee, while the other domestic plan covers all eligible employees (plan was frozen as of December 31, 2011). The two domestic and three German plans collectively comprise the 'Pension Benefits' disclosure caption.

Other Benefits - The Company's other post-retirement benefit plan provides health and life insurance to domestic employees hired prior to 1992.

The following table sets forth the aggregated net periodic benefit cost for all pension plans for the second quarters and six months ended June 30, 2021 and June 30, 2020:

(In millions)	Pension Benefits
	Second Quarter Ended				Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Service cost	$	0.2	$	0.2	$	0.4	$	0.3
Interest cost	0.7		1.1		1.4		2.2
Expected return on assets	(1.4)		(1.7)		(2.8)		(3.4)
Amortization of:
Prior service cost	—		—		—		—
Actuarial loss	1.1		0.9		2.1		1.8
Settlement cost	—		—		—		—
Net periodic benefit cost	$	0.6	$	0.5	$	1.1	$	0.9

In the six months ended June 30, 2021, the Company made contributions of $0.1 million to the funded plans. The amount of contributions to be made to the plans during the calendar year 2021 will be finalized by September 15, 2021, based upon the funding level requirements identified and year-end valuation performed at December 31, 2020.

The following table sets forth the aggregated net periodic benefit cost for the other post-retirement benefit plan for the second quarters and six months ended June 30, 2021 and June 30, 2020:

(In millions)	Other Benefits
	Second Quarter Ended				Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Service cost	$	—	$	—	$	—	$	—
Interest cost	0.1		—		0.1		0.1
Expected return on assets	—		—		—		—
Amortization of:
Prior service cost	—		—		—		—
Actuarial loss	—		—		0.1		—
Settlement cost	—		—		—		—
Net periodic benefit cost	$	0.1	$	—	$	0.2	$	0.1

8. INCOME TAXES

The Company’s effective tax rate from continuing operations for the six month period ended June 30, 2021 was 16.8 percent as compared to 20.6 percent for the six month period ended June 30, 2020. The effective tax rate is lower than the U.S. statutory rate of 21 percent primarily due to foreign earnings taxed at rates below the U.S. statutory rate, the recognition of the U.S. foreign-derived intangible income (FDII) provisions, and certain discrete events including excess tax benefits from share-based compensation partially offset by state taxes. For the second quarter of 2021 the effective tax rate was 19.0 percent as compared to 21.3 percent for the second quarter of 2020.

The decrease in the effective tax rate was primarily a result of net favorable discrete events of $0.5 million, including increased excess tax benefits from share-based compensation, recorded in the second quarter of 2021 compared to net unfavorable discrete events of $0.4 million in the second quarter of 2020 due to a valuation allowance on deferred tax assets in foreign jurisdictions. During the first quarter of 2021, the Company also recorded a deferred tax benefit of $0.8 million as a result of a tax election made in a foreign jurisdiction.

9. DEBT

Debt consisted of the following:

(In millions)	June 30, 2021		December 31, 2020
New York Life Agreement	75.0		75.0
Credit Agreement	130.0		—
Tax increment financing debt	17.1		17.6
Financing Leases	—		0.1
Foreign subsidiary debt	1.7		1.8
Other	—		0.2
Less: unamortized debt issuance costs	(0.1)		(0.1)
	$	223.7	$	94.6
Less: current maturities	(132.4)		(2.6)
Long-term debt	$	91.3	92.0

Debt outstanding, excluding unamortized debt issuance costs, at June 30, 2021 matures as follows:

(In millions)	Total		Year 1		Year 2		Year 3		Year 4		Year 5		More Than 5 Years
Debt	$	223.8	$	132.5	$	1.3	$	1.3	$	1.4	$	76.4	$	10.9

Prudential Agreement

The Company maintains the Third Amended and Restated Note Purchase and Private Shelf Agreement (the "Prudential Agreement"), which expires on July 30, 2021 and has an initial borrowing capacity of $250.0 million. As of June 30, 2021, the Company had no notes issued and $150.0 million borrowing capacity available under the Prudential Agreement.

Project Bonds

The Company, Allen County, Indiana and certain institutional investors maintain a Bond Purchase and Loan Agreement. Under the agreement, Allen County, Indiana issued a series of Project Bonds entitled “Taxable Economic Development Bonds, Series 2012 (Franklin Electric Co., Inc. Project)." The aggregate principal amount of the Project Bonds that were issued, authenticated, and are now outstanding thereunder was limited to $25.0 million. These Project Bonds ("Tax increment financing debt") bear interest at 3.6 percent per annum. Interest and principal balance of the Project Bonds are due and payable by the Company directly to the institutional investors in aggregate semi-annual installments commencing on July 10, 2013, and concluding on January 10, 2033.

New York Life Agreement

The Company maintains an uncommitted and unsecured private shelf agreement with NYL Investors LLC, an affiliate of New York Life, and each of the undersigned holders of Notes (the "New York Life Agreement"), with a maximum aggregate borrowing capacity of $200.0 million. On September 26, 2018, the Company issued and sold $75.0 million of fixed rate senior notes due September 26, 2025. These senior notes bear an interest rate of 4.04 percent with interest-only payments due semi-annually. The proceeds from the issuance of the notes were used to pay off existing variable interest rate indebtedness. As of June 30, 2021, there was $125.0 million remaining borrowing capacity under the New York Life Agreement.

Credit Agreement

The Company maintains the Fourth Amended and Restated Credit Agreement (the "Credit Agreement”). The Credit Agreement was renewed on May 13, 2021, has a maturity date of May 13, 2026, and commitment amount of $250.0 million. The Credit Agreement provides that the Borrowers may request an increase in the aggregate commitments by up to $125.0 million subject to agreement of the lenders (not to exceed a total commitment of $375.0 million). Under the Credit Agreement, the Borrowers are required to pay certain fees, including a facility fee of 0.100% to 0.275% (depending on the Company's leverage ratio) of the aggregate commitment, which fee is payable quarterly in arrears. Loans may be made either at (i) a Eurocurrency rate based on LIBOR plus an applicable margin of 0.85% to 1.88% (depending on the Company's leverage ratio) or (ii) an alternative base rate as defined in the Credit Agreement.

As of June 30, 2021, the Company had $130.0 million outstanding borrowings, $4.0 million in letters of credit outstanding, and $116.0 million of available capacity under the Credit Agreement.

Covenants

The Company’s credit agreements contain customary financial covenants. The Company’s most significant agreements and restrictive covenants are in the New York Life Agreement, the Project Bonds, the Prudential Agreement, and the Credit Agreement; each containing both affirmative and negative covenants. The affirmative covenants relate to financial statements, notices of material events, conduct of business, inspection of property, maintenance of insurance, compliance with laws and most favored lender obligations. The negative covenants include limitations on loans, advances and investments, and the granting of liens by the Company or its subsidiaries, as well as prohibitions on certain consolidations, mergers, sales and transfers of assets. The covenants also include financial requirements including a maximum leverage ratio of 3.50 to 1.00 and a minimum interest coverage ratio of 3.00 to 1.00. Cross default is applicable with the Prudential Agreement, the Project Bonds, the New York Life Agreement, and the Credit Agreement but only if the Company is defaulting on an obligation exceeding $10.0 million. The Company was in compliance with all financial covenants as of June 30, 2021.

10. EARNINGS PER SHARE

The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. The Company's participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders.

Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards.

The following table sets forth the computation of basic and diluted earnings per share:

	Second Quarter Ended				Six Months Ended
(In millions, except per share amounts)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Numerator:
Net income attributable to Franklin Electric Co., Inc.	$	39.1	$	24.7	$	67.0	$	35.3
Less: Earnings allocated to participating securities	0.2		0.2		0.4		0.2
Net income available to common shareholders	$	38.9	$	24.5	$	66.6	$	35.1
Denominator:
Basic weighted average common shares outstanding	46.5		46.2		46.4		46.3
Effect of dilutive securities:
Non-participating employee stock options and performance awards	0.6		0.3		0.6		0.4
Diluted weighted average common shares outstanding	47.1		46.5		47.0		46.7
Basic earnings per share	$	0.84	$	0.53	$	1.44	$	0.76
Diluted earnings per share	$	0.83	$	0.52	$	1.42	$	0.75

There were 0.0 million and 0.4 million stock options outstanding for the second quarters ended June 30, 2021 and June 30, 2020, and 0.1 million and 0.3 million stock options outstanding for the six months ended June 30, 2021 and June 30, 2020 respectively, that were excluded from the computation of diluted earnings per share, as their inclusion would be anti-dilutive.

11. EQUITY ROLL FORWARD

The schedules below set forth equity changes in the second quarters ended June 30, 2021 and June 30, 2020:

(In thousands)		Additional Paid in Capital		Retained Earnings		Minimum Pension Liability		Cumulative Translation Adjustment		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of March 31, 2021	4,641	$	292,668	$	779,456	$	(51,782)	$	(163,554)	$	2,257	$	863,686	$	(168)
Net income				39,141						270		39,411		(48)
Dividends on common stock (0.175/share)				(8,177)								(8,177)
Common stock issued		3,894										3,906
Common stock repurchased				(6,373)								(6,382)
Share-based compensation		2,382										2,383
Noncontrolling dividend										—		—
Currency translation adjustment								8,114		14		8,128		7
Pension liability, net of tax						885						885
Balance as of June 30, 2021	4,645	$	298,944	$	804,047	$	(50,897)	$	(155,440)	$	2,541	$	903,840	$	(209)

All values are in US Dollars.

(In thousands)		Additional Paid in Capital		Retained Earnings		Minimum Pension Liability		Cumulative Translation Adjustment		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of March 31, 2020	4,614	$	274,869	$	698,917	$	(49,373)	$	(177,848)	$	2,287	$	753,466	$	(245)
Net Income				24,651						169		24,820		(18)
Dividends on common stock (0.155/share)				(7,206)								(7,206)
Common stock issued		647										649
Common stock repurchased				(741)								(743)
Share-based compensation		2,659										2,663
Noncontrolling dividend										(830)		(830)
Currency translation adjustment								1,955		21		1,976		1
Pension liability, net of taxes						716						716
Balance as of June 30, 2020	4,618	$	278,175	$	715,621	$	(48,657)	$	(175,893)	$	1,647	$	775,511	$	(262)

All values are in US Dollars.

The schedule below set forth equity changes in the six months ended June 30, 2021 and June 30, 2020:

(In thousands)		Additional Paid in Capital		Retained Earnings		Minimum Pension Liability		Cumulative Translation Adjustment		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of December 31, 2020	4,622	$	283,420	$	764,562	$	(52,666)	$	(152,105)	$	2,116	$	849,949	$	(245)
Net Income				67,021						477		67,498		28
Dividends on common stock (0.3500/share)				(16,320)								(16,320)
Common stock issued		8,963										8,989
Common stock repurchased				(11,216)								(11,231)
Share-based compensation		6,561										6,573
Noncontrolling dividend										—		—
Currency translation adjustment								(3,335)		(52)		(3,387)		8
Pension liability, net of taxes						1,769						1,769
Balance as of June 30, 2021	4,645	$	298,944	$	804,047	$	(50,897)	$	(155,440)	$	2,541	$	903,840	$	(209)
(In thousands)		Additional Paid in Capital		Retained Earnings		Minimum Pension Liability		Cumulative Translation Adjustment		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of December 31, 2019	4,639	$	269,656	$	712,460	$	(50,089)	$	(140,121)	$	2,124	$	798,669	$	(236)
Net Income				35,294						356		35,650		(56)
Dividends on common stock (0.3100/share)				(14,446)								(14,446)
Common stock issued		1,516										1,520
Common stock repurchased				(17,687)								(17,724)
Share-based compensation		7,003										7,015
Noncontrolling dividend										(830)		(830)
Currency translation adjustment								(35,772)		(3)		(35,775)		30
Pension liability, net of taxes						1,432						1,432
Balance as of June 30, 2020	4,618	$	278,175	$	715,621	$	(48,657)	$	(175,893)	$	1,647	$	775,511	$	(262)

All values are in US Dollars.

12. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

Changes in accumulated other comprehensive income/(loss) by component for the six months ended June 30, 2021 and June 30, 2020, are summarized below:

(In millions)
For the six months ended June 30, 2021:	Foreign Currency Translation Adjustments		Pension and Post-Retirement Plan Benefit Adjustments (2)		Total
Balance as of December 31, 2020	$	(152.2)	$	(52.6)	$	(204.8)
Other comprehensive income/(loss) before reclassifications	(3.3)		—		(3.3)
Amounts reclassified from accumulated other comprehensive income/(loss) (1)	—		1.8		1.8
Net other comprehensive income/(loss)	(3.3)		1.8		(1.5)
Balance as of June 30, 2021	$	(155.5)	$	(50.8)	$	(206.3)
For the six months ended June 30, 2020:
Balance as of December 31, 2019	$	(140.2)	$	(50.0)	$	(190.2)
Other comprehensive income/(loss) before reclassifications	(35.8)		—		(35.8)
Amounts reclassified from accumulated other comprehensive income/(loss) (1)	—		1.4		1.4
Net other comprehensive income/(loss)	(35.8)		1.4		(34.4)
Balance as of June 30, 2020	$	(176.0)	$	(48.6)	$	(224.6)

(1) This accumulated other comprehensive income/(loss) component is included in the computation of net periodic pension cost (refer to Note 7 for additional details) and is included in the "Other income/(expense), net" line of the Company's condensed consolidated statements of income.

(2) Net of tax expense of $0.5 million and $0.4 million for the six months ended June 30, 2021 and June 30, 2020, respectively.

Amounts related to noncontrolling interests were not material.

13. SEGMENT AND GEOGRAPHIC INFORMATION

The accounting policies of the operating segments are the same as those described in Note 1 of the Company's Form 10-K. Revenue is recognized based on the invoice price at the point in time when the customer obtains control of the product, which is typically upon shipment to the customer. The Water and Fueling segments include manufacturing operations and supply certain components and finished goods, both between segments and to the Distribution segment. The Company reports these product transfers between Water and Fueling as inventory transfers as a significant number of the Company's manufacturing facilities are shared across segments for scale and efficiency purposes. The Company reports intersegment transfers from Water to Distribution as intersegment revenue at market prices to properly reflect the commercial arrangement of vendor to customer that exists between the Water and Distribution segments.

Segment operating income is a key financial performance measure. Operating income by segment is based on net sales less identifiable operating expenses and allocations and includes profits recorded on sales to other segments of the Company.

Financial information by reportable business segment is included in the following summary:

	Second Quarter Ended				Six Months Ended
(In millions)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	Net sales
Water Systems
External sales
United States & Canada	$	114.1	$	80.8	$	198.3	$	151.7
Latin America	34.7		24.2		66.4		52.4
Europe, Middle East & Africa	51.4		35.5		95.8		73.7
Asia Pacific	20.1		19.7		40.3		33.5
Intersegment sales
United States & Canada	26.9		18.2		44.0		31.2
Total sales	247.2		178.4		444.8		342.5
Distribution
External sales
United States & Canada	144.8		92.1		240.5		152.5
Intersegment sales	—		—		—		—
Total sales	144.8		92.1		240.5		152.5
Fueling Systems
External sales
United States & Canada	50.6		35.3		88.1		72.6
All other	21.6		20.7		40.9		38.6
Intersegment sales	—		—		—		—
Total sales	72.2		56.0		129.0		111.2
Intersegment Eliminations/Other	(26.9)		(18.2)		(44.0)		(31.2)
Consolidated	$	437.3	$	308.3	$	770.3	$	575.0
	Second Quarter Ended				Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	Operating income/(loss)
Water Systems	$	34.6	$	28.7	$	65.9	$	47.5
Distribution	16.0		6.8		18.0		4.6
Fueling Systems	18.5		13.5		33.4		25.6
Intersegment Eliminations/Other	(17.5)		(15.1)		(31.9)		(29.9)
Consolidated	$	51.6	$	33.9	$	85.4	$	47.8
	June 30, 2021		December 31, 2020
---	---	---	---	---
	Total assets
Water Systems	$	863.0	$	645.9
Distribution	296.6		249.0
Fueling Systems	270.0		268.9
Other	81.2		108.5
Consolidated	$	1,510.8	$	1,272.3

Other Assets are generally Corporate assets that are not allocated to the segments and are comprised primarily of cash and property, plant and equipment.

14. COMMITMENTS AND CONTINGENCIES

In 2011, the Company became aware of a review of alleged issues with certain underground piping connections installed in filling stations in France owned by the French Subsidiary of Exxon Mobile, Esso S.A.F. A French court ordered that a designated, subject-matter expert review 103 filling stations to determine what, if any, damages are present and the cause of those damages. The Company has participated in this investigation since 2011, along with several other third parties including equipment installers, engineering design firms who designed and provided specifications for the stations, and contract manufacturers of some of the installed equipment. The subject-matter expert has issued their preliminary report, which indicates that total damages incurred by Esso amounted to approximately 12 million euro. It is the Company’s position that its products were not the cause of any alleged damage. The Company has retained experts to demonstrate that its products did not cause the damage, and in January 2021, submitted its response to the expert’s preliminary report for each station. The expert's response to the Company's report is due to the Court in June 2022. The Company cannot predict the ultimate outcome of this matter. Any exposure related to this matter is neither probable nor estimable at this time. If payments result from a resolution of this matter, depending on the amount, they could have a material effect on the Company’s results of operations.

The Company is defending other various claims and legal actions which have arisen in the ordinary course of business. In the opinion of management, based on current knowledge of the facts and after discussion with counsel, these claims and legal actions can be defended or resolved without a material effect on the Company’s financial position, results of operations, and net cash flows.

At June 30, 2021, the Company had $7.8 million of commitments primarily for capital expenditures and purchase of raw materials to be used in production.

The Company provides warranties on most of its products. The warranty terms vary but are generally two years to five years from date of manufacture or one year to five years from date of installation. Provisions for estimated expenses related to product warranty are made at the time products are sold or when specific warranty issues are identified. These estimates are established using historical information about the nature, frequency, and average cost of warranty claims. The Company actively studies trends of warranty claims and takes actions to improve product quality and minimize warranty claims. The Company believes that the warranty reserve is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the reserve.

The changes in the carrying amount of the warranty accrual, as recorded in the "Accrued expenses and other current liabilities" line of the Company's condensed consolidated balance sheet for the six months ended June 30, 2021, are as follows:

(In millions)
Balance as of December 31, 2020	$	9.7
Accruals related to product warranties	6.5
Additions related to acquisitions	—
Reductions for payments made	(6.4)
Balance as of June 30, 2021	$	9.8

The Company maintains certain warehouses, distribution centers, office space, and equipment operating leases. The Company also has lease agreements that are classified as financing. These financing leases are immaterial to the Company.

The Company utilizes interest rates from lease agreements unless the lease agreement does not provide a readily determinable rate. In these instances, the Company utilizes its incremental borrowing rate based on the information available as of the adoption of ASU 2016-02 or at the inception of any new leases entered into thereafter when determining the present value of future lease payments.

Some of the Company’s leases include renewal options. The Company excludes these renewal options in the expected lease term unless the Company is reasonably certain that the option will be exercised.

The components of the Company’s operating lease portfolio as of the second quarter and six months ended June 30, 2021 are as follows:

Lease Cost (in millions):	Second Quarter Ended		Six Months Ended
Operating lease cost	$	2.7	$	5.7
Short-term lease cost	0.1		0.4
Other Information:
Weighted-average remaining lease term			4.1 years
Weighted-average discount rate			4.0		%

As of June 30, 2021, the Company has approximately $2.5 million of additional ROU assets related to leases that have not yet commenced, but create future lease obligations.

The minimum rental payments for non-cancellable operating leases as of June 30, 2021, are as follows:

(In millions)	2021		2022		2023		2024		2025		Thereafter
Future Minimum Rental Payments	$	9.2	$	10.3	$	7.0	$	4.0	$	2.5	$	6.6

15. SHARE-BASED COMPENSATION

The Franklin Electric Co., Inc. 2017 Stock Plan (the "2017 Stock Plan") is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards, stock unit awards, and stock appreciation rights ("SARs") to key employees and non-employee directors. The number of shares that may be issued under the Plan is 1,400,000. Stock options and SARs reduce the number of available shares by one share for each share subject to the option or SAR, and stock awards and stock unit awards settled in shares reduce the number of available shares by 1.5 shares for every one share delivered.

The Company also maintains the Franklin Electric Co., Inc. 2012 Stock Plan (the "2012 Stock Plan"), which is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards, and stock unit awards to key employees and non-employee directors.

The 2012 Stock Plan authorized 2,400,000 shares for issuance as follows:

2012 Stock Plan	Authorized Shares
Stock Options	1,680,000
Stock/Stock Unit Awards	720,000

The Company also maintains the Amended and Restated Franklin Electric Co., Inc. Stock Plan (the "2009 Stock Plan") which, as amended in 2009, provided for discretionary grants of stock options and stock awards. The 2009 Stock Plan authorized 4,400,000 shares for issuance as follows:

2009 Stock Plan	Authorized Shares
Stock Options	3,200,000
Stock Awards	1,200,000

All options in the 2009 Stock Plan have been awarded and no additional awards are granted out of the plan. However, there are still unvested awards and unexercised options under this plan.

The Company currently issues new shares from its common stock balance to satisfy option exercises and the settlement of stock awards and stock unit awards made under the outstanding stock plans.

Stock Options:

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model with a single approach and amortized using a straight-line attribution method over the option’s vesting period.

The assumptions used for the Black-Scholes model to determine the fair value of options granted during the six months ended June 30, 2021 and June 30, 2020 are as follows:

	June 30, 2021		June 30, 2020
Risk-free interest rate	0.66	%	1.39	%
Dividend yield	0.96	%	1.04	%
Volatility factor	34.98	%	29.45	%
Expected term	5.5 years		5.5 years

A summary of the Company’s outstanding stock option activity and related information for the six months ended June 30, 2021 is as follows:

(Shares in thousands)	June 30, 2021
Stock Options	Shares	Weighted-Average Exercise Price
Outstanding at beginning of period	1,331	$	41.90
Granted	152	73.14
Exercised	(256)	35.10
Forfeited	—	—
Outstanding at end of period	1,227	$	47.18
Expected to vest after applying forfeiture rate	1,224	$	47.13
Vested and exercisable at end of period	839	$	40.45

A summary of the weighted-average remaining contractual term and aggregate intrinsic value as of June 30, 2021 is as follows:

	Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value (000's)
Outstanding at end of period	6.19 years	$	41,025
Expected to vest after applying forfeiture rate	6.18 years	$	40,981
Vested and exercisable at end of period	5.06 years	$	33,700

The total intrinsic value of options exercised during the six months ended June 30, 2021 and June 30, 2020 was $11.2 million and $0.9 million, respectively.

As of June 30, 2021, there was $1.4 million of total unrecognized compensation cost related to non-vested stock options granted under the stock plans. That cost is expected to be recognized over a weighted-average period of 1.74 years.

Stock/Stock Unit Awards:

A summary of the Company’s restricted stock/stock unit award activity and related information for the six months ended June 30, 2021 is as follows:

(Shares in thousands)	June 30, 2021
Restricted Stock/Stock Unit Awards	Shares	Weighted-Average Grant-<br>Date Fair Value
Non-vested at beginning of period	403	$	49.34
Awarded	104	74.23
Vested	(118)	43.21
Forfeited	(9)	47.76
Non-vested at end of period	380	$	58.12

As of June 30, 2021, there was $11.5 million of total unrecognized compensation cost related to non-vested restricted stock/stock unit awards granted under the stock plans. That cost is expected to be recognized over a weighted-average period of 1.38 years.

16. SUBSEQUENT EVENT

Amended and Restated Note Purchase and Private Shelf Agreement - NYL Shelf Agreement

On July 30, 2021, Franklin Electric Co., Inc. and Franklin Electric B.V. ("Dutch Subsidiary Issuer") entered into a new unsecured $200.0 million uncommitted maximum aggregate principal amount private shelf facility for a period of up to 3 years pursuant to that certain Amended and Restated Note Purchase and Private Shelf Agreement with NYL Investors LLC, New York Life Insurance Company and New York Life Insurance and Annuity Corporation (collectively, “New York Life”) dated as of July 30, 2021 (the “NYL Shelf Agreement”). Subject to the terms and conditions set forth therein, the NYL Shelf Agreement allows the Company to issue senior promissory notes to New York Life at floating or fixed rate economic terms to be agreed upon at the time of issuance, from time to time during a three year issuance period ending July 30, 2024.

The minimum principal amount of the private shelf note that can be issued under the NYL Shelf Agreement is $5.0 million with an issuance fee of 0.10% of the aggregate principal amount of the issued shelf note, payable on the date of issuance in Dollars. The NYL Shelf Agreement also provides for other fees, including a varying leverage fee payable for periods during which the ratio of the Company’s consolidated total debt to earnings before interest, taxes, depreciation and amortization is equal to or greater than 2.00 to 1.00.

The term of each note issuance under the NYL Shelf Agreement will be selected by the Company and will not exceed 12 years for fixed rate notes and 10 years for floating rate notes. The proceeds of any issuance under the NYL Shelf Agreement will be used as set forth in the applicable Request for Purchase.

The NYL Shelf Agreement has customary affirmative and negative covenants for agreements of these types. The affirmative covenants include delivery of financial statements, permitting of inspections of the property of the Company and its subsidiaries, maintenance of insurance, compliance with laws and most favored lender obligations. The negative covenants include limitations on loans or advances, acquisitions (including investments), and the granting of liens by the Company or its subsidiaries, as well as prohibitions on certain consolidations, mergers, sales and transfers of assets. The covenants also include financial requirements including a maximum leverage ratio of 3.50 to 1.00 and a minimum interest coverage ratio of 3.00 to 1.00. Under specific acquisition factors, the maximum leverage ratio can increase to 4.00 to 1.00 for up to four consecutive Fiscal Quarters. Cross default is applicable with the NYL Shelf Agreement, but only if the Company is defaulting on an obligation exceeding $10.0 million. The NYL Shelf Agreement also contains customary events of default (with customary grace periods, as applicable, for certain of those events of default). If an event of default occurs, all payment obligations under the private shelf notes outstanding plus a yield maintenance amount (if any) may be declared due and payable. For certain events of default relating to insolvency, bankruptcy or liquidation, all payment obligations under outstanding private shelf notes plus a yield maintenance amount (if any) automatically become due and payable. The covenants in the NYL Shelf Agreement are subject to a number of important exceptions and qualifications set forth therein.

All notes issued under the NYL Shelf Agreement are unsecured and rank pari passu in right of payment with the Company’s other senior unsecured indebtedness. The payment of outstanding amounts due under any notes and the performance by the Company of its obligations under the NYL Shelf Agreement have been guaranteed by certain wholly-owned U.S. subsidiaries of the Company.

The description of the NYL Shelf Agreement contained herein is qualified in its entirety by reference to the NYL Shelf Agreement, a copy of which is filed hereto as Exhibit 10.5.

Fourth Amended and Restated Note Purchase and Private Shelf Agreement - Pru Shelf Agreement

Also on July 30, 2021, Franklin Electric Co., Inc. and Franklin Electric B.V. ("Dutch Subsidiary Issuer") entered into an unsecured $150.0 million uncommitted maximum aggregate principal amount private shelf facility for a period of up to 3 years pursuant to that certain Fourth Amended and Restated Note Purchase and Private Shelf Agreement, dated as of July 30, 2021, with Prudential Investment Management, Inc. (“Prudential”) and the purchasers named therein (the “Pru Shelf Agreement”). The Pru Shelf Agreement amended and restated the Third Amended and Restated Note Purchase and Private Shelf Agreement, dated as of May 28, 2015, between the Company and Prudential and the purchasers named therein (the “Existing 2015 Shelf Agreement”) and amended and restated the Existing 2004 Shelf Agreement and the Series B-1 Notes and Series B-2 Notes (collectively, the "Series B Notes"). The Series B Notes that were issued under the 2004 Shelf Agreement that were outstanding under the Existing 2015 Shelf Agreement in the original principal amount of $150.0 million became outstanding under the Pru Shelf Agreement. The minimum principal amount of the private shelf note that can be issued under the Pru Shelf Agreement is $5.0 million payable on the date of issuance. The Pru Shelf Agreement also provides for other fees,

including a varying leverage fee payable for periods during which the ratio of the Company’s consolidated total debt to earnings before interest, taxes, depreciation and amortization is equal to or greater than 2.00 to 1.00.

Any private shelf note issued under the Pru Shelf Agreement during the issuance period may have a maturity of up to 15 years, provided that the average life for each private shelf note issued is no more than 12 years after the date of original issuance. The private shelf notes may be issued in U.S. dollars or in the equivalent thereof at the time of issuance in British Pounds and Euros. The proceeds of any issuance under the Pru Shelf Agreement will be used for general corporate purposes, including the repayment of existing indebtedness.

The Pru Shelf Agreement has customary affirmative and negative covenants for agreements of these types. The affirmative covenants include delivery of financial statements, permitting of inspections of the property of the Company and its subsidiaries, maintenance of insurance, compliance with laws and most favored lender obligations. The negative covenants include limitations on loans or advances, acquisitions (including investments), and the granting of liens by the Company or its subsidiaries, as well as prohibitions on certain consolidations, mergers, sales and transfers of assets. The covenants also include financial requirements including a maximum leverage ratio of 3.50 to 1.00 and a minimum interest coverage ratio of 3.00 to 1.00. Under specific acquisition factors, the maximum leverage ratio can increase to 4.00 to 1.00 for up to four consecutive Fiscal Quarters. Cross default is applicable with the Pru Shelf Agreement, but only if the Company is defaulting on an obligation exceeding $10.0 million. The Pru Shelf Agreement also contains customary events of default (with customary grace periods, as applicable, for certain of those events of default). If an event of default occurs, all payment obligations under the private shelf notes outstanding plus a yield maintenance amount (if any) may be declared due and payable. For certain events of default relating to insolvency, bankruptcy or liquidation, all payment obligations under outstanding private shelf notes plus a yield maintenance amount (if any) automatically become due and payable. The covenants in the Pru Shelf Agreement are subject to a number of important exceptions and qualifications set forth therein.

All notes issued under the Pru Shelf Agreement are unsecured and rank pari passu in right of payment with the Company’s other senior unsecured indebtedness. The payment of outstanding amounts due under any notes and the performance by the Company of its obligations under the Pru Shelf Agreement have been guaranteed by certain wholly-owned U.S. subsidiaries of the Company.

The description of the Pru Shelf Agreement contained herein is qualified in its entirety by reference to the Pru Shelf Agreement, a copy of which is filed hereto as Exhibit 10.6.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Second Quarter 2021 vs. Second Quarter 2020

OVERVIEW

Sales in the second quarter of 2021 increased from the second quarter of last year. The sales increase was primarily from higher volumes, in part created by the business recovering from the uncertainty and general disruptions around the global pandemic last year and from acquisition related sales. The Company's consolidated gross profit was $152.2 million for the second quarter of 2021, an increase from the prior year’s second quarter. The gross profit as a percent of net sales was 34.8 percent in the second quarter of 2021 versus 34.7 percent during the second quarter of 2020. Diluted earnings per share in the second quarter of 2021 were up from the same period last year.

RESULTS OF OPERATIONS

Net Sales

Net sales in the second quarter of 2021 were $437.3 million, an increase of $129.0 million or about 42 percent compared to 2020 second quarter sales of $308.3 million. Acquisition related sales were $38.9 million. Sales revenue increased by $6.1 million or about 2 percent in the second quarter of 2021 due to foreign currency translation. Organic sales increased about 28 percent compared to the second quarter of 2020.

	Net Sales
(In millions)	Q2 2021		Q2 2020		2021 v 2020
Water Systems	$	247.2	$	178.4	$	68.8
Fueling Systems	72.2		56.0		$	16.2
Distribution	144.8		92.1		$	52.7
Eliminations/Other	(26.9)		(18.2)		$	(8.7)
Consolidated	$	437.3	$	308.3	$	129.0

Net Sales-Water Systems

Water Systems sales were $247.2 million in the second quarter of 2021, an increase of $68.8 million or about 39 percent versus the second quarter of 2020 sales of $178.4 million. Acquisition related sales were $23.8 million. Water Systems sales increased by $4.8 million or about 3 percent in the quarter due to foreign currency translation. Excluding acquisitions and foreign currency translation, Water Systems sales were up $40.2 million or about 23 percent compared to the second quarter of 2020.

Water Systems sales in the U.S. and Canada were up about 42 percent compared to the second quarter of 2020. The impact of foreign currency translation increased sales by about 2 percent. In the second quarter of 2021, sales from businesses acquired since the second quarter of 2020 were $23.8 million. Organic Water Systems sales in the U.S. and Canada were 17 percent in the second quarter. Sales of groundwater pumping equipment increased by about 16 percent, sales of dewatering equipment were up about 90 percent, and sales of surface pumping equipment increased by about 13 percent versus the second quarter of 2020, all due to strong end market demand and in part resulting from lower sales last year due to the pandemic.

Water Systems sales in markets outside the U.S. and Canada increased by 34 percent overall. The impact of foreign currency translation increased sales by about 4 percent. Excluding the impact of foreign currency translation, Water Systems sales in markets outside the U.S. and Canada, increased by 30 percent, primarily driven by higher sales in Latin America, Europe, the Middle East and African markets (EMEA).

Net Sales-Fueling Systems

Fueling Systems sales were $72.2 million in the second quarter of 2021, an increase of $16.2 million or about 29 percent versus the second quarter of 2020 sales of $56.0 million. Fueling Systems sales increased by $1.3 million or about 2 percent in the quarter due to foreign currency translation. Fueling Systems organic sales increased about 27 percent compared to the second quarter of 2020.

Fueling Systems sales in the U.S. and Canada increased by about 40 percent compared to the second quarter of 2020. The increase was due to higher demand for Piping, Pumping and Fuel Management Systems. Outside the U.S. and Canada, Fueling Systems revenues increased by about 1 percent, driven primarily by higher sales in Latin America and EMEA, partially offset by lower sales in China.

Net Sales - Distribution

Distribution sales were $144.8 million in the second quarter of 2021, versus the second quarter of 2020 sales of $92.1 million. In the second quarter of 2021, sales from businesses acquired since the second quarter of 2020 were $15.1 million. The Distribution segment organic sales increased 41 percent compared to the second quarter of 2020. Revenue growth was driven by broad-based demand in all regions and product categories.

Cost of Sales

Cost of sales as a percent of net sales for the second quarter of 2021 was 65.2 percent and 65.3 percent for the second quarter of 2020. Correspondingly, the gross profit margin was 34.8 percent and 34.7 percent for the second quarters of 2021 and 2020, respectively. The Company's consolidated gross profit was $152.2 million for the second quarter of 2021, up $45.1 million from the gross profit of $107.1 million in the second quarter of 2020. The gross profit increase was due to higher sales. In the second quarter, the gross profit margin percentage was flat.

Selling, General, and Administrative ("SG&A")

Selling, general, and administrative (SG&A) expenses were $100.5 million in the second quarter of 2021 compared to $72.3 million in the second quarter of 2020. SG&A expenses from acquired businesses were $9.9 million and excluding the acquired entities, SG&A expenses were higher by $18.3 million versus the prior year. The primary increase was about $10 million in variable compensation expense and commissions on higher sales. In addition, transaction, legal and other administrative costs were about $2 million. SG&A costs as a percent of Net Sales were slightly below the second quarter of 2020.

Restructuring Expenses

Restructuring expenses for the second quarter of 2021 were $0.2 million and related to continued miscellaneous manufacturing and distribution realignment activities in the Water Systems segment. Restructuring expenses for the second quarter of 2020 were $0.9 million and related to continued miscellaneous manufacturing and distribution realignment activities in the Water Systems segment.

Operating Income

Operating income was $51.6 million in the second quarter of 2021, up $17.7 million or about 52 percent from $33.9 million in the second quarter of 2020.

	Operating income (loss)
(In millions)	Q2 2021		Q2 2020		2021 v 2020
Water Systems	34.6		$	28.7	$	5.9
Fueling Systems	18.5		13.5		5.0
Distribution	16.0		6.8		9.2
Eliminations/Other	(17.5)		(15.1)		(2.4)
Consolidated	$	51.6	$	33.9	$	17.7

Operating Income-Water Systems

Water Systems operating income was $34.6 million in the second quarter of 2021, up $5.9 million or about 21 percent versus the second quarter of 2020 and operating income margin was 14.0 percent compared to the 16.1 percent in the second quarter of 2020. Operating income margin decreased in Water Systems primarily due to higher shipping and freight costs of about $3 million, which were not fully offset by price increases, mostly in North America and about $2 million for transaction, legal and other charges incurred in the second quarter.

Operating Income-Fueling Systems

Fueling Systems operating income was $18.5 million in the second quarter of 2021, up $5.0 million or about 37 percent compared to $13.5 million in the second quarter of 2020, and the second quarter operating income margin was 25.6 percent, an increase of 150 basis points from the 24.1 percent of net sales in the second quarter of 2020. The increase in operating income was primarily due to higher sales.

Operating Income-Distribution

Distribution operating income was $16.0 million in the second quarter of 2021, and the second quarter operating income margin was 11.0 percent. Distribution operating income was $6.8 million in the second quarter of 2020, and the second quarter

operating income margin was 7.4 percent. The increase in operating income margin is primarily related to higher revenues and operating leverage.

Operating Income-Eliminations/Other

Operating income-Eliminations/Other is composed primarily of unallocated general and administrative expenses and inter-segment sales and profit eliminations. The inter-segment profit elimination impact in the second quarter of 2021 versus the second quarter of 2020 was $0.3 million. General and administrative expenses were higher by $2.7 million primarily due to higher variable compensation.

Interest Expense

Interest expense for the second quarter of 2021 and 2020 was $1.4 million and $1.1 million, respectively.

Other Income or Expense

Other income or expense was a loss of $0.4 million in the second quarter of 2021 and 2020.

Foreign Exchange

Foreign currency-based transactions produced a loss for the second quarter of 2021 of $1.2 million, primarily due to the Argentinian peso relative to the U.S. dollar. Foreign currency-based transactions produced a loss for the second quarter of 2020 of $0.9 million, primarily due to the Argentinian peso relative to the U.S. dollar.

Income Taxes

The provision for income taxes in the second quarter of 2021 and 2020 was $9.3 million and $6.7 million, respectively. The effective tax rate for the second quarter of 2021 was about 19 percent and, before the impact of discrete events, was about 20 percent. The effective tax rate for the second quarter of 2020 was about 21 percent and, before the impact of discrete events, was about 20 percent. The decrease in the effective tax rate was primarily a result of net favorable discrete events, including increased excess tax benefits from share-based compensation, recorded in the second quarter of 2021 compared to net unfavorable discrete events recorded in the second quarter of 2020 from a valuation allowance on foreign deferred tax assets. The tax rate as a percentage of pre-tax earnings for the full year 2021 is projected to be about 20 percent, compared to the full year 2020 tax rate of about 21 percent, both before discrete adjustments.

Net Income

Net income for the second quarter of 2021 was $39.4 million compared to the prior year second quarter net income of $24.8 million. Net income attributable to Franklin Electric Co., Inc. for the second quarter of 2021 was $39.1 million, or $0.83 per diluted share, compared to the prior year second quarter net income attributable to Franklin Electric Co., Inc. of $24.7 million or $0.52 per diluted share.

First Half 2021 vs. First Half 2020

OVERVIEW

Sales in the first half of 2021 were up from the same period last year. The sales increase was primarily from higher volumes, in part created by the business recovering from the uncertainty and general disruptions around the global pandemic last year and from acquisition related sales. The Company's consolidated gross profit was $267.8 million for the first half of 2021, an increase of $70.4 million or about 36 percent from the first half of 2020. Diluted earnings per share in the first half of 2021 were up from the same period last year.

RESULTS OF OPERATIONS

Net Sales

	Net Sales
(In millions)	YTD June 30, 2021		YTD June 30, 2020		2021 v 2020
Water Systems	$	444.8	$	342.5	$	102.3
Fueling Systems	129.0		111.2		$	17.8
Distribution	240.5		152.5		$	88.0
Eliminations/Other	(44.0)		(31.2)		$	(12.8)
Consolidated	$	770.3	$	575.0	$	195.3

Net Sales-Water Systems

Water Systems sales were $444.8 million in the first half of 2021, an increase of $102.3 million or about 30 percent versus the first half of 2020. The incremental impact of sales from acquired businesses was $31.0 million. Foreign currency translation changes increased sales $1.1 million compared to sales in the first half of 2020. The Water Systems sales change in the first half of 2021, excluding acquisitions and foreign currency translation, was an increase of $70.2 million or about 20 percent.

Water Systems sales in the U.S. and Canada increased by about 32 percent compared to the first half of 2020. The incremental impact of sales from acquired businesses was $31.0 million. Sales revenue increased by $2.5 million in the first half of 2021 due to foreign currency translation. In the first half of 2021, organic Water Systems sales in the U.S. and Canada were 14 percent. Sales of groundwater pumping equipment increased by about 20 percent, sales of dewatering equipment were up about 30 percent, and sales of surface pumping equipment increased by about 12 percent versus the second quarter of 2020, all due to strong end market demand and in part resulting from lower sales last year due to the pandemic.

Water Systems sales in markets outside the U.S. and Canada increased by about 27 percent compared to the first half of 2020. Sales revenue decreased by $1.4 million or about 1 percent in the first half of 2021 due to foreign currency translation. International Water Systems organic sales change in the first half of 2021, excluding foreign currency translation, was an increase of about 28 percent. International Water Systems sales grew in all major geographic regions; Latin America, EMEA and the Asia Pacific markets, in part by the business recovering from the global pandemic last year.

Net Sales-Fueling Systems

Fueling Systems sales were $129.0 million in the first half of 2021, an increase of $17.8 million or about 16 percent from the first half of 2020. Foreign currency translation changes increased sales $2.1 million or about 2 percent compared to sales in the first half of 2020. The Fueling Systems sales change in the first half of 2021, excluding acquisitions and foreign currency translation, was an increase of about 14 percent.

Fueling Systems sales in the U.S. and Canada increased by about 20 percent during the first half. The increase was due to higher demand for Piping, Pumping and Fuel Management Systems. Outside the U.S. and Canada, Fueling Systems revenues increased by about 4 percent, driven primarily by higher sales in Latin America and EMEA, partially offset by lower sales in China.

Net Sales - Distribution

Distribution sales were $240.5 million in the first half of 2021, versus the first half of 2020 sales of $152.5 million. The incremental impact of sales from acquired businesses was $31.4 million. Distribution segment organic sales increased about 37 percent compared to the first half of 2020, driven by broad-based demand in all regions and product categories.

Cost of Sales

Cost of sales as a percent of net sales for the first half of 2021 and 2020 was 65.2 percent and 65.7 percent, respectively. Correspondingly, the gross profit margin was 34.8 percent and 34.3 percent, respectively. The Company's consolidated gross profit was $267.8 million for the first half of 2021, up $70.4 million from the gross profit of $197.4 million in the first half of 2020. The gross profit increase was primarily due to higher sales. The improvement in gross profit margin percentage is partially attributable to better selling price realization and improved product and geographic sales mix shifts.

Selling, General, and Administrative ("SG&A")

Selling, general, and administrative expenses were $182.1 million in the first half of 2021, and increased by $34.2 million or 23 percent in the first half of 2021 compared to $147.9 million in the first half of last year. SG&A expenses from acquired businesses were $14.8 million and excluding the acquired entities, SG&A expenses were higher by $19.4 million versus the prior year. The primary increase was about $13 million in variable compensation expense and commissions on higher sales.

Restructuring Expenses

Restructuring expenses for the first half of 2021 were $0.3 million. Restructuring expenses were $0.2 million in the Water Systems segment from continued miscellaneous manufacturing and distribution realignment activities and $0.1 in distribution related to branch consolidations and other asset rationalizations in the Headwater distribution segment. Restructuring expenses for the first half of 2020 were $1.7 million. Restructuring expenses were $1.5 million in the Water Systems segment and $0.1 million in the Fueling Systems segment from continued miscellaneous manufacturing and distribution realignment activities and $0.1 in distribution related to branch consolidations and other asset rationalizations in the Headwater distribution.

Operating Income

Operating income was $85.4 million in the first half of 2021, up $37.6 million or about 79 percent from $47.8 million in the first half of 2020.

	Operating income (loss)
(In millions)	YTD June 30, 2021		YTD June 30, 2020		2021 v 2020
Water Systems	65.9		47.5		$	18.4
Fueling Systems	33.4		25.6		7.8
Distribution	18.0		4.6		13.4
Eliminations/Other	(31.9)		(29.9)		(2.0)
Consolidated	$	85.4	$	47.8	$	37.6

Operating Income-Water Systems

Water Systems operating income was $65.9 million in the first half of 2021 compared to $47.5 million in the first half of 2020, an increase of about 39 percent. The first half operating income margin was 14.8 percent and increased by 90 basis points compared to the first half of 2020. Operating income margin increased in Water Systems primarily related to higher revenues and operating leverage.

Operating Income-Fueling Systems

Fueling Systems operating income was $33.4 million in the first half of 2021 compared to $25.6 million in the first half of 2020. The first half operating income margin was 25.9 percent compared to 23.0 percent of net sales in the first half of 2020, an increase of 290 basis points. The increase in operating income was primarily due to higher sales. Operating income margin increased in Fueling Systems primarily due to product and geographic sales mix shifts.

Operating Income-Distribution

Distribution operating income was $18.0 million in the first half of 2021 and operating income margin was 7.5 percent. Distribution operating income was $4.6 million in the first half of 2020 and operating income margin was 3.0 percent. The increase in operating income and margin is primarily related to higher revenues and operating leverage.

Operating Income-Eliminations/Other

Operating income-Eliminations/Other is composed primarily of inter-segment sales and profit eliminations and unallocated general and administrative expenses. The inter-segment profit elimination impact in the first half of 2021 versus the first half of 2020 was $0.4 million. General and administrative expenses were higher by $2.4 million or about 9 percent to last year in the first half primarily due to higher variable compensation.

Interest Expense

Interest expense for the first half of 2021 and 2020 was $2.5 million and $2.4 million, respectively.

Other Income or Expense

Other income or expense was a loss of $0.5 million in the first half of 2021. Other income or expense was a loss of $0.6 million in the first half of 2020.

Foreign Exchange

Foreign currency-based transactions for the first half of 2021 was a loss $1.2 million, primarily due to the Argentinian peso relative to the U.S. dollar. Foreign currency-based transactions for the first half of 2020 was a gain $0.1 million due to movements in several currencies relative to the U.S. dollar, none of which individually were significant.

Income Taxes

The provision for income taxes in the first half of 2021 and 2020 was $13.6 million and $9.3 million, respectively. The effective tax rate for the first half of 2021 was about 17 percent, and before the impact of discrete events, was about 20 percent. The effective tax rate in the first half of 2020 was about 21 percent, and before the impact of discrete events, was about 20 percent. The decrease in the effective tax rate was primarily a result of net favorable discrete events recorded in the first half of 2021 compared to net unfavorable discrete events in the first half of 2020. The tax rate as a percentage of pre-tax earnings for the full year 2021 is projected to be about 20 percent, compared to the full year 2020 tax rate of about 21 percent, both before discrete adjustments.

Net Income

Net income for the first half of 2021 was $67.5 million compared to 2020 first half net income of $35.6 million. Net income attributable to Franklin Electric Co., Inc. for the first half of 2021 was $67.0 million, or $1.42 per diluted share, compared to 2020 first half net income attributable to Franklin Electric Co., Inc. of $35.3 million or $0.75 per diluted share.

CAPITAL RESOURCES AND LIQUIDITY

Sources of Liquidity

The Company's primary sources of liquidity are cash on hand, cash flows from operations, revolving credit agreements, and long-term debt funds available. The Company believes its capital resources and liquidity position at June 30, 2021 is adequate to meet projected needs for the foreseeable future. The Company expects that ongoing requirements for operations, capital expenditures, pension obligations, dividends, share repurchases, and debt service will be adequately funded from cash on hand, operations, and existing credit agreements.

As of June 30, 2021 the Company had a $250.0 million revolving credit facility. The facility is scheduled to mature on May 13, 2026. As of June 30, 2021, the Company had $116.0 million borrowing capacity under the Credit Agreement as $4.0 million in letters of commercial and standby letters of credit were outstanding and undrawn and $130 million in revolver borrowings were drawn and outstanding, which were primarily used for funding recent acquisitions.

In addition, the Company maintains an uncommitted and unsecured private shelf agreement with NYL Investors LLC, an affiliate of New York Life, and each of the undersigned holders of Notes (the "New York Life Agreement") with a remaining borrowing capacity of $125.0 million as of June 30, 2021. The Company also has other long-term debt borrowings outstanding as of June 30, 2021. See Note 9 - Debt for additional specifics regarding these obligations and future maturities.

At June 30, 2021, the Company had $65.1 million of cash and cash equivalents held in foreign jurisdictions, which is intended to be used to fund foreign operations. There is currently no need or intent to repatriate these funds in order to meet domestic funding obligations or scheduled cash distributions.

Cash Flows

The following table summarizes significant sources and uses of cash and cash equivalents for the first six months of 2021 and 2020.

(in millions)	2021		2020
Net cash flows from operating activities	$	35.5	$	47.0
Net cash flows from investing activities	(193.7)		(15.2)
Net cash flows from financing activities	110.7		(48.6)
Impact of exchange rates on cash and cash equivalents	(1.7)		(4.5)
Change in cash and cash equivalents	$	(49.2)	$	(21.3)

Cash Flows from Operating Activities

2021 vs. 2020

Net cash provided by operating activities was $35.5 million for the six months ended June 30, 2021 compared to $47.0 million provided by operating activities for the six months ended June 30, 2020. The decrease in cash provided by operating activities was primarily due to increased working capital requirements in support of higher revenues.

Cash Flows from Investing Activities

2021 vs. 2020

Net cash used in investing activities was $193.7 million for the six months ended June 30, 2021 compared to $15.2 million used in investing activities for the six months ended June 30, 2020. The increase in cash used in investing activities was attributable to increased acquisition activity in 2021.

Cash Flows from Financing Activities

2021 vs. 2020

Net cash provided by financing activities was $110.7 million for the six months ended June 30, 2021 compared to $48.6 million used in financing activities for the six months ended June 30, 2020. The increase in cash provided by financing activities was attributable to increased debt proceeds and issuance of common stock, primarily through stock option exercises, and decreased common stock repurchases.

FACTORS THAT MAY AFFECT FUTURE RESULTS

This quarterly report on Form 10-Q contains certain forward-looking information, such as statements about the Company’s financial goals, acquisition strategies, financial expectations including anticipated revenue or expense levels, business prospects, market positioning, product development, manufacturing re-alignment, capital expenditures, tax benefits and expenses, and the effect of contingencies or changes in accounting policies. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” “plan,” “goal,” “target,” “strategy,” and similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” While the Company believes that the assumptions underlying such forward-looking statements are reasonable based on present conditions, forward-looking statements made by the Company involve risks and uncertainties and are not guarantees of future performance. Actual results may differ materially from those forward-looking statements as a result of various factors, including regional or general economic and currency conditions, various conditions specific to the Company’s business and industry, new housing starts, weather conditions, epidemics and pandemics, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs and availability, technology factors, integration of acquisitions, litigation, government and regulatory actions, the Company’s accounting policies, and other risks, all as described in the Company's Securities and Exchange Commission filings, included in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and in Exhibit 99.1 thereto. Any forward-looking statements included in this Form 10-Q are based upon information presently available. The Company does not assume any obligation to update any forward-looking information, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in the Company's exposure to market risk during the second quarter ended June 30, 2021. For additional information, refer to Part II, Item 7A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report (the "Evaluation Date"), the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rules 13a-15. Based upon that evaluation, the Company's Chief Executive Officer and the Company's Chief Financial Officer concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures were effective.

There have been no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15 under the Exchange Act during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect the Company's internal control over financial reporting.

ITEM 1. LEGAL PROCEEDINGS

The Company is defending various claims and legal actions which have arisen in the ordinary course of business. For a description of the Company's material legal proceedings, refer to Note 14 - Commitments and Contingencies, in the Notes to Consolidated Financial Statements included in Part I, Item 1, "Notes to Condensed Consolidated Financial Statements (Unaudited)," of this Quarterly Report on Form 10-Q, which is incorporated into this Item 1 by reference. In the opinion of management, based on current knowledge of the facts and after discussion with counsel, other claims and legal actions can be defended or resolved without a material effect on the Company’s financial position, results of operations, and net cash flows.

ITEM 1A. RISK FACTORS

There have been no material changes to the Company's risk factors as set forth in the annual report on Form 10-K for the fiscal year ended December 31, 2020. Additional risks and uncertainties, not presently known to the Company or currently deemed immaterial, could negatively impact the Company’s results of operations or financial condition in the future.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In April 2007, the Company's Board of Directors approved a plan to increase the number of shares remaining for repurchase from 628,692 to 2,300,000 shares. There is no expiration date for this plan. On August 3, 2015, the Company's Board of Directors approved a plan to increase the number of shares remaining for repurchase by an additional 3,000,000 shares. The authorization was in addition to the 535,107 shares that remained available for repurchase as of July 31, 2015. The Company repurchased 78,946 shares for approximately $6.2 million under the plan during the second quarter of 2021. The maximum number of shares that may still be purchased under this plan as of June 30, 2021 is 840,442.

Period	Total Number of Shares Repurchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plan	Maximum Number of Shares that may yet to be Repurchased
April 1 - April 30	—	—	—	919,388
May 1 - May 31	—	—	—	919,388
June 1 - June 30	78,946	78.53	78,946	840,442
Total	78,946	78.53	78,946	840,442

ITEM 5. OTHER INFORMATION

On July 30, 2021, the Company entered into two separate amended and restated shelf agreements. For the details relating to these agreements, refer to Note 16 - Subsequent Event, in the Notes to Consolidated Financial Statements included in Part I, Item 1, "Notes to Condensed Consolidated Financial Statements (Unaudited)," of this Quarterly Report on Form 10-Q, which is incorporated into this Item 5 by reference.

The Company is including this disclosure in this Form 10-Q rather than filing a Form 8-K under Items 1.01 and 2.03.

ITEM 6. EXHIBITS

| Number | Description | | --- | --- || 3.1 | Amended and Restated Articles of Incorporation of Franklin Electric Co., Inc. (incorporated by reference to Exhibit 3.1 of the Company's Form 8-K filed on May 7, 2019) | | --- | --- | | 3.2 | Amended and Restated Bylaws of Franklin Electric Co., Inc., as amended January 27, 2020 (incorporated by reference to Exhibit 3.1 of the Company's Form 8-K filed on January 30, 2020) | | 10.1 | Employment Security Agreement between the Company and Jeffery L. Taylor (filed herewith)* | | 10.2 | Form of Confidentiality and Non-Compete Agreement between the Company and Jeffery L. Taylor (incorporated by reference to Exhibit 10.15 of the Company’s Form 10-K for the fiscal year ended January 1, 2005)* | | 10.3 | Retirement Agreement and General Release between the Company and John J. Haines dated June 14, 2021 (filed herewith)* | | 10.4 | Fourth Amended and Restated Credit Agreement, dated May 13, 2021, by and among Franklin Electric Co., Inc., Franklin Electric B.V., JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and the lenders identified therein (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K filed on May 13, 2021) | | 10.5 | Amended and Restated Note Purchase and Private Shelf Agreement by and among Franklin Electric Co., Inc., Franklin Electric B.V., NYL Investors LLC, and the purchasers named therein (filed herewith) | | 10.6 | Fourth Amended and Restated Note Purchase and Private Shelf Agreement by and among Franklin Electric Co., Inc., Franklin Electric B.V., Prudential Insurance Company of America and the purchasers named therein (filed herewith) | | 31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 32.1 | Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 32.2 | Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 101 | The following financial information from Franklin Electric Co., Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted in Inline eXtensible Business Reporting Language (Inline XBRL): (i) Condensed Consolidated Statements of Income for the second quarter and six months ended June 30, 2021 and 2020 (ii) Condensed Consolidated Statements of Comprehensive Income/(Loss) for the second quarter and six months ended June 30, 2021 and 2020, (iii) Condensed Consolidated Balance Sheets as of June 30, 2021, and December 31, 2020, (iv) Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2021 and 2020, and (v) Notes to Condensed Consolidated Financial Statements (filed herewith) | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

* Management Contract, Compensatory Plan or Arrangement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		FRANKLIN ELECTRIC CO., INC.
		Registrant
Date: August 3, 2021	By	/s/ Gregg C. Sengstack
		Gregg C. Sengstack, Chairman and Chief Executive Officer
		(Principal Executive Officer)
Date: August 3, 2021	By	/s/ Jeffery L. Taylor
		Jeffery L. Taylor, Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

Document

EXHIBIT 10.1

EMPLOYMENT SECURITY AGREEMENT

This Employment Security Agreement (“Agreement”), is entered into as of the 14th day of June, 2021 by and between Franklin Electric Co., Inc., an Indiana corporation (“Franklin”), and Jeff Taylor (“Executive”).

WITNESSETH:

WHEREAS, Executive is currently employed by Franklin as Vice President and Chief Financial Officer;

WHEREAS, Franklin desires to provide certain security to Executive in connection with Executive’s employment with Franklin; and

WHEREAS, Executive and Franklin desire to enter into this Agreement pertaining to the terms of the security Franklin is providing to Executive with respect to his employment.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1. Definitions. For purposes of this Agreement:

(a) “Affiliate” has the meaning set forth in Rule 12b-2 under the Securities Exchange Act of 1934.

(b) “Base Salary” means Executive’s annual base salary at the rate in effect on the date of a Change in Control, or if greater, the rate in effect immediately prior to Executive’s termination of employment with Franklin.

(i) any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity (other than Franklin or a trustee or other fiduciary holding securities under an employee benefit plan of Franklin), or any syndicate or group deemed to be a person under Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of Franklin representing 20% or more of the combined voting power of Franklin’s then outstanding securities entitled to vote generally in the election of directors;

(ii) Franklin is party to a merger, consolidation, reorganization or other similar transaction with another corporation or other legal person unless, following such transaction, more than 50% of the combined voting power of the outstanding securities of the surviving, resulting or acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such transaction, in substantially the same proportions as their ownership, immediately prior to such transaction, of Franklin’s outstanding securities entitled to vote generally in the election of directors;

(iii) The stockholders of Franklin approve a plan of complete liquidation or dissolution of Franklin or Franklin sells all or substantially all of its business and/or assets to another corporation or other legal person unless, following such sale, more than 50% of the combined voting power of the outstanding securities of the acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such sale, in substantially the same proportions as their ownership, immediately prior to such sale, of Franklin’s outstanding securities entitled to vote generally in the election of directors; or

(iv) during any period of two consecutive years or less, individuals who at the beginning of such period constituted the Board of Directors of Franklin (and any new Directors, whose appointment or election by the Board of Directors or nomination for election by Franklin’s stockholders was approved by a vote of at

least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose appointment, election or nomination for election was so approved) cease for any reason to constitute a majority of the Board of Directors.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur by virtue of any transaction in which Executive is a participant in a group effecting an acquisition of Franklin if Executive holds an equity interest in the entity acquiring Franklin at the time of such acquisition.

(d) “Good Cause” means:

(i) Executive’s intentional and material misappropriation of, or damage to, the property or business of Franklin;

(ii) Executive’s conviction of a criminal violation involving fraud or dishonesty or of a felony that causes material harm or injury (whether financial or otherwise) to Franklin; or

(iii) Executive’s willful and continuous failure to perform his obligations under the Agreement, provided that Franklin shall first give written notice to Executive describing such failure and, as long as it is capable of being cured and does not involve acts of material dishonesty directed against Franklin, Executive does not substantially cure or correct such failure within 30 days thereafter, or if such failure can not reasonably be cured within such period, cure is not commenced within such period and diligently pursued and fully cured within 60 days of Franklin’s original notice to Executive.

Notwithstanding anything herein to the contrary, in the event Franklin terminates the employment of Executive for Good Cause hereunder, Franklin shall give Executive at least 30 days prior written notice specifying in detail the reason or reasons for Executive’s termination.

(e) “Good Reason” means:

(i) a material reduction in Executive’s salary or retirement benefits or a material reduction in Executive’s compensation and benefits in the aggregate, excluding, in the case of incentive benefits that are based upon the performance of Executive or Franklin, reductions in benefits resulting from diminished performance by Executive or Franklin;

(ii) any purchaser (or affiliate thereof) who purchases substantially all of the assets of Franklin shall decline to assume all of Franklin’s obligations under this Agreement; or

(iii) the relocation of the Executive’s principal place of employment by more than 50 miles.

(f) “Severance Period” means the period beginning on the date Executive’s employment with Franklin terminates under circumstances described in Section 2 and ending on the date 24 months thereafter.

(g) “Target Bonus” means the amount that would be payable to Executive under the Executive Officer Annual Incentive Cash Bonus Program or any successor plan thereto for the year in which Executive’s employment with Franklin terminates, assuming attainment of the target performance goals at 100% level and employment of Executive at the end of such year (such amount to be determined regardless of whether Executive would otherwise be eligible for a bonus under the terms of any such plan or the extent to which the performance goals are actually met).

2. Termination of Employment. If within two years after a Change in Control, (a) Franklin terminates Executive’s employment for any reason other than Good Cause, or (b) Executive terminates his employment with Franklin for Good Reason, Franklin shall make the payments and provide the benefits described in Section 3 below.

3. Benefits Upon Termination of Employment. Upon termination of Executive’s employment with Franklin under circumstances described in Section 2 above:

(a) Within 30 days following the date of such termination, Franklin shall pay Executive a lump sum cash payment equal to the sum of (i), (ii) and (iii) below:

(i) unpaid Base Salary earned by Executive through the date of termination (which shall include payment for all accrued but unused vacation pay);

(ii) two times Executive’s Base Salary; and

(iii) an amount equal to the sum of (A) a prorata portion of Executive’s

Target Bonus (based on the date on which such termination of employment occurs), and (B) two times Executive’s Target Bonus.

(b) Franklin shall pay Executive a lump sum payment (calculated based on his age as of his termination of employment) within 30 days following his termination of employment of an amount equal to the increase in benefits under all tax-qualified and supplemental retirement plans maintained by Franklin in which Executive participates at termination of employment that results from crediting Executive with an additional 24 months of service for all purposes (including determining service and age for early retirement factors, if applicable) under such plans, and deeming Executive to be an employee of Franklin during the Severance Period. The amounts attributable to additional benefits under any such plan shall be based on Executive’s compensation level as of his termination of employment. The amounts attributable to additional benefits under any retirement plan that is a defined contribution plan shall include the additional Franklin contributions that would have been made or credited on Executive’s behalf had he authorized the same elective contributions he had elected for the year in which the termination of employment occurs, and shall include earnings that would have accrued under the applicable plan during the Severance Period (the earnings will be determined by multiplying the aggregate contributions to each such plan by the weighted average of the rate of return of the actual investment alternatives elected by Executive as of the beginning of the 12-month period ending on the employment termination date). Benefits accrued under such plans prior to Executive’s termination of employment shall be paid in accordance with the terms of such plans. Notwithstanding the foregoing, the payment under this Section 3(b) shall be offset by the lump sum value of the amounts of additional benefits paid or payable in accordance with the terms of such plans as a result of the occurrence of a Change in Control but not below zero.

(c) If Executive holds any stock-based awards as of the date of his termination of employment, (i) all such awards that are stock options shall immediately become exercisable on such date and shall be exercisable for 12 months following such termination of employment, or if earlier, until the expiration of the term of the stock option; (ii) all restrictions on any awards of restricted stock or restricted stock units shall terminate or lapse; and (iii) all performance goals applicable to any performance-based awards shall be deemed satisfied at the target performance level, and in each case settlement of such awards shall be made to Executive within 30 days of Executive’s termination. To the extent any of the foregoing is not permissible under the terms of any plan pursuant to which the awards were granted, Franklin shall pay to Executive, in a lump sum within 30 days after termination of Executive’s employment, an amount as follows: (A) to the extent the acceleration of the exercise of such stock options is not permissible, an amount equal to the excess, if any, of the aggregate fair market value of the stock subject to such options, determined on the date of Executive’s termination of employment, over the aggregate exercise price of such stock options; (B) to the extent the termination or lapse of restrictions on restricted stock or restricted stock units is not permissible, an amount equal to the aggregate fair market value of the stock subject to the restrictions (determined without regard to such restrictions); and (C) to the extent performance awards are limited, an amount equal to the aggregate fair market value of the additional shares that were not awarded. Executive shall surrender all outstanding awards for which payment pursuant to the preceding sentence is made.

(d) During the Severance Period, Executive and his spouse and eligible dependents shall continue to be covered by all employee benefit plans of Franklin providing health, prescription drug, dental, vision, disability and life insurance in which he or his spouse or eligible dependents were participating immediately prior to the date of his termination of employment, as if he continued to be an active employee of Franklin, and Franklin shall continue to pay the costs of such coverage under such plans on the same basis as is applicable to active employees covered thereunder; provided that, if participation in any one or more of such plans is not possible under the terms thereof, Franklin shall provide substantially identical benefits. The date of Executive’s termination of employment shall be considered a “qualifying event” as such term is defined in Title I, Part 6 of the Employee Retirement Income Security Act of 1974 (“COBRA”), and any continued coverage by Executive, his spouse or eligible dependents under Franklin’s group health plan after Executive’s termination of employment shall be considered COBRA coverage.

(e) During the Severance Period, Executive will receive 12 months of executive outplacement services (not to exceed $50,000) with a professional outplacement firm selected by Franklin.

(f) If at the time of Executive’s termination of employment for reasons other than death he is a “Key Employee” as determined in accordance with the procedures set forth in Treas. Reg. §1.409A-1(i), any amounts payable to Executive pursuant to this Agreement that are subject to Section 409A of the Internal Revenue Code shall not be paid or commence to be paid until six months following Executive’s termination of employment, or if earlier, Executive’s subsequent death, with the first payment to include the payments that otherwise would have been made during such period and including interest accruing thereon from the first day of the month following the date of such termination of employment until the date of payment, based on the applicable interest rate as defined in Section 417(e)(3) of the Internal Revenue Code. Each payment made pursuant to Section 3 shall be considered a separate payment for purposes of Section 409A.

4. Release of Claims. Payment by Franklin of the termination benefits provided in Section 3 hereof shall be conditioned on Executive’s execution, and nonrevocation, of a release of claims. Payment of such termination benefits shall be delayed until the expiration of the revocation period applicable to the executed release of claims, provided that if Executive does not execute the release of claims within 60 days of the date of termination of employment, the termination benefits described in Section shall be forfeited and Executive shall be entitled to receive only the benefits to which he is otherwise entitled under applicable law.

5. Death. If Executive dies during the Severance Period, all amounts payable hereunder to Executive, to the extent not paid, shall be paid, within 30 days of the date of Executive’s death, to his surviving spouse or his designated beneficiary, or if none, then to his estate. Executive’s surviving spouse and eligible dependents shall continue to be covered under plans described in Section 3(d) during the remainder of the Severance Period. On the death of the surviving spouse and eligible dependents, no further coverage under such plans shall be provided (other than any coverage required pursuant to COBRA).

6. Excise Tax.

(a) If in connection with the Change in Control or other event Executive would be or is subject to an excise tax under Section 4999 of the Internal Revenue Code (an “Excise Tax”) with respect to any cash, benefits or other property received, or any acceleration of vesting of any benefit or award (the “Change in Control Benefits”), Executive may elect to have the Change in Control Benefits otherwise payable under this Agreement reduced to the largest amount payable without resulting in the imposition of such Excise Tax. Within 15 days after the occurrence of the event that triggers the Excise Tax, a nationally recognized accounting firm selected by Franklin shall make a determination as to whether any Excise Tax would be reported with respect to the Change in Control Benefits and, if so, the amount of the Excise Tax, the total net after-tax amount of the Change in Control Benefits (after taking into account federal, state and local income and employment taxes and the Excise Tax) and the amount of reduction to the Change in Control Benefits necessary to avoid such Excise Tax. Any reduction to the Change in Control Benefits shall first be made from any cash benefits payable pursuant to this Agreement, if any, and thereafter, as determined by Executive, and Franklin shall provide Executive with such information as is necessary to make such determination. Franklin shall be responsible for all fees and expenses connected with the determinations by the accounting firm pursuant to this paragraph 6.

(b) Executive agrees to notify Franklin in the event of any audit or other proceeding by the IRS or any taxing authority in which the IRS or other taxing authority asserts that any Excise Tax should be assessed against Executive and to cooperate with Franklin in contesting any such proposed assessment with respect to such Excise Tax (a “Proposed Assessment”). Executive agrees not to settle any Proposed Assessment without the consent of Franklin. If Franklin does not consent to allow Executive to settle the Proposed Assessment, within 30 days following such demand therefor, Franklin shall indemnify and hold harmless Executive with respect to any additional taxes, interest and/or penalties that Executive is required to pay by reason of the delay in finally resolving Executive’s tax liability (such indemnification to be made as soon as practicable, but in no event later than the end of the calendar year following the calendar year in which Executive makes such remittance).

7. Indemnification. Franklin shall indemnify, protect, defend and hold harmless Executive from and against all liabilities, costs and expenses (including but not limited to attorneys’ fees) incurred as a result of Executive’s employment with Franklin to the fullest extent permitted by the Indiana Business Corporation Law.

8. Litigation Expenses. Franklin shall reimburse Executive all out-of-pocket expenses, including attorneys’ fees, incurred by Executive in connection with any enforcement, claim or legal action or proceeding involving this Agreement, whether brought by Executive or by or on behalf of Franklin or by another party. Such reimbursement shall be made within 30 days of Executive’s submission of an invoice following resolution of the claim. Franklin shall pay prejudgment interest on any

money judgment obtained by Executive, calculated at the published prime interest rate charged by Franklin’s principal banking connection from the date that payment(s) to him should have been made under this Agreement.

9. Post-Termination Payment Obligations. Subject to Section 4, Franklin's obligation to pay Executive the compensation and to make the other arrangements provided herein to be paid and made after termination of Executive's employment with Franklin shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right that Franklin may have against him or anyone else. All amounts so payable by Franklin shall be paid without notice or demand. Each and every such payment made by Franklin shall be final and Franklin will not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason whatsoever.

10. Disclosure Of Confidential Information. Without the consent of Franklin, Executive shall not at any time divulge, furnish or make accessible to anyone (other than in the regular course of business of Franklin) any knowledge or information with respect to confidential or secret processes, inventions, formulae, machinery, plan, devices or materials of Franklin or with respect to any confidential or secret engineering development or research work of Franklin or with respect to any other confidential or secret aspect of the business of Franklin. Executive recognizes that irreparable injury will result to Franklin and its business and properties, in the event of any breach by Executive of any of the provisions of this Section 10. In the event of any breach of any of the commitments of Executive pursuant to this Section 10, Franklin shall be entitled, in addition to any other remedies and damages available, to injunctive relief to restrain the violation of such commitments by Executive or by any person or persons acting for or with Executive in any capacity whatsoever.

11. Solicitation Of Employees. During Executive’s employment with Franklin and for a period of 18 months after termination of employment, Executive shall not (a) directly or indirectly, employ or retain or solicit for employment or arrange to have any other person, firm or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee of Franklin or (b) encourage or solicit any such employee to leave the service of Franklin. Executive also acknowledges and agrees that he shall comply with the terms of the Confidentiality and Non-Compete Agreement in effect between him and Franklin. Executive and Franklin agree that of the amount paid to Executive pursuant to Section 3 of this Agreement, a portion equal to one times Executive’s Base Salary and one times the Target Bonus paid or payable to Executive pursuant to subparagraph 3(c) shall serve as adequate consideration for the restrictive covenants set forth in this Section 11.

12. Executive Assignment. No interest of Executive or his spouse or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Executive or his spouse or other beneficiary, by operation of law or otherwise, other than pursuant to the terms of a qualified domestic relations order to which Executive is a party.

13. Reimbursements or In-Kind Benefits. Reimbursements or in-kind benefits provided under this Agreement that are subject to Section 409A of the Internal Revenue Code of 1986, as amended, are subject to the following restrictions: (a) the amount of expenses eligible for reimbursements, or in-kind benefits provided, to Executive during a calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits provided in any other calendar year, and (b) reimbursement of an eligible expense shall be made as soon as practicable, but in no event later than the last day of the calendar year following the calendar year in which the expense was incurred.

14. Waiver, Modification. No provisions of this Agreement may be waived, modified or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and Franklin. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time.

15. Applicable Law. This Agreement shall be construed and interpreted pursuant to the laws of Indiana.

16. Entire Agreement. This Agreement contains the entire Agreement between Franklin and Executive and supersedes any and all previous agreements, written or oral, between the parties relating to severance benefits, including any previous employment agreement or employment security agreement between Executive and Franklin. No amendment or modification of the terms of this Agreement shall be binding upon the parties hereto unless reduced to writing and signed by Franklin and Executive.

17. Severability. If any provision of this Agreement or the application thereof is held invalid, such invalidity shall not affect other provisions or applications of this Agreement that can be given effect without the invalid provision or application and, to such end, the provisions of this Agreement are declared to be severable.

18. No Employment Contract. Nothing contained in this Agreement shall be construed to be an employment contract between Executive and Franklin. Executive is employed at will and Franklin may terminate his employment at any time, with or without cause.

19. Employment with an Affiliate. If Executive is employed by Franklin and an Affiliate, or solely by an Affiliate, on the date of termination of employment of Executive under circumstances described in Section 2, then (a) employment or termination of employment as used in this Agreement shall mean employment or termination of employment of Executive with Franklin and such Affiliate, or with such Affiliate, as applicable, and related references to Franklin shall also include Affiliate, as applicable, and (b) the obligations of Franklin hereunder shall be satisfied by Franklin and/or such Affiliate as Franklin, in its discretion, shall determine; provided that Franklin shall remain liable for such obligations to the extent not satisfied by such Affiliate.

20. Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives and successors. Any reference in this Agreement to Franklin shall be deemed a reference to any successor (whether direct or indirect, by purchase of stock or assets, merger or consolidation or otherwise) to all or substantially all of the business and/or assets of Franklin; provided that Executive’s employment by a successor shall not be deemed a termination of Executive’s employment with Franklin.

21. Withholding. Franklin may withhold from any payment that it is required to make under this Agreement amounts sufficient to satisfy applicable withholding requirements under any federal, state, or local law.

22. Headings. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

23. Notice. Notices given pursuant to this Agreement shall be in writing and shall be deemed given when received or, if mailed, two days after mailing by United States registered or certified mail, return receipt requested, postage prepaid and addressed as herein provided. Notice to Franklin shall be addressed to Secretary, Franklin Electric Co., Inc. at 9255 Coverdale Road, Fort Wayne, Indiana 46809. Notices to Executive shall be addressed to Executive at his last permanent address as shown on Franklin's records. Notwithstanding the foregoing, if either party shall designate a different address by notice to the other party given in the foregoing manner, then notices to such party shall be addressed as designated until the designation is revoked by further notice given in such manner.

24. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.

IN WITNESS WHEREOF, the parties have executed this Employment Security Agreement as of the day and year written above.

FRANKLIN ELECTRIC CO., INC.
/s/ Jonathan M. Grandon
Jonathan M. Grandon
General Counsel
EXECUTIVE
/s/ Jeffery Taylor
Jeffery Taylor

Document

EXHIBIT 10.3

June 9, 2021

John J. Haines

11129 Carnoustie Lane

Fort Wayne, IN 46814

Re: Separation Agreement and General Release

Dear John:

This letter when signed by you, will constitute the full agreement between you and Franklin Electric Co., Inc. and its subsidiaries, (collectively, “the Company”) on the terms of your retirement from employment (this “Agreement”).

1.As you have confirmed your planned retirement from your position of Vice President and Chief Financial Officer effective June 14, 2021, you will transition as of such date to the position of Senior Advisor to the CEO through December 31, 2021. Your annual salary will continue to be $480,000 per year, paid in accordance with normal payroll practices.

2.Acceptance of this agreement signifies the termination of the prior Employment Agreement between you and the Company, dated April 14, 2008, amended and restated February 22, 2013.

3.Your employment with the Company will be considered terminated effective December 31, 2021 (“Separation Date”).

4.In consideration of your acceptance of this Agreement, you will be entitled to the following:

(a)You will be eligible for participation in the Franklin Electric Manager Bonus plan for the 2021 plan year, measured against the corporate performance metrics (EPS and Working Capital), without any discretionary reduction or enhancement. The bonus for the 2021 plan year will be paid in February or March of 2022 in the ordinary course.

(b)Your Separation Date shall be considered a “qualifying event” for purposes of triggering your right to continue your group health and dental insurance pursuant to federal law (commonly referred to as “COBRA”). You will receive, under separate cover, information regarding your rights to such continuation coverage.

(c)As additional consideration for your acceptance of this Agreement, you will be provided with access to RightChoice, an outplacement program, to assist you in exploring Board of Director opportunities.

(d)Except as stated above, all other benefits, bonuses and compensation end on the Separation Date. However, this Agreement does not affect any existing vested rights that you may have in any Company bonus, deferred compensation, pension, retirement and/or 401(k) plans. This includes your vested rights under the Company’s long-term equity programs in which you are a participant, including the Company’s Performance Share Unit program, Restricted Stock Unit program and Stock Option program, each of which shall continue to be governed by the applicable plans and grant agreements. You will receive, under separate cover, information regarding your rights and options, if any, under any said plans.

5.In consideration of the payments and benefits provided to you above, to which you are not otherwise entitled and the sufficiency of which you acknowledge, you do, on behalf of yourself and your heirs, administrators, executors and assigns, hereby fully, finally and unconditionally release and forever discharge the Company and its parent, subsidiary and affiliated entities and all their former and present officers, directors, shareholders, employees, trustees, fiduciaries, administrators, attorneys, consultants, agents, and other representatives, and all their respective predecessors, successors and assigns (collectively “Released Parties”), in their corporate, personal and representative capacities, from any and all obligations, rights, claims, damages, costs, attorneys’ fees, suits and demands, of any and every kind, nature and character, known or unknown, liquidated or unliquidated, absolute or contingent, in law and in equity, enforceable under any local, state or federal common law, constitution, statute or ordinance, which arise from or relate to your past employment with the Company or the termination thereof, or

any past actions or omissions of the Company or any of the Released Parties, including without limitation, rights and claims arising under the Family and Medical Leave Act, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, as amended, the Age Discrimination in Employment Act of 1967, as amended, or, if applicable, any rights and claims arising under the laws and regulations administered by California’s Department of Fair Employment and Housing. Subject to applicable law, you also warrant that you have not filed or sued and will not sue or file any actions against the Company or any of the Released Parties with respect to claims covered by this release.

You recognize and understand that the foregoing is a general release by which you are giving up the opportunity to obtain compensation, damages, and other forms of relief for yourself. This Agreement, however, is not intended to and does not interfere with the right of any governmental agency to enforce laws or to seek relief that may benefit the general public, or your right to assist with or participate in that process. This release does not prevent you from filing a complaint with the EEOC, NLRB, or any other federal state or local agency charged with the enforcement of any employment laws. By signing this Agreement, however, you waive any right to personally recover against the Released Parties, and you give up the opportunity to obtain compensation, damages or other forms of relief for you other than that provided in this Agreement.

Further, notwithstanding anything herein to the contrary, nothing in this Separation Agreement shall (i) prohibit you from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation, or (ii) require notification or prior approval by the Company of any such report; provided that, you are not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege.

6.Non-Competition and Non-Solicitation

(a)The Company. The Company is a manufacturer and seller of components and systems for the movement of water and automotive fuels in residential, commercial, agricultural, industrial, municipal, and fueling applications.

(b)Your Job Duties. You agree that your job duties during your tenure with the Company included the following: responsible for leading the Company’s finance function and providing strategic leadership for Franklin Electric by working with the executive management team and board of directors to establish long-range goals, strategies, plans, and policies.

(c)Your Obligations. For twelve months following the Effective Date:

(i)Non-Competition. You agree that you will not perform the same or substantially the same job duties (including those related to product management and development, marketing, strategies, and sales) on behalf of or for the benefit of a Direct Competitor of the Company. For purposes of this Agreement, a “Direct Competitor” is defined as, and expressly limited to any of the following, including their affiliates and assigns: Lorentz, Pentair, Grundfos, Xylem, Cornell, Preferred Pump, Zoeller, Vontier, Dover and Liberty. You agree that your employment with a Direct Competitor in a similar role would put the Company at a competitive disadvantage and that the restrictions in this paragraph are necessary to prevent unfair competition and the disclosure of the Company’s trade secrets and confidential information.

(ii)Non-Solicitation. You agree that you will not directly or indirectly, individually or on behalf of any person or entity, solicit or induce, or assist in any manner in the solicitation or inducement of: (i) employees of the Company, other than those in clerical or secretarial positions, to leave their employment with the Company (this restriction is limited to employees with whom you have had contact for the purpose of performing your job duties and responsibilities); (ii) customers of the Company to purchase from another person or entity products and services that compete with those offered and provided by the Company (“Competitive Products”) (this restriction is limited to customers with whom you have contact through performance of your job duties and responsibilities or through otherwise

performing services on behalf of the Company); or (iii) suppliers of the Company to supply another person or entity providing Competitive Products to the exclusion or detriment of the Company (this restriction is limited to suppliers with whom you have had contact through performance of your job duties and responsibilities or through otherwise performing services on behalf of the Company.)

(d)Reasonableness. You hereby acknowledge and agree that: (i) the restrictions provided in this section are reasonable in time and scope in light of the necessity for the protection of the business and good will of the Company and the consideration provided to you under this Agreement; and (ii) your ability to work and earn a living will not be unreasonably restrained by the application of these restrictions.

(e)Injunctive Relief. You also recognize and agree that should you fail to comply with the restrictions set forth above regarding Non-Competition and/or Non-Solicitation, which restrictions you recognize are vital to the success of the Company’s business, the Company would suffer substantial damage for which there is no adequate remedy at law due to the impossibility of ascertaining exact money damages. Therefore, you agree that in the event of the breach or threatened breach by you of any of the terms and conditions of this Agreement, the Company shall be entitled, in addition to any other rights or remedies available to it, to institute proceedings in a federal or state court and to secure immediate temporary, preliminary and permanent injunctive relief. In the event the enforceability of any of the covenants in this section are challenged in court, the applicable time period as to such covenant shall be deemed tolled upon the filing of the lawsuit challenging the enforceability of this Agreement until the dispute is finally resolved and all periods of appeal have expired.

7.You understand and agree that this Agreement contemplates and memorializes an unequivocal, complete and final dissolution of your employment relationship with the Company, and that, therefore, you have no right to be reinstated to employment with or rehired by the Company, and that in the future, the Company and its affiliated and related entities and their successors and assigns shall have no obligation to consider you for employment.

8.You agree to return to the Company all of the Company’s property, including, without limit, any electronic or paper documents and records and copies thereof that you received or acquired during your employment regarding the Company’s practices, procedures, trade secrets, customer lists, or product marketing, and that you will not use the same for your own purpose. Unless required or otherwise permitted by law, you further agree that while you are considering this Agreement and thereafter, you will not disclose to any person or entity or use for your own benefit any information regarding the following:

(a)Any secret or confidential information obtained or learned by you in the course of your employment with the Company with regard to the operational, financial, business, strategies, planning, or other affairs of the Company or its subsidiaries, divisions, or parent companies including, without limitation, proprietary trade “know how” and secrets, financial information and models, customer lists, business, marketing, sales and acquisition plans, identity and qualifications of Company’s employees, sources of supply, pricing policies, proprietary operational methods, product specifications or technical processes; and

(b)The terms of this Agreement or the amount of supplement unemployment pay being paid pursuant to this Agreement, except that you may disclose this information to your spouse and your attorney, accountant or other professional advisor to whom you must make the disclosure in order for them to render professional services to you, provided that you first advise them of this confidentiality provision and they also agree to maintain the confidentiality of the Severance Pay and other terms of this Agreement.

9.Subject to applicable law, in the event that you breach any of your obligations under this Agreement, the Company is entitled to stop your supplemental unemployment payments and recover the supplemental unemployment already paid you and to obtain all other relief provided by law or equity.

10.It is agreed that neither you nor the Company, or any of its officers, directors or employees, make any admission of any failing or wrongdoing or violation of any local, state or federal law by entering into this Agreement, and that the parties have entered into this Agreement simply to resolve your employment relationship in an amicable manner. While considering this Agreement and at all times thereafter, you agree to act in a professional manner and not make any disparaging or negative statements regarding the Company, or its affiliated companies, and

their officers, directors and employees, or to otherwise act in any manner that would damage the business reputation of the same.

11.You acknowledge and agree that this Agreement sets forth the entire understanding between the parties concerning the matters discussed herein, that no promise or inducement has been offered to you to enter into this Agreement except as expressly set forth herein, and that the provisions of this Agreement are severable such that if any part of the Agreement is found to be unenforceable, the other parts shall remain fully valid and enforceable.

12.This Agreement shall apply to, and inure to the benefit of, the predecessor, successors, and assigns of the Company and each past, present, or future employee, agent, representative, officer, or director of the Company and any division, subsidiary, parent, or affiliated entity.

13.This Agreement shall be interpreted, enforced, and governed under the law of Indiana.

14.The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach.

15.Because you have been given the opportunity to thoroughly review this Agreement, the normal rule that ambiguity should be construed against the drafting party shall not be employed in the interpretation of this Agreement

16.Unless specifically voided herein, any agreement that you have previously entered into with the Company or its affiliated or related entities that by its terms, extends past your Separation Date, remains in full force and effect.

17.You are hereby advised in writing to consult an attorney prior to executing this Agreement. You have twenty-one (21) days from your receipt of this letter to accept the terms of this Agreement. You may accept and execute this Agreement within those 21 days.

If you accept the terms of this Agreement, please date and sign this letter and return it to me. Once you execute this Agreement, you have seven (7) days in which to revoke in writing your acceptance by providing the same to me, and such revocation will render this Agreement null and void. If you do not revoke your acceptance in writing and provide it to me by midnight on the seventh day, this Agreement shall be effective the day after the seven-day revocation period has elapsed.

Sincerely,

Franklin Electric

/s/ Gregg Sengstack

Gregg Sengstack

Chairman of the Board and CEO

By signing this letter, I represent and warrant that I am aware of my rights, especially those arising under the Older Workers Benefit Protection Act and the Age Discrimination in Employment Act, and that I have not been the victim of age or other discrimination or wrongful treatment in my employment and the termination thereof. I further acknowledge that the Company advised me in writing to consult with an attorney, that I had at least twenty-one (21) days to consider this Agreement, that I received all information necessary to make an informed decision and I had the opportunity to request and received additional information, that I have read, understand, and agree to the terms of this Agreement, that I have seven (7) days in which to revoke my acceptance of this Agreement, and that I am signing this Agreement voluntarily with full knowledge and understanding of its contents.

Dated:	June 14, 2021	Name:	/s/ John J. Haines
	(the "Effective Date")		John J. Haines

Document

EXHIBIT 10.5

FRANKLIN ELECTRIC CO., INC.

______________

AMENDED AND RESTATED NOTE PURCHASE AND PRIVATE SHELF AGREEMENT

______________

$200,000,000 Master Note Agreement

$75,000,000 4.04% Senior Note, Series B, Due September 26, 2025

Dated July 30, 2021

Table of Contents

Section Heading Page

Section 1. Background; Authorization of Notes........................................................................ 1

Section 1.1 Background....................................................................................................... 1

Section 1.2 Amendment and Restatement of Existing Master Note Agreement................. 1

Section 1.3 Authorization of Shelf Notes............................................................................ 2

Section 1.4 Interest Rate on Floating Rate Notes................................................................ 3

Section 2. Note Facility............................................................................................................. 3

Section 2.1 [Reserved]......................................................................................................... 3

Section 2.2 Facility.............................................................................................................. 3

Section 2.3 Issuance Period................................................................................................. 3

Section 2.4 Periodic Spread Information............................................................................. 4

Section 2.5 Request for Purchase........................................................................................ 4

Section 2.6 Spread Quotes................................................................................................... 5

Section 2.7 Acceptance........................................................................................................ 5

Section 2.8 Market Disruption............................................................................................. 6

Section 3. Closings.................................................................................................................... 6

Section 3.1 Facility Closings............................................................................................... 6

Section 3.2 Issuance Fee...................................................................................................... 7

Section 4. Conditions to Closing............................................................................................... 7

Section 4.1 Representations and Warranties........................................................................ 7

Section 4.2 Performance; No Default.................................................................................. 7

Section 4.3 Certificates; Corporate Documents................................................................... 7

Section 4.4 Opinions of Counsel......................................................................................... 8

Section 4.5 Purchase Permitted By Applicable Law, Etc.................................................... 8

Section 4.6 Payment of Issuance Fee and Special Counsel Fees......................................... 9

Section 4.7 Private Placement Number................................................................................ 9

Section 4.8 Changes in Corporate Structure........................................................................ 9

Section 4.9 Funding Instructions......................................................................................... 9

Section 4.10 Other Conditions................................................................................................ 9

Section 4.11 Notice of Floating Interest Rate......................................................................... 9

Section 4.12 Proceedings........................................................................................................ 9

Section 4.13 Closing Documents............................................................................................ 9

Section 4A. Conditions to Restatement...................................................................................................... 10

Section 5. Representations and Warranties of the Company................................................... 10

Section 5.1 Organization.................................................................................................... 11

Section 5.2 Power and Authority........................................................................................ 11

Section 5.3 Financial Statements....................................................................................... 11

Section 5.4 Actions Pending.............................................................................................. 12

Section 5.5 Outstanding Debt............................................................................................ 12

Section 5.6 Title to Properties............................................................................................ 12

Section 5.7 Taxes............................................................................................................... 12

Section 5.8 Conflicting Agreements and Other Matters.................................................... 12

Section 5.9 Offering of Notes............................................................................................ 13

Section 5.10 Use of Proceeds............................................................................................... 13

Section 5.11 Compliance with ERISA................................................................................. 13

Section 5.12 Governmental Consent.................................................................................... 14

Section 5.13 Compliance with Laws.................................................................................... 14

Section 5.14 Hostile Tender Offer........................................................................................ 15

Section 5.15 Disclosure........................................................................................................ 15

Section 5.16 Investment Company Status; Holding Company Status.................................. 15

Section 5.17 Foreign Assets Control Regulations, Etc......................................................... 15

Section 6. Representations of the Purchasers.......................................................................... 17

Section 6.1 Purchase for Investment.................................................................................. 17

Section 6.2 Source of Funds.............................................................................................. 17

Section 7. Information as to Issuers........................................................................................ 19

Section 7.1 Financial Information.................................................................................… 19

Section 7.2 Compliance Certificate................................................................................... 20

Section 7.3 Notice of Default............................................................................................ 20

Section 8. Payment and Prepayment of the Notes.................................................................. 20

Section 8.1 Required Prepayments; Maturity.................................................................... 20

Section 8.2 Optional Prepayments..................................................................................... 20

Section 8.3 Allocation of Partial Prepayments.................................................................. 21

Section 8.4 Maturity; Surrender, Etc................................................................................. 21

Section 8.5 Purchase of Notes........................................................................................... 21

Section 8.6 Make-Whole Amount..................................................................................... 21

Section 8.7 Swap Breakage............................................................................................... 28

Section 8.8 Change in Control........................................................................................... 30

Section 8.9 Prepayment for Tax Reasons.......................................................................... 30

Section 9. Affirmative Covenants........................................................................................... 32

Section 9.1 Inspection of Property..................................................................................... 32

Section 9.2 Covenant to Secure Notes Equally.................................................................. 32

Section 9.3 Maintenance of Insurance............................................................................... 32

Section 9.4 Compliance with Laws................................................................................... 33

Section 9.5 Most Favored Lender Status........................................................................... 33

Section 9.6 Leverage Fee................................................................................................... 33

Section 9.7 Pari Passu Status............................................................................................. 34

Section 9.8 Subsidiary Guarantors..................................................................................... 34

Section 10. Negative Covenants............................................................................................... 35

Section 10.1 Lien Restrictions.............................................................................................. 35

Section 10.2 Debt Restriction............................................................................................... 36

Section 10.3 Loans, Advances and Investments................................................................... 37

Section 10.4 Disposition of Certain Assets.......................................................................... 38

Section 10.5 Sale of Stock and Debt of Subsidiaries........................................................... 38

Section 10.6 Merger and Consolidation............................................................................... 38

Section 10.7 Sale or Discount of Receivables...................................................................... 39

Section 10.8 Restricted Transactions.................................................................................... 39

Section 10.9 Interest Coverage Ratio................................................................................... 39

Section 10.10 Debt to EBITDA Ratio.................................................................................... 39

Section 10.11 Subsidiary Restrictions.................................................................................... 40

Section 10.12 Restricted Payments........................................................................................ 40

Section 10.13 Terrorism Sanctions Regulations..................................................................... 40

Section 10.14 Dutch Fiscal Unit............................................................................................. 40

Section 10.15 y....................................................................................................................... 40

Section 11. Events of Default................................................................................................... 40

Section 12. Remedies on Default, Etc...................................................................................... 43

Section 12.1 Acceleration.................................................................................................... 43

Section 12.2 Other Remedies............................................................................................... 43

Section 12.3 Rescission........................................................................................................ 44

Section 12.4 No Waivers or Election of Remedies, Expenses, Etc...................................... 44

Section 13. Registration; Exchange; Substitution of Notes...................................................... 44

Section 13.1 Registration of Notes....................................................................................... 44

Section 13.2 Transfer and Exchange of Notes...................................................................... 45

Section 13.3 Replacement of Notes...................................................................................... 45

Section 14. Payments on Notes................................................................................................. 45

Section 14.1 Place of Payment............................................................................................. 45

Section 14.2 Home Office Payment..................................................................................... 46

Section 15. Expenses, Etc......................................................................................................... 46

Section 15.1 Transaction Expenses...................................................................................... 46

Section 15.2 Survival............................................................................................................ 47

Section 16. Survival of Representations and Warranties; Entire Agreement............................ 47

Section 17. Amendment and Waiver......................................................................................... 47

Section 17.1 Requirements................................................................................................... 47

Section 17.2 Solicitation of Holders of Notes...................................................................... 47

Section 17.3 Binding Effect, etc........................................................................................... 48

Section 17.4 Notes Held by Issuers, etc............................................................................... 48

Section 18. Notices................................................................................................................... 48

Section 19. Reproduction of Documents.................................................................................. 49

Section 20. Confidential Information........................................................................................ 49

Section 21. Substitution of Purchaser....................................................................................... 50

Section 22. Miscellaneous......................................................................................................... 51

Section 22.1 Successors and Assigns................................................................................... 51

Section 22.2 Payments Due on Non-Business Days............................................................ 51

Section 22.3 Accounting Terms............................................................................................ 51

Section 22.4 Severability...................................................................................................... 52

Section 22.5 Construction, etc.............................................................................................. 52

Section 22.6 Counterparts; Electronic Signatures................................................................ 52

Section 22.7 Governing Law................................................................................................ 53

Section 22.8 Jurisdiction and Process; Waiver of Jury Trial................................................ 53

Section 22.9 Transaction References.................................................................................... 54

Section 22.10 Obligation to Make Payment in the Applicable Currency............................... 54

Section 22.11 Determinations Involving Different Currencies.............................................. 55

Section 22.12 Divisions.......................................................................................................... 55

Section 23. Company Guaranty................................................................................................ 55

Section 24. Tax Indemnification; FATCA Information............................................................. 57

SCHEDULE A — DEFINED TERMS

SCHEDULE B — PURCHASER SCHEDULE

SCHEDULE 5.8 — CONFLICTING AGREEMENTS AND OTHER MATTERS

SCHEDULE 10.1 — LIEN RESTRICTIONS

EXHIBIT A-1 — FORM OF SERIES B NOTE

EXHIBIT A-2 — FORM OF SHELF NOTE (FIXED RATE)

EXHIBIT A-3 — FORM OF SHELF NOTE (FLOATING RATE)

EXHIBIT B — FORM OF REQUEST FOR PURCHASE

EXHIBIT C — FORM OF CONFIRMATION OF ACCEPTANCE

EXHIBIT D — FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY

EXHIBIT E — FORM OF SUBSIDIARY GUARANTY

FRANKLIN ELECTRIC CO., INC.

9255 COVERDALE ROAD

FORT WAYNE, IN 46809

July 30, 2021

NYL Investors LLC

51 Madison Avenue, 2nd Floor

New York, New York 10010

Ladies and Gentlemen:

Franklin Electric Co., Inc., an Indiana corporation (the “Company”) and Franklin Electric B.V., a Netherlands private company with limited liability (the “Dutch Subsidiary Issuer”), agree with NYL Investors LLC, a Delaware limited liability company (“New York Life”), each Series B Purchaser (as defined herein) and each other New York Life Affiliate (as defined herein) which becomes bound by this Agreement as provided herein (together with the Series B Purchasers, each, a “Purchaser” and, collectively, the “Purchasers”) as follows. Certain capitalized and other terms used in this Agreement are defined in Schedule A; references to a “Schedule” or an “Exhibit” are to a Schedule or an Exhibit attached to this Agreement unless otherwise specified, and references to any time of day are to New York City local time unless otherwise specified.

Section 1. Background; Authorization of Notes.

Section 1.1 Background. The Company, New York Life and certain New York Life Affiliates as Purchasers of the Series B Notes (as defined below) (the “Original Purchasers”) are currently parties to that certain Note Purchase and Private Shelf Agreement, dated May 27, 2015 (as amended prior to the date hereof, the “Existing Master Note Agreement”), pursuant to which, inter alia, (a) the Company issued and sold to certain New York Life Affiliates, and such New York Life Affiliates purchased from the Company, the Company’s Series A senior floating rate promissory notes due May 27, 2025, in the original aggregate principal amount of $75,000,000, which promissory notes were subsequently repaid in full, and (b) the Company issued and sold to the Series B Purchasers, and the Series B Purchasers purchased from the Company, the Company’s 4.04% Series B Senior Notes due September 26, 2025, in the original aggregate principal amount of $75,000,000 (the “Series B Notes”).

Section 1.2 Amendment and Restatement of Existing Master Note Agreement.

(a) Effective upon the Restatement Date and subject to the satisfaction of the conditions precedent in Section 4, the parties hereto hereby agree that this Agreement amends, restates and replaces in its entirety the Existing Master Note Agreement which, as so amended and restated by this Agreement, continues in full force and effect without rescission or novation thereof. The parties hereto hereby acknowledge and agree that the amendments to the Existing Master Note Agreement set forth herein could have been effected through an agreement or instrument amending such agreement, and for convenience, the parties hereto have agreed to restate the terms and provisions of the Existing Master Note Agreement, as amended hereby, pursuant to this Agreement. Effective upon the Restatement Date, the Series B Notes shall continue to be outstanding under this Agreement.

(b) Upon this Agreement becoming effective, the Dutch Subsidiary Issuer hereby agrees that by execution and delivery of this Agreement, the Dutch Subsidiary Issuer shall become a party hereto as an Issuer and agrees to be bound by all of the terms and obligations hereof as if it has been an original party hereto.

Section 1.3 Authorization of Shelf Notes. Each Issuer may, from time to time and in accordance with the terms of this Agreement, authorize the issue of additional senior promissory notes (the “Shelf Notes”) in an aggregate outstanding principal amount not to exceed the Available Facility Amount at any time, each to be dated the date of its issue, bearing interest on the unpaid balance from the date of original issuance at the rate per annum and in the Available Currency as provided by the terms of this Agreement and (x) in the case of Fixed Rate Notes, to mature no more than 12 years after the date of original issuance and to have an average life of no more than 12 years after the date of original issuance and (y) in the case of Floating Rate Notes, to mature no more than 10 years after the date of original issuance and to have an average life of no more than 10 years after the date of original issuance. Each Shelf Note will also be subject to the other terms of that Shelf Note as described in the Confirmation of Acceptance for the Shelf Note delivered pursuant to Section 2.7. Each Shelf Note that is a Fixed Rate Note will be substantially in the form of the attached Exhibit A-2 and each Shelf Note that is a Floating Rate Note will be substantially in the form of the attached Exhibit A-3 and the term “Shelf Note” and “Shelf Notes” as used in this Agreement includes each Shelf Note delivered pursuant to any provision of this Agreement and each Shelf Note delivered in substitution or exchange for any Shelf Note pursuant to any such provision. The terms “Note” and “Notes” as used herein shall include all Series B Notes and all Shelf Notes. Notes that have (a) the same final maturity, (b) the same principal prepayment dates, (c) the same principal prepayment amounts (as a percentage of the original principal amount of each Note), (d) the same interest rate, (e) the same interest payment periods, (f) the same currency specification, and (g) the same date of issuance (which, in the case of a Note issued in exchange for another Note, is deemed for these purposes the date on which such Note’s ultimate predecessor Note was issued), are a “Series” of Notes.

Section 1.4 Interest Rate on Floating Rate Notes.

(a) Floating Rate Notes shall bear interest (computed on the basis of a 360-day year and the actual number of days elapsed) on the unpaid principal thereof from the date of issuance at a floating rate equal to the Adjusted LIBOR Rate for the Floating Rate Interest Period in effect from time to time, payable in arrears on each Floating Rate Interest Payment Date and, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any LIBOR Breakage Amount, Swap Breakage Amount and Prepayment Premium, at a rate equal to the Floating Rate Default Rate.

(b) The Adjusted LIBOR Rate shall be determined by the Company, and notice thereof shall be given to the holders of the applicable Floating Rate Notes, on the second Business Day preceding the first day of each Floating Rate Interest Period, together with a copy of the relevant screen

used for the determination of LIBOR, a calculation of the Adjusted LIBOR Rate for such Floating Rate Interest Period, the number of days in such Floating Rate Interest Period, the date on which interest for such Floating Rate Interest Period will be paid and the amount of interest to be paid to each holder of such Floating Rate Notes on such date. In the event that any holder does not concur with such determination by the Company, as evidenced by notice to the Company given by such holder within ten (10) Business Days after receipt by the holders of the notice delivered by the Company pursuant to the immediately preceding sentence, the determination of the Adjusted LIBOR Rate shall be made by Floating Rate Required Holders in accordance with the provisions of this Agreement, shall be conclusive and binding absent manifest error.

Section 2. Note Facility.

Section 2.1 [Reserved].

Section 2.2 Facility. New York Life is willing to consider from time to time, in its sole discretion and within limits that may be authorized for purchase by New York Life and New York Life Affiliates, the purchase of Shelf Notes pursuant to this Agreement. The willingness of New York Life to consider such purchase of Shelf Notes is the “Facility.” NOTWITHSTANDING THE WILLINGNESS OF NEW YORK LIFE TO CONSIDER PURCHASES OF SHELF NOTES BY NEW YORK LIFE OR NEW YORK LIFE AFFILIATES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER NEW YORK LIFE NOR ANY NEW YORK LIFE AFFILIATE WILL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY IS NOT TO BE CONSTRUED AS A COMMITMENT BY NEW YORK LIFE OR ANY NEW YORK LIFE AFFILIATE.

Section 2.3 Issuance Period. Shelf Notes may be issued and sold pursuant to this Agreement until the earlier of:

(a)July 30, 2024 (or if such date is not a Business Day, the Business Day next preceding that date);

(b)the thirtieth day after New York Life gives to the Company, or the Company gives to New York Life, written notice stating that it elects to terminate the issuance and sale of Shelf Notes pursuant to this Agreement (or if such thirtieth day is not a Business Day, the Business Day next preceding such thirtieth day);

(c)the Closing Date after which there is no Available Facility Amount;

(d)the termination of the Facility under Section 12.1 of this Agreement; and

(e)the acceleration of any Note under Section 12.1 of this Agreement.

The period during which Shelf Notes may be issued and sold pursuant to this Agreement is the “Issuance Period.”

Section 2.4 Periodic Spread Information. On any Business Day during the Issuance Period and when an Available Facility Amount exists, the Company may request by e-mail or telephone to New York Life, and New York Life may, but shall be under no obligation to, provide to the Company on that Business Day (if such request is received not later than 9:30 A.M.) or on the following Business Day (if such request is received after 9:30 A.M.) information by e-mail or telephone with respect to various

spreads at which New York Life Affiliates might be interested in purchasing Shelf Notes of different average lives and, in the case of Fixed Rate Notes only, different Available Currencies. The amount and content of information to be provided is in the sole discretion of New York Life, but it is the intent of New York Life to provide information that will be of use to the Company in determining whether to submit a Request for Purchase under Section 2.5. The delivery of the information requested is not an offer to purchase Shelf Notes, and neither New York Life nor any New York Life Affiliate is obligated to purchase Shelf Notes at the spreads specified. New York Life may suspend or terminate providing information pursuant to this Section 2.4 for any reason in its sole discretion, including its determination that the credit quality of the Company has declined since the date of this Agreement.

Section 2.5 Request for Purchase. The Company may, from time to time during the Issuance Period, make requests for purchases of Shelf Notes (each request is called a “Request for Purchase”). Each Request for Purchase will be made to New York Life by e-mail or overnight delivery service, and must:

(a)specify the aggregate principal amount of Shelf Notes covered by the Request for Purchase, in a Dollar Amount not less than $5,000,000 and not greater than the Available Facility Amount at the time the Request for Purchase is made (and, in the case of any Shelf Notes being requested as Floating Rate Notes, not greater than the Available Floating Rate Sublimit Amount at the time the Request for Purchase is made);

(b)specify whether the interest rate will be fixed or floating and, in the case of a floating interest rate, specify whether the length of the Floating Rate Interest Period is to be one, three or six months, and in the case of fixed interest rate, specify the currency (which shall be an Available Currency);

(c)specify the principal amounts, final maturities (which are no more than (x) 12 years from the date of issuance, in the case of Fixed Rate Notes and (y) 10 years from the date of issuance, in the case of Floating Rate Notes), average life (which is no more than (x) 12 years from the date of issuance, in the case of Fixed Rate Notes and (y) 10 years from the date of issuance, in the case of Floating Rate Notes) and principal prepayment dates (if any) of the Shelf Notes covered by the Request for Purchase;

(d)specify whether interest payments on such Shelf Notes are to be made monthly, quarterly or semi-annually in arrears;

(e)specify the use or uses of proceeds of such Shelf Notes;

(f)specify the proposed Closing Date for such Shelf Notes, which will be a Business Day during the Issuance Period not less than 10 days and not more than 20 days (or as otherwise agreed) after the making of that Request for Purchase;

(g)certify that the representations and warranties contained in Section 5 are true on and as of the date of such Request for Purchase and that there exists on that same date no Default or Event of Default; and

(h)be substantially in the form of the attached Exhibit B.

Each Request for Purchase must be in writing and will be deemed made when received by New York Life.

Section 2.6 Spread Quotes. Not later than five Business Days after New York Life receives a Request for Purchase pursuant to Section 2.5, New York Life may, but is under no obligation to, provide

to the Company by telephone or e-mail, in each case between 9:30 A.M. and 1:30 P.M. (or such later time as New York Life may elect) quotes for interest rate spreads for the several principal amounts, maturities, principal prepayment schedules, currencies, and interest payment periods (whether monthly, quarterly or semi-annually) of Shelf Notes specified in that Request for Purchase. Spreads quoted for Fixed Rate Notes shall be (a) in the case of Shelf Notes to be denominated in Dollars, spreads over U.S. Treasury securities closest to the maturities specified in the Request for Purchase or an interpolated maturity, and (b) in the case of Shelf Notes to be denominated in an Available Currency other than Dollars, spreads over the relevant government security with a maturity corresponding to the average life of such Shelf Notes or in the absence of a single such security, over the linearly interpolated yield to maturity on two such securities with maturities on either side of the average life of such Shelf Notes. Spreads quoted for Floating Rate Notes shall be spreads over LIBOR. Each quote will represent the interest rate spread per annum at which a New York Life Affiliate would be willing to purchase such Shelf Notes at 100% of the principal amount thereof.

Section 2.7 Acceptance. By 11 a.m. on the next Business Day after New York Life provides interest rate spread quotes pursuant to Section 2.6 or such shorter period as New York Life may specify to the Company (such period, the “Acceptance Window”), the Company may, subject to Section 2.8, elect to accept those quotes as to not less than $5,000,000 in aggregate principal Dollar Amount of the Shelf Notes specified in the related Request for Purchase. Each election must be made by a Responsible Officer of the Company, notifying New York Life by telephone or e-mail within the Acceptance Window that the Company elects to accept a spread quote, specifying the Shelf Notes (each such Shelf Note being an “Accepted Note”) as to which such acceptance (the “Acceptance”) relates. With respect to Accepted Notes that are Fixed Rate Note, by the close of business on the day of such Acceptance or as mutually agreed between such parties, the Company and New York Life shall agree on the interest rate for the Accepted Notes based on such spread quote. The day an interest rate is agreed with respect to Accepted Notes that are Fixed Rate Notes and the date the Company notifies New York Life of an Acceptance with respect to Floating Rate Notes is the “Acceptance Day” for such Accepted Notes. Any quotes as to which New York Life does not receive an Acceptance within the Acceptance Window or which do not result in an agreement as to an interest rate, with respect to a Fixed Rate Note, will expire, and no purchase or sale of Shelf Notes will be made based on those expired quotes. Subject to Section 2.8 and the other terms and conditions of this Agreement, the applicable Issuer will sell to New York Life or a New York Life Affiliate, and New York Life or a New York Life Affiliate will purchase the Accepted Notes at 100% of the principal amount of those Accepted Notes, which purchase price shall be paid in the Available Currency in which such Notes are denominated. Within three Business Days following the Acceptance Day, New York Life will deliver to the Company a confirmation of the Acceptance substantially in the form of Exhibit C (the “Confirmation of Acceptance”). If the Company does not execute and deliver such Confirmation of Acceptance within five Business Days following the Acceptance Day, New York Life or any New York Life Affiliate may, at its election, cancel the purchase and sale with respect to those Accepted Notes by notifying the Company in writing.

Section 2.8 Market Disruption. Notwithstanding any other provision of this Agreement, if New York Life provides quotes pursuant to Section 2.6, and a Market Disruption occurs prior to agreement of the interest rate for Accepted Notes for Fixed Rate Notes or prior to an Acceptance for Floating Rate Notes in accordance with Section 2.7, then such quotes will expire, and no purchase or sale of Shelf Notes will be made based on those expired quotes. If after the occurrence of any such Market Disruption the Company notifies New York Life of the Acceptance of such quotes, such Acceptance will be ineffective for all purposes of this Agreement, and New York Life will promptly notify the Company that the provisions of this Section 2.8 are applicable with respect to such Acceptance. “Market Disruption” means the occurrence of any of the following: (a) in the case of Shelf Notes to be denominated in Dollars, the domestic market for U.S. Treasury securities has closed, or a general suspension, material limitation, or significant disruption of trading in securities generally on the New York Stock Exchange or in the domestic market for U.S. Treasury securities or (b) in the case of Shelf Notes to

be denominated in an Available Currency other than Dollars, the markets for the relevant government securities (which in the case of the Euro, shall be the German Bund), the domestic market for U.S. Treasury securities, the Euro Mid-Swap or the spot and forward currency market, the financial futures market or the interest rate swap market shall have closed or a general suspension, material limitation, or significant disruption of trading in securities in such markets.

Section 3. Closings.

Section 3.1 Facility Closings. Not later than 11:30 A.M. on the Closing Date for any Accepted Notes, the applicable Issuer will deliver to each Purchaser the Accepted Notes to be purchased by such Purchaser in the form of one or more Notes in authorized denominations as such Purchaser may request. The Accepted Notes will be dated the Closing Date and registered in the Purchaser’s name (or in the name of its nominee), delivered against payment of the purchase price thereof by transfer of immediately available funds in the Available Currency for such Notes. If the applicable Issuer, as applicable, fails to tender an Accepted Note prior to 11:30 A.M. on the scheduled Closing Date for those Accepted Notes or on such other Business Day thereafter during the Issuance Period as may be agreed upon by the Company and New York Life or any of the conditions specified in Section 4 are not fulfilled by such time, New York Life and each Purchaser may cancel such purchase and sale, without waiving any rights that New York Life or such Purchaser may have by reason of such failure or non-fulfillment, including any right pursuant to Section 15.1 to require payment of transaction expenses by the Company. The Restatement Closing and each Shelf Closing are hereafter sometimes each referred to as a “Closing”.

Section 3.2 Issuance Fee. The applicable Issuer will pay to each Purchaser in immediately available funds a fee (herein called the “Issuance Fee”) on each Closing Date in an amount equal to 0.10% of the aggregate principal amount of the Notes sold to such Purchaser payable in Dollars.

Section 4. Conditions to Closing.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at any Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at such Closing, of the following conditions:

Section 4.1 Representations and Warranties. The representations and warranties of the Issuers in this Agreement shall be correct when made and at the time of such Closing.

Section 4.2 Performance; No Default. The Issuers shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at such Closing. Before and after giving effect to the issue and sale of the Notes to be purchased (and the application of the proceeds thereof as contemplated by the related Request for Purchase, in the case of any Shelf Notes) no Default or Event of Default shall have occurred and be continuing.

Section 4.3 Certificates; Corporate Documents.

(a)Officer’s Certificate. The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the Closing Date, certifying that (i) the conditions specified in Sections 4.1, 4.2 and 4.8 have been fulfilled, and (ii) there have been no changes to Schedule 10.1 since the date of this Agreement.

(b)Secretary’s Certificates. The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the Closing Date, certifying as to (i) the resolutions attached thereto, incumbency of officers and other corporate proceedings relating to the authorization,

execution and delivery of the Notes and this Agreement and (ii) the Company’s organizational documents as then in effect. To the extent the Dutch Subsidiary Issuer will issue any Notes, it shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary or other authorized representative, dated the Closing Date, certifying as to (i) the resolutions attached thereto, incumbency of officers and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement and (ii) such Issuer’s organizational documents then in effect.

(c)Secretary’s Certificates of Guarantors. Each Subsidiary Guarantor shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the Closing Date, certifying as to (i) the resolutions attached thereto, incumbency of officers and other corporate proceedings relating to the authorization, execution and delivery of its Subsidiary Guaranty and (ii) such Subsidiary Guarantor’s organizational documents as then in effect.

(d)Good Standing Certificates. To the extent applicable in the relevant jurisdiction, Company, the Dutch Subsidiary Issuer (to the extent it is the Issuer of the relevant Notes) and each Subsidiary Guarantor shall have delivered to such Purchaser a certificate of good standing or existence or other equivalent certificate (or, in the case of the Dutch Subsidiary Issuer, a pdf copy of an extract of the Dutch Chamber of Commerce Commercial Register) dated as of a recent date from the Secretary of State of its state of formation and each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.

(e)Certified Articles. The Company, each Subsidiary Guarantor and the Dutch Subsidiary Issuer (to the extent it is issuing any Notes) shall have delivered to such Purchaser certified copies of the articles or certificate of incorporation, certificate of organization or limited partnership, or other registered organizational documents from the Secretary of State of its state of formation or the relevant Dutch equivalent.

Section 4.4 Opinions of Counsel. Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the Closing Date (a) from each of Barnes & Thornburg LLP, Verrill Dana LLP, and Stoel Rives LLP, special counsel for the Company and the Subsidiary Guarantors, covering the matters set forth in Exhibit D and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Company and the Subsidiary Guarantors hereby instruct its counsel to deliver such opinion to the Purchasers), (b) from Dutch counsel for the Dutch Subsidiary Issuer to the extent the Dutch Subsidiary Issuer is issuing any Notes, covering such matters as the applicable Purchasers shall reasonably request and the Dutch Subsidiary Issuer hereby instructs its counsel to deliver such opinion to the Purchasers and (c) from King & Spalding LLP, the Purchasers’ special counsel (and to the extent requested by the Purchasers, Dutch local counsel to such Purchasers) in connection with such transactions covering such matters incident to such transactions as such Purchaser may reasonably request.

Section 4.5 Purchase Permitted By Applicable Law, Etc. On the Closing Date such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

Section 4.6 Payment of Issuance Fee and Special Counsel Fees. The applicable Issuer shall have paid on or before the Closing the Issuance Fee referred to in Section 3.2. Without limiting the provisions of Section 15.1, the Company shall have paid on or before the Closing all fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing Date.

Section 4.7 Private Placement Number. A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the Notes to be purchased.

Section 4.8 Changes in Corporate Structure. No Issuer shall have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following January 3, 2015.

Section 4.9 Funding Instructions. At least three Business Days prior to the Closing Date, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the applicable Issuer confirming (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Notes is to be deposited.

Section 4.10 Other Conditions. Any special conditions to such purchase which may be specified by New York Life to the applicable Issuer at the time of the Confirmation of Acceptance, such as repayment of existing Indebtedness, shall have been fulfilled.

Section 4.11 Notice of Floating Interest Rate. Two Business Days prior to the Closing Date for any Floating Rate Notes, the Purchaser of such Floating Rate Notes shall have received written notice from the Company of LIBOR and the Adjusted LIBOR Rate for the Floating Rate Interest Period commencing on the applicable Closing Date, together with reasonably detailed calculations with respect to such Floating Rate Interest Period, all as set forth in Section 1.6(b).

Section 4.12 Proceedings. All corporate and other proceedings in connection with the issuance, purchase and sale of the Notes and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel.

Section 4.13 Closing Documents. Such Purchaser shall have received the following, each dated the Closing Date and in form and substance satisfactory to such Purchaser:

(a)The Note(s) to be purchased by such Purchaser, duly executed by an Authorized Officer of the applicable Issuer, with any Floating Rate Notes to be executed only by the Company and denominated only in Dollars.

(b)A Subsidiary Guaranty in the form of Exhibit E, or a ratification thereof, duly executed and delivered by each Subsidiary Guarantor.

(c)With respect to any Notes issued by the Dutch Issuer Subsidiary, a ratification by the Company of its obligations hereunder, including Section 23.

(d)All such counterpart originals or certified or other copies of such documents as such Purchaser or such Purchaser’s special counsel may reasonably request.

Section 4A. Conditions to Restatement.

The effectiveness of this Agreement and the amendment and restatement of the Existing Master Shelf Agreement on the terms set forth herein are subject to the satisfaction, on or before the Restatement Date, of the following conditions:

(i)the execution and delivery of this Agreement by each Issuer, the holders of the Series B Notes and New York Life,

(ii)the execution and delivery to New York Life and the holders of the Notes of an amended and restated Subsidiary Guaranty, in form and substance reasonably acceptable to the holders of the Series B Notes and New York Life, duly executed by all Material Subsidiaries of the Company that are Domestic Subsidiaries,

(iii)the delivery to New York Life and the holders of the Notes of an executed copy of the Credit Agreement and an amendment to the Prudential Note Purchase Agreement, in each case reflecting certain conforming changes in respect of this Agreement and in form and substance reasonably acceptable to the holders of the Series B Notes and New York Life,

(iv)the delivery to New York Life and the holders of the Notes of evidence from the Administrative Agent (as defined in the Credit Agreement) that this Agreement reflects the conforming changes in respect of the Credit Agreement and is otherwise in form and substance reasonably satisfactory to the Administrative Agent (as defined in the Credit Agreement),

(v)the payment of all fees, charges and disbursements of King & Spalding LLP to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing Date, and

(vi)the payment of all fees, charges and disbursements of NautaDutilh to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing Date.

Section 5. Representations and Warranties of the Company.

Each Issuer represents and warrants to each Purchaser that:

Section 5.1 Organization. The Company is a corporation duly organized and existing in good standing under the laws of the State of Indiana and has the corporate power to own its property and to carry on its business as now being conducted. The Dutch Issuer Subsidiary is a corporation duly organized under the laws of the Netherlands and has the corporate power to own its property and to carry on its business as now conducted. Each Subsidiary is duly organized and existing in good standing (to the extent such concept is applicable in the relevant jurisdiction) under the laws of its jurisdiction of incorporation and has the corporate power to own its property and to carry on its business as now being conducted except in such instances where the failure could not be reasonably expected to result in a Material Adverse Effect. Each of the Issuers and their Subsidiaries is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

Section 5.2 Power and Authority. Each Issuer has the corporate or other organizational power and authority to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof. The execution, delivery and performance of this Agreement and the Notes has been duly authorized by all requisite corporate or other organizational action, and this Agreement and the Notes have been duly executed and delivered by authorized officers of the applicable Issuer and are valid obligations of such Issuer, legally binding upon and enforceable against such Issuer in accordance with their terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

Section 5.3 Financial Statements. The Company has furnished each Purchaser of the Series B Notes and any Accepted Notes with the following financial statements, identified by a principal financial officer of the Company: (i) a consolidated balance sheet of the Company and its Subsidiaries as of the last day in each of the five fiscal years of the Company most recently completed prior to the date as of which this representation is made or repeated to such Purchaser (other than fiscal years completed within 90 days prior to such date for which audited financial statements have not been released) and a consolidated statement of income and statement of cash flows of the Company and its Subsidiaries for each such year, all certified by Deloitte & Touche (or such other independent accountants of national standing or such other accounting firm as may be reasonably acceptable to such Purchaser) and (ii) a consolidated balance sheet of the Company and its Subsidiaries as at the end of the quarterly period (if any) most recently completed prior to such date and after the end of such fiscal year (other than quarterly periods completed within sixty (60) days prior to such date for which financial statements have not been released) and the comparable quarterly period in the preceding fiscal year and consolidated statements of income, stockholders’ equity and cash flows of the Company and its Subsidiaries for the periods from the beginning of the fiscal years in which such quarterly periods are included to the end of such quarterly periods, prepared by the Company. Delivery of copies of the Annual Reports filed with the Securities and Exchange Commission on Form 10-K of the Company for the fiscal years described in clause (i) of the immediately preceding sentence and delivery of copies of the Quarterly Reports filed with the Securities and Exchange Commission on Form 10-Q of the Company for the quarterly periods described in clause (ii) of the immediately preceding sentence, shall be deemed to satisfy the requirements of the immediately preceding sentence. Such financial statements (including any related schedules and/or notes) are true and correct in all material respects (subject, as to interim statements, to changes resulting from audits and year-end adjustments), have been prepared in accordance with GAAP consistently followed throughout the periods involved and show all liabilities, direct and contingent, of the Company and its Subsidiaries required to be shown in accordance with GAAP. The balance sheets fairly present the condition of the Company and its Subsidiaries as at the dates thereof, and the statements of income and statements of cash flows fairly present the results of the operations of the Company and its Subsidiaries for the periods indicated. There has been no material adverse change in the business, assets, operations or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole since the end of the most recent fiscal year for which such audited financial statements have been furnished.

Section 5.4 Actions Pending. There is no action, suit, investigation or proceeding pending or, to the knowledge of any Issuer, threatened against any Issuer or any Subsidiary or any properties or rights of any Issuer or any Subsidiary, by or before any court, arbitrator or administrative or governmental body which, individually or in the aggregate, could be reasonably expected to have a Material Adverse Effect.

Section 5.5 Outstanding Debt. Neither any Issuer nor any Subsidiary has any outstanding Indebtedness except as permitted by Section 10.2. There exists no matured default or to the best of the knowledge of the Issuers any unmatured default under the provisions of any instrument evidencing such Indebtedness in excess of $1,000,000 or of any agreement relating thereto.

Section 5.6 Title to Properties. Each Issuer has, and each Subsidiary has, good and indefeasible title to its respective real properties (other than properties which it leases) and good title to all of its other properties and assets necessary in any respect for the conduct of their respective businesses, including the properties and assets reflected in the most recent audited balance sheet referred to in Section 5.3 (other than properties and assets disposed of in the ordinary course of business), subject to no Lien of any kind except Liens permitted by Section 10.1. Each Issuer and each Subsidiary enjoys peaceful and undisturbed possession of all leases necessary in any material respect for the conduct of their respective businesses, none of which contains any unusual or burdensome provisions which could be reasonably expected to have a Material Adverse Effect. All such leases are valid and subsisting and are in full force and effect.

Section 5.7 Taxes. Each Issuer has, and each Subsidiary has, filed all Federal, State, local and other income tax returns (other than non-material foreign tax returns) which, to the best knowledge of the officers of the Issuers, are required to be filed, and each has paid or made adequate provision for paying all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are being contested in good faith by appropriate proceedings for which adequate reserves or other appropriate provisions have been established in accordance with GAAP.

Section 5.8 Conflicting Agreements and Other Matters. Neither the Issuers nor any of their Subsidiaries is a party to any contract or agreement or subject to any charter or other corporate restriction which materially and adversely affects its business, property or assets, or financial condition. Neither the execution nor delivery of this Agreement or the Notes, nor the offering, issuance and sale of the Notes, nor fulfillment of nor compliance with the terms and provisions hereof and of the Notes will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the properties or assets of any Issuer or any of its Subsidiaries pursuant to, (a) the charter or by-laws (or comparable governing documents) of any Issuer or any of its Subsidiaries, (b) any award of any arbitrator or (c) any agreement (including any agreement with stockholders), instrument, order, judgment, decree, statute, law, rule or regulation to which any Issuer or any of its Subsidiaries is subject, except in the case of clauses (b) and (c) as will not singly or in the aggregate have a Material Adverse Effect. Neither the Issuers nor any of their Subsidiaries is a party to, or otherwise subject to any provision contained in, any instrument evidencing indebtedness of such Issuer or any of its Subsidiaries, any agreement relating thereto or any other contract or agreement (including its charter or comparable governing documents) which limits the amount of, or otherwise imposes restrictions on the incurring of, indebtedness of the Issuers of the type to be evidenced by the Notes except as set forth in the agreements listed in Schedule 5.8 attached hereto.

Section 5.9 Offering of Notes. Neither the Issuers nor any agent acting on its behalf has, directly or indirectly, offered the Notes or any similar security of the Issuers for sale to, or solicited any offers to buy the Notes or any similar security of the Issuers from, or otherwise approached or negotiated with respect thereto with, any Person other than Institutional Investors, and neither the Issuers nor any agent acting on its behalf has taken or will take any action which would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction.

Section 5.10 Use of Proceeds. The Issuers will use the proceeds of the Shelf Notes as set forth in the applicable Request for Purchase. None of the proceeds of the sale of any Notes will be used to finance a Hostile Tender Offer. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221) other than common stock of the Company that is acquired and promptly cancelled (but only to the extent that such actions do not violate Regulation U or require any filing or any other action by New York Life or any Purchaser under Regulation U or otherwise), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Issuers in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 25% of the value of the consolidated assets of the Company and its Subsidiaries, and the Issuers do not have any present intention that margin stock will constitute more than 25% of the value of such assets. As used in this paragraph, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

Section 5.11 Compliance with ERISA. (a) The Company and each member of the Controlled Group have fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and are in compliance in all material respects with the presently applicable provisions

of ERISA and the Code, and have not incurred any liability (other than liabilities incurred in the ordinary course of business) to the PBGC or a Plan under Title IV of ERISA.

(b) Either (i) neither the Company nor any member of the Controlled Group is or within the preceding five (5) years ever has been obligated to contribute to any Multiemployer Plan, or (ii) if the Company or any member of the Controlled Group is or within the preceding five (5) years has been obligated to contribute to any Multiemployer Plan, neither the Company nor any member of the Controlled Group has incurred any withdrawal liability in excess of $2,000,000 with respect to any Multiemployer Plan under Title IV of ERISA.

(c) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Company to each Purchaser in the first sentence of this Section 5.11(c) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by such Purchaser.

(c) All non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply could not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable non-U.S. Plan documents or applicable laws to be paid or accrued by the Company and its Subsidiaries have been paid or accrued as required, except where failure so to pay or accrue could not be reasonably expected to have a Material Adverse Effect.

(d) Plan Assets; Prohibited Transactions. Neither the Company nor any Controlled Entity is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations), and neither the execution, delivery nor performance of this Agreement will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

Section 5.12 Governmental Consent. Neither the nature of any Issuer or of any Subsidiary, nor any of their respective businesses or properties, nor any relationship between any Issuer or any Subsidiary and any other Person, nor any circumstance in connection with the offering, issuance, sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body (other than routine filings after the date of closing with the Securities and Exchange Commission and/or state Blue Sky authorities or consents which will be obtained prior to any applicable closing day) in connection with the execution and delivery of this Agreement and the Subsidiary Guaranty, the offering, issuance, sale or delivery of the Notes or fulfillment of or compliance with the terms and provisions of this Agreement.

Section 5.13 Compliance with Laws. Each Issuer and its Subsidiaries and all of their respective properties and facilities have complied at all times and in all respects with all federal, state, local and regional statutes, laws, ordinances and judicial or administrative orders, judgments, rulings and regulations, including those relating to protection of the environment except, in any such case, where failure to comply could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No transaction contemplated by this Agreement nor any transaction to be carried out in connection therewith meets any hallmark set out in Annex IV of the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU (“DAC6”).

Section 5.14 Hostile Tender Offer. None of the proceeds of the sale of any Notes will be used to finance a Hostile Tender Offer.

Section 5.15 Disclosure. Neither this Agreement nor any other document, certificate or statement furnished to any Purchaser by or on behalf of the Issuers in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to any Issuer or any of its Subsidiaries which currently has, or in the future may (so far as the Issuers can now foresee) have, a Material Adverse Effect and which has not been set forth in this Agreement or in the other documents, certificates and statements furnished to the Purchasers by the Issuers prior to the date hereof in connection with the transactions contemplated hereby.

Section 5.16 Investment Company Status; Holding Company Status. Neither any Issuer nor any Subsidiary of any Issuer is (a) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended or an “investment adviser” within the meaning of the Investment Advisors Act of 1940, as amended, or (b) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company” or a “public utility”, within the meaning of the Public Utility Holding Company Act of 1935, as amended, or a “public utility” within the meaning of the Federal Power Act, as amended.

Section 5.17 Foreign Assets Control Regulations, Etc. (a) Neither any Issuer nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (“CISADA”) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a “Blocked Person”). Neither any Issuer nor any Controlled Entity has been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions.

(b) No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by any Issuer or any Controlled Entity, directly or indirectly, (i) in connection with any investment in, or any transactions or dealings with, any Blocked Person that would cause any Purchaser to be in violation of any law or regulation applicable to such Purchaser, or (ii) otherwise in violation of U.S. Economic Sanctions.

(c) Neither any Issuer nor any Controlled Entity (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. Economic Sanctions violations, (ii) to the actual knowledge of the Issuers after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (iii) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (iv) has had any of its funds seized or

forfeited in an action under any Anti-Money Laundering Laws. Each Issuer has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that such Issuer and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws and U.S. Economic Sanctions.

(d) (1) Neither any Issuer nor any Controlled Entity (i) has been charged with, or convicted of bribery or any other anti-corruption related activity under any applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the Issuers’ actual knowledge after making due inquiry, is under investigation by any U.S. or non-U.S. Governmental Authority for possible violation of Anti-Corruption Laws, (iii) has been assessed civil or criminal penalties under any Anti-Corruption Laws or (iv) has been or, to the Issuers’ actual knowledge, is the target of sanctions imposed by the United Nations or the European Union;

(2) To the Issuers’ actual knowledge after making due inquiry, neither any Issuer nor any Controlled Entity has, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such Government Official in his or her official capacity, (ii) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (iii) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and

(3) No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage. The Issuers have established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that each Issuer and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Corruption Laws.

Section 6. Representations of the Purchasers.

Section 6.1 Purchase for Investment. Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.

Section 6.2 Source of Funds. Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

(a)the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account

contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

(b)the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

(c)the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(d)the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d);or

(e)the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or

(f)the Source is a governmental plan; or

(g)the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or

(h)the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

(i)

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

Section 7. Information as to Issuers.

Section 7.1 Financial Information. The Issuers shall deliver to each holder of Notes:

(a)as soon as practicable and in any event within sixty (60) days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, consolidated statements of income, stockholders’ equity and cash flows of the Company and its Subsidiaries for the period from the beginning of the current fiscal year to the end of such quarterly period, and a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarterly period, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year, all in reasonable detail and certified by an authorized financial officer of the Company, subject to changes resulting from audit and year-end adjustments; provided, however, that delivery (within the time period specified above) pursuant to clause (c) below of a copy of the Quarterly Report on Form 10-Q of the Company for such quarterly period filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (a);

(b)as soon as practicable and in any event within ninety (90) days after the end of each fiscal year, consolidated statements of income and cash flows and a consolidated statement of stockholders’ equity of the Company and its Subsidiaries for such year, and a consolidating and consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit, all in reasonable detail and satisfactory in form to the Required Holder(s) and, as to the consolidated statements, reported on by independent public accountants of recognized national standing selected by the Company (whose report shall be without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied and, as to the consolidating statements, certified by an authorized financial officer of the Company; provided, however, that delivery (within the time period specified above) pursuant to clause (c) below of a copy of the Annual Report on Form 10-K of the Company for such fiscal year filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (b);

(c)promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as it shall send to its public stockholders and copies of all registration statements (without exhibits) and all reports which it files with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission);

(d)promptly upon request, a copy of each other report submitted to the Company or any Subsidiary by independent accountants in connection with any annual, interim or special audit made by them of the books of the Company or any Subsidiary;

(e)simultaneously with the transmission thereof, copies of all notices, reports or financial statements given under the Credit Agreement, excluding routine borrowing requests; and

(f)with reasonable promptness, such other financial data as such Significant Holder may reasonably request.

Section 7.2 Compliance Certificate. Together with each delivery of financial statements required by clauses (a) and (b) above, the Issuers will deliver to each Significant Holder an Officer’s Certificate (signed on behalf of the Company) (i) demonstrating (with computations in reasonable detail) compliance by the Company and its Subsidiaries with the provisions of Section 10, (ii) demonstrating (with computations in reasonable detail) whether the Leverage Fee is payable for the most-recently ended Fiscal Quarter pursuant to Section 9.6 and (iii) stating that there exists no Event of Default or Default, or, if any Event of Default or Default exists, specifying the nature and period of existence thereof and what action the Company proposes to take with respect thereto.

Section 7.3 Notice of Default. Each Issuer also covenants that immediately after any Responsible Officer obtains knowledge of an Event of Default or Default, it will deliver to each Significant Holder an Officer’s Certificate (signed on behalf of the Company) specifying the nature and period of existence thereof and what action the Issuers proposes to take with respect thereto.

Section 8. Payment and Prepayment of the Notes.

Section 8.1 Required Prepayments; Maturity. Each Series of Notes will be subject to required prepayment, if any, as and to the extent set forth in the Notes of such Series.

Section 8.2 Optional Prepayments.

(a)Each Series of Notes will be subject to prepayment, in whole at any time or from time to time in part, at the option of the applicable Issuer, in a minimum amount of (a) $1,000,000 and multiples of $100,000 in excess thereof in the case of Notes denominated in Dollars, and (b) €1,000,000 and multiples of €100,000 in excess thereof in the case of Notes denominated in Euros, or, if less, the aggregate principal amount outstanding in respect of the Notes of the Series, at 100% of the principal amount so prepaid plus interest thereon to the prepayment date, plus (i) the Make-Whole Amount and the Swap Breakage Amount, if any, with respect to each Fixed Rate Note or (ii) the LIBOR Breakage Amount and Prepayment Premium, if any, with respect to the Floating Rate Notes. Unless specified otherwise in the applicable Confirmation of Acceptance with respect to any Shelf Notes, any partial prepayment of a Series of the Notes pursuant to this Section 8.2(a) will be applied in satisfaction of required payments of principal ratably to their scheduled due dates.

(b)The applicable Issuer will give the holder of each Note of a Series to be prepaid pursuant to this Section 8.2 irrevocable written notice of the prepayment not less than 10 Business Days prior to the prepayment date, specifying the prepayment date, the aggregate principal amount of the Notes of the Series to be prepaid on that date, the principal amount of the Notes of the Series held by the holder to be prepaid on that date and that prepayment is to be made pursuant to this Section 8.2. If proper notice has been given, the principal amount of the Notes specified in that notice, together with interest thereon to the prepayment date and the Make-Whole Amount, LIBOR Breakage Amount, the Swap Breakage Amount and Prepayment Premium, if any, will be due and payable on that prepayment date.

(c)Notwithstanding anything contained in this Section 8.2 or Section 8.3 to the contrary, if and so long as any Default or Event of Default exists, any partial prepayment of the Notes pursuant to the provisions of this Section 8.2 shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof (without regard to Series).

Section 8.3 Allocation of Partial Prepayments. In the case of each prepayment of less than the entire unpaid principal amount of all outstanding Notes of a Series pursuant to Section 8.1 or Section 8.2, the amount to be prepaid will be applied pro rata to all outstanding Notes of that Series according to the respective unpaid principal amounts thereof.

Section 8.4 Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, Prepayment Premium, Swap Breakage Amount and LIBOR Breakage Amount, if any. From and after such date, unless the Issuers shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, Prepayment Premium, Swap Breakage Amount and LIBOR Breakage Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

Section 8.5 Purchase of Notes. The Issuers will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to a written offer to purchase any outstanding Notes of any Series made by the Issuers or an Affiliate pro rata to the holders of the Notes of such Series upon the same terms and conditions, provided, that if and so long as any Default or Event of Default exists, such written offer shall be made pro rata to the holders of the Notes of all Series. Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 15 Business Days. If the holders of more than 25% of the principal amount of the Notes then outstanding and subject to such offer accept such offer, the Company shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 5 Business Days from its receipt of such notice to accept such offer. The Issuers will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

Section 8.6 Make-Whole Amount.

(a) Make-Whole Amount with respect to Non-Swapped Notes.

“Make-Whole Amount” means, with respect to any Non-Swapped Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Non-Swapped Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. All payments of Make-Whole Amount in respect of any Non-Swapped Note shall be made in the Applicable Currency of such Non-Swapped Notes. For the purposes of determining the Make-Whole Amount with respect to any Non-Swapped Note, the following terms have the following meanings:

“Called Principal” means, with respect to any Non-Swapped Note, the principal of such Non-Swapped Note that is to be prepaid pursuant to Section 8.2(a) or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Non-Swapped Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same

periodic basis as that on which interest on such Non-Swapped Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Implied Rate Dollar Yield” means, with respect to the Called Principal of any Non-Swapped Note denominated in Dollars, the “Ask Yield” to maturity implied by (i) the yields reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.

In the case of each determination under clause (i) or clause (ii), as the case may be, of the preceding paragraph, such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the applicable U.S. Treasury security with the maturity closest to and greater than such Remaining Average Life and (2) the applicable U.S. Treasury security with the maturity closest to and less than such Remaining Average Life.

“Implied Rate Euro Yield” means, with respect to the Called Principal of any Non-Swapped Note denominated in Euros, the yield to maturity implied by (i) the “Ask Yield” reported, as of 10:00 A.M. (New York time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PXGE” on Bloomberg Financial Markets (or such other display as may replace “Page PXGE” on Bloomberg Financial Markets) for the benchmark German Bund having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported are not ascertainable, the average of the ask-side yields as determined by Recognized German Bund Market Makers. Such implied yield will be determined, if necessary, by (a) converting quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the benchmark German Bund with the maturity closest to and greater than the Remaining Average Life of such Called Principal and (2) the benchmark German Bund with the maturity closest to and less than the Remaining Average Life of such Called Principal.

“Non-Swapped Note” means any Note other than a Swapped Note (as defined in subsection (b) below).

“Recognized German Bund Market Makers” means two internationally recognized dealers of German Bunds reasonably selected by New York Life.

“Reinvestment Yield” means, with respect to the Called Principal of any Non-Swapped Note denominated in (i) Dollars, 0.50% over the Implied Rate Dollar Yield, and (ii) Euros, 0.50% over the Implied Rate Euro Yield. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Non-Swapped Note.

“Remaining Average Life” means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-

twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Non-Swapped Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Non-Swapped Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1.

“Settlement Date” means, with respect to the Called Principal of any Non-Swapped Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

(b) Make-Whole Amount with respect to Swapped Notes.

“Make-Whole Amount” mean, with respect to any Swapped Note, an amount equal to the excess, if any, of the Swapped Note Discounted Value of the Swapped Note Remaining Scheduled Swap Payments with respect to the Swapped Note Called Notional Amount related to such Swapped Note over such Swapped Note Called Notional Amount, provided that the Make-Whole Amount may not in any event be less than zero. All payments of Make-Whole Amount in respect of any Swapped Note shall be made in Dollars. For the purposes of determining the Make-Whole Amount with respect to any Swapped Note, the following terms have the following meanings:

“New Swap Agreement” means any cross-currency swap agreement (which does not qualify as a Replacement Swap Agreement) pursuant to which the holder of a Swapped Note is to receive payment in Dollars and which is entered into in full or partial replacement of an Original Swap Agreement as a result of such Original Swap Agreement having terminated for any reason. The terms of a New Swap Agreement with respect to any Swapped Note do not have to be identical to those of the Original Swap Agreement with respect to such Swapped Note. Any holder of a Swapped Note that enters into or terminates a New Swap Agreement shall within a reasonable period of time thereafter deliver to the Company a copy of the confirmation or termination related thereto.

“Original Swap Agreement” means, with respect to any Swapped Note, (x) a cross-currency swap agreement and annexes and schedules thereto (an “Initial Swap Agreement”) that is entered into on an arm’s length basis by the original Purchaser of such Swapped Note (or any affiliate thereof) in connection with the issuance of such Swapped Note by the applicable Issuer and the purchase of such Swapped Note by the applicable initial Purchaser and relates to the scheduled payments by the applicable Issuer of interest and principal on such Swapped Note, under which the Purchaser of such Swapped Note is to receive payments from the counterparty thereunder in Dollars, the terms of which are provided by such Purchaser in the Confirmation of Acceptance or otherwise delivered to the applicable Issuer prior to the issuance of such Swapped Note (y) any Initial Swap Agreement that has been assumed (without any waiver, amendment, deletion or replacement of any material economic term or provision thereof) by a holder of a Swapped Note in connection with a transfer of such Swapped Note and (z) any Replacement Swap Agreement.

“Replacement Swap Agreement” means, with respect to any Swapped Note, a cross-currency swap agreement and annexes and schedules thereto with payment terms and provisions (other than a reduction in notional amount, if applicable) identical to those of the Initial Swap Agreement with respect to such Swapped Note that is entered into on an arm's length basis by the holder of such Swapped Note in full or partial replacement (by amendment, modification or otherwise) of such Initial Swap Agreement (or any subsequent Replacement Swap Agreement) in a notional amount not exceeding the

outstanding principal amount of such Swapped Note following a non-scheduled partial prepayment or a partial repayment or purchase of such Swapped Note prior to its scheduled maturity or an acceleration and rescission thereof of such Swapped Note as provided in Section 12.3. Any holder of a Swapped Note that enters into, assumes or terminates an Initial Swap Agreement or Replacement Swap Agreement shall within a reasonable period of time thereafter deliver to the Company (i) a copy of the confirmation, assumption or termination related thereto or (ii) a description of the terms of such confirmation, assumption or termination related thereto.

“Swap Agreement” means, with respect to any Swapped Note, an Original Swap Agreement or a New Swap Agreement, as the case may be.

“Swapped Note” means any Note that as of the date of the Closing is subject to a Swap Agreement. A “Swapped Note” shall no longer be deemed a “Swapped Note” for so long as the related Swap Agreement ceases to be in force in respect thereof; provided that if there is any Note that is a Swapped Note outstanding as of the date on which either the Company has provided notice of prepayment or offer of prepayment or purchase of such Note pursuant to Section 8 or such Note has become or is declared to be immediately due and payable pursuant to Section 12.1, then such Note shall be deemed to be a Swapped Note until payment in full of the principal, interest and Make-Whole Amount (if any) and Swap Breakage Amount due with respect to such Note.

“Swapped Note Called Notional Amount” means, with respect to any Swapped Note Called Principal of any Swapped Note, the payment in Dollars due to the holder of such Swapped Note under the terms of the Swap Agreement to which such holder is a party, attributable to and in exchange for such Swapped Note Called Principal and assuming that such Swapped Note Called Principal is paid on its scheduled payment date, provided that if such Swap Agreement is not an Original Swap Agreement, then the “Swapped Note Called Notional Amount” in respect of such Swapped Note shall not exceed the amount in Dollars which would have been due to the holder of such Swapped Note under the terms of the Original Swap Agreement to which such holder was a party (or if such holder was never party to an Original Swap Agreement, then the last Original Swap Agreement to which the most recent predecessor in interest to such holder as a holder of such Swapped Note was a party), attributable to and in exchange for such Swapped Note Called Principal and assuming that such Swapped Note Called Principal is paid on its scheduled payment date.

“Swapped Note Called Principal” means, with respect to any Swapped Note, the principal of such Swapped Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Swapped Note Discounted Value” means, with respect to the Swapped Note Called Notional Amount of any Swapped Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires, the amount obtained by discounting all Swapped Note Remaining Scheduled Swap Payments corresponding to the Swapped Note Called Notional Amount of such Swapped Note from their respective scheduled due dates to the Swapped Note Settlement Date with respect to such Swapped Note Called Notional Amount, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on such Swapped Note is payable) equal to the Swapped Note Reinvestment Yield with respect to such Swapped Note Called Notional Amount.

“Swapped Note Implied Rate Dollar Yield” means, with respect to the Swapped Note Called Notional Amount of any Swapped Note denominated in Dollars, the yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life

of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.

“Swapped Note Implied Rate Euro Yield” means, with respect to the Called Principal of any Non-Swapped Note denominated in Euros, the yield to maturity implied by (i) the ask-side yields reported, as of 10:00 A.M. (New York time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PXGE” on Bloomberg Financial Markets (or such other display as may replace “Page PXGE” on Bloomberg Financial Markets) for the benchmark German Bund having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported are not ascertainable, the average of the ask-side yields as determined by Recognized German Bund Market Makers. Such implied yield will be determined, if necessary, by (a) converting quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the benchmark German Bund with the maturity closest to and greater than the Remaining Average Life of such Called Principal and (2) the benchmark German Bund with the maturity closest to and less than the Remaining Average Life of such Called Principal.

“Swapped Note Reinvestment Yield” means, with respect to the Swapped Note Called Notional Amount of any Swapped Note, the sum of (x) 0.50% (50 basis points) per annum, plus (y) the yield to maturity implied by the “Ask Yields” reported as of 10.00 a.m. (New York City time) on the second Business Day preceding the Swapped Note Settlement Date with respect to such Swapped Note Called Notional Amount, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Swapped Note Remaining Average Life of such Swapped Note Called Notional Amount as of such Swapped Note Settlement Date. If there are no such U.S. Treasury securities Reported having a maturity equal to such Swapped Note Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the “Ask Yields” Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and greater than such Swapped Note Remaining Average Life and (2) closest to and less than such Swapped Note Remaining Average Life. The Swapped Note Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Swapped Note.

If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Swapped Note Reinvestment Yield” means, with respect to the Swapped Note Called Notional Amount of any Swapped Note, the sum of the (x) Swapped Note Applicable Percentage plus (y) the yield to maturity implied by the U.S. Treasury constant maturity yields reported for the latest day for which such yields have been so reported as of the second Business Day preceding the Swapped Note Settlement Date with respect to such Swapped Note Called Notional Amount, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the

U.S. Treasury constant maturity having a term equal to the Swapped Note Remaining Average Life of such Swapped Note Called Notional Amount as of such Swapped Note Settlement Date. If there is no such U.S. Treasury constant maturity having a term equal to such Swapped Note Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Swapped Note Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Swapped Note Remaining Average Life. The Swapped Note Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Swapped Note.

“Swapped Note Remaining Average Life” means, with respect to any Swapped Note Called Notional Amount, the number of years obtained by dividing (i) such Swapped Note Called Notional Amount into (ii) the sum of the products obtained by multiplying (a) the principal component of each Swapped Note Remaining Scheduled Swap Payment with respect to such Swapped Note Called Notional Amount by (b) the number of years, computed on the basis of a 360-day year comprised of twelve 30-day months and calculated to two decimal places, that will elapse between the Swapped Note Settlement Date with respect to such Swapped Note Called Notional Amount and the scheduled due date of such Swapped Note Remaining Scheduled Swap Payment.

“Swapped Note Remaining Scheduled Swap Payments” means, with respect to the Swapped Note Called Notional Amount relating to any Swapped Note, the payments due to the holder of such Swapped Note in Dollars under the terms of the Swap Agreement to which such holder is a party which correspond to all payments of the Swapped Note Called Principal of such Swapped Note corresponding to such Swapped Note Called Notional Amount and interest on such Swapped Note Called Principal (other than that portion of the payment due under such Swap Agreement corresponding to the interest accrued on the Swapped Note Called Principal to the Swapped Note Settlement Date) that would be due after the Swapped Note Settlement Date with respect to such Swapped Note Called Notional Amount assuming that no payment of such Swapped Note Called Principal is made prior to its originally scheduled payment date, provided that (i) if such Swapped Note Settlement Date is not a date on which an interest payment is due to be made under the terms of such Swapped Note, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Swapped Note Settlement Date and required to be paid on such Swapped Note Settlement Date pursuant to Section 8.2 or Section 12.1 and (ii) if the Swap Agreement with respect to such Swapped Note is not an Original Swap Agreement, then the interest on such Swapped Note Called Notional Amount shall not exceed the amount in Dollars that would have been due with respect to such Swapped Note under the terms of the Original Swap Agreement.

“Swapped Note Settlement Date” means, with respect to the Swapped Note Called Notional Amount of any Swapped Note Called Principal of any Swapped Note, the date on which such Swapped Note Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

Section 8.7 Swap Breakage.

(a)If any Swapped Note is prepaid or purchased pursuant to Section 8.2, 8.5, 8.8 or 8.9 or has become or is declared to be immediately due and payable pursuant to Section 12.1 (each a “Swap Unwind Event”), then upon any such Swap Unwind Event (i) any resulting Swap Breakage Loss in connection therewith shall be reimbursed to the holder of such Swapped Note by the applicable Issuer in Dollars no later than five Business Days after the date such holder has delivered the Swap Breakage Amount Notice with respect to such Swap Unwind Event and (ii) any resulting Swap Breakage Gain in connection therewith shall be forwarded to the applicable Issuer by the holder of such Swapped Note in Dollars no later than five Business Days after the date such holder shall have received payment in full of the principal, interest and Make-Whole Amount (if any) due hereunder with respect to such Swap Unwind Event, in each case unless alternative arrangements are otherwise agreed between the applicable Issuer

and the holder of a Swapped Note. Each holder of a Swapped Note shall be responsible for calculating its own Swap Breakage Amount in Dollars in connection with any Swap Unwind Event, and such calculations shall (unless alternative arrangements are otherwise agreed between the applicable Issuer and the holder of a Swapped Note) promptly, but no longer than two Business Days following such Swap Unwind Event, be reported to the applicable Issuer in writing and in reasonable detail (the “Swap Breakage Amount Notice”) and shall be binding on the applicable Issuer absent demonstrable error.

(b)As used in this Section 8.7, “Swap Breakage Amount” means, with respect to the Swap Agreement associated with any Swapped Note, the amount that is received (in which case the Swap Breakage Amount shall be referred to as the “Swap Breakage Gain”) or paid (in which case the Swap Breakage Amount shall be referred to as the “Swap Breakage Loss”) by the holder of such Swapped Note in connection with a termination or amendment of its Swap Agreement resulting from a Swap Unwind Event, where:

(i)such Swap Breakage Amount shall be calculated upon the inclusion of an accelerated exchange and payment of principal amounts and associated accrued and unpaid interest, whereby in connection with and incorporated into the termination or amendment of the Swap Agreement and determination of the Swap Breakage Amount, all remaining associated principal payments otherwise scheduled through the natural duration of the Swap Agreement and associated accrued and unpaid interest shall be accelerated and made (in their respective applicable currencies) at the time of the settlement of such termination or amendment (or, in the case of a Swap Unwind Event resulting from a Swapped Note becoming or being declared to be immediately due and payable pursuant to Section 12.1, as if such remaining associated principal payments and associated accrued and unpaid interest had been accelerated and made at the time of the settlement of such termination); and

(ii)the holder of such Swapped Note shall determine such Swap Breakage Amount in good faith and in a commercially reasonable manner in accordance with customary practices for calculating such amounts under the ISDA 1992 Multi-Currency Cross Border Master Agreement or ISDA 2002 Master Agreement, as applicable (the “ISDA Master Agreement”) pursuant to which such holder entered into such Swap Agreement and assuming for the purpose of such calculation that there are no transactions outstanding under such ISDA Master Agreement other than such Swap Agreement, provided, however, that if such holder (or its predecessor-in-interest with respect to such Swapped Note) was, but is not at the time, a party to an Original Swap Agreement but is a party to a New Swap Agreement, then the Swap Breakage Amount shall mean the lesser of (x) the Swap Breakage Amount that would have been received or paid by the holder of such Swapped Note under the terms of the Original Swap Agreement (if any) in respect of such Swapped Note to which such holder (or any affiliate thereof) was a party (or if such holder was never a party to an Original Swap Agreement, then the last Original Swap Agreement to which the most recent predecessor in interest to such holder as a holder of a Swapped Note was a party) and (y) the Swap Breakage Amount actually received or paid by the holder of such Swapped Note under the terms of the New Swap Agreement to which such holder (or any affiliate thereof) is a party.

Section 8.8 Change in Control.

(a)Notice of Change in Control. The Company will, within five (5) Business Days after the occurrence of any Change in Control, give written notice (the “Change of Control Notice”) of such Change in Control to each holder of Notes. Such Change of Control Notice shall contain and constitute an offer to prepay the Notes as described in Section 8.8(c) hereof and shall be accompanied by the certificate described in Section 8.8(e).

(b)Offer to Prepay Notes. The offer to prepay Notes contemplated by paragraph (a) of this Section 8.8 shall be an offer by the applicable Issuer to prepay, in accordance with and subject to this Section 8.8, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such Change of Control Notice (the “Proposed Prepayment Date”). Such date shall be not less than 30 days and not more than 90 days after the date of such offer.

(c)Acceptance. A holder of Notes may accept the offer to prepay made pursuant to this Section 8.8 by causing a notice of such acceptance to be delivered to the Company not later than 10 days prior to the Proposed Prepayment Date. A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.8 shall be deemed to constitute a rejection of such offer by such holder.

(d)Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.8 shall be at 100% of the principal amount of the Notes together with accrued and unpaid interest thereon but without any Make‑Whole Amount, Swap Breakage Amount or Prepayment Premium, but including any LIBOR Breakage Amount if the Proposed Prepayment Date is not on a regularly scheduled Floating Rate Interest Payment Date. The prepayment shall be made on the Proposed Prepayment Date.

(e)Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.8 shall be accompanied by a certificate, executed by a Senior Financial Officer of the applicable Issuer and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.8; (iii) the principal amount of each Note offered to be prepaid (which shall be 100% of each such Note); (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions of this Section 8.8 have been fulfilled; and (vi) in reasonable detail, the nature and date or proposed date of the Change in Control.

Section 8.9 Prepayment for Tax Reasons. (a) If at any time as a result of a Change in Tax Law (as defined below) the applicable Issuer is or becomes obligated to make any Additional Payments (as defined below) in respect of any payment of interest on account of any of the Fixed Rate Notes in an aggregate amount for all affected Fixed Rate Notes equal to 5.0% or more of the aggregate amount of such interest payment on account of all such Fixed Rate Notes, such Issuer may give the holders of all affected Notes irrevocable written notice (each, a “Tax Prepayment Notice”) of the prepayment of such affected Notes on a specified prepayment date (which shall be a Business Day not less than 30 days nor more than 60 days after the date of such notice) and the circumstances giving rise to the obligation of such Issuer to make any Additional Payments and the amount thereof and stating that all of the affected Notes shall be prepaid on the date of such prepayment at 100% of the principal amount so prepaid together with interest accrued thereon to the date of such prepayment plus an amount equal to the Swap Breakage Amount for each such Note, except in the case of an affected Note if the holder of such Note shall, by written notice given to the Company no more than 20 days after receipt of the Tax Prepayment Notice, reject such prepayment of such Note (each, a “Rejection Notice”). The form of Rejection Notice shall also accompany the Tax Prepayment Notice and shall state with respect to each Note covered thereby that execution and delivery thereof by the holder of such Note shall operate as a permanent waiver of such holder's right to receive the Additional Payments arising as a result of the circumstances described in the Tax Prepayment Notice in respect of all future payments of interest on such Note (but not of such holder's right to receive any Additional Payments that arise out of circumstances not described in the Tax Prepayment Notice or which exceed the amount of the Additional Payment described in the Tax Prepayment Notice), which waiver shall be binding upon all subsequent transferees of such Note. The Tax Prepayment Notice having been given as aforesaid to each holder of the affected Notes, the principal amount of such Notes together with interest accrued thereon to the date of such prepayment plus the Swap Breakage Amount shall become due and payable on such prepayment date, except in the case of Notes the holders of which shall timely give a Rejection Notice as aforesaid.

(b)No prepayment of the Notes pursuant to this Section 8.9 shall affect the obligation of the Company to pay Additional Payments in respect of any payment made on or prior to the date of such prepayment. For purposes of this Section 8.9, any holder of more than one affected Note may act separately with respect to each affected Note so held (with the effect that a holder of more than one affected Note may accept such offer with respect to one or more affected Notes so held and reject such offer with respect to one or more other affected Notes so held).

(c)An Issuer may not offer to prepay Notes pursuant to this Section 8.9 (i) if a Default or Event of Default then exists, (ii) until such Issuer shall have taken commercially reasonable steps to mitigate the requirement to make the related Additional Payments or (iii) if the obligation to make such Additional Payments directly results or resulted from actions taken by the Company or any Subsidiary (other than actions required to be taken under applicable law), and any Tax Prepayment Notice given pursuant to this Section 8.9 shall certify to the foregoing and describe such mitigation steps, if any.

(d)For purposes of this Section 8.9:

“Additional Payments” means additional amounts required to be paid to a holder of any Note pursuant to Section 24 by reason of a Change in Tax Law.

“Change in Tax Law” means (individually or collectively with one or more prior changes) (i) an amendment to, or change in, any law, treaty, rule or regulation of the Netherlands after the date of the Closing, or an amendment to, or change in, an official interpretation or application of such law, treaty, rule or regulation after the date of the Closing, which amendment or change is in force and continuing and meets the opinion and certification requirements described below or (ii) in the case of any other jurisdiction that becomes a Taxing Jurisdiction after the date of the Closing, an amendment to, or change in, any law, treaty, rule or regulation of such jurisdiction, or an amendment to, or change in, an official interpretation or application of such law, treaty, rule or regulation, in any case after such jurisdiction shall have become a Taxing Jurisdiction, which amendment or change is in force and continuing and meets such opinion and certification requirements. No such amendment or change shall constitute a Change in Tax Law unless the same would in the opinion of the applicable Issuer (which shall be evidenced by an Officer’s Certificate of the Company and, if requested by the holders of Notes, supported by a written opinion of counsel having recognized expertise in the field of taxation in the relevant Taxing Jurisdiction, both of which shall be delivered to all holders of the Notes prior to or concurrently with the Tax Prepayment Notice in respect of such Change in Tax Law) affect the deduction or require the withholding of any Tax imposed by such Taxing Jurisdiction on any payment payable on the Notes.

Section 9. Affirmative Covenants.

During the Issuance Period and so long thereafter as any of the Notes are outstanding:

Section 9.1 Inspection of Property. Each Issuer covenants that, to the extent permitted by law, it will permit any Person designated by any Significant Holder in writing, at such Significant Holder’s expense, if no Default or Event of Default exists and at the Company’s expense if a Default or Event of Default does exist, to (i) visit and inspect any of the properties of the Company and its Subsidiaries, to examine the corporate books and financial records of the Company and its Subsidiaries and make copies thereof or extracts therefrom and to discuss the affairs, finances and accounts of any of such corporations with the principal officers of the Issuers and, (ii) upon reasonable notice to the Company and opportunity for management of the Company to be present or represented, to discuss the affairs, finances and accounts of any of such corporations (which such Significant Holder has not been able to satisfactorily discuss with or obtain from the Company) with the independent public accountants of the Company and its Subsidiaries, all at such reasonable times and as often as such Significant Holder may reasonably request. Each Issuer acknowledges that any such Person permitted to act pursuant to this Section 9.1, after

exercising its rights of inspection, may prepare and (subject to the terms of Section 20 hereof) distribute to the Significant Holders certain reports pertaining to the Company and its Subsidiaries’ assets for internal use by such Person and the Significant Holders.

Section 9.2 Covenant to Secure Notes Equally. Each Issuer covenants that, if it or any Subsidiary shall create or assume any Lien upon any of its property or assets, whether now owned or hereafter acquired, other than Liens permitted by the provisions of Section 10.1 (unless prior written consent to the creation or assumption thereof shall have been obtained pursuant to Section 17), it will make or cause to be made effective provision whereby the Notes will be secured by such Lien equally and ratably with any and all other Indebtedness thereby secured so long as any such other Indebtedness shall be so secured.

Section 9.3 Maintenance of Insurance. Each Issuer covenants that it shall, and shall cause each Subsidiary to, maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to its properties and business and the properties and business of its Subsidiaries (which may include a reasonable self-insurance program) as is customarily maintained by other companies operating similar businesses.

Section 9.4 Compliance with Laws. Each Issuer covenants that it shall, and shall cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, the USA PATRIOT Act, the Trading with the Enemy Act, the International Emergency Economic Powers Act, CISADA, the Sudan Accountability and Divestment Act, and Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failure to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect. Without limitation of the foregoing, each Issuer will, and will cause each of its Subsidiaries to, not be a Person described in Section 1 of the Anti-Terrorism Order, and not engage in any dealings or transactions, or otherwise be associated, with any such Person. The Issuers will maintain in effect and enforce policies and procedures designed to promote and achieve compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable U.S. Economic Sanctions.

Section 9.5 Most Favored Lender Status. Except in the case of any Qualified Receivables Transaction, in the event that any Issuer or any Subsidiary shall enter into, assume or otherwise become bound by or obligated under, or amend, any agreement evidencing any present or future Indebtedness in excess of $10,000,000 (collectively, an “Other Financing Agreement”) which includes one or more Additional Covenants or Additional Defaults, the terms of this Agreement shall, without any further action on the part of any Issuer or any of the holders of the Notes, be deemed to be amended automatically to include each Additional Covenant and each Additional Default contained in such agreement. Each Issuer further covenants to promptly execute and deliver at its expense (including the reasonable fees and expenses of counsel for the holders of the Notes), an amendment to this Agreement in form and substance satisfactory to the Required Holder(s) evidencing the amendment of this Agreement to include such Additional Covenants and Additional Defaults, provided that the execution and delivery of such amendment shall not be a precondition to the effectiveness of such amendment as provided for in this Section 9.5, but shall merely be for the convenience of the parties hereto.

Section 9.6 Leverage Fee. In addition to interest accruing on the Notes, each Issuer agrees to pay to the holders of the Notes a fee (the “Leverage Fee”) with respect to each Fiscal Quarter, for which the ratio of Consolidated Total Debt as of the end of such Fiscal Quarter to EBITDA for the period of four

fiscal quarters then ended is equal to or greater than 2.00 to 1.00. The Leverage Fee payable with respect to each Note shall be an amount in Dollars equal to (a) the product obtained by multiplying (i) the Applicable Number (as defined below) for such Fiscal Quarter times (ii) the average outstanding principal Dollar Amount of such Note during the Fiscal Quarter to which the Leverage Fee relates and (b) dividing the product thus obtained by four. The Leverage Fee for each applicable Fiscal Quarter shall be payable in arrears on the date upon which the financial statements for such Fiscal Quarter are to be delivered under Section 7.1(a) (or Section 7.1(b), if the applicable Fiscal Quarter is the last Fiscal Quarter in a fiscal year). If the Company fails to deliver financial statements under Sections 7.1(a) or 7.1(b) for any Fiscal Quarter or fiscal year by the date such delivery is due, then the Company shall be deemed to owe the Leverage Fee for such Fiscal Quarter (based on an Applicable Number of .0025) and shall make the payment required for such Fiscal Quarter on the date due pursuant to the preceding sentence. Payment of the Leverage Fee shall be made pursuant to the terms of Section 14.

The acceptance of the Leverage Fee by any holder of a Shelf Note shall not constitute a waiver of any Default or Event of Default. The consequences for the failure to pay the Leverage Fee when due shall be governed by Section 11(b) hereof, treating the Leverage Fee, for such purposes and for the purpose of determining the amount payable upon acceleration of the Notes, as interest.

As used in this Section 9.6, (a) “Applicable Number” shall mean (i) .00075 if, with respect to such Fiscal Quarter, the ratio of Consolidated Total Debt to EBITDA, as calculated above, was equal to or greater than 2.00 to 1.00, but not greater than 2.50 to 1.00, (ii) .0015 if, with respect to such Fiscal Quarter, the ratio of Consolidated Total Debt to EBITDA, as calculated above, was greater than 2.50 to 1.00 but not greater than 3.00 to 1.00 or (iii) .0025 if, with respect to such Fiscal Quarter, the ratio of Consolidated Total Debt to EBITDA, as calculated above, was greater than 3.00 to 1.00.

Section 9.7 Pari Passu Status. Each Issuer covenants that it will cause all Indebtedness owing under the Notes and under this Agreement to rank at all times at least pari passu with all other present and future unsecured Indebtedness of such Issuer.

Section 9.8 Subsidiary Guarantors. (a) The Company will cause each of its Subsidiaries (other than the Excluded Subsidiary solely with respect to Excluded Debt) that guarantees or otherwise becomes liable at any time, whether as a borrower or an additional or co-borrower or otherwise, for or in respect of any Indebtedness under any Principal Credit Facility to concurrently therewith:

(i) enter into an agreement in form and substance satisfactory to the Required Holders providing for the guaranty by such Subsidiary, on a joint and several basis with all other such Subsidiaries, of (x) the prompt payment in full when due of all amounts payable by the Issuers pursuant to the Notes (whether for principal, interest, Make-Whole Amount, Swap Breakage Amount, Prepayment Premium, LIBOR Breakage Amount or otherwise) and this Agreement, including, without limitation, all indemnities, fees and expenses payable by the Company thereunder and (y) the prompt, full and faithful performance, observance and discharge by the Issuers of each and every covenant, agreement, undertaking and provision required pursuant to the Notes or this Agreement to be performed, observed or discharged by it (a “Subsidiary Guaranty”); and

(ii) deliver the following to each of holder of a Note:

(A) an executed counterpart of such Subsidiary Guaranty;

(B) a certificate signed by an authorized responsible officer of such Subsidiary containing representations and warranties on behalf of such Subsidiary to the same effect, mutatis mutandis, as those contained in Sections 5.1, 5.2, 5.4, 5.6, 5.7, 5.8, 5.12, 5.13 and

5.16 of this Agreement (but with respect to such Subsidiary and such Subsidiary Guaranty rather than the Company);

(C) all documents as may be reasonably requested by the Required Holders to evidence the due organization, continuing existence and good standing of such Subsidiary and the due authorization by all requisite action on the part of such Subsidiary of the execution and delivery of such Subsidiary Guaranty and the performance by such Subsidiary of its obligations thereunder; and

(D) an opinion of counsel reasonably satisfactory to the Required Holders covering such matters relating to such Subsidiary and such Subsidiary Guaranty as the Required Holders may reasonably request.

(b) At the election of the Company and by written notice to each holder of Notes, any Subsidiary Guarantor may be discharged from all of its obligations and liabilities under its Subsidiary Guaranty and shall be automatically released from its obligations thereunder without the need for the execution or delivery of any other document by the holders, provided that (i) if such Subsidiary Guarantor is a guarantor or is otherwise liable for or in respect of any Principal Credit Facility, then such Subsidiary Guarantor has been released and discharged (or will be released and discharged concurrently with the release of such Subsidiary Guarantor under its Subsidiary Guaranty) under such Principal Credit Facility, (ii) at the time of, and after giving effect to, such release and discharge, no Default or Event of Default shall be existing, (iii) no amount is then due and payable under such Subsidiary Guaranty, (iv) if in connection with such Subsidiary Guarantor being released and discharged under any Principal Credit Facility, any fee or other form of consideration is given to any holder of Indebtedness under such Principal Credit Facility for such release, the holders of the Notes shall receive equivalent consideration substantially concurrently therewith and (v) each holder shall have received a certificate of a Responsible Officer certifying as to the matters set forth in clauses (i) through (iv).

Section 10. Negative Covenants.

Each Issuer covenants that during the Issuance Period and so long thereafter as any of the Notes are outstanding, it will not and will not permit any Subsidiary to:

Section 10.1 Lien Restrictions. Create, incur, assume or suffer to exist any Lien upon any of its property or assets, whether now owned or hereafter acquired (whether or not provision is made for the equal and ratable securing of Notes in accordance with the provisions of Section 9.2 hereof), except:

(i)Liens existing on the date hereof encumbering the property and securing the Indebtedness identified on Schedule 10.1 attached hereto and Liens securing the refinancing, renewal or refunding of any such Indebtedness provided that the principal amount secured is not increased over the amount of such Indebtedness outstanding immediately prior to such refinancing, renewal or refunding and such Lien is not extended to any other property or assets;

(ii)Liens for taxes or other governmental charges not yet due or which are being actively contested in good faith by appropriate proceedings;

(iii)Liens incidental to the conduct of its business or the ownership of its assets which were not incurred in connection with the borrowing of money or obtaining credit or advances and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business;

(iv)Liens on property or assets of a (x) Subsidiary to secure obligations of such Subsidiary to the Company or another Subsidiary that is not in the Excluded Subsidiary Group or (y) member of the Excluded Subsidiary Group to secure obligations of such member to the Company or any Subsidiary;

(v)any Lien existing on any asset of any corporation or other Person at the time such corporation or other Person becomes a Subsidiary and not created in contemplation of such event;

(vi)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 the Company or a Subsidiary and not created in contemplation of such event;

(vii)any Lien existing on any asset prior to the acquisition thereof by the Company or a Subsidiary and not created in anticipation of such acquisition; and

(viii)Liens incurred in connection with any transfer of an interest in accounts or notes receivable or related assets as part of a Qualified Receivables Transaction;

(ix)Liens not otherwise permitted by the foregoing clauses provided that Priority Debt at no time exceeds twenty percent (20%) of Consolidated Total Tangible Assets, provided, further, that notwithstanding the foregoing, the Company shall not, and shall not permit any of its Subsidiaries to, secure pursuant to this Section 10.1(ix) any Indebtedness outstanding under or pursuant to any Principal Credit Facility unless and until the Notes (and any guaranty delivered in connection therewith) shall concurrently be secured equally and ratably with such Indebtedness pursuant to documentation reasonably acceptable to the Required Holders in substance and in form, including, without limitation, an intercreditor agreement and opinions of counsel to the Company and/or any such Subsidiary, as the case may be, from counsel that is reasonably acceptable to the Required Holders.

Section 10.2 Debt Restriction. Create, incur, assume or suffer to exist any Indebtedness, except:

(i)Indebtedness of the Company or any Subsidiary owing to the Company or to any Subsidiary;

(ii)other Indebtedness of the Company or Subsidiaries (other than Significant Subsidiaries), so long as Priority Debt at no time exceeds twenty percent (20%) of Consolidated Total Tangible Assets (notwithstanding the foregoing, the basket in this subclause (ii) shall not be used to provide credit enhancements (in any form, including Liens and Guarantees) to the lender(s) under the Company’s Principal Credit Facilities); provided that (x) so long as the Company complies with Section 9.8 and would be in compliance with Sections 10.9 and 10.10 hereof (calculated as of the date of, and after giving effect to, the incurrence of such Indebtedness), Material Subsidiaries (as defined in the Credit Agreement) may enter into additional Guarantees of Indebtedness of the Company under any Principal Credit Facility on terms and conditions no more restrictive on the Company and its Subsidiaries taken as a whole than the terms and conditions of the Subsidiary Guaranties provided to the holders of the Notes hereunder, in each case solely to the extent such Guarantees shall be unsecured and either junior in right of payment to the Notes and other obligations hereunder or pari passu to the Notes and other obligations hereunder, provided that the Company shall promptly provide New York Life and the holders of the Notes with a copy of any documentation evidencing such Guarantees and any modification to such Guarantees; and

(iii)Receivables Transaction Attributed Indebtedness and/or Indebtedness incurred pursuant to Qualified Receivables Transaction in an aggregate amount not to exceed $30,000,000 at any time.

Section 10.3 Loans, Advances and Investments. Make or permit to remain outstanding loans or advances to, or own, purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contributions to, any Person (collectively, “Investments”), except that the Company or any Subsidiary may:

(i)make or permit to remain outstanding loans or advances to the Company or any Subsidiary;

(ii)own, purchase or acquire stock, obligations or securities of a Subsidiary or of a corporation or other Person which immediately after such purchase or acquisition will be a Subsidiary;

(iii)acquire and own stock, obligations or securities received in settlement of debts (created in the ordinary course of business) owing to the Company or any Subsidiary, to the extent the aggregate amount of all such Investments described in this clause (iii) made after the date of this Agreement does not exceed $1,000,000;

(iv)own, purchase or acquire prime commercial paper, banker’s acceptances and certificates of deposit in commercial banks with a capital of $100,000,000 or more or whose credit is reasonably satisfactory to New York Life; repurchase agreements with respect to the foregoing; fixed income obligations of companies organized under Federal or state law; obligations of the United States Government (or any State thereof); obligations fully guaranteed by the United States Government (or any State thereof); obligations of counties or municipalities located in the United States or agencies or departments thereof in each case rated “A” or better by Standard & Poors Corporation or the equivalent thereof by any nationally recognized rating agency and mutual fund accounts which exclusively invest in any one or more of the foregoing;

(v)make or permit to remain outstanding loans or advances to officers and employees in the ordinary course of business reasonably consistent with the Company’s business practices as of the date of this Agreement;

(vi)make or permit to remain outstanding loans to the existing employee stock ownership plan of the Company;

(vii)make or permit to remain outstanding loans to any new employee stock ownership plan of the Company which is approved by the Company’s shareholders;

(viii)make or permit to remain outstanding loans to senior management of the Company pursuant to the Company’s stock purchase plan not to exceed in the aggregate at any time outstanding $5,000,000;

(ix)make deposits required by government agencies or public utilities in the ordinary course of business;

(x)make deposits in demand deposit accounts;

(xi)own treasury stock, and so long as no Default or Event of Default shall be continuing, repurchase from time to time of the capital stock of the Company as authorized by the Company’s board of directors from time to time;

(xii)make any Investments comprised of contributions (whether in the form of cash, a note, or other assets) to a Subsidiary or other special-purpose entity created solely to engage in a Qualified Receivables Transaction or otherwise resulting from transfers of assets permitted by Section 10.7 to such a special-purpose entity;

(xiii)make any Investments permitted pursuant to Section 10.4; and

(xiv)make other new Investments not to exceed an amount equal to twenty-five percent (25%) of Consolidated Net Worth.

Section 10.4 Disposition of Certain Assets. Except for Permitted Dispositions or except as permitted by Sections 10.3, 10.5, 10.6 and 10.7, sell, lease, transfer or otherwise dispose of any assets of the Company or any Subsidiary.

Section 10.5 Sale of Stock and Debt of Subsidiaries. Except for Permitted Dispositions or except as permitted by Section 10.6, sell or otherwise dispose of, or part with control of, any shares of stock or Indebtedness of any Subsidiary, except to the Company or any Subsidiary. Notwithstanding the foregoing, the Dutch Subsidiary Issuer and each Significant Subsidiary shall at all times be a Wholly-Owned Subsidiary of the Company.

Section 10.6 Merger and Consolidation. Merge with or consolidate into any other Person, except:

(i)Subsidiaries may be merged into any Issuer, and Subsidiaries other than the Dutch Subsidiary Issuer may be merged into any other Subsidiary; and

(ii)so long as no Default or Event of Default would exist after giving effect thereto or as a result therefrom each Issuer may merge with another entity which is organized under the laws of the United States of America or one of its states provided that such Issuer is the surviving corporation.

Section 10.7 Sale or Discount of Receivables. Except in connection with any Qualified Receivables Transaction, sell with or without recourse, discount or pledge or otherwise sell any of its notes or accounts receivable excluding, however, the sale on a non-recourse basis of receivables in the ordinary course of business owing from foreign account debtors so long as such sale is not for the exclusive purpose of raising a financing (e.g., a securitization).

Section 10.8 Restricted Transactions. Deal directly or indirectly with an Affiliate, any Person related by blood, adoption, or marriage to any Affiliate or any Person owning 5% or more of the Company’s or any Subsidiary’s stock, provided that (i) the Company may deal with such persons in the ordinary course of business at arm’s length, (ii) the Company and its Subsidiaries may make Investments permitted by Section 10.3, (iii) in addition to the foregoing, so long as the stock of the Company is publicly held, the Company may deal with such Persons so long as the aggregate amount of such transactions does not exceed $125,000 in any fiscal year and (iv) such prohibition shall not apply to transactions between Subsidiaries or between the Company and its Subsidiaries, including (without limitation) the right or ability of any Subsidiary to declare or pay a dividend, provided that any transactions between a member of the Excluded Subsidiary Group on the one hand, and the Company or any Subsidiary not in the Excluded Subsidiary Group on the other hand, shall be, taken as whole, on fair and reasonable terms no less favorable to the Company or the Subsidiary not in the Excluded Subsidiary Group than would be obtainable in a comparable arm’s length transaction.

Section 10.9 Interest Coverage Ratio. At the end of each Fiscal Quarter ending on or after March 31, 2021, the ratio of Consolidated EBITDA for the period of four consecutive Fiscal Quarters then

ended to Consolidated Interest Expense for the period of four consecutive Fiscal Quarters then ended shall not be less than 3.00 to 1.00.

Section 10.10 Debt to EBITDA Ratio. At the end of each Fiscal Quarter ending on or after March 31, 2021, the ratio of Consolidated Net Debt as at the end of such Fiscal Quarter to Consolidated EBITDA for the period of four consecutive Fiscal Quarters then ended (the “Leverage Ratio”) shall not exceed 3.50 to 1.00; provided, that (x) so long as no Event of Default exists at such time or would result therefrom, the Company may, on not more than two (2) occasions during the term of this Agreement, elect, upon written notice to New York Life and each holder of a Note delivered no later than the last Business Day of the Fiscal Quarter in which the relevant Permitted Acquisition is consummated, to increase the maximum Leverage Ratio permitted under this Section 10.10 to 4.00 to 1.00 for a period of four consecutive Fiscal Quarters in connection with a Permitted Acquisition occurring during the first of such four Fiscal Quarters if the aggregate consideration paid or to be paid in respect of such Permitted Acquisition exceeds $100,000,000 (each such period of four consecutive Fiscal Quarters, an “Adjusted Covenant Period”), and (y) notwithstanding the foregoing clause (x), the Company may not elect a new Adjusted Covenant Period for at least two (2) full Fiscal Quarters following the end of another Adjusted Covenant Period. The Company agrees to pay to the holders of the Notes a fee (the “Acquisition Spike Fee”) in Dollars equal to 0.50% per annum of the average outstanding principal amount of the Notes for each Fiscal Quarter during each Adjusted Covenant Period; the Acquisition Spike Fee shall be payable in arrears on the date upon which the financial statements for such Fiscal Quarter are to be delivered under Section 7.1(a) (or Section 7.1(b), if the applicable Fiscal Quarter is the last Fiscal Quarter in a fiscal year). Payment of the Acquisition Spike Fee shall be made pursuant to the terms of Section 14, and the consequences for the failure to pay the Acquisition Spike Fee when due shall be governed by Section 11(b) hereof, treating the Acquisition Spike Fee, for such purposes and for the purpose of determining the amount payable upon acceleration of the Notes, as interest.

Section 10.11 Subsidiary Restrictions. Enter into, or be otherwise subject to, any contract, agreement or other binding obligation (including its charter) that directly or indirectly limits the amount of, or otherwise restricts (i) the payment by any Subsidiary to the Company of dividends or other redemptions or distributions with respect to such Subsidiary’s capital stock, (ii) the repayment to the Company by any Subsidiary of intercompany loans or advances, (iii) the making of loans or advances by any Subsidiary to the Company or any Wholly-Owned Subsidiary (other than a Significant Subsidiary) or (iv) other intercompany transfers to the Company of property or other assets by Subsidiaries.

Section 10.12 Restricted Payments. Declare or make any Restricted Payment if any Default or Event of Default has occurred and is continuing or would result therefrom.

Section 10.13 Terrorism Sanctions Regulations. Permit any Controlled Entity (a) to become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or any Person that is the target of sanctions imposed by the United Nations or by the European Union if such ownership or control (i) would cause any holder to be in violation of any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions, or (b) directly or indirectly to have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder to be in violation of any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions, or (c) to engage, nor shall any Affiliate of either engage, in any activity that could subject such Person or any holder to sanctions under CISADA or any similar law or regulation with respect to Iran or any other country that is subject to U.S. Economic Sanctions.

Section 10.14 Dutch Fiscal Unit. Neither the Company nor any Subsidiary shall be part of any fiscal unity for Dutch tax purposes, other than the Dutch CIT Fiscal Unity.

Section 11. Events of Default.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

(a)any Issuer defaults in the payment of any principal or Make-Whole Amount, if any, or Prepayment Premium, if any, Swap Breakage Amount, if any, or LIBOR Breakage Amount, if any, on any Note when the same becomes due and payable, and in the Applicable Currency required hereunder, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b)any Issuer defaults in the payment of any interest on any Note for more than ten Business Days after the same becomes due and payable and in the Applicable Currency required hereunder; or

(c)the Company or any Subsidiary defaults (whether as primary obligor or as guarantor or other surety) in any payment of principal of or interest on any other Indebtedness (or any Capitalized Lease Obligation, any obligation under a conditional sale or other title retention agreement, any obligation issued or assumed as full or partial payment for property whether or not secured by a purchase money mortgage or any obligation under notes payable or drafts accepted representing extensions of credit) beyond any period of grace provided with respect thereto, or the Company or any Subsidiary fails to perform or observe any other agreement, term or condition contained in any agreement under which any such Indebtedness is created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee on behalf of such holder or holders) to cause, such obligation to become due (or to be repurchased by the Company or any Subsidiary) prior to any stated maturity, provided that the aggregate amount of all Indebtedness as to which such a payment default shall occur and be continuing or such a failure or other event causing or permitting acceleration (or resale to the Company or any Subsidiary) shall occur and be continuing exceeds $10,000,000; or

(d)any representation or warranty made by any Issuer herein or by any Issuer or any of its officers in any writing furnished in connection with or pursuant to this Agreement shall be false in any material respect on the date as of which made; or

(e)any Issuer or any Guarantor, as applicable, fails to perform or observe any agreement contained in Section 10; or

(f)any Issuer or any Guarantor, as applicable, fails to perform or observe any other agreement, term or condition contained herein or in any other Note Document, and such failure shall not be remedied within 30 days after any Responsible Officer obtains actual knowledge thereof; or

(g)any Issuer or any Subsidiary makes an assignment for the benefit of creditors or is generally not paying its debts as such debts become due; or

(h)any decree or order for relief in respect of any Issuer or any Subsidiary is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in effect (herein called the “Bankruptcy Law”), of any jurisdiction; or

(i)any Issuer or any Subsidiary petitions or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official of any Issuer or any Subsidiary, or of any substantial part of the assets of any Issuer or any Subsidiary, or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings (other than proceedings for the voluntary liquidation and dissolution of a Subsidiary) relating to any Issuer or any Subsidiary under the Bankruptcy Law of any other jurisdiction; or

(j)any such petition or application is filed, or any such proceedings are commenced, against any Issuer or any Subsidiary and such Issuer or such Subsidiary by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or

(k)any order, judgment or decree is entered in any proceedings against any Issuer decreeing the dissolution of such Issuer and such order, judgment or decree remains unstayed and in effect for more than 60 days; or

(l)any order, judgment or decree is entered in any proceedings against any Issuer or any Subsidiary decreeing a split-up of such Issuer or such Subsidiary which requires the divestiture of assets representing a substantial part, or the divestiture of the stock of a Subsidiary whose assets represent a substantial part, of the consolidated assets of the Company and its Subsidiaries (determined in accordance with GAAP) or which requires the divestiture of assets, or stock of a Subsidiary, which shall have contributed a substantial part of the consolidated net income of the Company and its Subsidiaries (determined in accordance with GAAP) for any of the three fiscal years then most recently ended, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or

(m)a final judgment in an amount in excess of $2,000,000 is rendered against any Issuer or any Subsidiary and, within 60 days after entry thereof, such judgment is not discharged or execution thereof stayed pending appeal, or within 60 days after the expiration of any such stay, such judgment is not discharged; or

(n)the Company or any member of the Controlled Group shall fail to pay when due any material amount which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans shall be filed under Title IV of ERISA by the Company, any member of the Controlled Group, any plan administrator or any combination of the foregoing which results in liability of the Company or any member of the Controlled Group of greater than $2,000,000; or the PBGC shall institute proceedings under Section 4042 of ERISA to terminate or to cause a trustee to be appointed to administer any such Plan or Plans or a proceeding shall be instituted by a fiduciary of any such Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 60 days thereafter; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any such Plan or Plans must be terminated; or the Company or any other member of the Controlled Group shall incur any withdrawal liability in excess of $2,000,000 with respect to a Multiemployer Plan; or

(o)the Dutch Subsidiary Issuer or any Significant Subsidiary shall cease, for any reason, to be a Wholly Owned Subsidiary; or

(p)for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all obligations of the Company and its Subsidiaries under this Agreement and

each other Note Document, any Note Document ceases to be in full force and effect; or the Company, any of its Subsidiaries or any other Person contests in writing the validity or enforceability of any provision of any Note Document; or any party hereto denies in writing that it has any or further liability or obligation under any Note Document, or purports in writing to revoke, terminate or rescind any Note Document.

Section 12. Remedies on Default, Etc.

Section 12.1 Acceleration. (a) If an Event of Default with respect to any Issuer described in Section 11 (h), (i) or (j) has occurred, the Facility will automatically terminate and all the Notes then outstanding shall automatically become immediately due and payable.

(b)If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, terminate the Facility and/or declare all the Notes then outstanding to be immediately due and payable.

(c)If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the Make-Whole Amount, LIBOR Breakage Amount, Swap Breakage Amount and Prepayment Premium, if any, determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. Each Issuer acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by any Issuer (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount, LIBOR Breakage Amount, Swap Breakage Amount and Prepayment Premium, if any, by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

Section 12.2 Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

Section 12.3 Rescission. At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the holders of not less than 51% in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Issuers have paid all overdue interest on the Notes, all principal of and Make-Whole Amount, LIBOR Breakage Amount, Swap Breakage Amount and Prepayment Premium, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, LIBOR Breakage Amount, Swap Breakage Amount and Prepayment Premium, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Issuers nor any other Person shall have paid any

amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

Section 12.4 No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement, or any other Note Document upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Issuers under Section 15, the Issuers will jointly and severally pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

Section 13. Registration; Exchange; Substitution of Notes.

Section 13.1 Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

Section 13.2 Transfer and Exchange of Notes. Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the applicable Issuer shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, of the same Series and in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit A-1, Exhibit A-2 or Exhibit A-3, as applicable. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $100,000 in the case of Notes denominated in Dollars, or €100,000, in the case of Notes denominated in Euros, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000 or €100,000, as applicable. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.

Section 13.3 Replacement of Notes. Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to

it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

(a)in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $100,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b)in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Issuers, at the expense of the Company shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

Section 14. Payments on Notes.

Section 14.1 Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole Amount, LIBOR Breakage Amount, Swap Breakage Amount and Prepayment Premium, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of JPMorgan Chase Bank in such jurisdiction. The applicable Issuer may at any time, by notice to each holder of a Note, change the place of payment of its Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

Section 14.2 Home Office Payment. So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the applicable Issuer will pay all sums becoming due on such Note for principal, Make-Whole Amount, LIBOR Breakage Amount. Swap Breakage Amount and Prepayment Premium, if any, and interest by the method and at the address specified for such purpose below such Purchaser’s name in Schedule B (in the case of the Series B Notes) or the Purchaser Schedule attached to the applicable Confirmation of Acceptance (in the case of any Shelf Notes), or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Issuers will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.

Section 15. Expenses, Etc.

Section 15.1 Transaction Expenses. Whether or not the transactions contemplated hereby are consummated or any Notes are issued hereunder, the Issuers jointly and severally will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the

Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Notes or any other Note Document (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Notes or any other Note Document or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Notes or any guaranty thereof, or by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes and any guaranty thereof and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO. The Issuers jointly and severally will pay, and will save each Purchaser and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes).

Section 15.2 Survival. The obligations of the Issuers under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, the Notes, or any other Note Document, and the termination of this Agreement.

Section 16. Survival of Representations and Warranties; Entire Agreement.

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Issuers pursuant to this Agreement shall be deemed representations and warranties of the Issuers under this Agreement. Subject to the preceding sentence, this Agreement, the Notes or any other Note Document embody the entire agreement and understanding between each Purchaser and each Issuer and supersede all prior agreements and understandings relating to the subject matter hereof.

Section 17. Amendment and Waiver.

Section 17.1 Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Issuers and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount or LIBOR Breakage Amount or Swap Breakage Amount or Prepayment Premium, if any, on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

Section 17.2 Solicitation of Holders of Notes.

(a)Solicitation. The Issuers will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to

any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes or any Subsidiary Guaranty. The Issuers will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17, or any Subsidiary Guaranty to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

(b)Payment. The Issuers will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof or of any Subsidiary Guaranty or any Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.

(c)Consent in Contemplation of Transfer. Any consent given pursuant to this Section 17 or any Subsidiary Guaranty by a holder of a Note that has transferred or has agreed to transfer its Note to the Company, any Subsidiary or any Affiliate or to any other Person in connection with, or in anticipation of, an acquisition of, tender offer for or merger with the Company and/or any of its Affiliates in connection with such consent shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

Section 17.3 Binding Effect, etc. Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Issuers without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between any Issuers and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

Section 17.4 Notes Held by Issuers, etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, the Notes, or any other Note Document, or have directed the taking of any action provided herein or in the Notes or any other Note Document to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by any Issuer or any of its Affiliates shall be deemed not to be outstanding.

Section 18. Notices.

All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy or e-mail if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent:

(i)if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule B (in the case of the Series B Notes) or the Purchaser Schedule attached to the applicable Confirmation of Acceptance (in the case of any Shelf Notes), or at such other address as such Purchaser or nominee shall have specified to the Company in writing,

(ii)if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing,

(iii)if to any Issuer, to the Company at its address set forth at the beginning hereof to the attention of Treasurer, legal@fele.com, (260) 827-5368 or at such other address as such Issuer shall have specified to the holder of each Note in writing; or

(iv)if to New York Life, the address specified for such communications in Schedule B in the case of any Series B Notes, and in the applicable Confirmation of Acceptance, in the case of any Shelf Note.

Notices under this Section 18 will be deemed given only when actually received.

Section 19. Reproduction of Documents.

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced. Each Issuer agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit any Issuer or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

Section 20. Confidential Information.

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by any Issuer or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its financial advisors and other professional

advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor other than a Competitor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any federal or state regulatory authority having jurisdiction over such Purchaser, (vi) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (vii) any other Person to which such delivery or disclosure may be necessary or appropriate (v) to the extent that preventing such disclosure would otherwise cause any transaction contemplated by this Agreement or any transaction carried out in connection with the transactions contemplated by this Agreement to become an arrangement described in Par II A 1 of Annex IV of DAC6, (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes and this Agreement or any guaranty thereof; provided, further, that in the case of sales contemplated by clause (iv) above, each Purchaser and each transferee agrees to distribute first to the potential purchaser the financial statements and audit reports received pursuant to paragraph 7.1(a), (b), (c) and (d) and second after such potential purchaser indicates that it is still considering consummating a purchase and has agreed in writing to be bound by this paragraph for the benefit of the Company, such Purchaser or transferee may distribute such other Confidential Information as it deems necessary in order for such potential purchaser to independently evaluate the Company’s creditworthiness. So long as no Default or Event of Default exists, prior to disclosing Confidential Information to such potential purchaser, each holder of a Note by its acceptance of the Note agrees to use reasonable efforts to give the Company written notice of its intention to disclose Confidential Information in connection with any proposed sale to an Institutional Investor stating in such notice the name of the Institutional Investor to whom such disclosure is to be made. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.

Section 21. Substitution of Purchaser.

Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser of the Notes that it has agreed to purchase under this Agreement or any Confirmation of Acceptance, by written notice to the Company, which notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, any reference to such Affiliate as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Affiliate, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.

Section 22. Miscellaneous.

Section 22.1 Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

Section 22.2 Payments Due on Non-Business Days. (i) Anything in this Agreement or the Fixed Rate Notes to the contrary notwithstanding, (x) subject to clause (y), any payment of interest on any Fixed Rate Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; and (y) any payment of principal of or Make-Whole Amount on any Fixed Rate Note (including principal due on the maturity date of such Fixed Rate Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

(ii)Anything in this Agreement or the Floating Rate Notes to the contrary notwithstanding, any payment of principal of or Prepayment Premium, Swap Breakage Amount, LIBOR Breakage Amount or interest on any Floating Rate Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of the interest payable on such next succeeding Business Day.

Section 22.3 Accounting Terms. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all unaudited financial statements and certificates and reports as to financial matters required to be furnished hereunder shall be prepared, in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of the Company and its Subsidiaries delivered pursuant to Section 7.1(b) or, if no such statements have been so delivered, the most recent audited financial statements referred to in clause (i) of Section 5.3. Any reference herein to any specific citation, section or form of law, statute, rule or regulation shall refer to such new, replacement or analogous citation, section or form should such citation, section or form be modified, amended or replaced. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Company or any Subsidiary at “fair value”, as defined therein, (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof and (iii) without giving effect to any changes in GAAP occurring after the Effective Date, the effect of which would be to cause leases which would be treated as operating leases under GAAP as of the Effective Date to be treated as Capital Leases under GAAP.

Section 22.4 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

Section 22.5 Construction, etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to

excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.

Section 22.6 Counterparts; Electronic Signatures.

(a)This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

(b)Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Note Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 18), certificate, request, statement, disclosure or authorization related to this Agreement, any other Note Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy, emailed pdf., or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Note Document or such Ancillary Document, as applicable. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Note Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Required Holders to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the Required Holders have agreed to accept any Electronic Signature, the Required Holders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Company, its Subsidiaries or any other party hereto without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (ii) upon the request of the Required Holders, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, the Company, its Subsidiaries and each other party hereto hereby (i) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Required Holders, the Purchasers, the Company, its Subsidiaries and the other parties hereto, Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement, any other Note Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (ii) the Required Holders may, at their option, create one or more copies of this Agreement, any other Note Document and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (iii) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Note Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Note Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (iv) waives any claim against any Indemnitee for any liabilities arising solely from the Required Holders’ and/or any Purchaser’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other

electronic means that reproduces an image of an actual executed signature page, including any liabilities arising as a result of the failure of the Company and/or any of its Subsidiaries to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.

Section 22.7 Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice‑of‑law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Section 22.8 Jurisdiction and Process; Waiver of Jury Trial. (a) Each Issuer irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, each Issuer irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(b)Each Issuer consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.8(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to such Section. Each Issuer agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

(c)Nothing in this Section 22.8 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

(d)The parties hereto hereby waive trial by jury in any action brought on or with respect to this Agreement, the Notes or any other document executed in connection herewith or therewith.

Section 22.9 Transaction References. Each Issuer agrees that New York Life may (a) refer to its role in establishing the Facility, as well as the identity of such Issuer, and the maximum aggregate principal amount of the Notes and the date on which the Facility was established on its internet site or in marketing materials, press releases, published “tombstone” announcements or any other print or electronic medium and (b) display the Company’s corporate logo in conjunction with any such reference.

Section 22.10 Obligation to Make Payment in the Applicable Currency. Principal and interest on any Notes shall be payable in the Applicable Currency in which such Notes were issued; fees and all other amounts payable under this Agreement, the Notes and any Subsidiary Guaranties shall be payable in Dollars. Any payment on account of an amount that is payable hereunder or under the Notes in the Applicable Currency which is made to or for the account of any holder of Notes in any other currency, whether as a result of any judgment or order or the enforcement thereof or the realization of any security or the liquidation of any Issuer, shall constitute a discharge of the obligation of such Issuer under this Agreement or the Notes only to the extent of the amount of the Applicable Currency which such holder could purchase in the foreign exchange markets in London, England, with the amount of such other

currency in accordance with normal banking procedures at the rate of exchange prevailing on the London Banking Day following receipt of the payment first referred to above. If the amount of the Applicable Currency that could be so purchased is less than the amount of the Applicable Currency originally due to such holder, the applicable Issuer agrees to the fullest extent permitted by law, to indemnify and save harmless such holder from and against all loss or damage arising out of or as a result of such deficiency. This indemnity shall, to the fullest extent permitted by law, constitute an obligation separate and independent from the other obligations contained in this Agreement and the Notes, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by such holder from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due hereunder or under the Notes or under any judgment or order. As used herein the term “London Banking Day” shall mean any day other than Saturday or Sunday or a day on which commercial banks are required or authorized by law to be closed in London, England.

Section 22.11 Determinations Involving Different Currencies. Unless stated otherwise, all calculations, comparisons, measurements or determinations under this Agreement, including with respect to the aggregate outstanding amount of Notes, shall be measured in Dollars. In particular, without limitation, for purposes of valuations or computations with respect to the calculations under this Agreement, unless expressly provided otherwise, where reference is made to any amount, such valuation or computation shall be measured as the Dollar Amount thereof. When applying any monetary limits, thresholds and other exceptions to the representations and warranties, covenants, undertakings and Events of Default under this Agreement, the Notes or any other Note Document, all amounts shall be measured at the Dollar Amount thereof.

Section 22.12 Divisions. For all purposes under the Note Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its Equity Interests at such time.

Section 23. Company Guaranty

(a)In order to induce the Purchasers to purchase Notes issued by the Dutch Subsidiary Issuer hereunder, the Company hereby absolutely and irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, the payment in full when and as due of all amounts payable by the Dutch Subsidiary Issuer pursuant to the Notes (whether for principal, interest, Make-Whole Amount, Prepayment Premium, Swap Breakage Amount, LIBOR Breakage Amount or otherwise) or this Agreement, including, without limitation, all indemnities, fees and expenses payable by the Dutch Subsidiary Issuer hereunder (collectively, the “Guaranteed Obligations”). The Company further agrees that the due and punctual payment of any of the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee hereunder notwithstanding any such extension or renewal of any such Guaranteed Obligation. The Company hereby irrevocably and unconditionally agrees that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the holders of the Notes immediately on demand against any cost, loss or liability they incur as a result of any other Issuer hereunder or a Subsidiary or any of its Affiliates not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by the Company under this Section 23 on the date when it would have been due (but so that the amount payable by the Company under this indemnity will not exceed the amount which it would have had to pay under this Section 23 if the amount claimed had been recoverable on the basis of a guarantee).

(b)The Company waives presentment to, demand of payment from and protest to any Issuer of any of the Guaranteed Obligations, and also waives notice of acceptance of its obligations and notice of protest for nonpayment. The obligations of the Company hereunder shall not be affected by (a) the failure of any holder of Notes to assert any claim or demand or to enforce any right or remedy against any Issuer under the provisions of this Agreement, any other Note Document or otherwise; (b) any extension or renewal of any of the Guaranteed Obligations; (c) any rescission, waiver, amendment or modification of, or release from, any of the terms or provisions of this Agreement, or any other Note Document or agreement; (d) any default, failure or delay, willful or otherwise, in the performance of any of the obligations hereunder; (e) the failure of any holder of Notes to take any steps to perfect and maintain any security interest in, or to preserve any rights to, any security or collateral for the Guaranteed Obligations, if any; (f) any change in the corporate, partnership or other existence, structure or ownership of the Company or any other guarantor of any of the Guaranteed Obligations; (g) the enforceability or validity of the Guaranteed Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to any collateral securing the Guaranteed Obligations or any part thereof, or any other invalidity or unenforceability relating to or against the Company or any other guarantor of any of the Guaranteed Obligations, for any reason related this Agreement, any other Note Document, or any provision of applicable law, decree, order or regulation of any jurisdiction purporting to prohibit the payment by the Company or any other guarantor of the Guaranteed Obligations, of any of the Guaranteed Obligations or otherwise affecting any term of any of the Guaranteed Obligations; or (h) any other act (other than payment of the Guaranteed Obligations), omission or delay to do any other act which may or might in any manner or to any extent vary the risk of the Company or otherwise operate as a discharge of a guarantor as a matter of law or equity or which would impair or eliminate any right of the Company to subrogation.

(c)The Company further agrees that its agreement hereunder constitutes a guarantee of payment when due (whether or not any bankruptcy or similar proceeding shall have stayed the accrual or collection of any of the Guaranteed Obligations or operated as a discharge thereof) and not merely of collection, and waives any right to require that any resort be had by any holder of Notes to any balance of any deposit account or credit on the books of any holder of Notes in favor of any Issuer or any other Person.

(d)The obligations of the Company hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Guaranteed Obligations), and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations, any impossibility in the performance of any of the Guaranteed Obligations or otherwise, including, without limitation, any defenses that may exist under the provisions of the Illinois Sureties Act or any similar statutes (all of which defenses are hereby waived).

(e)The Company further agrees that its obligations hereunder shall constitute a continuing and irrevocable guarantee of all Guaranteed Obligations now or hereafter existing and shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Guaranteed Obligation (including a payment effected through exercise of a right of setoff) is rescinded, or is or must otherwise be restored or returned by any holder of Notes upon the insolvency, bankruptcy or reorganization of any Issuer or otherwise (including pursuant to any settlement entered into by a holder of the Guaranteed Obligations in its discretion).

(f)In furtherance of the foregoing and not in limitation of any other right which any holder of Notes may have at law or in equity against the Company by virtue hereof, upon the failure of the Dutch Subsidiary Issuer to pay any obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Company hereby promises to and will, upon receipt of written demand by any holder of Notes, forthwith pay, or cause to be paid, to any

holder of Notes in cash an amount equal to the unpaid principal amount of the Guaranteed Obligations then due, together with accrued and unpaid interest thereon. The Company further agrees that if payment in respect of any Guaranteed Obligation shall be due in a currency other than Dollars and/or at a place of payment other than New York or a payment office specified by the applicable holder of Notes and if, by reason of any change in any applicable law, disruption of currency or foreign exchange markets, war or civil disturbance or other event, payment of such Guaranteed Obligation in such currency or at such place of payment shall be impossible or, in the reasonable judgment of any holder of Notes disadvantageous to any holder of Notes in any material respect, then, at the election of such holder, the Company shall make payment of such Guaranteed Obligation in Dollars (based upon the applicable Dollar Amount in effect on the date of payment) and/or in New York or such other payment office as is designated by such holder and, as a separate and independent obligation, shall indemnify each holder of Notes against any losses or reasonable out-of-pocket expenses that it shall sustain as a result of such alternative payment.

(g)Upon payment by the Company of any sums as provided above, all rights of the Company against the Dutch Subsidiary Issuer arising as a result thereof by way of right of subrogation or otherwise shall in all respects be subordinated and junior in right of payment to the prior indefeasible payment in full in cash of all the Guaranteed Obligations owed by the Dutch Subsidiary Issuer or any Subsidiary to the holders of Notes.

(h)Nothing shall discharge or satisfy the liability of the Company hereunder except the full performance and payment in cash of the Guaranteed Obligations.

Section 24. Tax Indemnification; FATCA Information

(a)All payments whatsoever under this Agreement will be made by the Company in lawful currency of the United States of America, and all payments whatsoever under the Notes will be made by the applicable Issuer in the Applicable Currency of such Notes, in each case free and clear of, and without liability for withholding or deduction for or on account of, any present or future Taxes of whatever nature imposed or levied by or on behalf of any jurisdiction other than the United States of America (or any political subdivision or taxing authority of or in such jurisdiction) (hereinafter a “Taxing Jurisdiction”), unless the withholding or deduction of such Tax is compelled by law.

(b)If any deduction or withholding for any Tax of a Taxing Jurisdiction shall at any time be required in respect of any amounts to be paid by any Issuer under this Agreement or the Notes, such Issuer will pay to the relevant Taxing Jurisdiction the full amount required to be withheld, deducted or otherwise paid before penalties attach thereto or interest accrues thereon and pay to each holder of a Note such additional amounts as may be necessary in order that the net amounts paid to such holder pursuant to the terms of this Agreement or the Notes after such deduction, withholding or payment (including any required deduction or withholding of Tax on or with respect to such additional amount), shall be not less than the amounts then due and payable to such holder under the terms of this Agreement or the Notes before the assessment of such Tax, provided that no payment of any additional amounts shall be required to be made for or on account of:

(1)any Tax that would not have been imposed but for the existence of any present or former connection between such holder (or a fiduciary, settlor, beneficiary, member of, shareholder of, or possessor of a power over, such holder, if such holder is an estate, trust, partnership or corporation or any Person other than the holder to whom the Notes or any amount payable thereon is attributable for the purposes of such Tax) and the Taxing Jurisdiction, other than the mere holding of the relevant Note or the receipt of payments thereunder or in respect thereof or the exercise of remedies in respect thereof, including such holder (or such other Person described in the above parenthetical) being or having been a citizen or resident thereof, or being or having been present or engaged in trade or business therein or having or having had an establishment, office, fixed base or branch therein, provided that this

exclusion shall not apply with respect to a Tax that would not have been imposed but for the applicable Issuer, after the Closing Date, opening an office in, moving an office to, reincorporating in, or changing the Taxing Jurisdiction from or through which payments on account of this Agreement or the Notes are made to, the Taxing Jurisdiction imposing the relevant Tax;

(2)any Tax that would not have been imposed but for the delay or failure by such holder (following a written request by the Company) in the filing with the relevant Taxing Jurisdiction of Forms (as defined below) that are required to be filed by such holder to avoid or reduce such Taxes (including for such purpose any refilings or renewals of filings that may from time to time be required by the relevant Taxing Jurisdiction), provided that the filing of such Forms would not (in such holder’s reasonable judgment) impose any unreasonable burden (in time, resources or otherwise) on such holder or result in any confidential or proprietary income tax return information being revealed, either directly or indirectly, to any Person and such delay or failure could have been lawfully avoided by such holder, and provided further that such holder shall be deemed to have satisfied the requirements of this clause (b)(ii) upon the good faith completion and submission of such Forms (including refilings or renewals of filings) as may be specified in a written request of the Company no later than 60 days after receipt by such holder of such written request (accompanied by copies of such Forms and related instructions, if any, all in the English language or with an English translation thereof); or

(3)any combination of clauses (i) and (ii) above;

provided further that in no event shall the Issuers be obligated to pay such additional amounts to any holder (i) not resident in the United States of America or any other jurisdiction in which an original Purchaser is resident for tax purposes on the Closing Date in excess of the amounts that the Issuers would be obligated to pay if such holder had been a resident of the United States of America or such other jurisdiction, as applicable, for purposes of, and eligible for the benefits of, any double taxation treaty from time to time in effect between the United States of America or such other jurisdiction and the relevant Taxing Jurisdiction or (ii) registered in the name of a nominee if under the law of the relevant Taxing Jurisdiction (or the current regulatory interpretation of such law) securities held in the name of a nominee do not qualify for an exemption from the relevant Tax and the Company shall have given timely notice of such law or interpretation to such holder.

(c)By acceptance of any Note, the holder of such Note agrees, subject to the limitations of clause (b)(ii) above, that it will from time to time with reasonable promptness (x) duly complete and deliver to or as reasonably directed by the Company all such forms, certificates, documents and returns provided to such holder by the Company (collectively, together with instructions for completing the same, “Forms”) required to be filed by or on behalf of such holder in order to avoid or reduce any such Tax pursuant to the provisions of an applicable statute, regulation or administrative practice of the relevant Taxing Jurisdiction or of a tax treaty between the United States of America and such Taxing Jurisdiction and (y) provide the Company with such information with respect to such holder as the Company may reasonably request in order to complete any such Forms, provided that nothing in this Section 24 shall require any holder to provide information with respect to any such Form or otherwise if in the opinion of such holder such Form or disclosure of information would involve the disclosure of tax return or other information that is confidential or proprietary to such holder, and provided further that each such holder shall be deemed to have complied with its obligation under this paragraph with respect to any Form if such Form shall have been duly completed and delivered by such holder to the Company or mailed to the appropriate taxing authority, whichever is applicable, within 60 days following a written request of the Company (which request shall be accompanied by copies of such Form and English translations of any such Form not in the English language) and, in the case of a transfer of any Note, at least 90 days prior to the relevant interest payment date.

(d)On or before the first Closing with respect to Notes to be issued by the Dutch Subsidiary Issuer, the Company will furnish each Purchaser with copies of the appropriate Form (and English translation if required as aforesaid) currently required to be filed in the Netherlands pursuant to Section 24(b)(ii), if any, and in connection with the transfer of any Note the Company will furnish the transferee of such Note with copies of any Form and English translation then required.

(e)If any payment is made by any Issuer to or for the account of the holder of any Note after deduction for or on account of any Taxes, and increased payments are made by such Issuer pursuant to this Section 24, then, if such holder at its sole discretion determines that it has received or been granted a refund of such Taxes, such holder shall, to the extent that it can do so without prejudice to the retention of the amount of such refund, reimburse to such Issuer such amount as such holder shall, in its sole discretion, determine to be attributable to the relevant Taxes or deduction or withholding. Nothing herein contained shall interfere with the right of the holder of any Note to arrange its tax affairs in whatever manner it thinks fit and, in particular, no holder of any Note shall be under any obligation to claim relief from its corporate profits or similar tax liability in respect of such Tax in priority to any other claims, reliefs, credits or deductions available to it or (other than as set forth in Section 24(b)(ii)) oblige any holder of any Note to disclose any information relating to its tax affairs or any computations in respect thereof.

(f)The Company will furnish the holders of Notes, promptly and in any event within 60 days after the date of any payment by any Issuer of any Tax in respect of any amounts paid under this Agreement or the Notes, the original tax receipt issued by the relevant taxation or other authorities involved for all amounts paid as aforesaid (or if such original tax receipt is not available or must legally be kept in the possession of the Company, a duly certified copy of the original tax receipt or any other reasonably satisfactory evidence of payment), together with such other documentary evidence with respect to such payments as may be reasonably requested from time to time by any holder of a Note.

(g)If any Issuer is required by any applicable law, as modified by the practice of the taxation or other authority of any relevant Taxing Jurisdiction, to make any deduction or withholding of any Tax in respect of which such Issuer would be required to pay any additional amount under this Section 24, but for any reason does not make such deduction or withholding with the result that a liability in respect of such Tax is assessed directly against the holder of any Note, and such holder pays such liability, then such Issuer will promptly reimburse such holder for such payment (including any related interest or penalties to the extent such interest or penalties arise by virtue of a default or delay by the Company) upon demand by such holder accompanied by an official receipt (or a duly certified copy thereof) issued by the taxation or other authority of the relevant Taxing Jurisdiction.

(h)If any Issuer makes payment to or for the account of any holder of a Note and such holder is entitled to a refund of the Tax to which such payment is attributable upon the making of a filing (other than a Form described above), then such holder shall, as soon as practicable after receiving written request from the Company (which shall specify in reasonable detail and supply the refund forms to be filed) use reasonable efforts to complete and deliver such refund forms to or as directed by the Company, subject, however, to the same limitations with respect to Forms as are set forth above.

(i)The obligations of the Issuers under this Section 24 shall survive the payment or transfer of any Note and the provisions of this Section 24 shall also apply to successive transferees of the Notes.

(j)By acceptance of any Note, the holder of such Note agrees that such holder will with reasonable promptness duly complete and deliver to the Company, or to such other Person as may be reasonably requested by the Company, from time to time (i) in the case of any such holder that is a United States Person, such holder’s United States tax identification number or other Forms reasonably requested

by the Company necessary to establish such holder’s status as a United States Person under FATCA and as may otherwise be necessary for the Issuers to comply with its obligations under FATCA and (ii) in the case of any such holder that is not a United States Person, such documentation prescribed by applicable law (including as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be necessary for each Issuer to comply with its obligations under FATCA and to determine that such holder has complied with such holder’s obligations under FATCA or to determine the amount (if any) to deduct and withhold from any such payment made to such holder. Nothing in this Section 24(j) shall require any holder to provide information that is confidential or proprietary to such holder unless the Issuers are required to obtain such information under FATCA and, in such event, the Issuers shall treat any such information they receive as confidential.

* * * * *

If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.

Very truly yours,

FRANKLIN ELECTRIC CO., INC.

By ____________________________________

Name: Jeffery L. Taylor

Title: Chief Financial Officer

FRANKLIN ELECTRIC B.V.

By ____________________________________

Name: Jeffery L. Taylor

Title: Chief Financial Officer

This Agreement is hereby

accepted and agreed to as

of the date thereof.

NYL INVESTORS LLC