EXHIBIT 99.5
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Credit Agreement (364-Day Facility)
Dated as of March 31, 2000
among
Mattel, Inc.
Bank of America, N.A.,
as Administrative Agent
Citicorp USA, Inc.,
as Syndication Agent
ABN AMRO Bank N.V.,
as Documentation Agent
and
The Other Financial
Institutions Party Hereto
Banc of America Securities LLC,
as Sole Lead Arranger and Sole Book Manager
[LOGO OF BANK OF AMERICA GOES HERE]
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MATTEL INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS
SECTION 1. DEFINITIONS................................................... 1
1.01 Certain Defined Terms....................................... 1
1.02 Other Definitional Provisions............................... 12
SECTION 2. THE COMMITMENTS............................................... 12
2.01 The Commitments............................................. 12
2.02 Loan Accounts and Notes..................................... 12
2.03 Borrowing Procedure......................................... 13
2.04 Conversion and Continuation Elections....................... 13
2.05 Reduction and Termination of Commitments.................... 14
2.06 Voluntary Prepayments....................................... 15
2.07 Repayment of Loans.......................................... 15
2.08 Interest on the Loans....................................... 15
2.09 Fees........................................................ 15
2.10 Calculation of Interest and Fees............................ 16
2.11 Payments by the Company..................................... 16
2.12 Payments by the Banks to the Administrative Agent........... 17
2.13 Sharing of Payments, Etc.................................... 18
SECTION 3. PAYMENTS IN GENERAL........................................... 18
3.01 Taxes....................................................... 19
3.02 Capital Adequacy............................................ 21
3.03 Illegality.................................................. 21
3.04 Increased Costs and Reduction of Return..................... 22
3.05 Funding Losses.............................................. 22
3.06 Inability to Determine Rates................................ 23
3.07 Survival.................................................... 23
SECTION 4. CONDITIONS PRECEDENT.......................................... 23
4.01 Conditions to Effectiveness................................. 23
4.02 Conditions to All Loans..................................... 24
SECTION 5. REPRESENTATIONS AND WARRANTIES................................ 25
5.01 Organization and Powers..................................... 25
5.02 Good Standing............................................... 25
5.03 Material Subsidiaries....................................... 25
5.04 Authorization of Borrowing.................................. 25
5.05 No Conflict................................................. 26
5.06 Governmental Consents....................................... 26
5.07 Binding Obligation.......................................... 26
5.08 Financial Condition......................................... 26
5.09 Changes, Etc................................................ 26
5.10 Title to Properties......................................... 27
5.11 Litigation; Adverse Facts................................... 27
5.12 Payment of Taxes............................................ 27
5.13 Agreements.................................................. 27
5.14 Performance................................................. 27
5.15 Governmental Regulation..................................... 28
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5.16 Employee Benefit Plans...................................... 28
5.17 Environmental Matters....................................... 28
5.18 Disclosure.................................................. 28
5.19 Subordination Agreements.................................... 28
5.20 Year 2000................................................... 28
SECTION 6. AFFIRMATIVE COVENANTS......................................... 29
6.01 Reporting and Information Requirements...................... 29
6.02 Corporate Existence, Etc.................................... 31
6.03 Payment of Taxes and Claims; Tax Consolidation.............. 31
6.04 Maintenance of Properties; Insurance........................ 32
6.05 Inspection of Property and Books and Records................ 32
6.06 Use of Proceeds of Loans.................................... 32
6.07 Environmental Laws.......................................... 32
6.08 Subordination Agreements.................................... 32
SECTION 7. NEGATIVE COVENANTS............................................ 33
7.01 Secured Indebtedness........................................ 33
7.02 Liens....................................................... 33
7.03 Restriction on Fundamental Changes.......................... 33
7.04 Sale or Discount of Receivables............................. 34
7.05 Consolidated Funded Indebtedness to Total Capitalization.... 34
7.06 Interest Coverage Ratio..................................... 34
7.07 ERISA....................................................... 35
7.08 Margin Regulations.......................................... 35
7.09 Independence of Covenants................................... 35
SECTION 8. EVENTS OF DEFAULT............................................. 35
8.01 Events of Default........................................... 35
8.02 Remedies.................................................... 37
8.03 Rights Not Exclusive........................................ 38
SECTION 9. THE ADMINISTRATIVE AGENT...................................... 38
9.01 Appointment and Authorization............................... 38
9.02 Delegation of Duties........................................ 38
9.03 Liability of Administrative Agent........................... 38
9.04 Reliance by Administrative Agent............................ 39
9.05 Notice of Default........................................... 39
9.06 Credit Decision............................................. 40
9.07 Indemnification............................................. 40
9.08 Administrative Agent in Individual Capacity................. 41
9.09 Successor Administrative Agent.............................. 41
9.10 Syndication Agent and Documentation Agent................... 41
SECTION 10. MISCELLANEOUS................................................ 42
10.01 Assignments, Participations, Etc............................ 42
10.02 Survival of Warranties and of Certain Agreements............ 44
10.03 Failure or Indulgence Not Waiver; Remedies Cumulative....... 44
10.04 Fees and Expenses........................................... 44
10.05 Set Off..................................................... 44
10.06 Notices..................................................... 45
10.07 Severability................................................ 45
10.08 Amendments and Waivers...................................... 45
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10.09 Obligations Several......................................... 46
10.10 Certain Changes............................................. 46
10.11 Headings.................................................... 46
10.12 Applicable Law.............................................. 46
10.13 Successors and Assigns...................................... 47
10.14 Counterparts................................................ 47
10.15 Indemnity................................................... 47
SIGNATURE PAGES S-1
EXHIBITS
Form of:
A Note
B Notice of Borrowing
C Notice of Conversion/Continuation
D Officers' Certificate
E Opinion of Assistant General Counsel of Company
F-1 Fisher-Price Continuing Guaranty
F-2 Mattel Sales Continuing Guaranty
G-1 Fisher-Price Subordination Agreements
G-2 Mattel Sales Subordination Agreements
H Notice of Assignment and Acceptance
SCHEDULES
1.01 Commitments and Pro Rata Shares
5.03 Material Subsidiaries of Company
5.11 Material Litigation
7.02 Certain Liens
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MATTEL, INC.
CREDIT AGREEMENT (364-Day facility)
This CREDIT AGREEMENT (364-DAY FACILITY) (this "Agreement") is dated as of
March 31, 2000 and is entered into by and among MATTEL, INC., a Delaware
corporation (the "Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (individually referred to herein as a "Bank" and collectively as
the "Banks"), Bank of America, N.A., as administrative agent for the Banks (in
such capacity, the "Administrative Agent"), Citicorp USA, Inc., as syndication
agent (in such capacity, the "Syndication Agent") and ABN AMRO Bank N.V., as
documentation agent (in such capacity, the "Documentation Agent").
RECITAL
The Company has requested that the Banks provide a revolving line of
credit, and the Banks and the Administrative Agent are willing to do so on the
terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
Section 1.
DEFINITIONS.
1.01 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Administrative Agent" has the meaning assigned to that term in the
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introduction to this Agreement.
"Administrative Agent's Office" means Administrative Agent's address and,
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as appropriate, account as set forth on Schedule 10.06 or such other address or
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account as Administrative Agent hereafter may designate by written notice to the
Company and the Banks.
"Administrative Agent-Related Persons" means Administrative Agent and any
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successor agent arising under Section 9.09, together with their respective
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Affiliates (including, in the case of Bank of America, the Arranger), and the
officers, directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Affiliate", as applied to any Person, means any other Person directly or
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indirectly controlling, controlled by or under common control with, that Person.
For the purposes of this definition, "control" (including with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting securities or by contract
or otherwise.
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"Agreement" means this Credit Agreement, as it may hereafter be amended,
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supplemented, restated or otherwise modified from time to time.
"Applicable Amount" means the commitment fee, utilization fee or the margin
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applicable to Loans (expressed in basis points per annum) set forth in the chart
below opposite the second highest rating issued by S&P, Moody's or Duff & Phelps
on the Company's senior unsecured long-term debt:
Senior Unsecured Long- Commitment Utilization Eurodollar Rate Base Rate
Term Debt Ratings Fee Fee Loans + Loans +
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A or higher by S&P 8.0 12.5 32.0 00.0
A2 or higher by Moody's
A or higher by Duff & Phelps
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A- by S&P 10.0 12.5 40.0 00.0
A3 by Moody's
A- by Duff & Phelps
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BBB+ by S&P 11.0 12.5 62.5 00.0
Baa1 by Moody's
BBB+ by Duff & Phelps
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BBB by S&P 13.0 12.5 75.0 00.0
Baa2 by Moody's
BBB by Duff & Phelps
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BBB- by S&P 17.5 12.5 112.5 25.0
Baa3 by Moody's
BBB- by Duff & Phelps
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None of above criteria satisfied 20.0 12.5 125.0 37.5
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Any change in the commitment fee, utilization fee or the margin applicable
to Loans shall become effective upon any public announcement of any change in
the above ratings that requires such a change according to the above chart.
"Arranger" means Banc of America Securities LLC.
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"Bank" has the meaning assigned to that term in the introduction to this
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Agreement, together with any other financial institutions that become a party
hereto as a "Bank" pursuant to Section 10.01.
"Bank Affiliate" means a Person engaged primarily in the business of
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commercial banking and that is a Subsidiary of a Bank or of a Person of which a
Bank is a Subsidiary.
"Bank of America" means Bank of America, N.A..
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"Base Rate" means a fluctuating rate per annum which is the higher of (a)
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the Federal Funds Rate plus one-half of one percent (1/2%) per annum and (b) the
rate of interest publicly
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announced from time to time by Bank of America as its prime rate, as in effect
on such date of determination. The prime rate is set by Bank of America based on
various factors including Bank of America's costs and desired return, general
economic conditions, and other factors, and is used as a reference point for
pricing some loans. Bank of America may make loans at, above or below the rate
announced by it as its prime rate.
"Base Rate Loans" means Loans made by the Banks bearing interest at rates
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determined by reference to the Base Rate.
"Business Day" means any day other than a Saturday, Sunday or other day on
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which commercial banks in New York City, New York, San Francisco, California or
Dallas, Texas are authorized or required by law to close and, if the applicable
Business Day relates to any Eurodollar Rate Loan, means such a day on which
dealings are carried on in the applicable offshore dollar interbank market.
"Capital Assets" means, as at any date of determination, those assets of a
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Person that would, in conformity with GAAP, be classified as property, plant or
equipment on the balance sheet of that Person.
"Capital Lease" as applied to any Person, means any lease of any property
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(whether real, personal or mixed) by that Person as lessee which would, in
conformity with GAAP, be required to be accounted for as a capital lease on the
balance sheet of that Person other than, in the case of the Company or any of
its Subsidiaries, any such lease under which the Company or any of its
Subsidiaries is the lessor.
"Combined Purchasers' Investments" means an amount equal to the sum of (a)
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the Purchasers' Investments under the Receivables Purchase Agreement plus (b)
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the analogous amount under Other Permitted Accounts Receivable Financing
Facilities relating to the sales of accounts receivable of Domestic Subsidiaries
(without duplication for accounts receivable sold to a Subsidiary of the Company
and then sold to a third party purchaser).
"Commitment" means, for each Bank, the amount set forth under "Commitment"
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on Schedule 1.01, as such amount may be adjusted pursuant to Section 2.05.
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"Company Party" means the Company or any Person (except the Banks, the
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Administrative Agent, the Syndication Agent, the Documentation Agent and the
Arranger and any of their respective Affiliates) from time to time party to a
Loan Document.
"Consolidated Funded Indebtedness" means, at any date of determination, for
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the Company and its Subsidiaries on a consolidated basis, the sum of (a) all
obligations and liabilities, whether current or long-term, for borrowed money,
(b) that portion of obligations with respect to Capital Leases which is
capitalized on the consolidated balance sheet of the Company and its
Subsidiaries, and (c) all guaranties of unconsolidated funded obligations for
borrowed money, all determined in conformity with GAAP.
"Consolidated Net Income" for any period, means the net income (or loss) of
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the Company and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with GAAP.
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"Consolidated Tangible Net Worth" means, as at any date of determination,
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the net worth of the Company and its Subsidiaries on a consolidated basis minus
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foreign exchange currency translation adjustments and intangible assets, all
determined in conformity with GAAP.
"Contingent Obligation", as applied to any Person, means, without
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duplication, any direct or indirect liability, contingent or otherwise, of that
Person (i) with respect to any indebtedness, lease, dividend or other obligation
of another if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such obligation
of another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof or (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings. Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another and
(b) any liability of such Person for the obligations of another through any
agreement (contingent or otherwise) (x) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise) or (y) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another, if in the case of any agreement described under subclauses (x) or (y)
of this sentence the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported. The amount
of any Contingent Obligation denominated in a currency other than Dollars shall
be equal to the Dollar Equivalent of such Contingent Obligation.
"Contractual Obligation" as applied to any Person, means any provision of
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any security issued by that Person or of any material indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
"Default" means any event or circumstance which, with the giving of notice,
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the lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
"Documentation Agent" means ABN AMRO Bank N.V. in its capacity as
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documentation agent.
"Dollars" means lawful money of the United States of America.
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"Domestic Subsidiary" means a Subsidiary of the Company that is
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incorporated in a jurisdiction of the United States of America.
"Duff & Phelps" means Duff & Phelps Credit Rating Co. or any successor
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thereto (including Fitch ICBA or any affiliates thereof).
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"Effective Date" means the date on which all the conditions in Section 4.01
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are satisfied or waived.
"Eligible Assignee" means (i) a commercial bank organized under the laws of
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the United States, or any state thereof, and having a combined capital and
surplus of at least $100,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
country in which it is organized or another country which is also a member of
the OECD; and (iii) a Person that is primarily engaged in the business of
commercial banking and that is (A) a Subsidiary of a Bank, (B) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (C) a Person of which a Bank is a
Subsidiary.
"Environmental Claims" means all claims, however asserted, by any
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Governmental Person or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
"Environmental Laws" means all federal, state or local laws, statutes,
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common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Person, in each case relating
to environmental, health, safety and land use matters.
"ERISA" means, at any time, the Employee Retirement Income Security Act of
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1974, as amended from time to time and any successor statute, and the rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Person, means any trade or business
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(whether or not incorporated) which is a member of a group of which that Person
is a member and which is under common control within the meaning of Section
414(b) and 414(c) of the Internal Revenue Code.
"Eurodollar Rate Loans" means Loans bearing interest at rates determined by
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reference to the Eurodollar Rate as provided in Section 2.08(a).
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"Eurodollar Rate" means for any Interest Period with respect to any
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Eurodollar Rate Loan, a rate per annum determined by Administrative Agent
pursuant to the following formula:
Eurodollar Rate = Eurodollar Base Rate
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1.00 - Eurodollar Reserve Percentage
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Where,
"Eurodollar Base Rate" means, for such Interest Period:
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(a) the rate per annum equal to the rate determined by Administrative
Agent to be the offered rate that appears on the page of the Telerate
screen that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(b) in the event the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall cease
to be available, the rate per annum equal to the rate determined by
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(c) in the event the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum determined by Administrative
Agent as the rate of interest (rounded upward to the next 1/100th of 1%) at
which deposits in Dollars for delivery on the first day of such Interest
Period in same day funds in the approximate amount of the Eurodollar Rate
Loan being made, continued or converted by Administrative Agent (or its
Affiliate) in its capacity as a Bank and with a term equivalent to such
Interest Period would be offered by Bank of America's London Branch to
major banks in the offshore Dollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any Interest
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Period, the reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on such day, whether or not applicable to
any Bank, under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"). The Eurodollar Rate for each
outstanding Eurodollar Rate Loan shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
The determination of the Eurodollar Reserve Percentage and the
Eurodollar Base Rate by Administrative Agent shall be conclusive in the
absence of manifest error.
"Event of Default" means any of the events set forth in Section 8.01.
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"Exchange Act" means, at any time, the Securities Exchange Act of 1934, as
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amended from time to time, and any successor statute, and the rules and
regulations promulgated thereunder.
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"Federal Funds Rate" means the weighted average of the rates on overnight
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Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day of determination (or if such
day of determination is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transaction received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
---------------------
System or any successor thereof.
"Fisher-Price" means Fisher-Price, Inc., a Delaware corporation.
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"Fisher-Price Guaranty" means the Continuing Guaranty signed by Fisher-
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Price substantially in the form of Exhibit F-1 hereto, as amended, supplemented,
restated or otherwise modified from time to time.
"Fisher-Price Subordination Agreement" means the Fisher-Price Subordination
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Agreement substantially in the form of Exhibit G-1 attached hereto signed by the
Company and certain Affiliates of the Company with respect to which Fisher-Price
has material outstanding obligations, as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time.
"Funding Date" means the Business Day of the funding of a Loan.
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"GAAP" means generally accepted accounting principles set forth in the
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opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Governmental Person" means the government of the United States or any
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foreign government or the government of any state or locality therein, any
political subdivision or any governmental, quasi-governmental, judicial, public
or statutory instrumentality, authority, body or entity, or other regulatory
bureau, authority, body or entity of the United States, any foreign government
or any state or locality therein, including the Federal Deposit Insurance
Company, the Comptroller of the Currency or the Federal Reserve Board.
"Governmental Rule" means any law, statute, rule, regulation, ordinance,
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order, judgment, guidelines or decision of any Governmental Person.
"Indebtedness", as applied to any Person, means (i) all indebtedness for
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borrowed money, (ii) that portion of obligations with respect to Capital Leases
which is required to be capitalized on a balance sheet in conformity with GAAP,
(iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (iv) any obligation
owed for all or any part of the deferred purchase price of property or services
which purchase price is (y) due more than twelve months from the date of
incurrence of the obligation
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in respect thereof, or (z) evidenced by a promissory note and (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is non-recourse to the credit of that Person. The
amount of any Indebtedness shall be the principal amount of and all interest,
premium, if any, and other fees and expenses accrued on any of the foregoing.
"Interest Payment Date" means, with respect to any Eurodollar Rate Loan,
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the last day of each Interest Period applicable to such Loan and, with respect
to any Base Rate Loan, the last day of each calendar quarter, and with respect
to all Loans, the Maturity Date; provided, however, that if any Interest Period
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for a Eurodollar Rate Loan exceeds three months, interest shall also be paid on
the date which falls three months after the beginning of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Rate Loan, the
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period commencing on the Business Day the Eurodollar Rate Loan is disbursed or
continued or on the date on which a Loan is converted into a Eurodollar Rate
Loan and ending on the date one, two, three or six months thereafter, as
selected by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation; provided that:
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(i) if any Interest Period pertaining to a Eurodollar Rate Loan
would otherwise end on a day which is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on
the immediately preceding Business Day;
(ii) any Interest Period pertaining to a Eurodollar Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
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to the date hereof and from time to time hereafter, and the rules and
regulations promulgated thereunder.
"Lending Office" means, with respect to any Bank, the office or offices of
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the Bank specified as its "Lending Office" under its name on Schedule 10.06, or
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such other office or offices of the Bank as it may from time to time specify to
the Company and the Administrative Agent in writing.
"Lien" means any lien, mortgage, pledge, security interest, charge or
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encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any kind
of security interest).
"Loan Documents" means this Agreement, any Notes, the Mattel Sales
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Guaranty, the Fisher-Price Guaranty, the Mattel Sales Subordination Agreement,
the Fisher-Price Subordination Agreement and all documents and instruments
delivered in connection herewith or therewith; provided, however, that for the
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avoidance of doubt, "Loan Documents" shall not
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include documents included in the definition of "Loan Documents" under that
certain Second Amended and Restated Credit Agreement dated as of March 11, 1998,
among the Company, the banks from time to time party thereto and Bank of America
as agent thereunder, except to the extent that any document or instrument
delivered in connection therewith is also delivered in connection herewith.
"Loans" has the meaning set forth in Section 2.01.
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"Margin Stock" has the meaning assigned to the term "Margin Stock" in
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Regulation U of the Federal Reserve Board as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
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business, operations, properties, assets, business prospects or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole,
or (ii) a material impairment of the ability of the Company to perform the
Obligations or of the Banks to enforce the Obligations.
"Material Subsidiary" means Mattel Sales, Fisher-Price, or any other
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Subsidiary of the Company which meets any of the following conditions:
(a) the Company's and its Subsidiaries' investments in, and advances
to, the Subsidiary exceed 10 percent of the total assets of the Company and
its Subsidiaries consolidated as of the end of the most recently completed
fiscal year (for a proposed business combination to be accounted for as a
pooling of interest, this condition is also met when the number of common
shares exchanged or to be exchanged by the Company exceeds 10 percent of
its total common shares outstanding at the date the combination is
initiated); or
(b) the Company and its other Subsidiaries' proportionate share of the
total assets (after intercompany eliminations) of the Subsidiary exceeds 10
percent of the total assets of the Company and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or
(c) the Company and its other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceeds 10 percent of such income of the Company and its Subsidiaries
consolidated for the most recently completed fiscal year.
For purpose of meeting the prescribed income test the following guidance
should be applied:
(i) When a loss has been incurred by either the Company and its
Subsidiaries consolidated or the tested Subsidiary, but not both, the
equity in the income or loss of the tested Subsidiary should be excluded
from the income of the Company and its Subsidiaries consolidated for
purposes of the computation.
(ii) If income of the Company and its Subsidiaries consolidated for
the most recent fiscal year is at least 10 percent lower than the average
of the income for the last
-9-
five years, such average income should be substituted for purposes of the
computation. Any loss years should be omitted for purposes of computing
average income.
(iii) Where the test involves combined entities, as in the case of
determining whether summarized financial data should be presented, entities
reporting losses shall not be aggregated with entities reporting income.
"Mattel Sales" means Mattel Sales Corp., a California corporation.
------------
"Mattel Sales Guaranty" means the Continuing Guaranty signed by Mattel
---------------------
Sales substantially in the form of Exhibit F-2 hereto, as amended, supplemented,
restated or otherwise modified from time to time.
"Mattel Sales Subordination Agreement" means the Mattel Sales Subordination
------------------------------------
Agreement substantially in the form of Exhibit G-2 attached hereto signed by the
Company and certain Affiliates of the Company with respect to which Mattel Sales
has material outstanding obligations, as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time.
"Maturity Date" means March 29, 2001.
-------------
"Moody's" means Moody's Investors Service, Inc. or any successor thereto.
-------
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
------------------
4001(a)(3) of ERISA which is maintained for employees of the Company or any
ERISA Affiliate of the Company.
"Note" means a promissory note of the Company payable to the order of a
----
Bank substantially in the form of Exhibit A hereto, evidencing the Loans made by
such Bank to the Company.
"Notice of Borrowing" means a notice substantially in the form of Exhibit B
-------------------
hereto with respect to a proposed borrowing pursuant to Section 2.03(a).
---------------
"Notice of Conversion/Continuation" means a notice given by the Company to
---------------------------------
the Administrative Agent pursuant to Section 2.04, in substantially the form of
------------
Exhibit C hereto.
"Obligations" means all obligations of every nature of the Company, Fisher-
-----------
Price and Mattel Sales from time to time owed to the Administrative Agent, the
Banks or any other Person required to be indemnified hereunder, or any of them,
under any Loan Document.
"Officers' Certificate" means a certificate substantially in the form of
---------------------
Exhibit D hereto executed on behalf of the Company by two different officers of
the Company, one of which shall be (a) its Chairman of the Board (if an
officer), one of its Presidents, one of its Executive Vice Presidents, or one of
its Senior Vice Presidents, and the other one of which shall be (b) its Chief
Financial Officer, its Treasurer, one of its Assistant Treasurers, or its
Controller, delivered to the Banks by the Company pursuant to Section 6.01(c).
---------------
-10-
"Other Permitted Accounts Receivable Financing Facility" means a financing
------------------------------------------------------
arrangement (other than the Receivables Purchase Agreement) entered into in the
ordinary course of business under which accounts receivable of the Company,
Mattel Sales, Fisher-Price or any other Subsidiary are periodically sold
directly to third party purchasers, or sold to a Subsidiary of the Company
formed for such purpose which in turn sells such accounts receivable to third
party purchasers; provided, however, that in connection with any such financing
-------- -------
arrangement:
(a) there is no recourse to any seller of such accounts receivable on
account of the creditworthiness of the obligor on such accounts receivable;
and
(b) no negative pledge or Lien is created on any accounts receivables
not actually sold or discounted.
"Participant" has the meaning set forth in Section 10.01.
----------- -------------
"Pension Plan" means any employee plan which is subject to Section 412 of
------------
the Internal Revenue Code and which is maintained for employees of the Company
or any ERISA Affiliate of the Company other than a Multiemployer Plan.
"Person" means any individual, partnership, corporation (including a
------
business trust), joint stock company, joint venture, trust, bank, trust company,
unincorporated association or other entity or a government or any agency or
political subdivision thereof.
"Pro Rata Share" means with respect to each Bank the percentage set forth
--------------
opposite such Bank's name on Schedule 1.01.
-------------
"Purchasers' Investment" has the meaning set forth in the Receivables
----------------------
Purchase Agreement.
"Receivables Purchase Agreement" means the Receivables Purchase Agreement
------------------------------
dated as of March 11, 1998, among Mattel Factoring, Inc., as transferor, the
Company, as guarantor and servicer, the purchasers party thereto and the
Receivables Purchase Administrative Agent, as it may be amended, supplemented,
restated or otherwise modified from time to time.
"Regulation D" means Regulation D of the Federal Reserve Board as in effect
------------
from time to time.
"Requisite Banks" means, as at any date of determination, Banks having at
---------------
least 51% of the then aggregate unpaid principal amount of the Loans (or if no
Loans are then outstanding, Banks having at least 51% of the combined
Commitments).
"Responsible Officer" means the Chief Executive Officer, the Chief
-------------------
Financial Officer, the Treasurer or an Assistant Treasurer of the Company or any
officer of the Company designated by any of the above. Any document or
certificate hereunder that is signed by a Responsible Officer shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of the Company and such Responsible
Officer shall be conclusively presumed to have acted on behalf of the Company.
-11-
"Securities Act" means, at any time, the Securities Act of 1933, as amended
--------------
from time to time, and any successor statute, and the rules and regulations
promulgated thereunder.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-
---
Hill Companies, Inc., or any successor thereto.
"Subsidiary" means any corporation, association or other business entity of
----------
which more than 50% of the total voting power of shares of stock entitled to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"Syndication Agent" means Citicorp USA, Inc. in its capacity as syndication
-----------------
agent.
1.02 Other Definitional Provisions.
References to "Sections" shall be to Sections of this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.01 may,
------------
unless the context otherwise requires, be used in the singular or the plural
depending on the reference.
Section 2.
THE COMMITMENTS.
2.01 The Commitments.
Each Bank hereby severally agrees to make advances to the Company ("Loans")
until the Maturity Date on the terms and conditions set forth in this Agreement
in an aggregate principal amount not exceeding such Bank's Commitment; provided,
--------
however, that the outstanding principal amount of all Loans hereunder shall not
- -------
exceed the combined Commitments. Within the limits of each Bank's Commitment,
and subject to the other terms and conditions hereof, the Company may borrow
under this Section 2.01, prepay pursuant to Section 2.06 and reborrow pursuant
------------
to this Section 2.01.
------------
2.02 Loan Accounts and Notes.
(a) Subject to Section 2.02(b), the Loans made by each Bank shall be
---------------
evidenced by one or more loan accounts maintained by such Bank in the ordinary
course of business. The loan accounts or records maintained by the
Administrative Agent and each Bank shall be conclusive absent manifest error of
the amount of the Loans made by the Banks to the Company and the interest and
payments thereon. Any failure to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Company hereunder to
pay any amount owing with respect to the Loans.
(b) Upon the written request of any Bank made through the Administrative
Agent, the Loans made by such Bank may be evidenced by one or more Notes,
instead of loan accounts. Each such Bank shall endorse on the schedules annexed
to its Note(s), the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with respect thereto.
Each such Bank is irrevocably authorized by the Company to endorse the schedules
annexed to its Note(s) and each Bank's record shall be conclusive absent
manifest error; provided, however, that the failure of a Bank to make, or an
-------- -------
error in making, a
-12-
notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of the Company hereunder or under any such Note to such Bank.
2.03 Borrowing Procedure.
(a) Whenever the Company desires to borrow hereunder, it shall deliver
irrevocable telephonic notice to the Administrative Agent followed immediately
by written notice in the form of a Notice of Borrowing, which telephonic notice
must be received by the Administrative Agent no later than (i) 8:00 a.m.
(California time) on the proposed Funding Date in the case of Base Rate Loans
and (ii) 9:00 a.m. (California time) three Business Days in advance of the
proposed Funding Date in the case of Eurodollar Rate Loans, specifying (A) the
proposed Funding Date which shall be a Business Day, (B) the amount of the
proposed borrowing, (C) whether the proposed borrowing shall consist of Base
Rate Loans or Eurodollar Rate Loans, and (D) in the case of Eurodollar Rate
Loans, the requested Interest Period. Base Rate Loans made on any Funding Date
shall be in an aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount. Eurodollar Rate Loans made on any Funding
Date shall be in an aggregate minimum amount of $5,000,000 and integral
multiples of $500,000 in excess of that amount.
(b) Promptly (and normally within two hours) after receipt of a Notice of
Borrowing (or telephone notice in lieu thereof), the Administrative Agent shall
notify each Bank of the proposed borrowing. Each Bank shall make available to
the Administrative Agent its Pro Rata Share of the amount (if any) by which the
principal amount of the proposed borrowing exceeds the principal amount of the
Loans (if any) maturing on the Funding Date, in same day funds, by remitting
such funds to Administrative Agent's Office no later than 11:00 a.m. (California
time) on the Funding Date. Upon satisfaction of the conditions set forth in
Section 4.02, the Administrative Agent shall make available to the Company on
- ------------
such Funding Date the aggregate of the amounts (if any) so made available by the
Banks by causing an amount of same day funds equal to such aggregate amount (if
any) received by the Administrative Agent to be credited to the account of the
Company at such office of Bank of America. To the extent that Eurodollar Rate
Loans made by the Banks mature on any Funding Date, the Banks shall apply the
proceeds of the Loans made on such Funding Date, to the extent thereof, to the
repayment of such maturing Loans, such Loans and repayments intended to be a
contemporaneous exchange.
2.04 Conversion and Continuation Elections.
(a) The Company may upon irrevocable written notice to the Administrative
Agent: (i) elect to convert any Base Rate Loans (or any part thereof in an
amount not less than $5,000,000 or an integral multiple of $500,000 in excess
thereof) on any Business Day into Eurodollar Rate Loans; (ii) elect to convert
any Eurodollar Rate Loans (or any part thereof) on the last day of any Interest
Period therefor into Base Rate Loans in an amount not less than $1,000,000 or an
integral multiple of $500,000 in excess thereof; or (iii) elect to continue any
Eurodollar Rate Loans (or any part thereof in an amount not less than $5,000,000
or an integral multiple of $500,000 in excess thereof) on the last day of any
Interest Period therefor; provided, that if the aggregate amount of Eurodollar
--------
Rate Loans shall have been reduced, by payment, prepayment, or conversion of
part thereof to be less than $5,000,000, the Eurodollar Rate Loans
-13-
shall automatically convert into Base Rate Loans, and on and after such date the
right of the Company to continue such Loans as Eurodollar Rate Loans shall
terminate.
(b) Each conversion or continuation shall be made upon irrevocable
telephonic notice to the Administrative Agent followed immediately by written
notice in the form of a Notice of Conversion/ Continuation, which telephonic
notice must be received by the Administrative Agent prior to (i) 9:00 a.m.
(California time) at least three Business Days in advance of the conversion or
continuation date, if the Loans are to be converted into or continued as
Eurodollar Rate Loans and (ii) 9:00 a.m. (California time) on the conversion or
continuation date, if the Loans are to be converted into Base Rate Loans,
specifying: (A) the proposed conversion or continuation date; (B) the aggregate
amount of Loans to be converted or continued; (C) the nature of the proposed
conversion or continuation; and (D) the duration of the requested Interest
Period, if applicable.
(c) If upon the expiration of any Interest Period applicable to Eurodollar
Rate Loans, the Company has failed to select a new Interest Period to be
applicable to such Eurodollar Rate Loans or type of Loan or if any Default or
Event of Default shall then exist, the Company shall be deemed to have elected
to convert such Eurodollar Rate Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the
Administrative Agent will promptly notify each Bank thereof, or, if no timely
notice is provided, the Administrative Agent will promptly notify each Bank of
the details of any automatic conversion. All conversions and continuations shall
be made pro rata according to the respective outstanding principal amounts of
the Loans with respect to which the notice was given held by each Bank.
(e) Unless the Requisite Banks shall otherwise agree, after the occurrence
of and during the continuance of a Default or Event of Default, the Company may
not elect to have a Loan be made as, or converted into or continued as, a
Eurodollar Rate Loan.
(f) Notwithstanding any other provision contained in this Agreement, after
giving effect to any conversion or continuation of any Loans, there shall not be
more than five different Interest Periods in effect.
2.05 Reduction and Termination of Commitments.
The Company may from time to time, upon not less than three Business Days'
prior written notice written or telephonic notice confirmed in writing to the
Administrative Agent, reduce or terminate the combined Commitments. The
Administrative Agent shall promptly notify the Banks of such request. Any
partial reduction of the Commitments shall be in an aggregate minimum amount of
$10,000,000 and integral multiples of $1,000,000 in excess of that amount. Any
reduction of the combined Commitments shall be applied to each Bank in
accordance with such Bank's Pro Rata Share thereof. All accrued commitment fees
to, but not including the effective date of any reduction or termination of the
Commitments, shall be paid on the effective date of such reduction or
termination. No reduction or termination of the Commitments shall be permitted
if, after giving effect thereto and to any prepayments made on the effective
date thereof, the outstanding principal amount of the Loans would exceed the
combined Commitments as so reduced. Any reduction or termination of the
Commitments shall be permanent.
-14-
2.06 Voluntary Prepayments. The Company may, upon not less than one
Business Days' prior written or telephonic notice confirmed in writing to the
Administrative Agent (in the case of a prepayment of a Base Rate Loan) or three
Business Days' prior written or telephonic notice confirmed in writing to the
Administrative Agent (in the case of a prepayment of a Eurodollar Rate Loan)
(which notice the Administrative Agent will promptly transmit by telecopy, telex
or telephone to each Bank), at any time and from time to time prepay (i) any
Eurodollar Rate Loans in whole or in part in an aggregate minimum amount of
$3,000,000 and integral multiples of $500,000 in excess of that amount so long
as the unpaid balance is not less than $5,000,000; or (ii) any Base Rate Loans
in whole or in part in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount; provided that in the event of
--------
any such prepayment of any Eurodollar Rate Loans, the Company shall be obligated
to reimburse the Banks in respect thereof pursuant to Section 3.05. If such
------------
notice of prepayment does not specify how such prepayment shall be applied, it
shall be applied first to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, as determined by the Administrative Agent.
All prepayments of Eurodollar Rate Loans shall be applied to the payment of any
interest that has accrued to the date of such prepayment before application to
principal. Prepayments of Base Rate Loans shall be applied to principal only.
2.07 Repayment of Loans. Each Loan shall mature and the Company shall repay
the unpaid principal amount of each Loan on the Maturity Date.
2.08 Interest on the Loans.
(a) Subject to Section 2.08(c), the Loans shall bear interest on the
---------------
unpaid principal amount thereof from the Funding Date through maturity (whether
by acceleration or otherwise) at a rate per annum equal to (i) with respect to
Eurodollar Rate Loans, the Eurodollar Rate plus the Applicable Amount for
----
Eurodollar Rate Loans or (ii) with respect to Base Rate Loans, the Base Rate
plus the Applicable Amount for Base Rate Loans.
- ----
(b) Subject to Section 2.08(c), from and after the Effective Date,
---------------
interest shall be payable in arrears on the Loans on each Interest Payment Date
applicable to that Loan. Interest paid on the date of any partial prepayment of
Loans hereunder shall be paid in respect of the portion of the Loans so prepaid.
(c) Any principal payments on the Loans not paid when due and, to the
extent permitted by applicable law, any interest payments on the Loans not paid
when due, in each case whether at stated maturity, by notice of prepayment, by
acceleration or otherwise, shall thereafter bear interest payable upon demand at
a rate which is 2% per annum in excess of the rate of interest otherwise payable
under this Agreement.
2.09 Fees.
(a) The Company agrees to pay a commitment fee equal to the Applicable
Amount for the commitment fee on the daily average unused portion of the
Commitment from the date of this Agreement until the Maturity Date. The Company
shall pay the commitment fee to the Administrative Agent for distribution to
each Bank in accordance with its Pro Rata Share. The commitment fee shall be
calculated on the basis of a 360-day year and the actual number of days
-15-
elapsed and shall be payable quarterly in arrears on the last Business Day of
each calendar quarter, for all amounts accrued to such date, and on the Maturity
Date; provided that, in connection with any reduction or termination of the
--------
Commitment pursuant to Section 2.05, the accrued fee calculated on the portion
------------
so terminated or reduced for the period ending on such date shall also be paid
on the date of such reduction or termination.
(b) The Company agrees to pay a utilization fee equal to the Applicable
Amount therefor on the daily average principal amount of all outstanding Loans
on each day that the aggregate principal amount of outstanding Loans exceeds
33.00% of the combined Commitments. The Company shall pay the utilization fee
to the Administrative Agent for distribution to each Bank in accordance with its
Pro Rata Share. The utilization fee shall be calculated on the basis of a 360-
day year and the actual number of days elapsed and shall be payable quarterly in
arrears on the last Business Day of each calendar quarter, for all amounts
accrued to such date, and on the Maturity Date; provided that, in connection
--------
with any reduction or termination of the Commitment pursuant to Section 2.05,
------------
the accrued fee calculated on the portion so terminated or reduced for the
period ending on such date shall also be paid on the date of such reduction or
termination.
(c) The Company shall pay to the Administrative Agent for the account of
each Bank an upfront fee as agreed upon between the Company and the Arranger.
(d) The Company shall pay to the Administrative Agent for the account of
itself and the Arranger a structuring and arrangement fee as agreed upon between
the Company, the Administrative Agent and the Arranger.
(e) The Company shall pay to the Administrative Agent for its own account
an annual administrative fee as agreed upon between the Company and the
Administrative Agent.
2.10 Calculation of Interest and Fees.
(a) Interest on all Loans and fees payable under this Agreement shall be
computed on the basis of a 360-day year and the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of the Loan or the first day of an Interest Period, as the case
may be, shall be included and the date of payment shall be excluded; provided
--------
that, if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
(b) Any change in the interest rate on a Loan resulting from a change in
the Applicable Amount or Eurodollar Reserve Percentage shall become effective as
of the opening of business on the day on which such change in the Applicable
Amount or Eurodollar Reserve Percentage becomes effective. Each determination
of an interest rate by the Administrative Agent pursuant hereto shall be
conclusive and binding on the Company and the Banks in the absence of manifest
error.
2.11 Payments by the Company.
(a) All payments of principal, interest and fees hereunder and under any
Notes shall be made without setoff, counterclaim, recoupment or any other
deduction, in same day funds and
-16-
delivered to the Administrative Agent at the Administrative Agent's Office for
the account of the Banks or the Administrative Agent not later than 11:00 a.m.
(California time) on the date due. The Administrative Agent will promptly
distribute to each Bank its Pro Rata Share (or other applicable share as
expressly provided herein) of such principal, interest, fees or other amounts in
like funds received. Any payment which is received by the Administrative Agent
after that time shall be deemed to have been paid by the Company on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.
(b) Subject to the provisions in the definition of "Interest Period",
whenever any payment hereunder shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Administrative Agent shall have received notice from the
Company prior to the date on which any payment is due to the Banks hereunder
that the Company will not make such payment in full as and when required
hereunder, the Administrative Agent may assume that the Company has made such
payment in full to the Administrative Agent on such date in immediately
available funds and the Administrative Agent may (but shall not be so required),
in reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the extent
the Company shall not have made such payment in full to the Administrative
Agent, each Bank shall repay to the Administrative Agent on demand such amount
distributed to such Bank, together with interest thereon for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Administrative Agent, at the Federal Funds Rate as in effect
for each such day.
2.12 Payments by the Banks to the Administrative Agent.
(a) Unless the Administrative Agent shall have received notice from a Bank
on the Effective Date or, with respect to each borrowing after the Effective
Date, by 12:00 noon (California time) one Business Day prior to the date of any
proposed borrowing of Eurodollar Rate Loans, or by 10:00 a.m. (California time)
on the date of any proposed borrowing of Base Rate Loans, that such Bank will
not make available to the Administrative Agent as and when required hereunder
for the account of the Company the amount of that Bank's Pro Rata Share of the
borrowing, the Administrative Agent may assume that each Bank has made such
amount available to the Administrative Agent in immediately available funds on
the Funding Date and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Company on
such date a corresponding amount. If and to the extent any Bank shall not have
made its full amount available to the Administrative Agent in immediately
available funds and the Administrative Agent in such circumstances has made
available to the Company such amount, that Bank shall on the next Business Day
following the date of such borrowing make such amount available to the
Administrative Agent, together with interest at the Federal Funds Rate for and
determined as of each day during such period. A notice of the Administrative
Agent submitted to any Bank with respect to amounts owing under this Section
-------
2.12(a) shall be conclusive, absent manifest error. If such amount is so made
- -------
available, such payment to the Administrative Agent shall constitute such Bank's
Loan on the date of borrowing for all purposes of this Agreement. If such
amount is not made available to the Administrative
-17-
Agent on the next Business Day following the date of such borrowing, the
Administrative Agent shall notify the Company of such failure to fund and, upon
demand by the Administrative Agent, the Company shall pay such amount to the
Administrative Agent for the Administrative Agent's account, together with
interest thereon for each day elapsed since the date of such borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such borrowing.
(b) The failure of any Bank to make any Loan on any date of borrowing
shall not relieve any other Bank of any obligation hereunder to make a Loan on
the date of such borrowing, but no Bank shall be responsible for the failure of
any other Bank to make the Loan to be made by such other Bank on the date of any
borrowing.
2.13 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share of payments on account of
the Loans obtained by all the Banks, such Bank shall forthwith (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them; provided,
--------
however, that if all or any portion of such excess payment is thereafter
- -------
recovered from the purchasing Bank, such purchase shall to that extent be
rescinded and each other Bank shall repay to the purchasing Bank the purchase
price paid therefor, together with an amount equal to such paying Bank's Pro
Rata Share (according to the proportion of (i) the amount of such paying Bank's
required repayment to (ii) the total amount so recovered from the purchasing
Bank) of any interest or other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. The Company agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 2.13 may,
------------
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Bank were the direct creditor of the Company in the amount of such
participation. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased pursuant to this Section 2.13 and will in each case notify the Banks
------------
following any such purchases or repayments.
Section 3.
PAYMENTS IN GENERAL.
-18-
3.01 Taxes.
(a) Subject to Section 3.01(d) and Section 3.01(g), any and all payments
--------------- ---------------
by the Company to each Bank or the Administrative Agent under this Agreement
shall be made free and clear of, and without deduction or withholding for, any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Bank and the Administrative Agent, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by each Bank's or the
Administrative Agent's net income by the jurisdiction under the laws of which
such Bank or the Administrative Agent, as the case may be, is organized or
maintains a Lending Office or any political subdivision thereof (all such non-
excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Company shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents
(hereinafter referred to as "Other Taxes").
(c) Subject to Section 3.01(g), the Company shall indemnify and hold
---------------
harmless each Bank and the Administrative Agent for the full amount of Taxes or
Other Taxes (including without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 3.01) paid by such Bank
------------
or the Administrative Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto.
Payment under this indemnification shall be made within 30 days from the date
such Bank or the Administrative Agent makes written demand therefor.
(d) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any Bank
or the Administrative Agent, then, subject to Section 3.01(g): (i) the sum
---------------
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.01) such Bank or the Administrative Agent, as the case may be,
------------
receives an amount equal to the sum it would have received had no such
deductions been made; (ii) the Company shall make such deductions, and (iii) the
Company shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by the Company of Taxes
or Other Taxes, the Company shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Administrative Agent.
(f) Each Bank that is a "foreign corporation, partnership or trust" within
the meaning of the Internal Revenue Code shall deliver to the Administrative
Agent, prior to receipt of any payment subject to withholding under the Internal
Revenue Code (or after accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Bank and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Bank by the Company pursuant
to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all
payments to be
-19-
made to such Bank by the Company pursuant to this Agreement) or such other
evidence satisfactory to the Company and the Administrative Agent that such Bank
is entitled to an exemption from U.S. withholding tax. Thereafter and from time
to time, each such Bank shall (i) promptly submit to the Administrative Agent
such additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Company and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Bank by the Company pursuant to this Agreement, (ii) promptly
notify the Administrative Agent of any change in circumstances which would
modify or render invalid any claimed exemption or reduction, and (iii) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Bank, and as may be reasonably necessary (including the re-
designation of its Lending Office) to avoid any requirement of applicable laws
that the Company make any deduction or withholding for taxes from amounts
payable to such Bank. If such Bank fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from any interest
payment to such Bank an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Internal Revenue Code, without
reduction. If any Governmental Person asserts that the Administrative Agent did
not properly withhold any tax or other amount from payments made in respect of
such Bank, such Bank shall indemnify the Administrative Agent therefor,
including all penalties and interest, any taxes imposed by any jurisdiction on
the amounts payable to the Administrative Agent under this Section, and costs
and expenses (including costs and expenses of attorneys to the Administrative
Agent) of the Administrative Agent. The obligation of the Banks under this
Section shall survive the payment of all Obligations and the resignation or
replacement of the Administrative Agent.
(g) The Company will not be required to pay any additional amounts in
respect of Taxes pursuant to Section 3.01(d) to any Bank for the account of any
---------------
Lending Office of such Bank: (i) if the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank to comply with its
obligations under Section 3.01(f) in respect of such Lending Office; or (ii) if
---------------
such Bank shall have delivered to the Company the form(s) in respect of such
Lending Office pursuant to Section 3.01(f), and such Bank shall not be entitled
---------------
to exemption from deduction or withholding of United States Federal income tax
in respect of payments by the Company hereunder for the account of such Lending
Office for any reason other than a change in United States law or regulations or
in the official interpretation of such law or regulations by any Governmental
Person charged with the interpretation or administration thereof (whether or not
having the force of law) after the date of delivery of such form(s)
(h) If, at any time, the Company requests any Bank to deliver any forms or
other documentation pursuant to Section 3.01(f), then the Company shall, on
---------------
demand of such Bank through the Administrative Agent, reimburse such Bank for
any costs and expenses (including expenses of outside legal counsel and the
allocated costs of in-house counsel) reasonably incurred by such Bank in the
preparation or delivery of such forms or other documentation.
(i) If the Company is required to pay additional amounts to any Bank or
the Administrative Agent pursuant to Section 3.01(d), then such Bank shall use
---------------
its reasonable best efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending
-20-
Office so as to eliminate any such additional payment by the Company which may
thereafter accrue if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank.
(j) The agreements and obligations of the Company contained in this
Section 3.01 shall survive the payment in full of all other Obligations.
- ------------
3.02 Capital Adequacy. If (a) any adoption of or any change in or in the
interpretation of any law, rule or regulation, or (b) compliance with any
guideline, request or directive of any central bank or other Governmental Person
or quasi-governmental authority exercising control over banks or financial
institutions generally or any court (whether or not having the force of law), or
(c) any change in the force or effectiveness of the regulations set forth at 12
C.F.R. Part 3 (Appendix A), 12 C.F.R. Part 225 (Appendix A), 12 C.F.R. Part 208
(Appendix A) or 12 C.F.R. Part 325 (Appendix A) requires that the commitments of
any Bank hereunder (including, without limitation, commitments and obligations
in respect of Loans) be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
such Bank or any corporation controlling such Bank (a "Change in Law"), the
result of which is to reduce the rate of return on such Bank's capital as a
consequence of such commitments to a level below that which such Bank could have
achieved but for such Change in Law, taking into consideration such Bank's
policies with respect to capital adequacy, by an amount which such Bank deems to
be material, the Bank shall deliver to the Company a statement of the amount
necessary to compensate such Bank for the reduction in the rate of return on its
capital attributable to such commitments (the "Capital Compensation Amount").
The Bank shall determine the Capital Compensation Amount in good faith, using
reasonable attribution and averaging methods. The Bank shall from time to time
notify the Company of the amount so determined. Such amount shall be due and
payable by the Company to such Bank ten Business Days after such notice is
given. As soon as practicable after any Change in Law, each Bank shall submit to
the Company estimates of the Capital Compensation Amounts that would be payable
as a function of such Bank's commitments hereunder.
3.03 Illegality.
(a) If any Bank shall determine that any Governmental Rule or any change
therein or in the interpretation or administration thereof has made it unlawful,
or that any Governmental Person has asserted that it is unlawful, for any Bank
or its Lending Office to make Eurodollar Rate Loans, then, on notice thereof by
the Bank to the Company through the Administrative Agent, the obligation of the
Bank to make Eurodollar Rate Loans shall be suspended until the Bank shall have
notified the Administrative Agent and the Company that the circumstances giving
rise to such determination no longer exists.
(b) If a Bank shall determine that any Governmental Rule or any change
therein or in the interpretation or administration thereof has made it unlawful,
or that any Governmental Person has asserted that it is unlawful, for any Bank
or its Lending Office to maintain any Eurodollar Rate Loan, the Company shall
prepay all Eurodollar Rate Loans of the Bank then outstanding, together with
interest accrued thereon, or convert all Eurodollar Rate Loans of the Bank then
outstanding to Base Rate Loans pursuant to Section 2.04, either on the last day
------------
of the Interest Period thereof if the Bank may lawfully continue to maintain
such Eurodollar Rate
-21-
Loans to such day, or promptly, if the Bank may not lawfully continue to
maintain such Eurodollar Rate Loans, together with any amounts required to be
paid in connection therewith pursuant to Section 3.05.
------------
(c) If the obligation of any Bank to make or maintain Eurodollar Rate
Loans has been terminated, the Company may elect, by giving notice to the Bank
through the Administrative Agent that all Loans which would otherwise be made by
the Bank as Eurodollar Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Administrative Agent pursuant to this
Section 3.03, the affected Bank shall designate a different Lending Office with
- ------------
respect to its Eurodollar Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of the
Bank, be illegal or otherwise disadvantageous to the Bank.
3.04 Increased Costs and Reduction of Return. If any Bank shall determine
that, due to either (a) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements included in the
calculation of the Eurodollar Rate) in or in the interpretation of any law or
regulation or (b) the compliance with any guideline or request from any
Governmental Person (whether or not having the force of law), there shall be any
increase in the cost to such Bank of agreeing to make or making, funding or
maintaining any Eurodollar Rate Loans, then the Company shall be liable for, and
shall from time to time, upon demand therefor by such Bank (with a copy of such
demand to the Administrative Agent), pay to such Bank, additional amounts as are
sufficient to compensate such Bank for such increased costs. Each Bank agrees to
notify the Company of the occurrence of such an increased cost event promptly
after obtaining knowledge thereof.
3.05 Funding Losses. The Company agrees to reimburse each Bank and to hold
each Bank harmless from any loss or expense which the Bank may sustain or incur
as a consequence of: (a) the failure of the Company to make any payment or
prepayment of principal of any Eurodollar Rate Loan (including payments made
after any acceleration thereof); (b) the failure of the Company to borrow,
continue or convert a Loan after the Company has given (or is deemed to have
given) a Notice of Borrowing or a Notice of Conversion/ Continuation; (c) the
failure of the Company to make any prepayment after the Company has given a
notice in accordance with Section 2.06; or (d) the prepayment of a Eurodollar
------------
Rate Loan for any reason on a day which is not the last day of the Interest
Period with respect thereto; including any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain its Eurodollar
Rate Loans hereunder or from fees payable to terminate the deposits from which
such funds were obtained. Solely for purposes of calculating amounts payable by
the Company to the Banks under this Section 3.03(b) and Sections 3.04 and 3.05,
--------------- ------------- -----
each Eurodollar Rate Loan made by a Bank (and each related reserve, special
deposit or similar requirement) shall be conclusively deemed to have been funded
at the Eurodollar Rate used in determining the Eurodollar Rate for such
Eurodollar Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan is in fact so funded. This covenant shall
survive the payment in full of all other Obligations.
-22-
3.06 Inability to Determine Rates. If Administrative Agent shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan, or if the Requisite Banks advise the
Administrative Agent in writing that the Eurodollar Rate applicable for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan does
not adequately and fairly reflect the cost to such Banks of funding such Loan,
the Administrative Agent will forthwith give notice of such determination to the
Company and each Bank. Thereafter, the obligation of the Banks to make or
maintain Eurodollar Rate Loans hereunder shall be suspended until the
Administrative Agent upon the instruction of the Requisite Banks revokes such
notice in writing. Upon receipt of such notice, the Company may revoke any
Notice of Borrowing or Notice of Conversion/ Continuation then submitted by it.
If the Company does not revoke such notice with respect to Loans, the Banks
shall make, convert or continue the Loans, as proposed by the Company, in the
amount specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Base Rate Loans instead of
Eurodollar Rate Loans.
3.07 Survival. The agreements and obligations of the Company in this
Section 3 shall survive the payment of all other Obligations.
- ---------
Section 4.
CONDITIONS PRECEDENT.
4.01 Conditions to Effectiveness. The effectiveness of the Agreement is
subject to satisfaction of the following conditions precedent:
(a) The Company shall deliver to the Administrative Agent and Banks (or to
the Administrative Agent for the Banks with sufficient originally executed
copies for each Bank, except for any Notes):
(i) This Agreement, duly executed and delivered by the Company, the
Administrative Agent and all Banks;
(ii) A Note, duly executed and delivered by the Company, drawn to
the order of each Bank requesting a Note, with appropriate insertions;
(iii) The Mattel Sales Guaranty and the Fisher-Price Guaranty, duly
executed and delivered by Mattel Sales and Fisher-Price, respectively;
(iv) the Mattel Sales Subordination Agreement and the Fisher-Price
Subordination Agreement duly executed and delivered by the Company and each
Affiliate of the Company to whom Mattel Sales or Fisher-Price owes any
material outstanding obligations;
(v) Copies of the resolutions of the board of directors or the
executive committee of each Company Party approving and authorizing the
execution, delivery and performance by such Company Party of each Loan
Document to which it is a party,
-23-
certified as of the Effective Date by the secretary or an assistant
secretary of such Company Party;
(vi) A certificate of the secretary or assistant secretary of each
Company Party, certifying the names and true signatures of the officers of
such Company Party authorized to execute and deliver the Loan Documents to
which it is a party;
(vii) The articles or certificate of incorporation or organization of
each Company Party as in effect on the Effective Date, certified by the
secretary of state of the state of its incorporation or formation as of a
recent date and the bylaws or operating agreement of each Company Party as
in effect on the Effective Date, certified by the secretary or assistant
secretary of such Company Party as of the Effective Date;
(viii) A good standing certificate for each Company Party from the
secretary of state of its state of incorporation or formation dated as of a
recent date;
(ix) Executed copies of one or more favorable written opinions of
Christopher O'Brien, Esq., Assistant General Counsel of the Company, dated
as of the Effective Date, substantially in the form of Exhibit E hereto
relating to the Company Parties and as to such other matters as the
Administrative Agent and the Banks may reasonably request; and
(x) A certificate signed by one of the officers authorized to
deliver an Officers' Certificate certifying (A) that the conditions
specified in Sections 4.01(d) and (e) have been satisfied, (B) that there
---------------- ---
has been no event or circumstance since the date of the audited financial
statements dated December 31, 1999 referred to in Section 5.08 which has a
------------
Material Adverse Effect; and (C) the current ratings on the Company's long-
term unsecured Indebtedness by S&P, Moody's and Duff & Phelps.
(b) The Company shall have paid all fees payable pursuant to Sections
--------
2.09(b), (c), (d) and (e).
- ------- --- --- ---
(c) The Company shall have performed in all material respects all
agreements which this Agreement provides shall be performed by it on or before
the Effective Date.
(d) The representations and warranties of each Company Party contained in
any Loan Document shall be true, correct and complete in all material respects
on and as of the Effective Date.
(e) No Default or Event of Default shall exist.
4.02 Conditions to All Loans. The obligation of each Bank to make any Loan
is subject to the following further conditions precedent that, as of the
applicable Funding Date:
(a) The Administrative Agent shall have received on or before that Funding
Date a Notice of Borrowing signed by a Responsible Officer on behalf of the
Company in writing delivered to the Administrative Agent;
-24-
(b) The representations and warranties of the Company contained in any
Loan Document (except the representation and warranty contained in Section 5.09
------------
and, in the case of a borrowing of Loans where the aggregate principal amount of
the Loans being made on that Funding Date equals or is less than the aggregate
principal amount of Loans maturing on that Funding Date, the representation and
warranty contained in Section 5.11), shall be true, correct and complete in all
------------
material respects on and as of that Funding Date (except to the extent that such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct in all material respects as of such earlier
date), to the same extent as though made on and as of that Funding Date; and
(c) No Default or Event of Default shall exist or shall result from such
borrowing or continuation or conversion.
Each Notice of Borrowing submitted by the Company hereunder shall
constitute a representation and warranty by the Company hereunder, as of the
Funding Date, that the conditions in Section 4.02 are satisfied or waived.
------------
Section 5.
REPRESENTATIONS AND WARRANTIES.
In order to induce the Banks and the Administrative Agent to enter into
this Agreement and to make any extension of credit hereunder, the Company
represents and warrants to each Bank and the Administrative Agent that the
following statements are true, correct and complete:
5.01 Organization and Powers.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware; and, except for changes in the
ordinary course of business or as permitted or contemplated by this Agreement,
each of the Material Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation; and each has all requisite corporate power and authority to own
and operate its properties, to carry on its business as now conducted and
proposed to be conducted and, in the case of the Company, to enter into this
Agreement, a Fisher-Price Subordination Agreement and a Mattel Sales
Subordination Agreement, to issue the Notes and to carry out the transactions
contemplated hereby and thereby.
5.02 Good Standing.
The Company and, except for changes in the ordinary course of business or
as permitted or contemplated by this Agreement, each Material Subsidiary is in
good standing wherever necessary to carry on its present business and
operations, except in jurisdictions in which the failure to be in good standing
has or will have no Material Adverse Effect.
5.03 Material Subsidiaries.
Except for changes in the ordinary course of business or as permitted or
contemplated by this Agreement, Schedule 5.03 correctly sets forth the name,
-------------
jurisdiction of incorporation and ownership interest of the Company in each of
its Material Subsidiaries as of the date hereof.
5.04 Authorization of Borrowing.
The execution, delivery and performance of each Loan Document to which it
is a party, and acknowledgement of the Fisher-Price Subordination
-25-
Agreement and the Mattel Sales Subordination Agreement and the issuance,
delivery and payment of the Notes have been duly authorized by all necessary
corporate action by the Company.
5.05 No Conflict. The execution, delivery and performance by the Company of
this Agreement and the acknowledgement of the Fisher-Price Subordination
Agreement, the Mattel Sales Subordination Agreement and the issuance, delivery
and payment of the Notes do not and will not (a) violate the Restated
Certificate of Incorporation or Bylaws of the Company, (b) violate any provision
of law applicable to the Company, or any material order, judgment or decree of
any court or other agency of government binding on the Company, the violation of
which would result in a Material Adverse Effect, (c) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of the Company, (d) result in or require the
creation or imposition of any material lien, security interest, charge or
encumbrance of any nature whatsoever upon any of its material properties or
assets, or (e) require any approval of stockholders or any approval or consent
of any Person under any Contractual Obligation of the Company.
5.06 Governmental Consents. The execution, delivery and performance by the
Company of each Loan Document to which it is a party and each agreement,
document, or instrument required hereunder, the acknowledgment of the Fisher-
Price Subordination Agreement, Mattel Sales Subordination Agreement, and the
issuance, delivery and payment of the Notes do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any Federal, state or other governmental authority or regulatory
body or other such person.
5.07 Binding Obligation. This Agreement is, and each other Loan Document to
which it is a party, when executed and delivered hereunder will be, the legally
valid and binding obligations of the Company, enforceable against it in
accordance with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors' rights generally.
5.08 Financial Condition. The Company has heretofore delivered to the Banks
a consolidated balance sheet of the Company and its Subsidiaries for the fiscal
year ended December 31, 1999 and related consolidated statements of income,
shareholders' equity and changes in financial position of the Company and its
Subsidiaries for such fiscal year, audited by Price Waterhouse. All such
statements were prepared in accordance with GAAP and fairly present the
consolidated financial position of the Company and its Subsidiaries as at the
date thereof and the consolidated results of operations and statement of cash
flow of the Company and its Subsidiaries for the period then ended. Neither the
Company nor any of its Subsidiaries has any material Contingent Obligation,
liability for taxes or long-term lease which as of the date of this Agreement,
individually or in the aggregate, would, if it became absolute, result in a
Material Adverse Effect which is not reflected in the foregoing statements or in
the notes thereto.
5.09 Changes, Etc. Since December 31, 1999, there has been no event or
events that have, either individually or in the aggregate, resulted in a
Material Adverse Effect.
-26-
5.10 Title to Properties. The Company and its Subsidiaries have good,
sufficient and legal title to all the properties and assets reflected in the
consolidated balance sheet referred to in Section 5.08 except as set forth in
------------
said balance sheet or in the notes thereto, except for assets acquired or
disposed of in the ordinary course of business or as otherwise permitted by this
Agreement since December 31, 1999 and except for immaterial defects in title as
could not, individually or in the aggregate, have a Material Adverse Effect.
5.11 Litigation; Adverse Facts. Except as set forth on Schedule 5.11,
------------
there is no action, suit, proceeding or arbitration (whether or not purportedly
on behalf of the Company or any of its Subsidiaries) at law or in equity or
before or by any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries or any of the Company's or such Subsidiaries'
properties which, in the reasonable judgment of the Company and its executive
officers (assuming adverse determination of facts which the Company in good
faith believes it would not successfully prove, and considering damages which in
their best judgment is the maximum that would be awarded upon, and the
likelihood of, an adverse determination of the claim or the amount which
reflects their best judgment as to that required to be paid to settle the
claims) would result in a Material Adverse Effect and there is no basis known to
such executive officers for any such action, suit or proceeding. Neither the
Company nor any of its Subsidiaries is (i) in violation of any applicable law
which could result in a Material Adverse Effect, or (ii) subject to or in
default with respect to any final judgment, writ, injunction, decree, rule or
regulation of any court or Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which could result in a Material Adverse Effect. There is no action,
suit, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries which
provides a reasonable basis for questioning the validity or the enforceability
of any Loan Document.
5.12 Payment of Taxes. All tax returns and reports of the Company and its
Material Subsidiaries required to be filed by any of them have been timely
filed, and all taxes, assessments, fees and other governmental charges upon the
Company and its Subsidiaries and upon their respective properties, assets,
income and franchises which are due and payable have been paid when due and
payable or bonded against, except to the extent permitted by Section 6.03. The
------------
Company knows of no proposed tax assessment against it or any of its
Subsidiaries that would result in a Material Adverse Effect.
5.13 Agreements. Neither the Company nor any of its Subsidiaries is a party
to or is subject to any material agreement or instrument or charter or other
internal restriction which results in a Material Adverse Effect.
5.14 Performance. Neither the Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation of the Company,
and no condition exists which, with the giving of notice or the lapse of time or
both, would constitute such a default, except, in any such case, where the
consequences, direct or indirect, of such default or defaults, if any, would not
result in a Material Adverse Effect.
-27-
5.15 Governmental Regulation. Neither the Company nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or to any Federal or state statute or regulation
limiting its ability in any material way to incur Indebtedness for money
borrowed.
5.16 Employee Benefit Plans. The Company and each of its ERISA Affiliates
is in compliance in all material respects with any applicable provisions of
ERISA and the regulations and published interpretations thereunder with respect
to all Pension Plans. Neither the Company nor any of its ERISA Affiliates has
participated in or participates in any Multiemployer Plan the withdrawal from
which may result in any liability to any party in an amount in excess of
$1,000,000.
5.17 Environmental Matters. The Company conducts in the ordinary course of
business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Company has reasonably concluded that such Environmental Laws and
Environmental Claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.18 Disclosure. No representation or warranty of the Company contained in
this Agreement or any other document, certificate or written statement furnished
to the Banks by the Company since January 1, 2000 for use in connection with the
transactions contemplated by this Agreement as of the date of this Agreement
contains any untrue statement of a material fact or omits to state a material
fact (known to the officers of the Company in the case of any document or fact
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading except to the extent that any such statement or
omission that was untrue or misleading at the time made or that subsequently
became untrue or misleading has been superseded or corrected by information
provided to the Banks prior to the date of this Agreement. The projections and
pro forma financial information contained in such written materials are based
upon good faith estimates and assumptions believed by the Company to be
reasonable at the time made, it being recognized by the Banks that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There is no fact known to the officers of the
Company as of the date of this Agreement (other than matters of a general
economic nature) which materially adversely affects the business, operations,
property, assets or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, which has not been disclosed herein or in the
written materials referred to in Section 5.08 other than as disclosed in writing
------------
to the Banks on or before the date hereof.
5.19 Subordination Agreements. Neither Fisher-Price nor Mattel Sales has
any material outstanding obligations to any Affiliate of the Company which has
not signed a Fisher-Price Subordination Agreement or a Mattel Sales
Subordination Agreement, respectively.
5.20 Year 2000. The Company has (a) completed a review and assessment of
all areas within its and each of its Subsidiaries' business and operations
(including those affected by customers and vendors) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications and devices containing imbedded computer chips used by the
-28-
Company or any of its Subsidiaries (or their respective customers and vendors)
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999), (b)
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (c) substantially completed implementation of that plan in accordance
with that timetable. The Year 2000 Problem has not resulted in, and the Company
reasonably believes that the Year 2000 Problem will not result in, a Material
Adverse Effect.
Section 6.
AFFIRMATIVE COVENANTS.
The Company agrees from the Effective Date until payment in full of all
Obligations and termination of the Commitments, unless Requisite Banks shall
otherwise give prior written consent, the Company will perform all covenants in
this Section 6.
---------
6.01 Reporting and Information Requirements.
The Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. The Company will deliver to the Administrative Agent and to each
Bank:
(a) as soon as practicable and in any event not later than 55 days after
the end of each of the first three fiscal quarters of the Company, consolidated
balance sheets of the Company and its Subsidiaries as at the end of such period
and for the fiscal year to date and the related consolidated statements of
income, consolidated statements of stockholders' equity and consolidated
statements of cash flow all in reasonable detail and certified by the Chief
Financial Officer, Executive Vice President Finance or the Treasurer of the
Company that the consolidated statements (and to the best of his or her belief,
the consolidating statements) and other materials required by this clause (a)
fairly present the financial condition of the Company and its Subsidiaries as at
the dates indicated and the results of their operations for the periods
indicated, subject to changes resulting from year-end audit and normal year-end
adjustments;
(b) as soon as practicable and in any event not later than 100 days after
the end of each fiscal year of the Company, consolidated and consolidating
balance sheets of the Company and its Subsidiaries as at the end of such year
and the related consolidated (and, as to statements of income only, consolidated
and consolidating) statements of income, stockholders' equity and cash flow of
the Company and its Subsidiaries for such fiscal year, setting forth in each
case, in comparative form the consolidated figures for the previous year, all in
reasonable detail and (i) in the case of such consolidated financial statements,
accompanied by a report thereon of Price Waterhouse or other independent
accountants of recognized national standing selected by the Company which report
shall state that such consolidated financial statements present fairly the
financial position of the Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flow for the periods
indicated in conformity with GAAP and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards and (ii) in the case of
such consolidating financial statements, certified by the chief financial or
accounting officer of the Company;
-29-
(c) together with each delivery of financial statements of the Company and
its Subsidiaries pursuant to clauses (a) and (b) above, an Officers' Certificate
(i) stating that the signers have reviewed the terms of this Agreement and the
Notes and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of the Company and its
Subsidiaries during the accounting period covered by such financial statements
and that such review has not disclosed the existence during or at the end of
such accounting period, and that the signers do not have knowledge of the
existence as at the date of the Officers' Certificate, of any condition or event
which constitutes an Event of Default or Default, or, if any such condition or
event existed or exists, specifying the nature and period of existence thereof,
and (ii) demonstrating in reasonable detail compliance during (to the extent
required) and at the end of such accounting periods with the restrictions
contained in Sections 7.05 and 7.06.
------------- ----
(d) together with each delivery of consolidated financial statements of
the Company and its Subsidiaries pursuant to clause (b) above, a written
statement by the independent accountants giving the report thereon (i) stating
that their audit examination has included a review of the terms of this
Agreement and the Notes as they relate to accounting matters, and (ii) stating
whether, in connection with their audit examination, any condition or event
which constitutes an Event of Default or Default has come to their attention,
and if such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants shall not
--------
be liable by reason of any failure to obtain knowledge of any such Event of
Default or Default that would not be disclosed in the course of their audit
examination. The Administrative Agent shall have the right, from time to time,
to discuss the affairs of the Company directly with such independent certified
public accountants;
(e) promptly upon receipt thereof, copies of all reports submitted to the
Company (including, without limitation, the Company's Board of Directors) by the
Company's independent accountants in connection with each annual, interim or
special audit of the consolidated financial statements of the Company made by
such accountants, including, without limitation, any comment letter submitted by
such accountants to management in connection with their annual audit;
(f) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available
generally by the Company to its security holders or by any Subsidiary of the
Company to its security holders other than the Company or another Subsidiary,
and, promptly upon their becoming effective, and in any event within 15 days of
filing, all regular and periodic reports and all registration statements and
prospectuses that have been filed by the Company or any of its Subsidiaries with
any securities exchange or with the Securities and Exchange Commission or any
Governmental Person succeeding to any of its functions, and all press releases
and other statements made available generally by the Company or any Subsidiary
to the public concerning material developments in the business of the Company
and its Subsidiaries;
(g) promptly upon any executive officer of the Company obtaining knowledge
(i) of any condition or event which constitutes an Event of Default or Default,
or becoming aware that the Administrative Agent or any Bank has given any notice
or taken any other action with respect to a claimed Event of Default or Default
under this Agreement, (ii) of any condition or
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event which would be required to be disclosed in a current report filed by the
Company with the Securities and Exchange Commission on Form 8-K (Items 1, 2, 4
and 6 of such Form as in effect on the date hereof) if the Company were required
to file such reports under the Exchange Act, (iii) that any Person has given any
notice to the Company or any Subsidiary of the Company or taken any other action
with respect to a claimed default or event or condition of the type referred to
in Section 8.01, (iv) of the institution of any litigation involving an alleged
------------
liability of the Company or any of its Subsidiaries equal to or greater than
$20,000,000 or any adverse determination in any litigation involving a potential
liability of the Company or any of its Subsidiaries equal to or greater than
$20,000,000, or (v) of a Material Adverse Effect, in each case an Officers'
Certificate specifying the nature and period of existence of any such condition
or event, or specifying the notice given or action taken by such holder or
Person and the nature of such claimed default, Event of Default, Default, event
or condition, and what action the Company has taken, is taking and proposes to
take with respect thereto;
(h) as soon as available but no later than March 31 of each year, copies
of the Company's consolidated financial plan for the then current fiscal year as
customarily prepared for internal use;
(i) promptly after the acquisition of any Material Subsidiary, notice of
such acquisition;
(j) promptly upon any executive officer of the Company obtaining
knowledge, notice of any change in the ratings on the Company's long-term
unsecured Indebtedness by S&P, Moody's and, Duff & Phelps;
(k) promptly after any discovery or determination thereof, notice that the
Year 2000 Problem (as defined in Section 5.20) has resulted in, or is reasonably
------------
expected to result in, a Material Adverse Effect; and
(l) with reasonable promptness, such other information and data with
respect to the Company or any of its Subsidiaries as from time to time may be
reasonably requested by any Bank or the Administrative Agent, including any
financial reports regularly prepared by the Company for internal use.
6.02 Corporate Existence, Etc. Except as permitted or not prohibited in
Section 7.03, the Company will at all times preserve and keep in full force and
- ------------
effect its corporate existence and rights and franchises material to its
business and those of each of its Material Subsidiaries; provided that the
--------
corporate existence and the rights and franchises of any Material Subsidiary may
be terminated or permitted to lapse if such termination or lapse is in the best
interest of the Company, is approved by the Board of Directors of the Company
and is not materially disadvantageous to the holder of any Note.
6.03 Payment of Taxes and Claims; Tax Consolidation. The Company will, and
will cause each of its Material Subsidiaries to, pay all taxes, assessments and
other governmental charges imposed upon it or any of its properties or assets or
in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
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have become due and payable and which by law have or may become a Lien upon any
of its properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or claim need be
--------
paid if being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor. The Company will not, nor will it permit any Material Subsidiary
to, file or consent to the filing of any consolidated income tax return with any
Person (other than the Company or a Subsidiary of the Company).
6.04 Maintenance of Properties; Insurance. Except as permitted or not
prohibited in Section 7.03, the Company will maintain or cause to be maintained
------------
in good repair, working order and condition all material properties (other than
obsolete properties) used or useful in the business of the Company and its
Material Subsidiaries and from time to time will make or cause to be made all
appropriate repairs, renewals, substitutions and replacements thereof. The
Company will 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 Material Subsidiaries against loss or damage
of the kinds customarily insured against by corporations of established
reputation engaged in the same or similar businesses and similarly situated, of
such types and in such amounts as are customarily carried under similar
circumstances by such other corporations; provided that the Company may maintain
a program of self insurance for the Company and its Material Subsidiaries in
accordance with sound business practices.
6.05 Inspection of Property and Books and Records. The Company shall
maintain and shall cause each of its Subsidiaries to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Company and such Subsidiaries.
The Company will permit any authorized representatives designated by any Bank at
the expense of that Bank, to visit and inspect any of the properties of the
Company or any of its Subsidiaries, including its and their financial and
accounting records, and to make copies and take extracts therefrom (but not
records relating to intellectual property), and to discuss its and their
affairs, finances and accounts with its and their officers and independent
public accountants, all upon reasonable notice and at such reasonable times
during normal business hours and as often as may be reasonably requested.
6.06 Use of Proceeds of Loans. The Company shall use the proceeds of Loans
for general corporate purposes, including, without limitation, lending to its
Subsidiaries and acquiring other Persons or businesses so long as the
acquisition is approved by the board of directors of the Person being acquired.
6.07 Environmental Laws. The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws, except where the failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.08 Subordination Agreements. If from time to time Fisher-Price or Mattel
Sales has any material outstanding obligations owing to any Affiliate of the
Company which has not
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signed a Fisher-Price Subordination Agreement or a Mattel Sales Subordination
Agreement, respectively, the Company shall cause such Affiliate to execute
deliver a Fisher-Price Subordination Agreement or a Mattel Sales Subordination
Agreement, as the case may be, and deliver to the Administrative Agent a
signature and incumbency certificate of the officers of each such Affiliate and
cause Fisher-Price or Mattel Sales, as the case may be, to acknowledge each such
agreement.
Section 7.
NEGATIVE COVENANTS.
The Company agrees from the Effective Date until payment in full of all
Obligations and termination of the Commitments, unless Requisite Banks shall
otherwise give prior written consent, the Company will perform all covenants in
this Section 7.
---------
7.01 Secured Indebtedness. Other than as permitted under Section 7.02, the
------------
Company will not, and will not permit any of its Material Subsidiaries to,
directly or indirectly incur, assume, guaranty or otherwise become directly or
indirectly liable with respect to any Indebtedness which (a) is senior to the
Obligations, (b) has any priority of payment over the Obligations or (c) is
secured by Liens on any of the Company's or any Subsidiary's assets.
7.02 Liens. The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of the Company or any
Subsidiary except:
(a) Liens securing Indebtedness for borrowed money not exceeding
$100,000,000 in the aggregate at any time;
(b) Liens existing on the date hereof;
(c) Liens securing Indebtedness under the Receivables Purchase Agreement;
(d) Liens securing Indebtedness under Other Permitted Accounts Receivable
Financing Facilities;
(e) Liens listed on Schedule 7.02; and
-------------
(f) Liens on newly-acquired Capital Assets; provided that such Liens on
--------
Capital Assets located in the United States shall not secure Indebtedness for
borrowed money in excess of $25,000,000.
7.03 Restriction on Fundamental Changes.
(a) The Company shall not, and shall not permit any of its Material
Subsidiaries to, engage in any material line of business substantially different
from those lines of business carried on by it on the date hereof; provided,
--------
however, that the Company may engage in the production and sale of consumer
- -------
software products related to the Company's existing lines of business.
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(b) the Company shall not, and shall not suffer or permit any of its
Material Subsidiaries to, merge, consolidate with or into, or convey, transfer,
lease or otherwise dispose of whether in one transaction or in a series of
transactions, all or substantially all, of its assets to or in favor of any
Person, except:
(i) (A) the Company may merge or consolidate with any other Person
provided that the Company shall be the continuing or surviving corporation,
and (B) any Material Subsidiary may merge or consolidate with any other
Person provided that the Company or a Material Subsidiary shall be the
continuing or surviving corporation; provided, further, that (1) if any
-------- -------
transaction shall be between a Subsidiary and a wholly-owned Subsidiary,
the wholly-owned Subsidiary shall be the continuing or surviving
corporation, (2) no Default or Event of Default shall result from such
merger or consolidation, and (3) except where a wholly-owned Subsidiary
merges or consolidates with another wholly-owned Subsidiary or the Company,
no Default or Event of Default shall exist prior to such merger or
consolidation; and
(ii) any Subsidiary of the Company may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise), to the Company or
another Wholly-Owned Subsidiary of the Company.
7.04 Sale or Discount of Receivables. The Company will not, and will not
permit any of its Domestic Subsidiaries to, directly or indirectly, sell with or
without recourse, or discount or otherwise sell for less than the face value
thereof any of its notes or accounts receivable, except:
(a) discounts offered in the ordinary course of business for early payment
of accounts receivable and negotiated settlements of bad debts and disputed
accounts receivable in the ordinary course of business;
(b) sales of accounts receivable under the Receivables Purchase Agreement
and agreements entered into in connection therewith;
(c) sales of accounts receivable under Other Permitted Accounts Receivable
Financing Facilities; and
(d) sales of accounts receivable where the Company believes in good faith
that the collectibility of such accounts receivable is or may be jeopardized by
the distressed financial condition of the obligor under such accounts
receivable.
7.05 Consolidated Funded Indebtedness to Total Capitalization. The Company
shall not permit the ratio of the sum of (a) Consolidated Funded Indebtedness
plus (b) Combined Purchasers' Investments to the sum of (x) Consolidated Funded
- ----
Indebtedness plus (y) Combined Purchasers' Investments plus (z) the consolidated
---- ----
net worth of the Company and its Subsidiaries on a consolidated basis determined
in conformity with GAAP to exceed 60% at the end of each of the first three
fiscal quarters in each fiscal year and 50% at the end of each fiscal year.
7.06 Interest Coverage Ratio. The Company shall not permit, as of the last
day of each fiscal quarter, the ratio of (a) the sum of (i) its net income from
continuing operations, for the four consecutive fiscal quarters ending on such
date, before (A) special items, (B) minority
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interest, (C) gains on reacquisition of debt, plus (ii) income taxes accrued for
----
the four consecutive fiscal quarters ending on such date, plus (iii) interest
----
accrued for the four consecutive fiscal quarters ending on such date, excluding
capitalized interest and without regard to interest income plus (iv)
----
depreciation and amortization for the four consecutive fiscal quarters ending on
such date to (b) interest incurred for the four consecutive fiscal quarters
ending on such date, including capitalized interest and without regard to
interest income, to be less than 3.50 to 1.
7.07 ERISA. The Company will not, and will not permit any of its ERISA
Affiliates to, permit the actuarial present value of all benefit liabilities
under all Pension Plans to exceed the fair market value of the assets of such
Pension Plans (excluding Pension Plans with assets greater than vested benefits)
allocable to such benefit liabilities by more than $10,000,000. As used in this
Section 7.08, the terms "actuarial present value" and "benefit liabilities" have
- ------------
the meanings specified in Section 4001 of ERISA.
7.08 Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by the Company for the purpose of "purchasing" or
"carrying" any Margin Stock or used in any manner which might cause such
borrowing or the application of such proceeds to violate Regulation U,
Regulation T, or Regulation X of the Federal Reserve Board or any other
regulation of the Federal Reserve Board or to violate the Exchange Act, in each
case as in effect on the date or dates of such borrowing and the use of such
proceeds.
7.09 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.
Section 8.
EVENTS OF DEFAULT.
8.01 Events of Default. Any of the following conditions or events shall
constitute an "Event of Default:"
(a) Failure to Make Payments When Due. (i) Failure by the Company to pay
any required payment of principal under this Agreement or of any Loan or any
Notes, when due, whether at stated maturity, by acceleration, by notice of
prepayment or otherwise, (ii) failure by the Company to pay any required payment
of interest under this Agreement or on any Loan or any Note or any fees payable
pursuant to Section 2 for a period of five days or more after the date such
---------
payment is due, or (iii) failure by any Company Party to pay any other amount
due under this Agreement within 90 days after written notice thereof; or
(b) Default in Other Agreements. (i) Failure of the Company, Fisher-Price,
Mattel Sales or any of its Material Subsidiaries to pay or any default in the
payment of any principal or interest on any Indebtedness in an amount exceeding
$15,000,000 or any default in any other obligation for the payment of money in
an amount in excess of $15,000,000 beyond any period of grace allowed; or (ii)
any breach or default (unless cured or waived) with respect to any other
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term of any evidence of such other Indebtedness for borrowed money in an amount
exceeding $15,000,000 or of any loan agreement, mortgage, indenture or other
agreement relating thereto, and such breach or default continues after the
applicable grace or notice period, if any, specified in the document relating
thereto, if the effect of such failure, default or breach is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness for borrowed money to become
or be declared due prior to its stated maturity; or
(c) Breach of Certain Covenants. Failure of the Company to perform or
comply with any term or condition contained in Sections 6.01(g), 6.02 or Section
---------------- ---- -------
7 of this Agreement; or
- -
(d) Breach of Warranty. Any of the Company's, Fisher-Price's or Mattel
Sales' representations or warranties made in any Loan Document in writing
pursuant hereto or in connection herewith shall be false in any material respect
on the date as of which made; or
(e) Other Defaults Under Loan Documents or Receivables Purchase Agreement.
Failure of the Company, Fisher-Price, Mattel Sales or Mattel Factoring, Inc., to
perform or comply with any other term or condition contained in any Loan
Document or the Receivables Purchase Agreement, in each case to the extent it is
a party thereto, other than the conditions referred to in Subsections (a), (b),
(c) and (d) above, and such default shall not have been remedied or waived
within 30 days after receipt of notice from the Administrative Agent or any Bank
of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court
having jurisdiction in the premises shall enter a decree or order for relief in
respect of the Company or any of its Material Subsidiaries in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, which decree or order is not stayed, or (ii) any other
similar relief shall be granted under any applicable federal or state or
applicable foreign law; a petition for an involuntary case shall be filed
against the Company or any of its Material Subsidiaries under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over the Company or any of its Material
Subsidiaries, or over all or substantially all of its property, shall have been
entered; or an interim receiver, trustee or other custodian of the Company or
any of its Material Subsidiaries for all or substantially all of the property of
the Company or any of its Material Subsidiaries shall be appointed
involuntarily; and the continuance of any such events in clause (ii) for 45 days
unless dismissed, bonded or discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc. The Company or any
of its Material Subsidiaries shall have an order for relief entered with respect
to it or commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or shall consent to the entry
of an order for relief in any involuntary case, or to the conversion from an
involuntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, sequestrator, trustee or other
custodian for all or substantially all of its property; the making by the
Company or any of its Material Subsidiaries of any assignment for the benefit of
creditors; or the inability or failure of the Company or any of its Material
Subsidiaries, or the admission by the Company or any of
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its Material Subsidiaries in writing of its inability, to generally pay its
debts as such debts become due; or the Board of Directors of the Company or any
of its Material Subsidiaries adopts any resolution or otherwise takes action to
approve any of the foregoing; or
(h) Judgments. Any final money judgment involving in any case an amount
in excess of $20,000,000 or in excess of $40,000,000 in the aggregate at any one
time for all final judgments shall be entered or filed against the Company or
any Material Subsidiary or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 45 days or in any
event later than five days prior to the date of any proposed sale thereunder; or
(i) Dissolution. Any order, judgment or decree shall be entered against
the Company or any Material Subsidiary decreeing the dissolution or split up of
the Company and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
(j) ERISA. (i) any Pension Plan maintained by the Company or any of its
ERISA Affiliates shall be terminated within the meaning of Title IV of ERISA, or
(ii) a trustee shall be appointed by an appropriate United States district court
to administer any Pension Plan, or (iii) the Pension Benefit Guaranty
Corporation (or any successor thereto) shall institute proceedings to terminate
any Pension Plan or to appoint a trustee to administer any Pension Plan, or (iv)
the Company or any of its ERISA Affiliates shall withdraw (under Section 4063 of
ERISA) from a Pension Plan, if, as of the date of the event listed in clauses
(i)-(iv) above or any subsequent date, any of the Company or its ERISA
Affiliates has any liability (such liability to include, without limitation, any
liability to the Pension Benefit Guaranty Corporation, or any successor thereto,
or to any other party under Sections 4062, 4063 or 4064 of ERISA or any other
provision of law) resulting from or otherwise associated with the events listed
in clauses (i)-(iv) above for unfunded guarantied vested benefits under the
Pension Plans which exceeds the current value of assets accumulated in such
Pension Plan by more than $10,000,000; or
(k) Loss of Property. All, or a substantial part of, the property, assets
or business of the Company or any Material Subsidiary shall be condemned or
seized and such condemnation or seizure shall have (after taking into account
any insurance or condemnation award) a Material Adverse Effect; or
(l) Cessation of Business. The Company or any Material Subsidiary shall at
any time voluntarily or involuntarily suspend its business or a substantial part
thereof which would constitute a substantial part of, and would have a Material
Adverse Effect; or
(m) Servicer Default. A Servicer Default (as defined in the Receivables
Purchase Agreement) shall occur and be continuing;
8.02 Remedies. If any Event of Default occurs, the Administrative Agent
shall, at the request of, or may, with the consent of, the Requisite Banks, (a)
declare the Commitment of each Bank to make Loans to be terminated, whereupon
such Commitments shall forthwith be terminated; (b) declare the unpaid principal
amount of all outstanding Loans, all interest accrued and unpaid thereon, and
all other amounts owing or payable hereunder or under any other Loan
-37-
Document to be immediately due and payable; without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by the
Company; and (c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law; provided, however, that upon the occurrence of any event specified in
-------- -------
paragraph (f) or (g) of Section 8.01 above (in the case of clause (ii) of
------------
paragraph (f) upon the expiration of the 45-day period mentioned therein), the
obligation of each Bank to make Loans shall automatically terminate and the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable without further
act of the Administrative Agent or any Bank.
8.03 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
Section 9.
THE ADMINISTRATIVE AGENT.
9.01 Appointment and Authorization. Each Bank hereby irrevocably appoints,
designates and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Loan
Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent.
9.02 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or attorney-in-
fact that it selects with reasonable care.
9.03 Liability of Administrative Agent. None of the Administrative Agent-
Related Persons shall (i) be liable for any action taken or omitted to be taken
by any of them under or in connection with this Agreement or any other Loan
Document (except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Banks for any recital, statement,
representation or warranty made by the Company or any Subsidiary or Affiliate of
the Company, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or any other Loan Document, or for the value
of any Collateral or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for
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any failure of the Company or any other party to any Loan Document to perform
its obligations hereunder or thereunder. No Administrative Agent-Related Person
shall be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the Properties,
books or records of the Company or any of the Company's Subsidiaries or
Affiliates.
9.04 Reliance by Administrative Agent. (a) The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Company), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Requisite Banks as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Banks against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Requisite Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions specified
in Sections 4.01 and 4.02, each Bank that has executed this Agreement shall be
------------- ----
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter either sent by the Administrative Agent to such Bank
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank, unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from the Bank
prior to any borrowing specifying its objection thereto and either such
objection shall not have been withdrawn by notice to the Administrative Agent to
that effect or the Bank shall not have made available to the Administrative
Agent the Bank's ratable portion of such borrowing.
9.05 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Banks,
unless the Administrative Agent shall have received written notice from a Bank
or the Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Banks. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
requested by the Requisite Banks in accordance with Section 8; provided,
--------- --------
however, that unless and until the Administrative Agent shall have received any
- -------
such request, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of the
Banks.
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9.06 Credit Decision. Each Bank expressly acknowledges that none of the
Administrative Agent-Related Persons has made any representation or warranty to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Company and its Subsidiaries shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Bank. Each Bank represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company and
its Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Company hereunder. Each Bank also represents
that it will, independently and without reliance upon the Administrative Agent
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Administrative
Agent, the Administrative Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of any of the
Administrative Agent-Related Persons.
9.07 Indemnification. Whether or not the transactions contemplated hereby
shall be consummated, the Banks shall indemnify upon demand the Administrative
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), ratably
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever which may at any time (including at any time following the
repayment of the Loans and the termination or resignation of the related
Administrative Agent) be imposed on, incurred by or asserted against any such
Person any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any such Person
under or in connection with any of the foregoing; provided, however, that no
-------- -------
Bank shall be liable for the payment to the Administrative Agent-Related Persons
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank shall reimburse the Administrative Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including fees and
expenses of counsel and the allocated cost of in-house counsel) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Company. Without limiting the generality of the foregoing, if the Internal
Revenue Service or any other Governmental Person of the United States or other
jurisdiction asserts a claim that the Administrative Agent did not properly
-40-
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered, was not properly executed, or because such
Bank failed to notify the Administrative Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason) such Bank shall indemnify the Administrative Agent
fully for all amounts paid, directly or indirectly, by the Administrative Agent
as tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the Administrative Agent
under this Section, together with all costs and expenses (including fees and
expenses of counsel and the allocated cost of in-house counsel). The obligation
of the Banks in this Section shall survive the payment of all Obligations
hereunder.
9.08 Administrative Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory or other business with the Company and its
Subsidiaries and Affiliates as though Bank of America were not the
Administrative Agent hereunder and without notice to or consent of the Banks.
With respect to its Loans, Bank of America shall have the same rights and powers
under this Agreement as any other Bank and may exercise the same as though it
were not the Administrative Agent, and the terms "Bank" and "Banks" shall
include Bank of America in its individual capacity.
9.09 Successor Administrative Agent. The Administrative Agent may, and at
the request of the Requisite Banks shall, resign as Administrative Agent upon 30
days' notice to the Banks. If the Administrative Agent shall resign as
Administrative Agent under this Agreement, the Requisite Banks shall appoint
from among the Banks a successor agent for the Banks which successor agent shall
be approved by the Company. If no successor agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Banks and the
Company, a successor agent from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Administrative Agent and the
term "Administrative Agent" shall mean such successor agent and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 9 and Sections
--------- --------
10.04 and 10.15 shall inure to its benefit as to any actions taken or omitted to
- ----- -----
be taken by it while it was Administrative Agent under this Agreement. If no
successor agent has accepted appointment as Administrative Agent by the date
which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Banks shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Requisite Banks
appoint a successor agent as provided for above.
9.10 Syndication Agent and Documentation Agent. None of the Banks
identified on the facing page or signature pages of this Agreement as the
Syndication Agent or the Documentation Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Banks as such. Without limiting the foregoing, none of
the Banks so identified as the Syndication Agent or the Documentation Agent
shall have or be deemed to have any fiduciary relationship with any Bank. Each
Bank
-41-
acknowledges that it has not relied, and will not rely, on any of the Banks so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
Section 10.
MISCELLANEOUS.
10.01 Assignments, Participations, Etc.
(a) From time to time following the Effective Date, each Bank may assign
to one or more Eligible Assignees all or any portion of its Commitment and
outstanding Loans; provided that (i) such assignment, if not to a Bank or an
--------
Affiliate of the assigning Bank, shall be consented to by the Company at all
times other than during the existence of a Default or Event of Default and by
the Administrative Agent (which approval of the Company shall not be
unreasonably withheld or delayed), (ii) a copy of a duly signed and completed
Assignment and Acceptance in the form of Exhibit H ("Assignment and Acceptance")
--------- -------------------------
shall be delivered to the Administrative Agent and the Company, (iii) except in
the case of an assignment (A) to an Affiliate of the assigning Bank or to
another Bank or (B) of the entire remaining Commitment of the assigning Bank,
the portion of the Commitment assigned shall not be less than $10,000,000, (iv)
the assigning Bank shall have delivered any Note or Notes subject to the
assignment to the Administrative Agent, and (v) the effective date of any such
assignment shall be as specified in the Assignment and Acceptance, but not
earlier than the date which is five Business Days after the date the
Administrative Agent has received the Assignment and Acceptance. Upon
satisfaction of the conditions set forth in the prior sentence, any forms
required by Section 3.01(f) and payment of the requisite fee described below,
---------------
the assignee named therein shall be a Bank for all purposes of this Agreement
effective as of the specified effective date to the extent of the Assigned
Interest (as defined in such Assignment and Acceptance), and the assigning Bank
shall be released from any further obligations under this Agreement to the
extent of such Assigned Interest. Until satisfaction of the conditions set forth
herein to any assignment, the Company and Administrative Agent may continue to
deal solely and directly with the assigning Bank in connection the Assigned
Interest. Upon request following satisfaction of the conditions set forth herein
to any assignment, the Company shall execute and deliver new or replacement
Notes to the assigning Bank and the assignee Bank to evidence Loans made by
them. The Administrative Agent's consent to any assignment shall not be deemed
to constitute any representation or warranty by any Administrative Agent-Related
Person as to any matter.
(b) After receipt of a completed Assignment and Acceptance, and receipt of
an assignment fee of $3,500 from such Eligible Assignee or such assigning Bank
(including in the case of assignments to Affiliates of assigning Banks), the
Administrative Agent shall, promptly following the effective date thereof,
provide to Borrower and Banks a revised Schedule 10.06 giving effect thereto.
--------------
(c) Upon advance written notice to the Company, any Bank may at any time
sell to one or more commercial banks or other Persons not Affiliates of the
Company (a "Participant") participating interests in any Loans, the Commitment
-----------
of that Bank and the other interests of that Bank (the "originating Bank")
hereunder and under the other Loan Documents; provided, however, that (i) the
-------- -------
originating Bank's obligations under this Agreement shall remain
-42-
unchanged, (ii) the originating Bank shall remain solely responsible for the
performance of such obligations, (iii) the Company and the Administrative Agent
shall continue to deal solely and directly with the originating Bank in
connection with the originating Bank's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Bank shall transfer or grant
any participating interest under which the Participant shall have rights to
approve any amendment to, or any consent or waiver with respect to this
Agreement except to the extent such amendment, consent or waiver would require
unanimous consent as described in the first proviso to Section 10.08. The
-------------
Company hereby acknowledges and agrees that any such disposition will give rise
to a direct obligation of the Company to the Participant and the Participant
shall be entitled to the benefit of Sections 3.01, 3.04 and 10.15 as if it were
------------- ---- -----
a "Bank." In the case of any such participation, the Participant shall not have
any rights under this Agreement, or any of the other Loan Documents, and all
amounts payable by the Company hereunder shall be determined as if such Bank had
not sold such participation, except that if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Bank under
this Agreement.
(d) Notwithstanding any other provision in this Agreement, any Bank may at
any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement and the Note(s) held by it in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR (S)203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
(e) Each Bank agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information provided to
it by the Company or any Subsidiary of the Company, or by the Administrative
Agent on such Company's or Subsidiary's behalf, in connection with this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement; except to the extent such
information (i) was or becomes generally available to the public other than as a
result of a disclosure by the Bank, or (ii) was or becomes available on a non-
confidential basis from a source other than the Company, provided that such
source is not bound by a confidentiality agreement with the Company known to the
Bank; provided, however, that any Bank may disclose such information (A) at the
-------- -------
request or pursuant to any requirement of any Governmental Person to which the
Bank is subject or in connection with an examination of such Bank by any such
authority; (B) pursuant to subpoena or other court process and when required to
do so in accordance with the provisions of any applicable Governmental Rule;
provided, that a Bank shall disclose only the information required by such
- --------
request and shall notify the Company in advance of such disclosure so that the
Company may seek an appropriate protective order, and (C) to such Bank's
Affiliates, independent auditors and other professional advisors provided such
Persons are obligated to keep such information confidential. Notwithstanding the
foregoing, the Company authorizes each Bank to disclose to any Assignee or
Participant and to any prospective Assignee or Participant, such financial and
other information in such Bank's possession concerning the Company or its
Subsidiaries which has been delivered to Administrative Agent or the Banks
pursuant to this
-43-
Agreement or which has been delivered to the Administrative Agent or the Banks
by the Company in connection with the Banks' credit evaluation of the Company
prior to entering into this Agreement; provided that, unless otherwise agreed by
--------
the Company, such Assignee or Participant agrees in writing to such Bank to keep
such information confidential to the same extent required of the Banks
hereunder.
10.02 Survival of Warranties and of Certain Agreements.
(a) All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the making of the Loans
hereunder and the execution and delivery of any Notes.
(b) Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Company set forth in Sections 2.09, 3, 10.04 and
------------- - -----
10.15 and the agreements of the Banks set forth in Sections 2.13, 9, 10.01(a),
- ----- ---- - --------
10.01(e) and 10.05 shall survive the payment of the Obligations by the Company
- -------- -----
and the termination of this Agreement.
10.03 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of any Bank or any holder of any Note in the exercise of any
power, right or privilege hereunder or under any Note shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege. All rights and remedies existing under this Agreement or any
Notes are cumulative to and not exclusive of, any rights or remedies otherwise
available.
10.04 Fees and Expenses. Whether or not the transactions contemplated
hereby shall be consummated, the Company agrees to pay within 30 days after
submission of an invoice therefor (a) all the actual and reasonable out-of-
pocket costs and expenses of preparation of the Loan Documents and all the costs
of furnishing all opinions by counsel for the Company (including without
limitation any opinions requested by the Banks as to any legal matters arising
hereunder), and of the Company's performance of and compliance with all
agreements and conditions contained therein on its part to be performed or
complied with; (b) the cost of delivering to the Banks any Notes pursuant to the
provisions of this Agreement; (c) the reasonable fees, expenses and
disbursements of the Administrative Agent and the Administrative Agent's counsel
(including the allocated cost of Administrative Agent's inhouse counsel and
staff) in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loans and any amendments and
waivers hereto; and (d) after the occurrence of an Event of Default, all actual
and reasonable out-of-pocket costs and expenses (including reasonable fees of
law firms engaged by the Banks and the reasonable estimate of the allocable
costs of counsel in the staff of legal departments of the Banks and costs of
settlement) incurred by the Administrative Agent and each Bank in enforcing any
Obligations or in collecting any payments due from the Company hereunder or
under any Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of any Loan Document in the nature of a "work-out"
or of any insolvency or bankruptcy proceeding.
10.05 Set Off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of and during the
-44-
continuance of any Event of Default (after the giving of any notice and the
expiration of any grace period contained in the definition thereof), each Bank
and each subsequent holder of any Note is hereby authorized by the Company at
any time or from time to time, without notice to the Company, or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate any and all deposits (including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured but not
including trust accounts) and any other indebtedness at any time held or owing
by that Bank or that subsequent holder or any Bank Affiliate thereof to or for
the credit or the account of the Company and to apply any such amounts in
accordance with the provisions of Section 2.13 irrespective of whether or not
------------
that Bank or that subsequent holder shall have made any demand hereunder and
each such Bank Affiliate is hereby irrevocably authorized to permit such setoff
and appropriation.
10.06 Notices. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given shall be in
writing and may be personally served, telecopied, telexed or sent by United
States mail and shall be deemed to have been given upon delivery in person,
receipt of telecopy or telex or four Business Days after deposit in the United
States mail, registered or certified, with postage prepaid and properly
addressed. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 10.06) shall
-------------
be as set forth under each party's name on Schedule 10.06.
--------------
10.07 Severability. In case any provision in or obligation under this
Agreement or any Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
10.08 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Requisite Banks and the Company, and acknowledged
by the Administrative Agent, and then such waiver shall be effective only in the
specific instance and for the specific purpose for which given; provided,
--------
however, that no such waiver, amendment, or consent shall, unless in writing and
- -------
signed by all the Banks and the Company, and acknowledged by the Administrative
Agent, do any of the following:
(a) increase or extend any Bank's Commitment or subject any Bank to any
additional obligations;
(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Banks (or any of them) hereunder or
under any Loan Document;
(c) reduce the principal of, or the rate of interest specified herein on
any Loan, or of any fees or other amounts payable hereunder or under any Loan
Document;
(d) change any Bank's Pro Rata Share or of the aggregate unpaid principal
amount of any extension of credit which shall be required for the Banks or any
of them to take any action hereunder;
-45-
(e) amend this Section 10.08 or Section 2.13;
------------- ------------
(f) amend Section 2.01, the definitions of "Pro Rata Share" or "Requisite
------------
Banks;" or
(g) discharge any Guarantor;
provided further, that no amendment, waiver or consent shall, unless in writing
- -------- -------
and signed by the Administrative Agent in addition to the Requisite Banks or all
the Banks, as the case may be, affect the rights or duties of the Administrative
Agent under any Loan Document. No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.08 shall be
-------------
binding upon each holder of any Notes at the time outstanding, each future
holder of the Notes and, if signed by the Company, on the Company.
10.09 Obligations Several. The obligation of each Bank hereunder is
several, and no Bank shall be responsible for any obligation or commitment of
any other Bank hereunder. Nothing contained in this Agreement and no action
taken by Banks pursuant hereto shall be deemed to constitute Banks to be a
partnership, an association, a joint venture or another entity.
10.10 Certain Changes. If (a) any changes in accounting principles from
those used in the preparation of the financial statements referred to in Section
-------
5.08 hereafter occasioned by the promulgation of rules, regulations,
- ----
pronouncements and opinions by or requested by the Financial Accounting
Standards Board or the American Institute of Certified Public Accounts (or
successors thereto or agencies with similar functions) result in a change in the
method of calculation of financial covenants, standards or terms found in
Sections 1, 6 and 7, or (b) the Company changes the manner in which its fiscal
- ---------- - -
year, fiscal quarters and fiscal months are determined, the parties hereto agree
to enter into negotiations in order to amend the appropriate provisions of this
Agreement so as to equitably reflect such changes with the desired result that
the criteria for evaluating the Company's financial condition and operations or
establishing limitations hereunder shall be the same after such changes as if
such changes had not been made.
10.11 Headings. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.12 Applicable Law.
(a) This Agreement, any Notes and the other Loan Documents shall be
governed by, and shall be construed and enforced in accordance with, the
internal laws of the State of California, without regard to conflicts of laws
principles.
(b) Any legal action or proceeding with respect to this Agreement and any
other Loan Documents may be brought in the courts of the State of California or
of the United States for the Central District of California, and by execution
and delivery of this Agreement, each of the Company, the Administrative Agent
and the Banks consents, for itself and in respect of its property, to the non-
exclusive jurisdiction of those courts. Each of the Company, the Administrative
Agent and the Banks irrevocably waives any objection, including any objection
-46-
to the laying of venue or based on the grounds of forum non conveniens, which it
may now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Agreement or any document related hereto. The
Company, the Administrative Agent and the Banks each waive personal service of
any summons, complaint or other process, which may be made by any other means
permitted by California law.
10.13 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent and each Bank.
10.14 Counterparts. This Agreement and any amendments, waivers, consents,
or supplements may be executed in any number of counterparts, and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
10.15 Indemnity. Whether or not the transactions contemplated hereby are
consummated, the Company shall indemnify and hold the Administrative Agent-
Related Persons, and each Bank and each of its respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
------------------
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including reasonable fees and out-of-pocket expenses of counsel and the
allocated cost of internal counsel) of any kind or nature whatsoever which may
at any time (including at any time following repayment of the Loans and the
termination, resignation or replacement of the Administrative Agent or
replacement of any Bank) be imposed on, incurred by or asserted against any such
Person arising out of this Agreement or any document contemplated by or referred
to herein, or the transactions contemplated hereby, or any action taken or
omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding (including
any proceeding of the type referred to in Section 8.01(f) or (g) or appellate
--------------- ---
proceeding) related to or arising out of this Agreement or the Loans or the use
of the proceeds thereof, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the "Indemnified Liabilities");
-----------------------
provided, that the Company shall have no obligation hereunder to any Indemnified
- --------
Person with respect to Indemnified Liabilities resulting from the gross
negligence or willful misconduct of such Indemnified Person. The agreements in
this Section shall survive payment of all other Obligations.
-47-
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
(364-Day Facility) to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
MATTEL, INC.
By: /s/ William Stavro
-----------------------------
William Stavro
Senior Vice President and
Treasurer
S-1
AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Gina Meador
-------------------------------
Gina Meador
Vice President
BANKS: BANK OF AMERICA, N.A., as a Bank
By: /s/ Robert W. Troutman
-------------------------------
Robert W. Troutman
Managing Director
S-2
CITICORP USA, INC.,
as Syndication Agent and a Bank
By: /s/ William Royer
-------------------------------------
Name: William Royer
-----------------------------------
Title: Attorney-In-Fact
----------------------------------
S-3
ABN AMRO Bank N.V.,
as Documentation Agent and a Bank
By: /s/ Ellen M. Coleman
-------------------------------------
Name: Ellen M. Coleman
-----------------------------------
Title: Group Vice President
-----------------------------------
By: /s/ Mitsoo Iravani
-------------------------------------
Name: Mitsoo Iravani
-----------------------------------
Title: Assistant Vice President
----------------------------------
S-4
BANK ONE, NA
By: /s/ Stephanie A. Mack
-------------------------------------
Name: Stephanie A. Mack
----------------------------------
Title: Commercial Banking Officer
----------------------------------
S-5
BANQUE NATIONALE DE PARIS, LOS
ANGELES AGENCY
By: /s/ Clive Bettles
----------------------------------------
Name: Clive Bettles
--------------------------------------
Title: Senior Vice President & Manager
-------------------------------------
By: /s/ Mitchell M. Ozawa
-------------------------------------
Name: Mitchell M. Ozawa
-----------------------------------
Title: Vice President
----------------------------------
S-6
BARCLAYS BANK PLC
By: /s/ Marlene Wechselblatt
-------------------------------------
Name: Marlene Wechselblatt
-----------------------------------
Title: Vice President
----------------------------------
S-7
FLEET NATIONAL BANK
By: /s/ Jorge A. Schwarz
-------------------------------------
Name: Jorge A. Schwarz
-------------------------------------
Title: Director
-------------------------------------
S-8
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ V. Timiraos
-------------------------------------
Name: Vicente L. Timiraos
-------------------------------------
Title: Joint General Manager
-------------------------------------
S-9
SOCIETE GENERALE, NEW YORK
BRANCH
By: /s/ Robert Petersen
-------------------------------------
Name: Robert Petersen
-------------------------------------
Title: Director
-------------------------------------
S-10
STANDARD CHARTERED BANK
By: /s/ Sylvia D. Rivera
-------------------------------------
Name: Sylvia D. Rivera
-------------------------------------
Title: Vice President
-------------------------------------
By: /s/ M. Machado-Schammel
-------------------------------------
Name: M. Machado-Schammel
-------------------------------------
Title: Senior Vice President
-------------------------------------
S-11
TORONTO DOMINION (TEXAS), INC.
By: /s/ Debbie A. Greene
-------------------------------------
Name: DEBBIE A. GREENE
-------------------------------------
Title: VICE PRESIDENT
-------------------------------------
S-12
WELLS FARGO BANK
By: /s/ Catherine M. Wallace
-------------------------------------
Name: CATHERINE M. WALLACE
-------------------------------------
Title: VICE PRESIDENT
-------------------------------------
By: /s/ Frieda Youlios
-------------------------------------
Name: FRIEDA YOULIOS
-------------------------------------
Title: Vice President
-------------------------------------
S-13
CREDIT SUISSE FIRST BOSTON
By: /s/ Thomas G. Muoio
-------------------------------------
Name: THOMAS G. MUOIO
-----------------------------------
Title: VICE PRESIDENT
----------------------------------
By: /s/ Karl M. Studer
-------------------------------------
Name: KARL M. STUDER
-----------------------------------
Title: DIRECTOR
----------------------------------
S-14