EXHIBIT 10.3
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Term Loan Agreement
Dated as of July 17, 2000
among
Mattel, Inc.
The Lenders Party hereto
The Industrial Bank of Japan, Limited,
as Administrative Agent and Co-Syndication Agent
and
Bear, Stearns & Co. Inc.,
as Co-Syndication Agent
Bear, Stearns & Co. Inc.,
Arranger
and
The Industrial Bank of Japan, Limited,
Co-Arranger
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MATTEL INC.
TERM LOAN AGREEMENT
TABLE OF CONTENTS
SECTION 1. DEFINITIONS............................................................. 1
1.01 Certain Defined Terms.................................................. 1
1.02 Other Definitional Provisions.......................................... 13
SECTION 2. THE COMMITMENTS......................................................... 13
2.01 The Commitments........................................................ 13
2.02 Loan Accounts and Notes................................................ 13
2.03 Borrowing Procedure.................................................... 13
2.04 Conversion and Continuation Elections.................................. 14
2.05 Voluntary Prepayments.................................................. 15
2.06 Repayment of Loans..................................................... 15
2.07 Interest on the Loans.................................................. 15
2.08 Fees................................................................... 16
2.09 Calculation of Interest and Fees....................................... 16
2.10 Payments by the Company................................................ 16
2.11 Payments by the Lenders to the Administrative Agent.................... 17
2.12 Sharing of Payments, Etc............................................... 17
SECTION 3. PAYMENTS IN GENERAL..................................................... 18
3.01 Taxes.................................................................. 18
3.02 Capital Adequacy....................................................... 20
3.03 Illegality............................................................. 21
3.04 Increased Costs and Reduction of Return................................ 21
3.05 Funding Losses......................................................... 21
3.06 Inability to Determine Rates........................................... 22
3.07 Survival............................................................... 22
SECTION 4. CONDITIONS PRECEDENT.................................................... 22
4.01 Conditions to Effectiveness............................................ 22
4.02 Conditions to Funding of Loans......................................... 24
SECTION 5. REPRESENTATIONS AND WARRANTIES.......................................... 24
5.01 Organization and Powers................................................ 24
5.02 Good Standing.......................................................... 25
5.03 Material Subsidiaries.................................................. 25
5.04 Authorization of Borrowing............................................. 25
5.05 No Conflict............................................................ 25
5.06 Governmental Consents.................................................. 25
5.07 Binding Obligation..................................................... 25
5.08 Financial Condition.................................................... 25
5.09 Changes, Etc........................................................... 26
5.10 Title to Properties.................................................... 26
5.11 Litigation; Adverse Facts.............................................. 26
5.12 Payment of Taxes....................................................... 26
5.13 Agreements............................................................. 27
5.14 Performance............................................................ 27
5.15 Governmental Regulation................................................ 27
5.16 Employee Benefit Plans................................................. 27
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5.17 Environmental Matters.................................................. 27
5.18 Disclosure............................................................. 27
5.19 Subordination Agreements............................................... 28
SECTION 6. AFFIRMATIVE COVENANTS................................................... 28
6.01 Reporting and Information Requirements................................. 28
6.02 Corporate Existence, Etc............................................... 30
6.03 Payment of Taxes and Claims; Tax Consolidation......................... 30
6.04 Maintenance of Properties; Insurance................................... 31
6.05 Inspection of Property and Books and Records........................... 31
6.06 Use of Proceeds of Loans............................................... 31
6.07 Environmental Laws..................................................... 31
6.08 Subordination Agreements............................................... 31
SECTION 7. NEGATIVE COVENANTS...................................................... 32
7.01 Senior or Secured Indebtedness......................................... 32
7.02 Liens.................................................................. 32
7.03 Restriction on Fundamental Changes..................................... 32
7.04 Sale or Discount of Receivables........................................ 33
7.05 Consolidated Funded Indebtedness to Total Capitalization............... 33
7.06 Interest Coverage Ratio................................................ 33
7.07 ERISA.................................................................. 34
7.08 Margin Regulations..................................................... 34
7.09 Independence of Covenants.............................................. 34
SECTION 8. EVENTS OF DEFAULT....................................................... 34
8.01 Events of Default...................................................... 34
8.02 Remedies............................................................... 36
8.03 Rights Not Exclusive................................................... 37
SECTION 9. THE ADMINISTRATIVE AGENT................................................ 37
9.01 Appointment and Authorization.......................................... 37
9.02 Delegation of Duties................................................... 37
9.03 Liability of Administrative Agent...................................... 37
9.04 Reliance by Administrative Agent....................................... 38
9.05 Notice of Default...................................................... 38
9.06 Credit Decision........................................................ 39
9.07 Indemnification........................................................ 39
9.08 Administrative Agent in Individual Capacity............................ 40
9.09 Successor Administrative Agent......................................... 40
9.10 Co-Syndication Agents, Documentation Agent, Arranger and Co-Arranger... 40
SECTION 10. MISCELLANEOUS.......................................................... 41
10.01 Assignments, Participations, Etc....................................... 41
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 Setoff................................................................. 44
10.06 Notices................................................................ 45
10.07 Severability........................................................... 45
10.08 Amendments and Waivers................................................. 45
10.09 Obligations Several.................................................... 46
10.10 Certain Changes........................................................ 46
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10.11 Headings............................................................... 46
10.12 Applicable Law......................................................... 46
10.13 Successors and Assigns................................................. 47
10.14 Counterparts........................................................... 47
10.15 Indemnity.............................................................. 47
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 Agreement
G-2 Mattel Sales Subordination Agreement
H Notice of Assignment and Acceptance
I Notice of Prepayment
J Joining Lender Agreement
SCHEDULES
1.01 Commitments and Pro Rata Shares
5.03 Material Subsidiaries of Company
5.11 Material Litigation
7.02 Certain Liens
10.06 Addresses for Notices and Lending Offices
MATTEL, INC.
TERM LOAN AGREEMENT
This TERM LOAN AGREEMENT (this "Agreement") is dated as of July 17, 2000
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and is entered into by and among MATTEL, INC., a Delaware corporation (the
"Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
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(individually referred to herein as a "Lender" and collectively as the
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"Lenders"), THE INDUSTRIAL BANK OF JAPAN, LIMITED, as administrative agent for
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the Lenders (in such capacity, the "Administrative Agent") and as co-syndication
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agent (in such capacity, a "Co-Syndication Agent"), and BEAR, STEARNS & CO.
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INC., as co-syndication agent (in such capacity, a "Co-Syndication Agent").
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RECITAL
The Company has requested that the Lenders provide a term loan facility,
and the Lenders 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 the Administrative Agent's address
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and, as appropriate, account as set forth on Schedule 10.06 or such other
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address or account as the Administrative Agent hereafter may designate by
written notice to the Company and the Lenders.
"Administrative Agent-Related Persons" means the Administrative Agent and
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any successor agent arising under Section 9.09, together with their respective
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Affiliates, 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.
"Agreement" means this Term Loan Agreement, as it may hereafter be amended,
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supplemented, restated or otherwise modified from time to time.
"Applicable Margin" means the margin applicable to Eurodollar Rate Loans
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(expressed in basis points per annum) set forth in the chart below (i) opposite
the second-highest rating issued from among S&P, Moody's and Fitch on the
Company's senior unsecured long-term debt or (ii) if the Company's senior
unsecured long-term debt is rated by only one of those three companies, opposite
the rating issued by that company:
Senior Unsecured Long-Term Debt Applicable
Ratings Margin
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A or higher by S&P
A2 or higher by Moody's 52.5
A or higher by Fitch
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A- by S&P
A3 by Moody's 72.5
A- by Fitch
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BBB+ by S&P
Baa1 by Moody's 100.0
BBB+ by Fitch
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BBB by S&P
Baa2 by Moody's 125.0
BBB by Fitch
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BBB- by S&P
Baa3 by Moody's 150.0
BBB- by Fitch
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BB+ or lower by S&P 200.0
Ba1 or lower by Moody's
BB+ or lower by Fitch
unrated by S&P, Moody's and
Fitch
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Any change in the Applicable Margin 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 Bear Stearns, in its capacity as arranger of the credit
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facility provided pursuant to this Agreement.
"Assignment and Acceptance" has the meaning set forth in Section 10.01(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 IBJ as its prime rate, as in effect on such date
of determination. Such prime rate is set by IBJ based on various factors
including IBJ's costs and desired return, general economic conditions, and other
factors, and is used as a reference point for pricing some loans. IBJ may make
loans at, above or below the rate announced by it as its prime rate.
"Base Rate Loans" means Loans, or portions thereof, made by the Lenders
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bearing interest at rates determined by reference to the Base Rate.
"Bear Stearns" means Bear, Stearns & Co. Inc., a Delaware corporation.
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"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 or Los Angeles, California 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.
"Co-Arranger" means IBJ, in its capacity as co-arranger of the credit
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facility provided pursuant to this Agreement.
"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 Lender, the amount set forth under
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"Commitment" on Schedule 1.01 or in any applicable Joining Lender Agreement.
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"Company Party" means the Company or any Person (except the Lenders, the
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Administrative Agent, the Co-Syndication Agents, the Documentation Agent, the
Arranger and the Co-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
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money, all determined in conformity with GAAP.
"Consolidated Net Income", for any period, means the net income (or loss)
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of the Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP.
"Consolidated Net Worth" means, as at any date of determination, the net
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worth of the Company and its Subsidiaries on a consolidated basis as 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 (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 subclause (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.
"Co-Syndication Agent" has the meaning assigned to that term in the
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introduction to this Agreement.
"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 any Lender that is given the title of
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"Documentation Agent," as agreed by the Company, IBJ and Bear Stearns, in such
Lender's capacity as such.
"Dollar Equivalent" means, with respect to any other currency, the
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equivalent in Dollars
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of such other currency determined by using the quoted spot rate at which IBJ's
principal office in New York offers to exchange Dollars for such other currency
in New York at 11:00 a.m. (New York time) two Business Days before the date on
which such equivalent is to be determined.
"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.
"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
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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
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country in which it is organized or another country which is also a member of
the OECD; (iii) a Person that is primarily engaged in the business of commercial
banking and that is (A) a Subsidiary of a Lender, (B) a Subsidiary of a Person
of which a Lender is a Subsidiary, or (C) a Person of which a Lender is a
Subsidiary; (iv) an insurance company, investment fund or other financial
institution that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and has total assets in
excess of $100,000,000; and (v) any other Person approved by the Administrative
Agent and, in the absence of any Event of Default, the Company.
"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, 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 the Employee Retirement Income Security Act of 1974, as
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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, or portions thereof, bearing interest
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at rates determined by reference to the Eurodollar Rate as provided in Section
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2.07(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 the Administrative Agent
pursuant to the following formula:
Eurodollar Rate = Eurodollar Base Rate
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1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Base Rate" means, for such Interest Period:
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(a) the rate per annum equal to the rate determined by the
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 the
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 the
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 the
Administrative Agent (or its Affiliate) in its capacity as a Lender and
with a term equivalent to such Interest Period would be offered by IBJ'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 Lender, 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
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Rate by the 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.
"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
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System or any successor thereof.
"Fee Letter" means the fee letter agreement dated June 13, 2000 among the
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Company, IBJ and Bear Stearns.
"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 a Fisher-Price Subordination
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Agreement substantially in the form of Exhibit G-1 attached hereto signed by
Fisher-Price and any of certain Affiliates of the Company to which Fisher-Price
has material outstanding obligations, as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time.
"Fitch" means Fitch, Inc. or any successor thereto.
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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 and the Federal Reserve Board.
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"Governmental Rule" means any law, statute, rule, regulation, ordinance,
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order, judgment, guideline or decision of any Governmental Person.
"IBJ" means The Industrial Bank of Japan, Limited, a Japanese bank, or any
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successor thereto.
"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 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.
"Initial Funding Date" means the Business Day of the funding of the initial
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Loan(s) hereunder.
"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
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thereunder.
"Joining Lender" has the meaning set forth in Section 10.01(f).
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"Joining Lender Agreement" means a Joining Lender Agreement signed by the
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Company and a Joining Lender and approved by the Administrative Agent,
substantially in the form of Exhibit J hereto, as amended, supplemented,
restated or otherwise modified from time to time.
"Lender" has the meaning assigned to that term in the introduction to this
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Agreement and includes any other financial institution that becomes a party
hereto as a "Lender" pursuant to Section 10.01.
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"Lender Affiliate" means a Person engaged primarily in the business of
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commercial banking and that is a Subsidiary of a Lender or of a Person of which
a Lender is a Subsidiary.
"Lending Office" means, with respect to any Lender, the office or offices
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of the Lender specified as its "Lending Office" under its name on Schedule
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10.06, or such other office or offices of the Lender as it may from time to time
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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" means the amount initially advanced by a Lender to the Company
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pursuant to this Agreement, whether pursuant to Section 2.01, 10.01(a) or
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10.01(f), as such amount may be decreased pursuant to Section 10.01(a) or
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increased pursuant to Section 10.01(f).
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"Loan Documents" means this Agreement, any Notes, the Mattel Sales
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Guaranty, the Fisher-Price Guaranty, all Mattel Sales Subordination Agreements,
all Fisher-Price Subordination Agreements, the Fee Letter and all documents,
certificates and instruments delivered in connection herewith or therewith;
provided, however, that for the avoidance of doubt, "Loan Documents" shall not
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include documents included in the definition of "Loan Documents" under (i) 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, N.A., as agent thereunder, or (ii) that certain Credit Agreement (364-
Day Facility) dated as of March 31, 2000, among the Company, the banks from time
to time party thereto and Bank of America, N.A., as administrative agent
thereunder, except to the extent that any document or instrument delivered in
connection with either of those credit agreements is also delivered in
connection herewith.
"Margin Stock" has the meaning assigned to the term "Margin Stock" in
------------
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
-----------------------
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 Lenders to enforce the Obligations.
-9-
"Material Subsidiary" means Mattel Sales, Fisher-Price, or any other
-------------------
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 interests, 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;
provided, however, that, notwithstanding the foregoing, TLC shall not be a
- -------- -------
Material Subsidiary hereunder.
For the 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 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.
-10-
"Mattel Sales Subordination Agreement" means a Mattel Sales Subordination
------------------------------------
Agreement substantially in the form of Exhibit G-2 attached hereto signed by
Mattel Sales and any of certain Affiliates of the Company 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 July 17, 2003.
-------------
"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
----
Lender substantially in the form of Exhibit A hereto, evidencing the Loan made
by such Lender 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
Lenders 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 Lenders by the Company pursuant to Section 6.01(c).
---------------
"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 receivable
not actually sold or discounted.
-11-
"Participant" has the meaning set forth in Section 10.01(c).
----------- ----------------
"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, lender, trust
company, unincorporated association or other entity or any Governmental Person.
"Pro Rata Share" means with respect to each Lender the percentage set forth
--------------
opposite such Lender's name on Schedule 1.01, as the same may be adjusted from
-------------
time to time pursuant to Section 10.01.
-------------
"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 Lenders" means, as at any date of determination, Lenders having
-----------------
at least 51% of the then aggregate unpaid principal amount of the Loans (or if
no Loans are then outstanding, Lenders 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.
"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, with respect to any Person, any corporation,
----------
association or other business entity of which more than 50% of the total voting
power of shares of stock or other ownership interests entitled to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof. Unless otherwise
specified herein, "Subsidiary" means a Subsidiary of the Company.
-12-
"TLC" means TLC Multimedia, Inc., a Minnesota corporation.
---
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. The words "include," "includes" and "including"
shall be deemed to be followed by the words "without limitation."
SECTION 2.
THE COMMITMENTS.
2.01 The Commitments. Each Lender that becomes a party to this Agreement on
or before the Initial Funding Date hereby agrees severally, on the terms and
conditions set forth in this Agreement, to make a single advance to the Company
on the Initial Funding Date in an amount not to exceed such Lender's Commitment.
Upon the making of each such Lender's Loan pursuant to this Section 2.01, the
------------
unused portion, if any, of each such Lender's Commitment shall terminate.
Amounts borrowed hereunder and repaid or prepaid may not be reborrowed.
2.02 Loan Accounts and Notes.
(a) Subject to Section 2.02(b), the Loan made by each Lender shall be
---------------
evidenced by a loan account maintained by such Lender in the ordinary course of
business. The loan accounts or records maintained by the Administrative Agent
and each Lender shall be conclusive absent manifest error of the amount of the
Loans made by the Lenders 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 Lender made through the Administrative
Agent, the Loan made by such Lender may be evidenced by a Note instead of by a
loan account. Each such Lender shall endorse on the schedules annexed to its
Note the date, amount and maturity of the Loan made by it and the amount of each
payment of principal made by the Company with respect thereto. Each such Lender
is irrevocably authorized by the Company to endorse the schedules annexed to its
Note, and each Lender's record shall be conclusive absent manifest error;
provided, however, that the failure of a Lender to make, or an error in making,
- -------- -------
a notation thereon with respect to its Loan shall not limit or otherwise affect
the obligations of the Company hereunder or under any such Note to such Lender.
2.03 Borrowing Procedure.
(a) When the Company desires to borrow pursuant to Section 2.01, it shall
------------
deliver irrevocable telephonic notice to the Administrative Agent followed
immediately by written notice in the form of the Notice of Borrowing, which
telephonic notice must be received by the Administrative Agent no later than (i)
11:00 a.m. (New York time) on the proposed Initial
-13-
Funding Date in the case of Base Rate Loans and (ii) 12:00 noon (New York time)
three Business Days in advance of the proposed Initial Funding Date in the case
of Eurodollar Rate Loans, specifying (A) the proposed Initial 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 the Initial 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 the Initial 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 after receipt of the Notice of Borrowing (or telephonic notice
in lieu thereof), the Administrative Agent shall notify each Lender of the
proposed borrowing. Each Lender shall make available to the Administrative
Agent its Pro Rata Share of the amount of the proposed borrowing on the Initial
Funding Date, in same-day funds, by remitting such funds to the Administrative
Agent's Office no later than 2:00 p.m. (New York time) on the Initial Funding
Date. Upon satisfaction of the conditions set forth in Section 4.02, the
------------
Administrative Agent shall make available to the Company on the Initial Funding
Date the aggregate of the amounts so made available by the Lenders by causing an
amount of same-day funds equal to such aggregate amount received by the
Administrative Agent to be credited to the account of the Company designated
thereby.
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 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) 12:00 noon (New
York 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) 12:00 noon (New York 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.
-14-
(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 a new 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 Lender thereof, or, if no timely notice is
provided, the Administrative Agent will promptly notify each Lender 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 Lender.
(e) Unless the Requisite Lenders 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 Voluntary Prepayments. The Company may, upon not less than ten
Business Days' prior written notice to the Administrative Agent in the form of
Exhibit I hereto (which notice the Administrative Agent will promptly transmit
by telecopier to each Lender), 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 Lenders 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.
2.06 Repayment of Loans. Each Loan shall mature, and the Company shall
repay the unpaid principal amount of each Loan, on the Maturity Date.
2.07 Interest on the Loans.
(a) Subject to Section 2.07(c), the Loans shall bear interest on the unpaid
---------------
principal amount thereof from the Initial 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 Margin or (ii)
----
with respect to Base Rate Loans, the Base Rate.
(b) Subject to Section 2.07(c), from and after the Effective Date, interest
---------------
shall be payable in arrears on each Loan on each Interest Payment Date
applicable to that Loan. Interest
-15-
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.
2.08 Fees. The Company shall pay to the Administrative Agent, for the
account of IBJ or Bear Stearns, as applicable, such fees as specified in the Fee
Letter.
2.09 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 Margin or Eurodollar Reserve Percentage shall become effective as
of the opening of business on the day on which such change in the Applicable
Margin 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 Lenders in the absence of manifest
error.
2.10 Payments by the Company.
(a) All payments of principal, interest, fees and other amounts hereunder,
under the Fee Letter and under any Notes shall be made without setoff,
counterclaim, recoupment or any other deduction, in same-day funds, and
delivered to the Administrative Agent at the Administrative Agent's Office not
later than 12:00 noon (New York time) on the date due. The Administrative Agent
will promptly distribute to each Lender its Pro Rata Share (or other applicable
share as expressly provided herein) of such principal, interest 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 Lenders hereunder
that the Company will not make such payment in full as and when required
hereunder, the Administrative Agent may
-16-
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 Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent the Company shall not have made such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent on demand such amount distributed to such Lender, together
with interest thereon for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate as in effect for each such day.
2.11 Payments by the Lenders to the Administrative Agent.
(a) Unless the Administrative Agent shall have received notice from a
Lender on the Initial Funding Date that such Lender will not make available to
the Administrative Agent as and when required hereunder for the account of the
Company the amount of that Lender's Pro Rata Share of the borrowing hereunder on
the Initial Funding Date, the Administrative Agent may assume that each Lender
has made such amount available to the Administrative Agent in immediately
available funds on the Initial 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
Lender 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 Lender shall
on the next Business Day following the Initial Funding Date 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 Lender with respect to amounts owing
under this Section 2.11(a) shall be conclusive, absent manifest error. If such
---------------
amount is so made available, such payment to the Administrative Agent shall
constitute such Lender's Loan for all purposes of this Agreement. If such
amount is not made available to the Administrative Agent on the next Business
Day following the Initial Funding Date, 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 Initial Funding Date, at a rate per annum equal to the
interest rate(s) applicable at the time to the Loans.
(b) The failure of any Lender to make its Loan on the Initial Funding Date
shall not relieve any other Lender of any obligation hereunder to make its Loan
on the Initial Funding Date, but no Lender shall be responsible for the failure
of any other Lender to make the Loan to be made by such other Lender on the
Initial Funding Date.
2.12 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loan made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) in excess of its Pro Rata Share of payments on account of
the Loans obtained by all the Lenders, such Lender shall forthwith (a) notify
the Administrative Agent of such fact, and (b) purchase from the other Lenders
such participations in the Loans made by them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however,
- -------- -------
-17-
that if all or any portion of such excess payment is thereafter recovered from
the purchasing Lender, such purchase shall to that extent be rescinded, and each
other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender's Pro Rata Share
(according to the proportion of (i) the amount of such paying Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Company agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.12
------------
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Lender 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 2.12 and will in each case notify the Lenders
------------
following any such purchases or repayments.
SECTION 3.
PAYMENTS IN GENERAL.
3.01 Taxes.
(a) Subject to Section 3.01(d) and Section 3.01(g), any and all payments by
--------------- ---------------
the Company to each Lender 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 Lender and the Administrative Agent, such taxes (including income taxes
or franchise taxes) as are imposed on or measured by each Lender's or the
Administrative Agent's net income by the jurisdiction under the laws of which
such Lender 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 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 Lender and the Administrative Agent for the full amount of Taxes
and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction
on amounts payable under this Section 3.01) paid by such Lender 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 Lender 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 Lender or
the Administrative Agent, then, subject to Section 3.01(g): (i) the sum payable
---------------
shall be increased as necessary so
-18-
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.01) such Lender 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 Lender 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 Lender and entitling it to an exemption
from, or reduction of, withholding tax on all payments to be made to such Lender
by the Company pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Lender by the Company
pursuant to this Agreement) or such other evidence satisfactory to the Company
and the Administrative Agent that such Lender is entitled to an exemption from
U.S. withholding tax. Thereafter and from time to time, each such Lender 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 Lender 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 Lender, 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 Lender. If such Lender fails
to deliver the above forms or other documentation, then the Administrative Agent
may withhold from any interest payment to such Lender 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 Lender, such Lender 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 Lenders 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 Lender for the account of
---------------
any Lending Office of such Lender: (i) if the obligation to pay such additional
amounts would not have arisen but for a
-19-
failure by such Lender to comply with its obligations under Section 3.01(f) in
---------------
respect of such Lending Office; or (ii) if such Lender shall have delivered to
the Company the form(s) in respect of such Lending Office pursuant to Section
-------
3.01(f), and such Lender 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 Lender to deliver any forms
or other documentation pursuant to Section 3.01(f), then the Company shall, on
---------------
demand of such Lender through the Administrative Agent, reimburse such Lender
for any costs and expenses (including expenses of outside legal counsel and the
allocated costs of in-house counsel) reasonably incurred by such Lender in the
preparation or delivery of such forms or other documentation.
(i) If the Company is required to pay additional amounts to any Lender or
the Administrative Agent pursuant to Section 3.01(d), then such Lender shall use
---------------
its reasonable best efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue if such change in
the judgment of such Lender is not otherwise disadvantageous to such Lender.
(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 lenders 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 Lender hereunder (including 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 Lender or any corporation
controlling such Lender (a "Change in Law"), the result of which is to reduce
-------------
the rate of return on such Lender's capital as a consequence of such commitments
to a level below that which such Lender could have achieved but for such Change
in Law, taking into consideration such Lender's policies with respect to capital
adequacy, by an amount which such Lender deems to be material, the Lender shall
deliver to the Company a statement of the amount necessary to compensate such
Lender for the reduction in the rate of return on its capital attributable to
such commitments (the "Capital Compensation Amount"). The Lender shall determine
---------------------------
the Capital Compensation Amount in good faith, using reasonable attribution and
averaging methods. The Lender 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 Lender ten Business Days after such notice is given. As soon as practicable
after any Change in Law, each Lender shall submit to the Company estimates of
the Capital Compensation Amounts that would be payable as a function of such
Lender's commitments hereunder.
-20-
3.03 Illegality.
(a) If any Lender 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 Lender
or its Lending Office to make Eurodollar Rate Loans, then, on notice thereof by
the Lender to the Company through the Administrative Agent, the obligation of
the Lender to make Eurodollar Rate Loans shall be suspended until the Lender
shall have notified the Administrative Agent and the Company that the
circumstances giving rise to such determination no longer exists.
(b) If a Lender 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 Lender
or its Lending Office to maintain any Eurodollar Rate Loan, the Company shall
prepay all Eurodollar Rate Loans of the Lender then outstanding, together with
interest accrued thereon, or convert all Eurodollar Rate Loans of the Lender
then outstanding to Base Rate Loans pursuant to Section 2.04, either on the last
------------
day of the Interest Period thereof if the Lender may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or promptly, if the Lender 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 Lender to make or maintain Eurodollar Rate
Loans has been terminated, the Company may elect, by giving notice to the Lender
through the Administrative Agent, that all Loans which would otherwise be made
by the Lender 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 Lender 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 Lender, be illegal or otherwise disadvantageous to the Lender.
3.04 Increased Costs and Reduction of Return. If any Lender 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 Lender 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 Lender (with a copy of
such demand to the Administrative Agent), pay to such Lender, additional amounts
as are sufficient to compensate such Lender for such increased costs. Each
Lender 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 Lender for, and
to hold each Lender harmless from, any loss or expense which the Lender may
sustain or incur as a consequence of (a) the failure of the Company to make any
payment or prepayment of principal
-21-
of any Eurodollar Rate Loan (including payments made after any acceleration
thereof) when due, (b) the failure of the Company to borrow, continue or convert
a Loan on the specified date 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 on the specified date after the
Company has given a notice in accordance with Section 2.05 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; provided that any such loss or expense
--------
shall include any 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 Lenders
under Sections 3.03(b), 3.04 and 3.05, each Eurodollar Rate Loan made by a
---------------- ---- ----
Lender (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the Eurodollar Base 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.
3.06 Inability to Determine Rates. If the 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 Lenders advise the
Administrative Agent in writing that the Eurodollar Base 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 Lenders of funding such Loan,
the Administrative Agent will forthwith give notice of such determination to the
Company and each Lender. Thereafter, the obligation of the Lenders to make or
maintain Eurodollar Rate Loans hereunder shall be suspended until the
Administrative Agent upon the instruction of the Requisite Lenders 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 Lenders
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 Lenders (or
to the Administrative Agent for the Lenders with sufficient originally executed
copies for each Lender, except for any Notes):
-22-
(i) This Agreement, duly executed and delivered by the Company, the
Administrative Agent and all Lenders;
(ii) A Note, duly executed and delivered by the Company, drawn to the
order of each Lender 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) Mattel Sales Subordination Agreements and Fisher-Price
Subordination Agreements, duly executed and delivered by Mattel Sales or
Fisher-Price, as applicable, and any and all Affiliates of the Company to
which 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, 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 Lenders 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 unaudited financial
statements dated March 31, 2000 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 Fitch.
(b) The Company shall have paid all fees payable pursuant to Section 2.08.
------------
-23-
(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 Funding of Loans. The obligation of each Lender that
becomes a party to this Agreement on or before the Initial Funding Date to fund
its Loan on the Initial Funding Date is subject to the following further
conditions precedent:
(a) The Administrative Agent shall have received on or before the Initial
Funding Date a Notice of Borrowing signed by a Responsible Officer on behalf of
the Company in writing delivered to the Administrative Agent;
(b) The representations and warranties of the Company contained in each
Loan Document shall be true, correct and complete in all material respects on
and as of the Initial 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 the Initial Funding Date;
and
(c) No Default or Event of Default shall exist or shall result from the
funding of the Loans on the Initial Funding Date.
Submission of the Notice of Borrowing by the Company to the Administrative Agent
hereunder shall constitute a representation and warranty by the Company
hereunder, as of the Initial Funding Date, that the conditions in Section 4.02
------------
are satisfied or waived.
SECTION 5.
REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders and the Administrative Agent to enter into
this Agreement and to make any extension of credit hereunder, the Company
represents and warrants to each Lender 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, to issue the Notes and to carry out the
transactions contemplated hereby and thereby.
-24-
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 of, the jurisdiction of incorporation of, and the
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 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 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 Governmental Rule binding on the Company, or any
material order, judgment or decree of any referee or arbitrator 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 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 and the issuance, delivery and
payment of the Notes by the Company do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
Governmental Person, referee or arbitrator.
5.07 Binding Obligation. This Agreement is, and each other Loan Document
to which the Company is a party when executed and delivered hereunder will be,
the legally valid and binding obligation of the Company, enforceable against it
in accordance with the respective terms of such Loan Document, 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
Lenders (a) 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 PricewaterhouseCoopers
LLP, and (b) a consolidated balance sheet of the Company and its Subsidiaries
for the fiscal quarter ended March 31, 2000 and related consolidated statements
of income, shareholders' equity and changes in financial position of the Company
and its Subsidiaries for such fiscal quarter, certified by the Chief Financial
Officer, Executive Vice
-25-
President Finance or Treasurer of the Company. 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 dates thereof and the
consolidated results of operations and statement of cash flow of the Company and
its Subsidiaries for the periods 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 March 31, 2000 there has been no event or events
that have, either individually or in the aggregate, resulted in a Material
Adverse Effect.
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 as of March 31, 2000 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 March 31, 2000 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, investigation or arbitration (whether or
not purportedly on behalf of the Company or any of its Subsidiaries) before or
by any Governmental Person, referee or arbitrator pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its
Subsidiaries or an 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 are
the maximum that would be awarded upon, and the likelihood of, an adverse
determination of the claims 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, proceeding, investigation or arbitration. Neither the Company
nor any of its Subsidiaries is (i) in violation of any applicable Governmental
Rule 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 Governmental Person, referee or arbitrator which could result
in a Material Adverse Effect. There is no action, suit, proceeding,
investigation or arbitration 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.
-26-
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.
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 Governmental Rule 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 all 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 the business, operations and properties of it and its
Subsidiaries, 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 Lenders by the Company since April 1, 2000 for use in connection with the
transactions contemplated by this Agreement contains, as of the date of this
Agreement, 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 Lenders 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 Lenders 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,
properties, assets
-27-
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 Lenders 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.
SECTION 6.
AFFIRMATIVE COVENANTS.
The Company agrees from the Effective Date until payment in full of all
Obligations and termination of the Commitments, unless the Requisite Lenders
shall otherwise give prior written consent, that 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 Lender:
(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 Treasurer of the Company
that the consolidated 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 normal year-end audit 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,
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 PricewaterhouseCoopers LLP or other
independent certified public 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 (to the best of his or her belief) by the chief financial
officer or chief accounting officer of the Company;
-28-
(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 certified public 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 the Company's Board of Directors) by the Company's
independent certified public accountants in connection with each annual, interim
or special audit of the consolidated financial statements of the Company made by
such accountants, including 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 Lender 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 event required to be
disclosed in a current report to be filed by the Company with the Securities
-29-
and Exchange Commission on Form 8-K (Items 1, 2, 4 and 6 of such Form as in
effect on the date hereof), (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 any 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 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
of any such change, notice of any change in the ratings on the Company's long-
term unsecured Indebtedness by S&P, Moody's or Fitch; and
(k) 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 Lender 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 the 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 any Lender.
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 claims for labor,
services, materials and supplies) for sums which 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
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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 Lender,
at the expense of that Lender, 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 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 signed a Fisher-Price Subordination Agreement or a Mattel
Sales Subordination Agreement, respectively, the Company shall cause such
Affiliate to execute and 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.
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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 Lenders shall
otherwise give prior written consent, that the Company will perform all
covenants in this Section 7.
---------
7.01 Senior or 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 licensing, production and sale of
- -------
consumer software products related to the Company's existing lines of business.
(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
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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;
(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; and
(iii) the Company may sell the assets and business that the Company
has reported as Discontinued Operations in the Consolidated Statement of
Operations in the Consolidated Financial Statements filed with the
Securities and Exchange Commission in its Current Report on Form 8-K dated
July 6, 2000.
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 receivable 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 (a) the sum of (i) Consolidated Funded
Indebtedness plus (ii) Combined Purchasers' Investments to (b) the sum of (i)
----
Consolidated Funded Indebtedness plus (ii) Combined Purchasers' Investments plus
---- ----
(iii) the Consolidated Net Worth of the Company and its Subsidiaries, all on a
consolidated basis determined in conformity with GAAP, to exceed 60% at the end
of any of the first three fiscal quarters of any fiscal year or 50% at the end
of any fiscal year.
7.06 Interest Coverage Ratio. The Company shall not permit, as of the last
day of any 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
day, before (A) special items, (B) minority
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interest, and (C) gains on reacquisition of debt, plus (ii) income taxes accrued
----
for the four consecutive fiscal quarters ending on such day, plus (iii) interest
----
accrued for the four consecutive fiscal quarters ending on such day, excluding
capitalized interest and without regard to interest income, plus (iv)
----
depreciation and amortization for the four consecutive fiscal quarters ending on
such day to (b) interest incurred for the four consecutive fiscal quarters
ending on such day, 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 7.07, 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
Note, 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 (including pursuant to the Fee Letter) 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 other Material Subsidiary 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
-34-
term of any evidence of such Indebtedness 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 breach or default is to cause, or to permit the holder or holders or
beneficiary or beneficiaries 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 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 Section 6.01(g), Section 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 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 terms and conditions referred to in Subsections
(a), (b), (c) and (d) above, and such failure shall not have been remedied or
waived within 30 days after receipt of notice from the Administrative Agent or
any Lender of such failure; 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; (ii) any other similar
relief shall be granted under any applicable federal, state or foreign law;
(iii) 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; (iv) 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 (v) 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; provided that, in
--------
the case of any of the events described in clause (ii), (iii), (iv) or (v)
above, such event shall continue for 45 days without being dismissed, bonded or
discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (i) The Company or
any of its Material Subsidiaries (A) shall have an order for relief entered with
respect to it, (B) shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (C)
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, (D) 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, (E) shall make an assignment for the
-35-
benefit of creditors or (F) shall be unable, shall fail or shall admit in
writing its inability to generally pay its debts as such debts become due; or
(ii) the Board of Directors of the Company or any of its Material Subsidiaries
shall adopt any resolution or otherwise take 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 any of the events listed in
clauses (i) through (iv) above or any subsequent date, any of the Company and
its ERISA Affiliates has any liability (such liability to include any liability
to the Pension Benefit Guaranty Corporation, or any successor thereto, or to any
other party under Section 4062, 4063 or 4064 of ERISA or any other provision of
law) resulting from or otherwise associated with the events listed in clauses
(i) through (iv) above for unfunded guarantied vested benefits under all Pension
Plans which exceeds the current value of assets accumulated in such Pension
Plans 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 (except as permitted by Section 7.03(b)), and such suspension shall 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 Lenders (a)
declare the Commitment of each Lender 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
-36-
and unpaid thereon, and all other amounts owing or payable hereunder or under
any other Loan 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 Lenders all
rights and remedies available to it and the Lenders 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 (and, in the case of any
------------
of clauses (ii), (iii), (iv) and (v) of paragraph (f), upon the expiration of
the 45-day period mentioned in paragraph (f)), the obligation of each Lender 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 Lender.
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 Lender 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 Lender, 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 Lenders 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
-37-
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 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 Lender
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 Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders 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
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions specified in
Sections 4.01 and 4.02, each Lender 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 Lender
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender, unless
an officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from the Lender
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 Lender shall not have made available to the Administrative
Agent the Lender'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 Lenders,
unless the Administrative Agent shall have received written notice from a Lender
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 Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
requested by the Requisite Lenders in accordance
-38-
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 Lenders.
9.06 Credit Decision. Each Lender 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
Lender. Each Lender 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 Lender 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
Lenders by the Administrative Agent, the Administrative Agent shall not have any
duty or responsibility to provide any Lender 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 any Administrative Agent-Related Person.
9.07 Indemnification. Whether or not the transactions contemplated hereby
shall be consummated, the Lenders 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 in 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
-------- -------
Lender shall be liable for the payment to any Administrative Agent-Related
Person 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 Lender shall reimburse the Administrative Agent upon demand
for its ratable share of all costs and 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
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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 any other jurisdiction asserts a claim that the Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered or was not properly executed, or
because such Lender 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 Lender 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 Lenders in this Section shall survive the
payment of all Obligations hereunder.
9.08 Administrative Agent in Individual Capacity. IBJ 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 IBJ were not the Administrative Agent
hereunder and without notice to or consent of the Lenders. With respect to its
Loans, IBJ shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include IBJ in its individual
capacity.
9.09 Successor Administrative Agent. The Administrative Agent may, and at
the request of the Requisite Lenders shall, resign as Administrative Agent upon
30 days' notice to the Lenders. If the Administrative Agent shall resign as
Administrative Agent under this Agreement, the Requisite Lenders shall appoint
from among the Lenders a successor agent for the Lenders, 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 Lenders and the
Company, a successor agent from among the Lenders. 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, 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 Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Requisite
Lenders appoint a successor agent as provided for above.
9.10 Co-Syndication Agents, Documentation Agent, Arranger and Co-Arranger.
None of the Persons identified on the facing page or signature pages of this
Agreement as Co-
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Syndication Agent, Documentation Agent, Arranger or Co-Arranger shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than, in the case of any such Person that is also a Lender, those
applicable to all Lenders as such. Without limiting the foregoing, none of the
Persons so identified as a Co-Syndication Agent, the Documentation Agent, the
Arranger or the Co-Arranger shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Persons 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 Lender may assign
to one or more Eligible Assignees all or any portion of its Commitment and/or
outstanding Loans; provided that (i) such assignment, if not to a Lender or an
--------
Affiliate of the assigning Lender, 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
Notice of Assignment and Acceptance in the form of Exhibit H (an "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
Lender or to another Lender or (B) of the entire remaining Commitment of the
assigning Lender, the portion of the Commitment assigned shall not be less than
$5,000,000, (iv) the assigning Lender 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, delivery of any
forms required by Section 3.01(f) and payment of the requisite fee described
---------------
below, the assignee named therein shall be a Lender 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 Lender 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 Lender 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 Lender and the assignee Lender
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 Lender
(including cases of assignments to Affiliates of assigning Lenders but excluding
cases of assignments by IBJ), the Administrative Agent shall, promptly following
the effective date thereof, provide to the
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Company and the Lenders a revised Schedule 10.06 giving effect thereto.
--------------
(c) Upon advance written notice to the Company, any Lender may at any time
sell to one or more commercial lenders or other Persons not Affiliates of the
Company (a "Participant") participating interests in any Loans, the Commitment
-----------
of that Lender and the other interests of that Lender (the "originating Lender")
------------------
hereunder and under the other Loan Documents; provided, however, that (i) the
-------- -------
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender 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 Lender in connection
with the originating Lender's rights and obligations under this Agreement and
the other Loan Documents, and (iv) no Lender 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 in respect of, and the Participant
shall be entitled to the benefit of, Sections 3.01, 3.04 and 10.15 as if it were
------------- ---- -----
a "Lender." In the case of any such participation, except as provided in the
preceding sentence, 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 Lender 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 setoff 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 Lender under this
Agreement.
(d) Notwithstanding any other provision in this Agreement, any Lender 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 Federal
Reserve Board 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 Lender 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 the Company's or such 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 such Lender, 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
such Lender; provided, however, that any Lender may disclose such information
-------- -------
(A) at the request or pursuant to any requirement of any Governmental Person to
which the Lender is subject or in connection with an examination of such Lender
by any Governmental Person, (B) pursuant to subpoena or other court process
(including of a
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referee or arbitrator) and when required to do so in accordance with the
provisions of any applicable Governmental Rule, provided that a Lender 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 Lender's Affiliates, independent
auditors and other professional advisors, provided that such Persons are
--------
obligated to keep such information confidential. Notwithstanding the foregoing,
the Company authorizes each Lender to disclose to any Assignee or Participant
and to any prospective Assignee or Participant such financial and other
information in such Lender's possession concerning the Company or its
Subsidiaries which has been delivered to the Administrative Agent or the Lenders
pursuant to this Agreement or which has been delivered to the Administrative
Agent or the Lenders by the Company in connection with the Lenders' credit
evaluation of the Company prior to entering into this Agreement; provided that,
--------
unless otherwise agreed by the Company, such Assignee or Participant shall agree
in writing to such Lender to keep such information confidential to the same
extent required of the Lenders hereunder.
(f) At the request of the Company made to the Administrative Agent not
later than October 17, 2000 and with the consent of the Administrative Agent,
the aggregate principal amount of the Loans or, if the Initial Funding Date has
not yet occurred, the aggregate Commitments may be increased by the joining of
one or more additional Lenders to this Agreement or by the increase of the Loan
or Commitment, as applicable, of an existing Lender (each a "Joining Lender"),
--------------
in accordance with the terms of this Section 10.01(f). Any Joining Lender shall
----------------
be subject to the approval of the Administrative Agent and the Company and shall
become a Joining Lender pursuant to a Joining Lender Agreement executed by such
Joining Lender and the Company and approved by the Administrative Agent;
provided that (i) any such Joining Lender must make a new Loan or have a new
- --------
Commitment of, or must increase its existing Loan or Commitment by, at least
$10,000,000 and (ii) in no event may the aggregate principal amount of the Loans
or the aggregate Commitments, as applicable, exceed $300,000,000. Upon the
execution and delivery of a Joining Lender Agreement by a Joining Lender and the
other parties thereto, from and after the effective date determined pursuant to
such Joining Lender Agreement such Joining Lender shall be a party hereto (if
not already a party) and shall have the rights and obligations of a Lender
hereunder (including the obligation to comply with Section 3.01(f)) with a new
---------------
or increased Loan or Commitment, as applicable, as set forth in such Joining
Lender Agreement. Any such Joining Lender Agreement shall be deemed to amend
this Agreement only to the extent necessary to reflect the addition of such
Joining Lender to this Agreement, if applicable, and the resulting adjustment of
Pro Rata Shares resulting from the addition to or increase of the aggregate
Loans or the aggregate Commitments, as applicable. If a Joining Lender becomes
a party hereto (by execution of a Joining Lender Agreement) effective after the
Initial Funding Date, then the Company, such Joining Lender and the
Administrative Agent shall determine among themselves the timing and other
procedures for the funding of such Joining Lender's new or increased Loan;
provided, however, that such timing and other procedures shall be substantially
- -------- -------
similar to those contained in Section 2. As conditions precedent to the making
or increase of a Loan or Commitment by a Joining Lender effective after the
Initial Funding Date, the Company shall, at its expense, execute and deliver to
the Administrative Agent for such Joining Lender (i) a certificate of a
Responsible Officer to the effect set forth in Sections 4.02(b) and (c)
---------------- ---
(provided that such certification shall be made on and as of the date of funding
--------
of such Joining Lender's new or increased Loan and in respect of such Loan) and
(ii) if requested by such Joining Lender, an appropriate Note to the order of
such
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Joining Lender.
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 Lenders set forth in Sections 2.12, 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 Lender 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; (b) all the
costs of furnishing all opinions by counsel for the Company (including any
opinions requested by the Lenders 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; (c)
the cost of delivering to the Lenders any Notes pursuant to the provisions of
this Agreement; (d) the reasonable fees, expenses and disbursements of the
Administrative Agent and the Administrative Agent's counsel (including the
allocated cost of Administrative Agent's in-house 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 (e)
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
Lenders and the reasonable estimate of the allocable costs of counsel on the
staff of legal departments of the Lenders and costs of settlement) incurred by
the Administrative Agent and each Lender 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 Setoff. 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 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 Lender 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
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appropriate any and all deposits (including 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 Lender or
that subsequent holder or any Lender 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 2.12 irrespective of whether or not that Lender or that
------------
subsequent holder shall have made any demand hereunder, and each such Lender
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 Lenders and the Company, and acknowledged
by the Administrative Agent, and any such waiver or consent 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 Lenders and the Company, and acknowledged by the
Administrative Agent, do any of the following:
(a) increase or extend any Lender's Commitment or subject any Lender to any
additional obligations, except as permitted by Section 10.01(f);
----------------
(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder or
under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein on,
any Loan, or reduce any fees or other amounts payable hereunder or under any
other Loan Document;
(d) change any Lender's Pro Rata Share, except as provided in Section
-------
10.01(f), or the aggregate unpaid principal amount of any extension of credit
- --------
which shall be required for the Lenders or any of them to take any action
hereunder;
(e) amend this Section 10.08 or Section 2.12;
------------- ------------
(f) amend Section 2.01 or the definition of "Pro Rata Share" or "Requisite
------------
Lenders"; or
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(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 Lenders or
all the Lenders, 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, waiver or consent
effected in accordance with this Section 10.08 shall be binding upon each Lender
-------------
at the time, each future Lender, 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 Lender hereunder is
several, and no Lender shall be responsible for any obligation or commitment of
any other Lender hereunder. Nothing contained in this Agreement, and no action
taken by the Lenders pursuant hereto, shall be deemed to constitute the Lenders
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
Section 1, 6 or 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 or any
other Loan Document 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 Lenders 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 Lenders irrevocably waives any objection, including any objection
to the laying of venue or based on the grounds of forum non conveniens, which it
may now or
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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 Lenders 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 (a) 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 Lender and (b) the Lenders may
assign or transfer any of their rights and obligations under this Agreement only
in accordance with Section 10.01.
-------------
10.14 Counterparts. This Agreement and any related 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 the Administrative Agent-Related
Persons, each Lender and each Lender's respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
------------------
for, and hold each 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 Lender) 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) and any 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Term Loan Agreement
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
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as Administrative Agent, Co-Syndication Agent and
a Lender
By: /s/ Vicente L. Timiraos
---------------------------------------------
Name: Vicente L. Timiraos
-------------------------------------------
Title: Joint General Manager
------------------------------------------
S-2
BEAR, STEARNS & CO. INC.,
as Co-Syndication Agent
By: /s/ Don Mullen
------------------------------------------
Name: Don Mullen
----------------------------------------
Title: Senior Managing Director
---------------------------------------
S-3