EXHIBIT 99.0
================================================================================
--------------------------------------------------------------------------------
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 11, 1998
among
MATTEL, INC.,
THE BANKS NAMED HEREIN,
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
[LOGO OF BANK OF AMERICA]
Arranged by
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
================================================================================
MATTEL INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.............................................................. 1
1.1 CERTAIN DEFINED TERMS....................................................... 1
1.2 OTHER DEFINITIONAL PROVISIONS............................................... 12
SECTION 2. THE COMMITMENTS.......................................................... 12
2.1 THE AGGREGATE FACILITIES COMMITMENT......................................... 12
2.2 LOAN ACCOUNTS AND NOTES..................................................... 12
2.3 BORROWING PROCEDURE......................................................... 13
2.4 CONVERSION AND CONTINUATION ELECTIONS....................................... 13
2.5 ADJUSTMENTS OF AGGREGATE LOAN COMMITMENT AND PURCHASERS' INVESTMENT LIMIT... 15
2.6 VOLUNTARY PREPAYMENTS....................................................... 16
2.7 REPAYMENT OF LOANS.......................................................... 16
2.8 INTEREST ON THE LOANS....................................................... 16
2.9 FEES........................................................................ 16
2.10 CALCULATION OF INTEREST AND FEES............................................ 17
2.11 PAYMENTS BY THE COMPANY..................................................... 17
2.12 PAYMENTS BY THE BANKS TO THE AGENT.......................................... 18
2.13 SHARING OF PAYMENTS, ETC.................................................... 19
SECTION 3. PAYMENTS IN GENERAL...................................................... 20
3.1 TAXES....................................................................... 21
3.2 CAPITAL ADEQUACY............................................................ 21
3.3 ILLEGALITY.................................................................. 22
3.4 INCREASED COSTS AND REDUCTION OF RETURN..................................... 22
3.5 FUNDING LOSSES.............................................................. 23
3.6 INABILITY TO DETERMINE RATES................................................ 23
3.7 SURVIVAL.................................................................... 23
SECTION 4. CONDITIONS PRECEDENT..................................................... 24
4.1 CONDITIONS TO EFFECTIVENESS................................................. 24
4.2 CONDITIONS TO ALL LOANS..................................................... 25
SECTION 5. REPRESENTATIONS AND WARRANTIES........................................... 26
5.1 ORGANIZATION AND POWERS..................................................... 26
5.2 GOOD STANDING............................................................... 26
5.3 MATERIAL SUBSIDIARIES....................................................... 26
5.4 AUTHORIZATION OF BORROWING.................................................. 26
5.5 NO CONFLICT................................................................. 26
5.6 GOVERNMENTAL CONSENTS....................................................... 27
5.7 BINDING OBLIGATION.......................................................... 27
5.8 FINANCIAL CONDITION......................................................... 27
5.9 CHANGES, ETC................................................................ 27
5.10 TITLE TO PROPERTIES......................................................... 27
5.11 LITIGATION; ADVERSE FACTS................................................... 27
5.12 PAYMENT OF TAXES............................................................ 28
5.13 AGREEMENTS.................................................................. 28
5.14 PERFORMANCE................................................................. 28
5.15 GOVERNMENTAL REGULATION..................................................... 28
5.16 EMPLOYEE BENEFIT PLANS...................................................... 28
5.17 ENVIRONMENTAL MATTERS....................................................... 28
-i-
5.18 DISCLOSURE.................................................................. 29
5.19 SUBORDINATION AGREEMENTS.................................................... 29
SECTION 6. AFFIRMATIVE COVENANTS.................................................... 29
6.1 REPORTING AND INFORMATION REQUIREMENTS...................................... 29
6.2 CORPORATE EXISTENCE, ETC.................................................... 32
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.............................. 32
6.4 MAINTENANCE OF PROPERTIES; INSURANCE........................................ 32
6.5 INSPECTION OF PROPERTY AND BOOKS AND RECORDS................................ 32
6.6 USE OF PROCEEDS OF LOANS.................................................... 33
6.7 ENVIRONMENTAL LAWS.......................................................... 33
6.8 SUBORDINATION AGREEMENTS.................................................... 33
SECTION 7. NEGATIVE COVENANTS....................................................... 33
7.1 SECURED INDEBTEDNESS........................................................ 33
7.2 LIENS....................................................................... 33
7.3 RESTRICTION ON FUNDAMENTAL CHANGES.......................................... 34
7.4 SALE OR DISCOUNT OF RECEIVABLES............................................. 34
7.5 CONSOLIDATED FUNDED INDEBTEDNESS TO TOTAL CAPITALIZATION.................... 35
7.6 INTEREST COVERAGE RATIO..................................................... 35
7.7 ERISA....................................................................... 35
7.8 MARGIN REGULATIONS.......................................................... 35
7.9 INDEPENDENCE OF COVENANTS................................................... 35
SECTION 8........................................................................... 36
8.1 EVENTS OF DEFAULT........................................................... 36
8.2 REMEDIES.................................................................... 38
8.3 RIGHTS NOT EXCLUSIVE........................................................ 38
SECTION 9. THE AGENT................................................................ 39
9.1 APPOINTMENT AND AUTHORIZATION............................................... 39
9.2 DELEGATION OF DUTIES........................................................ 39
9.3 LIABILITY OF AGENT.......................................................... 39
9.4 RELIANCE BY AGENT........................................................... 39
9.5 NOTICE OF DEFAULT........................................................... 40
9.6 CREDIT DECISION............................................................. 40
9.7 INDEMNIFICATION............................................................. 41
9.8 AGENT IN INDIVIDUAL CAPACITY................................................ 41
9.9 SUCCESSOR AGENT............................................................. 42
SECTION 10. MISCELLANEOUS........................................................... 42
10.1 ASSIGNMENTS, PARTICIPATIONS, ETC............................................ 42
10.2 SURVIVAL OF WARRANTIES AND OF CERTAIN AGREEMENTS............................ 44
10.3 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE....................... 44
10.4 FEES AND EXPENSES........................................................... 45
10.5 SET OFF..................................................................... 45
10.6 NOTICES..................................................................... 45
10.7 SEVERABILITY................................................................ 45
10.8 AMENDMENTS AND WAIVERS...................................................... 46
10.9 OBLIGATIONS SEVERAL......................................................... 46
10.10 CERTAIN CHANGES............................................................. 46
10.11 HEADINGS.................................................................... 47
10.12 APPLICABLE LAW.............................................................. 47
10.13 SUCCESSORS AND ASSIGNS...................................................... 47
10.14 COUNTERPARTS................................................................ 47
10.15 INDEMNITY................................................................... 47
-ii-
10.16 AMENDMENT AND RESTATEMENT................................................... 48
SIGNATURE PAGES S-1
-iii-
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 ▇▇▇▇▇▇-▇▇▇▇▇ Continuing Guaranty
F-2 Mattel Sales Continuing Guaranty
G-1 ▇▇▇▇▇▇-▇▇▇▇▇ Subordination Agreements
G-2 Mattel Sales Subordination Agreements
H Change in Commitments
I Notice of Assignment and Acceptance
SCHEDULES
1.1 Commitments and Pro Rata Shares
5.3 Material Subsidiaries of Company
5.11 Material Litigation
7.2 Certain Liens
-iv-
MATTEL, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is
dated as of March 11, 1998 and is entered into by and among MATTEL, INC., a
Delaware corporation (the "Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (individually referred to herein as a "Bank" and
collectively as the "Banks"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as the agent for the Banks (the "Agent").
PRELIMINARY STATEMENTS
A. The Company, certain of the Banks and the Agent are parties to that
certain Credit Agreement dated as of March 10, 1995, as amended and restated by
a First Amended and Restated Credit Agreement dated as of March 13, 1997 (as so
amended and restated, the "Existing Credit Agreement") pursuant to which the
Banks agreed to make certain credit facilities available to the Company in
accordance with the terms of the Existing Credit Agreement.
B. The Company, the Banks and the Agent desire to further amend and restate
the Existing Credit Agreement in its entirety on the terms and conditions set
forth herein.
In consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Company, the Banks and the Agent agree to further amend and restate the Existing
Credit Agreement in its entirety as follows:
SECTION 1.
DEFINITIONS.
1.1 CERTAIN DEFINED TERMS. The following terms used in this Agreement
shall have the following meanings:
"Affiliate", as applied to any Person, means any other Person directly or
---------
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.
"Agent" has the meaning assigned to that term in the introduction to this
-----
Agreement.
"Agent-Related Persons" means Agent and any successor agent arising under
---------------------
Section 9.9, together with their respective Affiliates (including, in the case
of Bank of America, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
-1-
"Aggregate Facilities Commitment" means the amount set forth opposite
-------------------------------
"Total" under "Facilities Commitments" on Schedule 1.1, as such amount may be
adjusted pursuant to Section 2.5.
"Aggregate Loan Commitment" means the amount set forth opposite "Total"
-------------------------
under "Loan Commitment" on Schedule 1.1, as such amount may be adjusted pursuant
to Section 2.5.
"Agreement" means this Credit Agreement, as it may hereafter be amended,
---------
supplemented, restated or otherwise modified from time to time.
"Applicable Amount" means the commitment fee or the margin applicable to
-----------------
Eurodollar Rate Loans (expressed in basis points per annum) set forth in the
chart below opposite the second highest rating issued by S&P, ▇▇▇▇▇'▇ or ▇▇▇▇ &
▇▇▇▇▇▇ on ▇▇▇▇▇▇▇▇'s senior unsecured long-term debt:
SENIOR UNSECURED LONG-TERM COMMITMENT EURODOLLAR RATE
DEBT RATINGS FEE LOANS +
--------------------------------------------------------------------------------
A or higher by S&P 6.50 20.00
A2 or higher by ▇▇▇▇▇'▇
A or higher by Duff & ▇▇▇▇▇▇
--------------------------------------------------------------------------------
A- or higher by S&P 7.50 22.50
A3 or higher by ▇▇▇▇▇'▇
A- or higher by Duff & ▇▇▇▇▇▇
--------------------------------------------------------------------------------
BBB+ or higher by S&P 9.00 27.50
Baa1 or higher by ▇▇▇▇▇'▇
BBB+ or higher by ▇▇▇▇ & ▇▇▇▇▇▇
--------------------------------------------------------------------------------
BBB or higher by S&P 11.00 32.50
Baa2 or higher by ▇▇▇▇▇'▇
BBB or higher by ▇▇▇▇ & ▇▇▇▇▇▇
--------------------------------------------------------------------------------
BBB- or higher by S&P 15.00 37.50
Baa3 or higher by ▇▇▇▇▇'▇
BBB- or higher by ▇▇▇▇ & ▇▇▇▇▇▇
--------------------------------------------------------------------------------
None of above criteria satisfied 25.00 62.50
--------------------------------------------------------------------------------
Any change in the commitment fee or the margin applicable to Eurodollar
Rate Loans shall become effective upon any public announcement of any change in
the above ratings that requires such a change according to the above chart.
-2-
"Arranger" means BancAmerica Securities, Inc., a Delaware corporation.
--------
"Availability Period" means the period from the Effective Date to but
-------------------
excluding the Termination Date.
"Bank" has the meaning assigned to that term in the introduction to this
----
Agreement.
"Bank Affiliate" means a Person engaged primarily in the business of
--------------
commercial banking and that is a Subsidiary of a Bank or of a Person of which a
Bank is a Subsidiary.
"Bank of America" means Bank of America National Trust and Savings
---------------
Association.
"Base Rate" means a fluctuating rate per annum which is the higher of (a)
---------
the Federal Funds Rate plus one-half of one percent (1/2%) per annum and (b) the
Reference Rate.
"Base Rate Loans" means Loans made by the Banks bearing interest at rates
---------------
determined by reference to the Base Rate.
"Business Day" means any day other than a Saturday, Sunday or other day on
------------
which commercial banks in New York City, New York, San Francisco, California or
Dallas, Texas are authorized or required by law to close and, if the applicable
Business Day relates to any Eurodollar Rate Loan, means such a day on which
dealings are carried on in the applicable offshore dollar interbank market.
"Capital Assets" means, as at any date of determination, those assets of a
--------------
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
-------------
(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.
"Change in Commitment Notice" means a notice substantially in the form of
---------------------------
Exhibit H hereto with respect to a reallocation of Commitments.
"Combined Purchasers' Investments" means an amount equal to the sum of (a)
--------------------------------
the Purchasers' Investments under the Receivables Purchase Agreement plus (b)
----
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 the Aggregate Loan Commitment or the Purchasers'
----------
Investment Limit (collectively, the "Commitments").
-----------
"Consolidated Funded Indebtedness" means, at any date of determination, for
--------------------------------
the Company and its Subsidiaries on a consolidated basis, the sum of (a) all
obligations and
-3-
liabilities, whether current or long-term, for borrowed money, (b) that portion
of obligations with respect to Capital Leases which is capitalized on the
consolidated balance sheet of the Company and its Subsidiaries, and (c) all
guaranties of unconsolidated funded obligations for borrowed money, all
determined in conformity with GAAP.
"Consolidated Net Income" for any period, means the net income (or loss) of
-----------------------
the Company and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with GAAP.
"Consolidated Tangible Net Worth" means, as at any date of determination,
-------------------------------
the net worth of the Company and its Subsidiaries on a consolidated basis minus
-----
foreign exchange currency translation adjustments and intangible assets, all
determined in conformity with GAAP.
"Contingent Obligation", as applied to any Person, means, without
---------------------
duplication, any direct or indirect liability, contingent or otherwise, of that
Person (i) with respect to any indebtedness, lease, dividend or other obligation
of another if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such obligation
of another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof or (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings. Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another and
(b) any liability of such Person for the obligations of another through any
agreement (contingent or otherwise) (x) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise) or (y) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another, if in the case of any agreement described under subclauses (x) or (y)
of this sentence the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported. The amount
of any Contingent Obligation denominated in a currency other than Dollars shall
be equal to the Dollar Equivalent of such Contingent Obligation.
"Contractual Obligation", as applied to any Person, means any provision of
----------------------
any security issued by that Person or of any material indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
"Default" means any event or circumstance which, with the giving of notice,
-------
the lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
"Dollars" means lawful money of the United States of America.
-------
-4-
"Domestic Subsidiary" means a Subsidiary of the Company that is
-------------------
incorporated in a jurisdiction of the United States of America.
"Duff & ▇▇▇▇▇▇" means ▇▇▇▇ & ▇▇▇▇▇▇ Credit Rating Co.
-------------
"Effective Date" means the date on or after March 11, 1998 on which all the
--------------
conditions in Section 4.1 are satisfied or waived.
"Eligible Assignee" means (i) a commercial bank organized under the laws of
-----------------
the United States, or any state thereof, and having a combined capital and
surplus of at least $100,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
country in which it is organized or another country which is also a member of
the OECD; and (iii) a Person that is primarily engaged in the business of
commercial banking and that is (A) a Subsidiary of a Bank, (B) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (C) a Person of which a Bank is a
Subsidiary.
"Environmental Claims" means all claims, however asserted, by any
--------------------
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,
------------------
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Person, in each case relating
to environmental, health, safety and land use matters.
"ERISA" means, at any time, the Employee Retirement Income Security Act of
-----
1974, as amended from time to time and any successor statute, and the rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Person, means any trade or business
---------------
(whether or not incorporated) which is a member of a group of which that Person
is a member and which is under common control within the meaning of Section
414(b) and 414(c) of the Internal Revenue Code.
"Eurodollar Rate Loans" means Loans bearing interest at rates determined by
---------------------
reference to the Eurodollar Rate as provided in Section 2.8(a).
"Eurodollar Rate" means, for each Interest Period for any Eurodollar Rate
---------------
Loan, an interest rate per annum (rounded upward to the nearest 1/16 of one
percent) determined pursuant to the following formula:
Eurodollar Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
-5-
"Eurodollar Reserve Percentage" means the maximum reserve percentage
-----------------------------
(expressed as a decimal rounded upward to the next 1/100 of one percent) in
effect on the date LIBOR for such Interest Period is determined (whether or
not applicable to any Bank) under regulations issued from time to time by
the Federal Reserve Board 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") having a term equal to such Interest Period;
and
"LIBOR" means the rate of interest per annum determined by the Agent
-----
to be the arithmetic mean (rounded upward to the nearest 1/16th of 1%) of
the rates of interest per annum notified to the Agent by each Reference
Bank as the rate of interest at which dollar deposits in the approximate
amount of the amount of the Loan to be made or continued as, or converted
into, a Eurodollar Rate Loan by such Reference Bank and having a maturity
comparable to such Interest Period would be offered to major banks in the
London interbank market at their request at or about 11:00 a.m. (London
time) on the second Business Day prior to the commencement of such Interest
Period.
"Event of Default" means any of the events set forth in Section 8.1.
----------------
"Exchange Act" means, at any time, the Securities Exchange Act of 1934, as
------------
amended from time to time, and any successor statute, and the rules and
regulations promulgated thereunder.
"Existing Credit Agreement" has the meaning set forth in Recital A hereto.
-------------------------
"Federal Funds Rate" means the weighted average of the rates on overnight
------------------
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 Agent from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
---------------------
System or any successor thereof.
"▇▇▇▇▇▇-▇▇▇▇▇" means ▇▇▇▇▇▇-▇▇▇▇▇, Inc., a Delaware corporation.
------------
"▇▇▇▇▇▇-▇▇▇▇▇ Guaranty" means the First Amended and Restated Continuing
---------------------
Guaranty signed by ▇▇▇▇▇▇-▇▇▇▇▇ substantially in the form of Exhibit F-1 hereto,
as amended, supplemented, restated or otherwise modified from time to time.
"▇▇▇▇▇▇-▇▇▇▇▇ Subordination Agreement" means the First Amended and Restated
------------------------------------
▇▇▇▇▇▇-▇▇▇▇▇ Subordination Agreement substantially in the form of Exhibit G-1
attached hereto signed by the Company and certain Affiliates of the Company with
respect to which ▇▇▇▇▇▇-▇▇▇▇▇ has material outstanding obligations, as it may
hereafter be amended, supplemented, restated or otherwise modified from time to
time.
-6-
"Funding Date" means the Business Day of the funding of a Loan.
------------
"GAAP" means generally accepted accounting principles set forth in the
----
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 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 or any state or locality therein, including the Federal
Deposit Insurance Company, the Comptroller of the Currency or the Federal
Reserve Board.
"Governmental Rule" means any law, statute, rule, regulation, ordinance,
-----------------
order, judgment, guidelines or decision of any Governmental Person.
"Indebtedness", as applied to any Person, means (i) all indebtedness for
------------
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.
"Ineligible Securities" means securities which may not be underwritten or
---------------------
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. (S) 24, Seventh), as amended.
"Interest Payment Date" means, with respect to any Eurodollar Rate Loan,
---------------------
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 Termination Date; provided, however, that if any Interest
-------- -------
Period for a Eurodollar Rate Loan exceeds three months, respectively, 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
---------------
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:
--------
-7-
(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 Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
---------------------
to the date hereof and from time to time hereafter, and the rules and
regulations promulgated thereunder.
"Lending Office" means, with respect to any Bank, the office or offices of
--------------
the Bank specified as its "Lending Office" or "Domestic Lending Office" or
"Eurodollar Lending Office," as the case may be, opposite its name on Schedule
10.6 hereto, or such other office or offices of the Bank as it may from time to
time specify to the Company and the Agent in writing.
"Lien" means any lien, mortgage, pledge, security interest, charge or
----
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 Commitment" means, for each Bank, the amount set forth under "Loan
---------------
Commitment" on Schedule 1.1, as such amount may be adjusted pursuant to Section
2.5.
"Loan Documents" means this Agreement, any Notes, the Mattel Sales
--------------
Guaranty, the ▇▇▇▇▇▇-▇▇▇▇▇ Guaranty, the Mattel Sales Subordination Agreement,
the ▇▇▇▇▇▇-▇▇▇▇▇ Subordination Agreement and all documents and instruments
delivered in connection therewith (other than the Receivables Purchase Agreement
and the documents delivered pursuant thereto).
"Loans" has the meaning set forth in Section 2.1.
-----
"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 Banks to enforce the Obligations.
"Material Subsidiary" means a Subsidiary of the Company, including its
-------------------
Subsidiaries, which meets any of the following conditions:
-8-
(a) the Company's and its Subsidiaries' investments in, and advances to,
the Subsidiary exceed 10 percent of the total assets of the Company and its
Subsidiaries consolidated as of the end of the most recently completed fiscal
year (for a proposed business combination to be accounted for as a pooling of
interest, this condition is also met when the number of common shares exchanged
or to be exchanged by the Company exceeds 10 percent of its total common shares
outstanding at the date the combination is initiated); or
(b) the Company and its other Subsidiaries' proportionate share of the
total assets (after intercompany eliminations) of the Subsidiary exceeds 10
percent of the total assets of the Company and its Subsidiaries consolidated as
of the end of the most recently completed fiscal year; or
(c) the Company and its other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and cumulative
effect of a change in accounting principles of the Subsidiary exceeds 10 percent
of such income of the Company and its Subsidiaries consolidated for the most
recently completed fiscal year.
For purpose of meeting the prescribed income test the following guidance
should be applied:
(i) When a loss has been incurred by either the Company and its
Subsidiaries consolidated or the tested Subsidiary, but not both, the
equity in the income or loss of the tested Subsidiary should be excluded
from the income of the Company and its Subsidiaries consolidated for
purposes of the computation.
(ii) If income of the Company and its Subsidiaries consolidated for
the most recent fiscal year is at least 10 percent lower than the average
of the income for the last 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 First Amended and Restated Continuing
---------------------
Guaranty signed by Mattel Sales substantially in the form of Exhibit F-2 hereto,
as amended, supplemented, restated or otherwise modified from time to time.
"Mattel Sales Subordination Agreement" means the First Amended and Restated
------------------------------------
Mattel Sales Subordination Agreement substantially in the form of Exhibit G-2
attached hereto signed by the Company and certain Affiliates of the Company with
respect to which Mattel Sales has material outstanding obligations, as it may
hereafter be amended, supplemented, restated or otherwise modified from time to
time.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
-------
-9-
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
------------------
4001(a)(3) of ERISA which is maintained for employees of the Company or any
ERISA Affiliate of the Company.
"Note" means a promissory note of the Company payable to the order of a
----
Bank substantially in the form of Exhibit A hereto, evidencing the Loans made by
such Bank to the Company.
"Notice of Borrowing" means a notice substantially in the form of Exhibit B
-------------------
hereto with respect to a proposed borrowing pursuant to Section 2.3(a).
"Notice of Conversion/Continuation" means a notice given by the Company to
---------------------------------
the Agent pursuant to Section 2.4, in substantially the form of Exhibit C
hereto.
"Obligations" means all obligations of every nature of the Company, ▇▇▇▇▇▇-
-----------
Price and Mattel Sales from time to time owed to the Agent, the Banks or any
other Person required to be indemnified hereunder, or any of them, under any
Loan Document.
"Officers' Certificate" means a certificate substantially in the form of
---------------------
Exhibit D hereto executed on behalf of the Company by two different officers of
the Company, one of which shall be (a) its Chairman of the Board (if an
officer), one of its Presidents, one of its Executive Vice Presidents, or one of
its Senior Vice Presidents, and the other one of which shall be (b) its Chief
Financial Officer, its Treasurer, one of its Assistant Treasurers, or its
Controller, delivered to the Banks by the Company pursuant to Section 6.1(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, ▇▇▇▇▇▇-▇▇▇▇▇ or any other Subsidiary are periodically sold
directly to third party purchasers, or sold to a Subsidiary of the Company
formed for such purpose which in turn sells such accounts receivable to third
party purchasers; provided, however, that in connection with any such financing
-------- -------
arrangement:
(a) there is no recourse to any seller of such accounts receivable on
account of the creditworthiness of the obligor on such accounts receivable; and
(b) no negative pledge or Lien is created on any accounts receivables not
actually sold or discounted.
"Participant" has the meaning set forth in Section 10.1.
-----------
"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.
"Percentage" has the meaning set forth in the Receivables Purchase
----------
Agreement.
-10-
"Person" means any individual, partnership, corporation (including a
------
business trust), joint stock company, joint venture, trust, bank, trust company,
unincorporated association or other entity or a government or any agency or
political subdivision thereof.
"Pro Rata Share" means with respect to each Bank the percentage set forth
--------------
opposite such Bank's name on Schedule 1.1 hereto.
"Purchasers" has the meaning set forth in the Receivables Purchase
----------
Agreement.
"Purchaser Commitment" means, for each Bank, the amount set forth for each
--------------------
Bank under "Purchaser Commitment" on Schedule 1.1, as such amount may be
adjusted under Section 2.5 and the Receivables Purchase Agreement.
"Purchasers' Investment" has the meaning set forth in the Receivables
----------------------
Purchase Agreement.
"Purchasers' Investment Limit" means the amount set forth opposite "Total"
----------------------------
under "Purchaser Commitment" on Schedule 1.1, as such amount may be adjusted
pursuant to Section 2.5.
"Receivables Purchase Agent" means NationsBank of Texas, N.A. in its
--------------------------
capacity as agent under 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 and the Receivables Purchase
Agent, as it may be amended, supplemented, restated or otherwise modified from
time to time.
"Reference Banks" means Bank of America and NationsBank of Texas, N.A.
---------------
Subject to Section 3.6, in the event that at any time of determination only one
Bank designated as a Reference Bank is providing rates for deposits referred to
in the definition of "Eurodollar Rate," such Bank shall be the "Reference Banks"
for purposes of this Agreement.
"Reference Rate" means the rate of interest publicly announced from time to
--------------
time by Bank of America in San Francisco as its reference rate, as in effect on
such date of determination. The reference rate is set by Bank of America based
on various factors including Bank of America's costs and desired return, general
economic conditions, and other factors, and is used as a reference point for
pricing some loans. Bank of America may make loans at, above or below the rate
announced by it as its reference rate.
"Regulation D" means Regulation D of the Federal Reserve Board as in effect
------------
from time to time.
"Requisite Banks" means, as at any date of determination, Banks having at
---------------
least 66-2/3% of the then aggregate unpaid principal amount of the Loans (or if
no Loans are then outstanding, Banks having at least 66-2/3% of the Aggregate
Loan Commitment), and the Requisite Purchasers (as defined in the Receivables
Purchase Agreement).
-11-
"Securities Act" means, at any time, the Securities Act of 1933, as amended
--------------
from time to time, and any successor statute, and the rules and regulations
promulgated thereunder.
"Section 20 Subsidiary" means the Subsidiary of the bank holding company
---------------------
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
"S&P" means Standard & Poor's Ratings Service, a division of ▇▇▇▇▇▇-▇▇▇▇,
---
Inc., a corporation.
"Subsidiary" means any corporation, association or other business entity of
----------
which more than 50% of the total voting power of shares of stock entitled to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"Termination Date" means March 31, 2003.
----------------
1.2 OTHER DEFINITIONAL PROVISIONS. References to "Sections" shall be to
Sections of this Agreement unless otherwise specifically provided. Any of the
terms defined in Section 1.1 may, unless the context otherwise requires, be used
in the singular or the plural depending on the reference.
SECTION 2.
THE COMMITMENTS.
2.1 THE AGGREGATE FACILITIES COMMITMENT. Each Bank hereby severally
agrees (a) to make advances to the Company ("Loans") on the terms and conditions
set forth in this Agreement in an aggregate principal amount not exceeding such
Bank's Pro Rata Share of the Aggregate Loan Commitment during the Availability
Period and (b) to purchase receivables on the terms and conditions set forth in
the Receivables Purchase Agreement in an amount not exceeding such Bank's
Purchaser Commitment during the period from the Closing Date (as defined in the
Receivables Purchase Agreement) to but excluding the Facility Termination Date
(as defined in the Receivables Purchase Agreement); provided, however, that:
-------- -------
(i) the outstanding principal amount of all Loans hereunder shall not exceed the
Aggregate Loan Commitment; (ii) the aggregate amount of the Purchasers'
Investments shall not exceed the Purchasers' Investment Limit; (iii) the
Aggregate Loan Commitment and the Purchasers' Investment Limit shall not exceed
the Aggregate Facilities Commitment; and (iv) each Bank's Pro Rata Share
hereunder shall at all times be equal to such Bank's Percentage under, and as
defined in, the Receivables Purchase Agreement. Within the limits of each
Bank's Loan Commitment, and subject to the other terms and conditions hereof,
the Company may borrow under this Section 2.1, prepay pursuant to Section 2.6
and reborrow pursuant to this Section 2.1.
2.2 LOAN ACCOUNTS AND NOTES. (a) Subject to Section 2.2(b), the Loans
made by each Bank shall be evidenced by one or more loan accounts maintained by
such Bank in the ordinary course of business. The loan accounts or records
maintained by the Agent and each Bank shall be conclusive absent manifest error
of the amount of the Loans made by the Banks to the Company and the interest and
payments thereon. Any failure to record or any error in doing
-12-
so shall not, however, limit or otherwise affect the obligation of the Company
hereunder to pay any amount owing with respect to the Loans.
(b) Upon the written request of any Bank made through the Agent, the
Loans made by such Bank may be evidenced by one or more Notes, instead of loan
accounts. Each such Bank shall endorse on the schedules annexed to its Note(s),
the date, amount and maturity of each Loan made by it and the amount of each
payment of principal made by the Company with respect thereto. Each such Bank is
irrevocably authorized by the Company to endorse its Note(s) and each Bank's
record shall be conclusive absent manifest error; provided, however, that the
-------- -------
failure of a Bank to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of the
Company hereunder or under any such Note to such Bank.
2.3 BORROWING PROCEDURE.
(a) Whenever the Company desires to borrow hereunder, it shall deliver
irrevocable telephonic notice to the Agent followed immediately by written
notice in the form of a Notice of Borrowing, which telephonic notice must be
received by the Agent no later than (i) 8:00 a.m. (San Francisco time) on the
proposed Funding Date in the case of Base Rate Loans and (ii) 9:00 a.m. (San
Francisco time) three Business Days in advance of the proposed Funding Date in
the case of Eurodollar Rate Loans, specifying (A) the proposed Funding Date
which shall be a Business Day, (B) the amount of the proposed borrowing, (C)
whether the proposed borrowing shall consist of Base Rate Loans or Eurodollar
Rate Loans, and (D) in the case of Eurodollar Rate Loans, the requested Interest
Period. Base Rate Loans made on any Funding Date shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $500,000 in excess of
that amount. Eurodollar Rate Loans made on any Funding Date shall be in an
aggregate minimum amount of $5,000,000 and integral multiples of $500,000 in
excess of that amount.
(b) Promptly (and normally within two hours) after receipt of a Notice
of Borrowing (or telephone notice in lieu thereof), the Agent shall notify each
Bank of the proposed borrowing. Each Bank shall make available to the Agent its
Pro Rata Share of the amount (if any) by which the principal amount of the
proposed borrowing exceeds the principal amount of the Loans (if any) maturing
on the Funding Date, in same day funds, by remitting such funds to: Bank of
America National Trust and Savings Association, ABA No. ▇▇▇-▇▇▇-▇▇▇, Attn:
Agency Management Services No. 5596 For credit to: BANCONTROL Account No.
12358-88449, Reference: Mattel, Inc. at the office of Bank of America located
at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, no later than 11:00 a.m.
(San Francisco time) on the Funding Date. Upon satisfaction of the conditions
set forth in Section 4.2, the Agent shall make available to the Company on such
Funding Date the aggregate of the amounts (if any) so made available by the
Banks by causing an amount of same day funds equal to such aggregate amount (if
any) received by the Agent to be credited to the account of the Company at such
office of Bank of America. To the extent that Eurodollar Rate Loans made by the
Banks mature on any Funding Date, the Banks shall apply the proceeds of the
Loans made on such Funding Date, to the extent thereof, to the repayment of such
maturing Loans, such Loans and repayments intended to be a contemporaneous
exchange.
2.4 CONVERSION AND CONTINUATION ELECTIONS.
-13-
(a) The Company may upon irrevocable written notice to the 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 Agent followed immediately by written notice in the
form of a Notice of Conversion/ Continuation, which telephonic notice must be
received by the Agent prior to (i) 9:00 a.m. (San Francisco time) at least three
Business Days in advance of the conversion or continuation date, if the Loans
are to be converted into or continued as Eurodollar Rate Loans and (ii) 9:00
a.m. (San Francisco time) on the conversion or continuation date, if the Loans
are to be converted into Base Rate Loans, specifying: (A) the proposed
conversion or continuation date; (B) the aggregate amount of Loans to be
converted or continued; (C) the nature of the proposed conversion or
continuation; and (D) the duration of the requested Interest Period, if
applicable.
(c) If upon the expiration of any Interest Period applicable to
Eurodollar Rate Loans, the Company has failed to select a new Interest Period to
be applicable to such Eurodollar Rate Loans or type of Loan or if any Default or
Event of Default shall then exist, the Company shall be deemed to have elected
to convert such Eurodollar Rate Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the Agent
will promptly notify each Bank thereof, or, if no timely notice is provided, the
Agent will promptly notify each Bank of the details of any automatic conversion.
All conversions and continuations shall be made pro rata according to the
respective outstanding principal amounts of the Loans with respect to which the
notice was given held by each Bank.
(e) Unless the Requisite Banks shall otherwise agree, after the
occurrence of and during the continuance of a Default or Event of Default, the
Company may not elect to have a Loan be made as, or converted into or continued
as, a Eurodollar Rate Loan.
(f) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Loans, there shall
not be more than five different Interest Periods in effect.
-14-
2.5 ADJUSTMENTS OF AGGREGATE LOAN COMMITMENT AND PURCHASERS' INVESTMENT
LIMIT.
(A) REDUCTION AND TERMINATION OF COMMITMENTS. The Company may from
time to time, in accordance with Section 2.5(c), reduce or terminate the
Aggregate Loan Commitment or the Purchasers' Investment Limit. Any reduction or
termination of any Commitment pursuant to this Section 2.5(a) shall be
permanent.
(B) REALLOCATION OF COMMITMENTS. In addition, the Company may from
time to time, in accordance with Section 2.5(c), (i) reallocate the Purchasers'
Investment Limit to the Aggregate Loan Commitment and/or (ii) reallocate the
Aggregate Loan Commitment to the Purchasers' Investment Limit; provided,
--------
however, that (x) the Company may not deliver a Change in Commitment Notice to
-------
the Agent to reallocate Commitments pursuant to this Section 2.5(b) more than
four times in any consecutive 12-month period, and, as a result of any
reallocation, (y) the Purchasers' Investment Limit may not exceed the amount set
forth opposite "Total" under "Purchaser Commitment" on Schedule 1.1 at any time,
and (z) the Aggregate Loan Commitment may not be reduced to less than the amount
set forth opposite "Total" under "Loan Commitment" on Schedule 1.1 pursuant to
this Section 2.5(b) at any time.
(C) PROCEDURES. (i) The Company may effect the termination,
reduction or reallocation of the Aggregate Loan Commitment or the
Purchasers' Investment Limit by delivering a fully completed Change in
Commitment Notice to the Agent not less than three Business Days'
prior to the date of the requested termination, reduction or
reallocation.
(ii) Promptly after receipt of any Change in Commitment Notice
(and in no event later than the end of the following Business Day),
the Agent shall notify each Bank and the Receivables Purchase Agent
thereof. In the case of any reduction, termination or reallocation of
the Purchasers' Investment Limit, the Agent shall directly contact the
Receivables Purchase Agent for any relevant information.
(iii) Any partial reduction or reallocation of a Commitment shall
be in an aggregate minimum amount of $10,000,000 for each such
Commitment, and integral multiples of $1,000,000 in excess of that
amount for each such Commitment. Any reduction or reallocation of any
Commitment shall be applied to each Bank in accordance with such
Bank's Pro Rata Share thereof. All accrued commitment fees to, but not
including the effective date of any termination of any Commitment,
shall be paid on the effective date of such termination.
(iv) No reduction, termination or reallocation of any
Commitments shall be permitted if, after giving effect thereto and to
any prepayments made on the effective date thereof, (A) the
outstanding principal amount of the Loans hereunder would exceed the
Aggregate Loan Commitment; or (B) the Purchasers' Investment would
exceed the Purchasers' Investment Limit.
-15-
(v) Concurrently with any termination, reduction or
reallocation of the Aggregate Loan Commitment, the Company shall sign
such amended Notes as requested by the Banks through the Agent to
reflect such change.
2.6 VOLUNTARY PREPAYMENTS. The Company may, upon not less than one
Business Days' prior written or telephonic notice confirmed in writing to the
Agent (in the case of a prepayment of a Base Rate Loan) or three Business Days'
prior written or telephonic notice confirmed in writing to the Agent (in the
case of a prepayment of a Eurodollar Rate Loan) (which notice the Agent will
promptly transmit by telecopy, telex or telephone to each Bank), at any time and
from time to time prepay (i) any Eurodollar Rate Loans in whole or in part in an
aggregate minimum amount of $3,000,000 and integral multiples of $500,000 in
excess of that amount so long as the unpaid balance is not less than $5,000,000;
or (ii) any Base Rate Loans in whole or in part in an aggregate minimum amount
of $1,000,000 and integral multiples of $100,000 in excess of that amount;
provided that in the event of any such prepayment of any Eurodollar Rate Loans,
--------
the Company shall be obligated to reimburse the Banks in respect thereof
pursuant to Section 3.5. 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 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.
2.7 REPAYMENT OF LOANS. Each Loan shall mature and the Company shall repay
the unpaid principal amount of each Loan on the Termination Date.
2.8 INTEREST ON THE LOANS.
(a) Subject to Section 2.8(c), the Loans shall bear interest on the
unpaid principal amount thereof from the Funding Date through maturity (whether
by acceleration or otherwise) at a rate per annum equal to the (i) Eurodollar
Rate plus the Applicable Amount or (ii) the Base Rate.
----
(b) Subject to Section 2.8(c), from and after the Effective Date,
interest shall be payable in arrears on the Loans on each Interest Payment Date
applicable to that Loan. Interest paid on the date of any partial prepayment of
Loans hereunder shall be paid in respect of the portion of the Loans so prepaid.
(c) Any principal payments on the Loans not paid when due and, to the
extent permitted by applicable law, any interest payments on the Loans not paid
when due, in each case whether at stated maturity, by notice of prepayment, by
acceleration or otherwise, shall thereafter bear interest payable upon demand at
a rate which is 2% per annum in excess of the rate of interest otherwise payable
under this Agreement.
2.9 FEES. (a) The Company agrees to pay a commitment fee equal to the
Applicable Amount on the daily average unused portion of the Loan Commitment
during the Availability Period. The Company shall pay the commitment fee to the
Agent for distribution to each Bank in accordance with its Pro Rata Share. The
commitment fee shall be calculated on the basis of a
-16-
360-day year and the actual number of days elapsed and shall be payable
quarterly in arrears on the last Business Day of each calendar quarter, for all
amounts accrued to such date, and on the Termination Date; provided that, in
--------
connection with any reduction or termination of the Loan Commitment pursuant to
Section 2.5, the accrued fee calculated on the portion so terminated or reduced
for the period ending on such date shall also be paid on the date of such
reduction or termination.
(b) The Company shall pay to the Agent and the Arranger other fees in
accordance with a term sheet dated as of February 3, 1998 from the Arranger and
Bank of America to the Company.
(c) The Company shall pay to the Agent such fees as may from time to
time be agreed upon between the Company and the Agent.
2.10 CALCULATION OF INTEREST AND FEES. (a) Interest on all Loans and
fees payable under this Agreement shall be computed on the basis of a 360-day
year and the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making of the Loan
or the first day of an Interest Period, as the case may be, shall be included
and the date of payment shall be excluded; provided that, if a Loan is repaid on
--------
the same day on which it is made, one day's interest shall be paid on that Loan.
(b) Any change in the interest rate on a Loan resulting from a change
in the Applicable Amount, Reserve Percentage or Eurodollar Reserve Percentage
shall become effective as of the opening of business on the day on which such
change in the Applicable Amount or Eurodollar Reserve Percentage becomes
effective. Each determination of an interest rate by the Agent pursuant hereto
shall be conclusive and binding on the Company and the Banks in the absence of
manifest error.
2.11 PAYMENTS BY THE COMPANY. (a) All payments of principal, interest and
fees hereunder and under any Notes shall be made without setoff, counterclaim,
recoupment or any other deduction, in same day funds and delivered to the Agent
for credit to:
Bancontrol Account No. 12358-88449
Reference: Mattel, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
for the account of the Banks or the Agent not later than 11:00 a.m. (San
Francisco time) on the date due. The Agent will promptly distribute to each
Bank its Pro Rata Share (or other applicable share as expressly provided herein)
of such principal, interest, fees or other amounts in like funds received. Any
payment which is received by the 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.
-17-
(c) Unless the Agent shall have received notice from the Company prior
to the date on which any payment is due to the Banks hereunder that the Company
will not make such payment in full as and when required hereunder, the Agent may
assume that the Company has made such payment in full to the Agent on such date
in immediately available funds and the Agent may (but shall not be so required),
in reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the extent
the Company shall not have made such payment in full to the Agent, each Bank
shall repay to the Agent on demand such amount distributed to such Bank,
together with interest thereon for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate as in effect for each such day.
2.12 PAYMENTS BY THE BANKS TO THE AGENT.
(a) Unless the Agent shall have received notice from a Bank on the
Effective Date or, with respect to each borrowing after the Effective Date, by
12:00 noon (San Francisco time) one Business Day prior to the date of any
proposed borrowing of Eurodollar Rate Loans, or by 10:00 a.m. (San Francisco
time) on the date of any proposed borrowing of Base Rate Loans, that such Bank
will not make available to the Agent as and when required hereunder for the
account of the Company the amount of that Bank's Pro Rata Share of the
borrowing, the Agent may assume that each Bank has made such amount available to
the Agent in immediately available funds on the Funding Date and the Agent may
(but shall not be so required), in reliance upon such assumption, make available
to the Company on such date a corresponding amount. If and to the extent any
Bank shall not have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made available to the
Company such amount, that Bank shall on the next Business Day following the date
of such borrowing make such amount available to the Agent, together with
interest at the Federal Funds Rate for and determined as of each day during such
period. A notice of the Agent submitted to any Bank with respect to amounts
owing under this Section 2.12(a) shall be conclusive, absent manifest error. If
such amount is so made available, such payment to the Agent shall constitute
such Bank's Loan on the date of borrowing for all purposes of this Agreement.
If such amount is not made available to the Agent on the next Business Day
following the date of such borrowing, the Agent shall notify the Company of such
failure to fund and, upon demand by the Agent, the Company shall pay such amount
to the Agent for the Agent's account, together with interest thereon for each
day elapsed since the date of such borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such borrowing.
(b) The failure of any Bank to make any Loan on any date of borrowing
shall not relieve any other Bank of any obligation hereunder to make a Loan on
the date of such borrowing, but no Bank shall be responsible for the failure of
any other Bank to make the Loan to be made by such other Bank on the date of any
borrowing.
2.13 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share of payments on account of
the Loans obtained by all the Banks, such Bank shall forthwith
-18-
(a) notify the Agent of such fact, and (b) purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them; provided,
--------
however, that if all or any portion of such excess payment is thereafter
-------
recovered from the purchasing Bank, such purchase shall to that extent be
rescinded and each other Bank shall repay to the purchasing Bank the purchase
price paid therefor, together with an amount equal to such paying Bank's Pro
Rata Share (according to the proportion of (i) the amount of such paying Bank's
required repayment to (ii) the total amount so recovered from the purchasing
Bank) of any interest or other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. The Company agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 2.13 may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Bank were the direct creditor of the Company in the amount of such
participation. The Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased pursuant
to this Section 2.13 and will in each case notify the Banks following any such
purchases or repayments.
SECTION 3
PAYMENTS IN GENERAL.
3.1 TAXES.
(a) Subject to Section 3.1(d) and Section 3.1(g), any and all payments
by the Company to each Bank or the Agent under this Agreement shall be made free
and clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank and the
Agent, such taxes (including income taxes or franchise taxes) as are imposed on
or measured by each Bank's or the Agent's net income by the jurisdiction under
the laws of which such Bank or the 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 any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Subject to Section 3.1(g), the Company shall indemnify and hold
harmless each Bank and the Agent for the full amount of Taxes or Other Taxes
(including without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 3.1) paid by such Bank or the
Agent and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days from the date such Bank or the
Agent makes written demand therefor.
-19-
(d) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any Bank
or the Agent, then, subject to Section 3.1(g): (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 3.1) such
Bank or the 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 Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to the Agent.
(f) Each Bank which is a foreign person (i.e., a person other than a
United States person for United States Federal income tax purposes) agrees that:
(i) it shall, no later than the Effective Date (or, in the case of a Bank which
becomes a party hereto after the Effective Date, the date upon which the Bank
becomes a party hereto) deliver to the Company and the Agent: (A) if any
Lending Office is located in the United States, two accurate and complete signed
originals of Internal Revenue Service Form 4224 or any successor thereto ("Form
4224"), and (B) if any Lending Office is located outside the United States, two
accurate and complete signed originals of Internal Revenue Service Form 1001 or
any successor thereto ("Form 1001"), in each case indicating that the Bank is on
the date of delivery thereof entitled to receive payments of principal, interest
and fees for the account of such Lending Office or Offices under this Agreement
free from withholding of United States Federal income tax; (ii) if at any time
the Bank changes its Lending Office or Offices or selects an additional Lending
Office as herein provided, it shall with reasonable promptness deliver to the
Company and the Agent in replacement for, or in addition to, the forms
previously delivered by it hereunder: (A) if such changed or additional Lending
Office is located in the United States, two accurate and complete signed
originals of Form 4224; or (B) otherwise, two accurate and complete signed
originals of Form 1001, in each case indicating that the Bank is on the date of
delivery thereof entitled to receive payments of principal, interest and fees
for the account of such changed or additional Lending Office under this
Agreement free from withholding of United States Federal income tax; (iii) it
shall, before or promptly after the occurrence of any event (including the
passing of time but excluding any event mentioned in (ii) above) requiring a
change in the most recent Form 4224 or Form 1001 previously delivered by such
Bank and if the delivery of the same be lawful, deliver to the Company and the
Agent two accurate and complete original signed copies of Form 4224 or Form 1001
in replacement for the forms previously delivered by the Bank; and (iv) it
shall, promptly upon the Company's reasonable request to that effect, deliver to
the Company and the Agent such other forms or similar documentation as may be
required from time to time by any applicable law, treaty, rule or regulation in
order to establish such Bank's tax status for withholding purposes.
(g) The Company will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to Section 3.1(d) to any
Bank for the account of any Lending Office of such Bank: (i) if the obligation
to pay such additional amounts would not have arisen but for a failure by such
Bank to comply with its obligations under Section 3.1(f) in respect of such
Lending Office; (ii) if such Bank shall have delivered to the Company a
-20-
Form 4224 in respect of such Lending Office pursuant to Section 3.1(f)(i)(A),
and such Bank shall not be entitled to exemption from deduction or withholding
of United States Federal income tax in respect of payments by the Company
hereunder for the account of such Lending Office for any reason other than a
change in United States law or regulations or in the official interpretation of
such law or regulations by any Governmental Person charged with the
interpretation or administration thereof (whether or not having the force of
law) after the date of delivery of such Form 4224; or (iii) if the Bank shall
have delivered to the Company a Form 1001 in respect of such Lending Office
pursuant to Section 3.1(f)(i)(B), and such Bank shall not at any time be
entitled to exemption from deduction or withholding of United States Federal
income tax in respect of payments by the Company hereunder for the account of
such Lending Office for any reason other than a change in United States law or
regulations or any applicable tax treaty or regulations or in the official
interpretation of any such law, treaty or regulations by any Governmental Person
charged with the interpretation or administration thereof (whether or not having
the force of law) after the date of delivery of such Form 1001.
(h) If, at any time, the Company requests any Bank to deliver any
forms or other documentation pursuant to Section 3.1(f)(iv), then the Company
shall, on demand of such Bank through the Agent, reimburse such Bank for any
costs and expenses (including expenses of outside legal counsel and the
allocated costs of in-house counsel) reasonably incurred by such Bank in the
preparation or delivery of such forms or other documentation.
(i) If the Company is required to pay additional amounts to any Bank
or the Agent pursuant to Section 3.1(d), then such Bank 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 Bank is not otherwise disadvantageous to such Bank.
(j) The agreements and obligations of the Company contained in this
Section 3.1 shall survive the payment in full of all other Obligations.
3.2 CAPITAL ADEQUACY. If (a) any adoption of or any change in or in the
interpretation of any law, rule or regulation, or (b) compliance with any
guideline, request or directive of any central bank or other Governmental Person
or quasi-governmental authority exercising control over banks or financial
institutions generally or any court (whether or not having the force of law), or
(c) any change in the force or effectiveness of the regulations set forth at 12
C.F.R. Part 3 (Appendix A), 12 C.F.R. Part 225 (Appendix A), 12 C.F.R. Part 208
(Appendix A) or 12 C.F.R. Part 325 (Appendix A) requires that the commitments of
any Bank hereunder (including, without limitation, commitments and obligations
in respect of Loans) be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
such Bank or any corporation controlling such Bank (a "Change in Law"), the
result of which is to reduce the rate of return on such Bank's capital as a
consequence of such commitments to a level below that which such Bank could have
achieved but for such Change in Law, taking into consideration such Bank's
policies with respect to capital adequacy, by an amount which such Bank deems to
be material, the Bank shall deliver to the Company a statement of the amount
necessary to compensate such Bank for the reduction in the rate of return on its
capital attributable to such commitments (the "Capital Compensation Amount").
The Bank shall determine the Capital Compensation Amount in good faith, using
reasonable
-21-
attribution and averaging methods. The Bank shall from time to time notify the
Company of the amount so determined. Such amount shall be due and payable by the
Company to such Bank ten Business Days after such notice is given. As soon as
practicable after any Change in Law, each Bank shall submit to the Company
estimates of the Capital Compensation Amounts that would be payable as a
function of such Bank's commitments hereunder.
3.3 ILLEGALITY.
(a) If any Bank shall determine that any Governmental Rule or any
change therein or in the interpretation or administration thereof has made it
unlawful, or that any Governmental Person has asserted that it is unlawful, for
any Bank or its Lending Office to make Eurodollar Rate Loans, then, on notice
thereof by the Bank to the Company through the Agent, the obligation of the Bank
to make Eurodollar Rate Loans shall be suspended until the Bank shall have
notified the Agent and the Company that the circumstances giving rise to such
determination no longer exists.
(b) If a Bank shall determine that any Governmental Rule or any change
therein or in the interpretation or administration thereof has made it unlawful,
or that any Governmental Person has asserted that it is unlawful, for any Bank
or its Lending Office to maintain any Eurodollar Rate Loan, the Company shall
prepay all Eurodollar Rate Loans of the Bank then outstanding, together with
interest accrued thereon, or convert all Eurodollar Rate Loans of the Bank then
outstanding to Base Rate Loans pursuant to Section 2.4, either on the last day
of the Interest Period thereof if the Bank may lawfully continue to maintain
such Eurodollar Rate Loans to such day, or promptly, if the Bank may not
lawfully continue to maintain such Eurodollar Rate Loans, together with any
amounts required to be paid in connection therewith pursuant to Section 3.5.
(c) If the obligation of any Bank to make or maintain Eurodollar Rate
Loans has been terminated, the Company may elect, by giving notice to the Bank
through the Agent that all Loans which would otherwise be made by the Bank as
Eurodollar Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent pursuant to this Section
3.3, the affected Bank shall designate a different Lending Office with respect
to its Eurodollar Rate Loans if such designation will avoid the need for giving
such notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
3.4 INCREASED COSTS AND REDUCTION OF RETURN. If any Bank shall determine
that, due to either (a) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements included in the
calculation of the Eurodollar Rate) in or in the interpretation of any law or
regulation or (b) the compliance with any guideline or request from any
Governmental Person (whether or not having the force of law), there shall be any
increase in the cost to such Bank of agreeing to make or making, funding or
maintaining any Eurodollar Rate Loans, then the Company shall be liable for, and
shall from time to time, upon demand therefor by such Bank (with a copy of such
demand to the Agent), pay to such Bank, additional amounts as are sufficient to
compensate such Bank for such increased costs. Each
-22-
▇▇▇▇ agrees to notify the Company of the occurrence of such an increased cost
event promptly after obtaining knowledge thereof.
3.5 FUNDING LOSSES. The Company agrees to reimburse each Bank and to
hold each Bank harmless from any loss or expense which the Bank may sustain or
incur as a consequence of: (a) the failure of the Company to make any payment
or prepayment of principal of any Eurodollar Rate Loan (including payments made
after any acceleration thereof); (b) the failure of the Company to borrow,
continue or convert a Loan after the Company has given (or is deemed to have
given) a Notice of Borrowing or a Notice of Conversion/ Continuation; (c) the
failure of the Company to make any prepayment after the Company has given a
notice in accordance with Section 2.6; or (d) the prepayment of a Eurodollar
Rate Loan on a day which is not the last day of the Interest Period with respect
thereto; including any such loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain its Eurodollar Rate Loans
hereunder or from fees payable to terminate the deposits from which such funds
were obtained. Solely for purposes of calculating amounts payable by the
Company to the Banks under this Section 3.3(b) and Sections 3.4 and 3.5, each
Eurodollar Rate Loan made by a Bank (and each related reserve, special deposit
or similar requirement) shall be conclusively deemed to have been funded at the
Eurodollar Rate used in determining the Eurodollar Rate for such Eurodollar Rate
Loan by a matching deposit or other borrowing in the interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan is in fact so funded. This covenant shall survive the
payment in full of all other Obligations.
3.6 INABILITY TO DETERMINE RATES. If any two Reference Banks shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan, or if the Requisite Banks advise the Agent
in writing that the Eurodollar Rate applicable for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan does not adequately and fairly
reflect the cost to such Banks of funding such Loan, the Agent will forthwith
give notice of such determination to the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Eurodollar Rate Loans hereunder
shall be suspended until the Agent upon the instruction of the Requisite Banks
revokes such notice in writing. Upon receipt of such notice, the Company may
revoke any Notice of Borrowing or Notice of Conversion/ Continuation then
submitted by it. If the Company does not revoke such notice with respect to
Loans, the Banks shall make, convert or continue the Loans, as proposed by the
Company, in the amount specified in the applicable notice submitted by the
Company, but such Loans shall be made, converted or continued as Base Rate Loans
instead of Eurodollar Rate Loans.
3.7 SURVIVAL. The agreements and obligations of the Company in this
Section 3 shall survive the payment of all other Obligations.
-23-
SECTION 4.
CONDITIONS PRECEDENT.
4.1 CONDITIONS TO EFFECTIVENESS. This Agreement shall become effective
only upon the Company delivering to the Agent and Banks (or to the Agent for the
Banks with sufficient originally executed copies for each Bank, except for any
Notes):
(a) To the extent different from that delivered in connection with the
Existing Credit Agreement, a copy of the Restated Certificate of Incorporation
of the Company, together with evidence acceptable to Agent that the same has
been filed with the Secretary of State of the State of Delaware;
(b) To the extent different from that delivered in connection with the
Existing Credit Agreement, copies of the Bylaws of the Company, certified as of
the Effective Date by its corporate secretary or an assistant secretary;
(c) Resolutions of the Board of Directors of the Company approving and
authorizing the execution, delivery and performance of each Loan Document to
which it is a party or which it is acknowledging and approving and authorizing
the execution, delivery and payment of any Notes, certified as of the Effective
Date by its corporate secretary or an assistant secretary;
(d) A signature and incumbency certificate of the officers of the
Company executing or acknowledging any Loan Document;
(e) To the extent different from that delivered in connection with the
Existing Credit Agreement, a copy of the Certificate of Incorporation of ▇▇▇▇▇▇-
▇▇▇▇▇, together with evidence acceptable to the Agent that the same has been
filed with the Secretary of State of the State of Delaware;
(f) To the extent different from that delivered in connection with the
Existing Credit Agreement, copies of the Bylaws of ▇▇▇▇▇▇-▇▇▇▇▇, certified as of
the Effective Date by its corporate secretary or an assistant secretary;
(g) To the extent different from that delivered in connection with the
Existing Credit Agreement, a copy of the Articles of Incorporation of ▇▇▇▇▇▇
▇▇▇▇▇, together with evidence acceptable to the Agent that the same has been
filed with the Secretary of State of the State of California;
(h) To the extent different from that delivered in connection with the
Existing Credit Agreement, copies of the Bylaws of Mattel Sales, certified as of
the Effective Date by its corporate secretary or an assistant secretary;
(i) Executed copies of this Agreement and, as requested by any Bank,
executed Notes drawn to the order of such Bank and with appropriate insertions;
-24-
(j) A certificate or other evidence from the Receivables Purchase
Agent that the Receivables Purchase Agreement shall have been, or concurrently
herewith is being, duly executed and delivered and all conditions precedent to
the initial purchase thereunder shall have been, or concurrently herewith are
being, satisfied or waived by the Banks;
(k) Executed copies of one or more favorable written opinions of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 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, ▇▇▇▇▇▇-▇▇▇▇▇ and Mattel Sales and as to such other matters as the Agent
and the Banks may reasonably request;
(l) A certificate signed by one of the officers authorized to deliver
an Officers' Certificate, or other evidence satisfactory to the Agent, of the
ratings on the Company's long-term unsecured Indebtedness by S&P, ▇▇▇▇▇'▇ and
▇▇▇▇ & ▇▇▇▇▇▇;
(m) Payment of all fees payable pursuant to Section 2.9(b);
(n) An acknowledgement signed by ▇▇▇▇▇▇-▇▇▇▇▇ and Mattel Sales
consenting to the amendment and restatement of the Existing Credit Agreement on
the terms of this Agreement; and
(o) 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
4.2 CONDITIONS TO ALL LOANS. The obligation of each Bank to make any
Loan is subject to the following further conditions precedent that, as of the
applicable Funding Date:
(a) The Agent shall have received on or before that Funding Date a
Notice of Borrowing signed by 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 described officers on behalf of
the Company in writing delivered to the Agent;
(b) The representations and warranties of the Company contained in any
Loan Document (except the representation and warranty contained in Section 5.9
and, in the case of a borrowing of Loans where the aggregate principal amount of
the Loans being made on that Funding Date equals or is less than the aggregate
principal amount of Loans maturing on that Funding Date, the representation and
warranty contained in Section 5.11), shall be true, correct and complete in all
material respects on and as of that Funding Date, to the same extent as though
made on and as of that Funding Date; and
(c) No Default or Event of Default shall exist or shall result from
such borrowing or continuation or conversion.
Each Notice of Borrowing submitted by the Company hereunder shall
constitute a representation and warranty by the Company hereunder, as of the
Funding Date, that the conditions in Section 4.2 are satisfied.
-25-
SECTION 5.
REPRESENTATIONS AND WARRANTIES.
In order to induce the Banks and the Agent to enter into this Agreement and
to make any extension of credit hereunder, the Company represents and warrants
to each Bank and the Agent that the following statements are true, correct and
complete:
5.1 ORGANIZATION AND POWERS. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
and, except for changes in the ordinary course of business or as permitted or
contemplated by this Agreement, each of the Material Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation; and each has all requisite corporate
power and authority to own and operate its properties, to carry on its business
as now conducted and proposed to be conducted and, in the case of the Company,
to enter into this Agreement, a ▇▇▇▇▇▇-▇▇▇▇▇ Subordination Agreement and a
Mattel Sales Subordination Agreement, to issue the Notes and to carry out the
transactions contemplated hereby and thereby.
5.2 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.
5.3 MATERIAL SUBSIDIARIES. Except for changes in the ordinary course of
business or as permitted or contemplated by this Agreement, Schedule 5.3 hereto
correctly sets forth the name, jurisdiction of incorporation and ownership
interest of the Company in each of its Material Subsidiaries as of the date
hereof.
5.4 AUTHORIZATION OF BORROWING. The execution, delivery and performance
of each Loan Document to which it is a party, and acknowledgement of the ▇▇▇▇▇▇-
▇▇▇▇▇ Subordination Agreement and the Mattel Sales Subordination Agreement and
the issuance, delivery and payment of the Notes have been duly authorized by all
necessary corporate action by the Company.
5.5 NO CONFLICT. The execution, delivery and performance by the Company
of this Agreement and the acknowledgement of the ▇▇▇▇▇▇-▇▇▇▇▇ Subordination
Agreement, the Mattel Sales Subordination Agreement and the issuance, delivery
and payment of the Notes do not and will not (a) violate the Restated
Certificate of Incorporation or Bylaws of the Company, (b) violate any provision
of law applicable to the Company, or any material order, judgment or decree of
any court or other agency of government binding on the Company, the violation of
which would result in a Material Adverse Effect, (c) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of the Company, (d) result in or require the
creation or imposition of any material lien, security interest, charge or
encumbrance of any nature whatsoever upon any of its material properties or
assets, or (e) require any approval of stockholders or any approval or consent
of any Person under any Contractual Obligation of the Company.
-26-
5.6 GOVERNMENTAL CONSENTS. The execution, delivery and performance by
the Company of each Loan Document to which it is a party and each agreement,
document, or instrument required hereunder, the acknowledgment of the ▇▇▇▇▇▇-
▇▇▇▇▇ Subordination Agreement, Mattel Sales Subordination Agreement, and the
issuance, delivery and payment of the Notes do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any Federal, state or other governmental authority or regulatory
body or other such person.
5.7 BINDING OBLIGATION. This Agreement is, and each other Loan Document
to which it is a party, when executed and delivered hereunder will be, the
legally valid and binding obligations of the Company, enforceable against it in
accordance with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors' rights generally.
5.8 FINANCIAL CONDITION. The Company has heretofore delivered to the
Banks a consolidated balance sheet of the Company and its Subsidiaries for the
fiscal year ended December 31, 1996 and related consolidated statements of
income, shareholders' equity and changes in financial position of the Company
and its Subsidiaries for such fiscal year, audited by Price Waterhouse. All
such statements were prepared in accordance with GAAP and fairly present the
consolidated financial position of the Company and its Subsidiaries as at the
date thereof and the consolidated results of operations and statement of cash
flow of the Company and its Subsidiaries for the period then ended. Neither the
Company nor any of its Subsidiaries has any material Contingent Obligation,
liability for taxes or long-term lease which as of the date of this Agreement,
individually or in the aggregate, would, if it became absolute, result in a
Material Adverse Effect which is not reflected in the foregoing statements or in
the notes thereto.
5.9 CHANGES, ETC. Since December 31, 1996, 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 referred to in Section 5.8 except as set forth in
said balance sheet or in the notes thereto, except for assets acquired or
disposed of in the ordinary course of business or as otherwise permitted by this
Agreement since December 31, 1996 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
hereto, there is no action, suit, proceeding or arbitration (whether or not
purportedly on behalf of the Company or any of its Subsidiaries) at law or in
equity or before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries or any of the Company's or such
Subsidiaries' properties which, in the reasonable judgment of the Company and
its executive officers (assuming adverse determination of facts which the
Company in good faith believes it would not successfully prove, and considering
damages which in their best judgment is the maximum that would be awarded upon,
and the likelihood of, an adverse determination of the claim or the amount which
reflects their best judgment as to that required to be paid to settle the
claims) would result in a Material
-27-
Adverse Effect and there is no basis known to such executive officers for any
such action, suit or proceeding. Neither the Company nor any of its Subsidiaries
is (i) in violation of any applicable law which could result in a Material
Adverse Effect, or (ii) subject to or in default with respect to any final
judgment, writ, injunction, decree, rule or regulation of any court or Federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which could result in a Material
Adverse Effect. There is no action, suit, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any of its Subsidiaries which provides a reasonable basis for questioning the
validity or the enforceability of any Loan Document.
5.12 PAYMENT OF TAXES. All tax returns and reports of the Company and its
Material Subsidiaries required to be filed by any of them have been timely
filed, and all taxes, assessments, fees and other governmental charges upon the
Company and its Subsidiaries and upon their respective properties, assets,
income and franchises which are due and payable have been paid when due and
payable or bonded against, except to the extent permitted by Section 6.3. The
Company knows of no proposed tax assessment against it or any of its
Subsidiaries that would result in a Material Adverse Effect.
5.13 AGREEMENTS. Neither the Company nor any of its Subsidiaries is a
party to or is subject to any material agreement or instrument or charter or
other internal restriction which results in a Material Adverse Effect.
5.14 PERFORMANCE. Neither the Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation of the Company,
and no condition exists which, with the giving of notice or the lapse of time or
both, would constitute such a default, except, in any such case, where the
consequences, direct or indirect, of such default or defaults, if any, would not
result in a Material Adverse Effect.
5.15 GOVERNMENTAL REGULATION. Neither the Company nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or to any Federal or state statute or regulation
limiting its ability in any material way to incur Indebtedness for money
borrowed.
5.16 EMPLOYEE BENEFIT PLANS. The Company and each of its ERISA Affiliates
is in compliance in all material respects with any applicable provisions of
ERISA and the regulations and published interpretations thereunder with respect
to all Pension Plans. Neither the Company nor any of its ERISA Affiliates has
participated in or participates in any Multiemployer Plan the withdrawal from
which may result in any liability to any party in an amount in excess of
$1,000,000.
5.17 ENVIRONMENTAL MATTERS. The Company conducts in the ordinary course
of business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Company has reasonably concluded that such Environmental Laws and
Environmental Claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
-28-
5.18 DISCLOSURE. No representation or warranty of the Company contained
in this Agreement or any other document, certificate or written statement
furnished to the Banks by the Company since January 1, 1997 for use in
connection with the transactions contemplated by this Agreement as of the date
of this Agreement contains any untrue statement of a material fact or omits to
state a material fact (known to the officers of the Company in the case of any
document or fact not furnished by it) necessary in order to make the statements
contained herein or therein not misleading except to the extent that any such
statement or omission that was untrue or misleading at the time made or that
subsequently became untrue or misleading has been superseded or corrected by
information provided to the Banks prior to the date of this Agreement. The
projections and pro forma financial information contained in such written
materials are based upon good faith estimates and assumptions believed by the
Company to be reasonable at the time made, it being recognized by the Banks that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There is no fact known to the officers of
the Company as of the date of this Agreement (other than matters of a general
economic nature) which materially adversely affects the business, operations,
property, assets or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, which has not been disclosed herein or in the
written materials referred to in Section 5.8 other than as disclosed in writing
to the Banks on or before the date hereof.
5.19 SUBORDINATION AGREEMENTS. Neither ▇▇▇▇▇▇-▇▇▇▇▇ nor Mattel Sales has
any material outstanding obligations to any Affiliate of the Company which has
not signed a ▇▇▇▇▇▇-▇▇▇▇▇ 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 Aggregate Facilities Commitment and the
Receivables Purchase Agreement, unless Requisite Banks shall otherwise give
prior written consent, the Company will perform all covenants in this Section 6.
6.1 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 Agent and to each Bank:
(a) as soon as practicable and in any event not later than 55 days
after the end of each of the first three fiscal quarters of the Company,
consolidated balance sheets of the Company and its Subsidiaries as at the end of
such period and for the fiscal year to date and the related consolidated
statements of income, consolidated statements of stockholders' equity and
consolidated statements of cash flow all in reasonable detail and certified by
the Chief Financial Officer, Executive Vice President Finance or the Treasurer
of the Company that the consolidated statements (and to the best of his or her
belief, the consolidating statements) and other materials required by this
clause (a) fairly present the financial condition of the Company and its
-29-
Subsidiaries as at the dates indicated and the results of their operations for
the periods indicated, subject to changes resulting from year-end audit and
normal year-end adjustments;
(b) as soon as practicable and in any event not later than 100 days
after the end of each fiscal year of the Company, consolidated and consolidating
balance sheets of the Company and its Subsidiaries as at the end of such year
and the related consolidated (and, as to statements of income only, consolidated
and consolidating) statements of income, stockholders' equity and cash flow of
the Company and its Subsidiaries for such fiscal year, setting forth in each
case, in comparative form the consolidated figures for the previous year, all in
reasonable detail and (i) in the case of such consolidated financial statements,
accompanied by a report thereon of Price Waterhouse or other independent
accountants of recognized national standing selected by the Company which report
shall state that such consolidated financial statements present fairly the
financial position of the Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flow for the periods
indicated in conformity with GAAP and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards and (ii) in the case of
such consolidating financial statements, certified by the chief financial or
accounting officer of the Company;
(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 7.5 and 7.6.
(d) together with each delivery of consolidated financial statements
of the Company and its Subsidiaries pursuant to clause (b) above, a written
statement by the independent accountants giving the report thereon (i) stating
that their audit examination has included a review of the terms of this
Agreement and the Notes as they relate to accounting matters, and (ii) stating
whether, in connection with their audit examination, any condition or event
which constitutes an Event of Default or Default has come to their attention,
and if such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants shall not
--------
be liable by reason of any failure to obtain knowledge of any such Event of
Default or Default that would not be disclosed in the course of their audit
examination. The Agent shall have the right, from time to time, to discuss the
affairs of the Company directly with such independent certified public
accountants;
(e) promptly upon receipt thereof, copies of all reports submitted to
the Company (including, without limitation, the Company's Board of Directors) by
the Company's independent accountants in connection with each annual, interim or
special audit of the
-30-
consolidated financial statements of the Company made by such accountants,
including, without limitation, any comment letter submitted by such accountants
to management in connection with their annual audit;
(f) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available
generally by the Company to its security holders or by any Subsidiary of the
Company to its security holders other than the Company or another Subsidiary,
and, promptly upon their becoming effective, and in any event within 15 days of
filing, all regular and periodic reports and all registration statements and
prospectuses that have been filed by the Company or any of its Subsidiaries with
any securities exchange or with the Securities and Exchange Commission or any
Governmental Person succeeding to any of its functions, and all press releases
and other statements made available generally by the Company or any Subsidiary
to the public concerning material developments in the business of the Company
and its Subsidiaries;
(g) promptly upon any executive officer of the Company obtaining
knowledge (i) of any condition or event which constitutes an Event of Default or
Default, or becoming aware that the Agent or any Bank has given any notice or
taken any other action with respect to a claimed Event of Default or Default
under this Agreement, (ii) of any condition or event which would be required to
be disclosed in a current report filed by the Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4 and 6 of such Form as in effect
on the date hereof) if the Company were required to file such reports under the
Exchange Act, (iii) that any Person has given any notice to the Company or any
Subsidiary of the Company or taken any other action with respect to a claimed
default or event or condition of the type referred to in Section 8.1, (iv) of
the institution of any litigation involving an alleged liability of the Company
or any of its Subsidiaries equal to or greater than $20,000,000 or any adverse
determination in any litigation involving a potential liability of the Company
or any of its Subsidiaries equal to or greater than $20,000,000, or (v) of a
Material Adverse Effect, in each case an Officers' Certificate specifying the
nature and period of existence of any such condition or event, or specifying the
notice given or action taken by such holder or Person and the nature of such
claimed default, Event of Default, Default, event or condition, and what action
the Company has taken, is taking and proposes to take with respect thereto;
(h) as soon as available but no later than March 31 of each year,
copies of the Company's consolidated financial plan for the then current fiscal
year as customarily prepared for internal use;
(i) promptly after the acquisition of any Material Subsidiary, notice
of such acquisition;
(j) promptly upon any executive officer of the Company obtaining
knowledge, notice of any change in the ratings on the Company's long-term
unsecured Indebtedness by S&P, ▇▇▇▇▇'▇ and, ▇▇▇▇ & ▇▇▇▇▇▇; 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
-31-
any Bank or the Agent, including any financial reports regularly prepared by the
Company for internal use.
6.2 CORPORATE EXISTENCE, ETC. Except as permitted or not prohibited in
Section 7.3, the Company will at all times preserve and keep in full force and
effect its corporate existence and rights and franchises material to its
business and those of each of its Material Subsidiaries; provided that the
--------
corporate existence and the rights and franchises of any Material Subsidiary may
be terminated or permitted to lapse if such termination or lapse is in the best
interest of the Company, is approved by the Board of Directors of the Company
and is not materially disadvantageous to the holder of any Note.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Company will, and
will cause each of its Material Subsidiaries to, pay all taxes, assessments and
other governmental charges imposed upon it or any of its properties or assets or
in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien upon any
of its properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or claim need be
--------
paid if being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor. The Company will not, nor will it permit any Material Subsidiary
to, file or consent to the filing of any consolidated income tax return with any
Person (other than the Company or a Subsidiary of the Company).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE. Except as permitted or not
prohibited in Section 7.3, 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.
6.5 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall
maintain and shall cause each of its Subsidiaries to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Company and such Subsidiaries.
The Company will permit any authorized representatives designated by any Bank at
the expense of that Bank, to visit and inspect any of the properties of the
Company or any of its Subsidiaries, including its and their financial and
accounting records, and to make copies and take extracts therefrom (but not
records relating to intellectual property), and to discuss its and
-32-
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.
6.6 USE OF PROCEEDS OF LOANS. (a) The Company shall use the proceeds of
Loans for general corporate purposes, including, without limitation, lending to
its Subsidiaries and acquiring other Persons or businesses so long as the
acquisition is approved by the board of directors of the Person being acquired.
(b) The Company shall not, directly or indirectly, use any portion of
the Loan proceeds (i) knowingly to purchase Ineligible Securities from a Section
20 Subsidiary during any period in which such Section 20 Subsidiary makes a
market in such Ineligible Securities, (ii) knowingly to purchase during the
underwriting or placement period Ineligible Securities being underwritten or
privately placed by a Section 20 Subsidiary, or (iii) to make payments of
principal or interest on Ineligible Securities underwritten or privately placed
by a Section 20 Subsidiary and issued by or for the benefit of the Company or
any Affiliate of the Company.
6.7 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.
6.8 SUBORDINATION AGREEMENTS. If from time to time ▇▇▇▇▇▇-▇▇▇▇▇ or Mattel
Sales has any material outstanding obligations owing to any Affiliate of the
Company which has not signed a ▇▇▇▇▇▇-▇▇▇▇▇ Subordination Agreement or a Mattel
Sales Subordination Agreement, respectively, the Company shall cause such
Affiliate to execute deliver a ▇▇▇▇▇▇-▇▇▇▇▇ Subordination Agreement or a Mattel
Sales Subordination Agreement, as the case may be, and deliver to the Agent a
signature and incumbency certificate of the officers of each such Affiliate and
cause ▇▇▇▇▇▇-▇▇▇▇▇ or Mattel Sales, as the case may be, to acknowledge each such
agreement.
SECTION 7.
NEGATIVE COVENANTS.
The Company agrees from the Effective Date until payment in full of all
Obligations and termination of the Aggregate Facilities Commitment and the
Receivables Purchase Agreement, unless Requisite Banks shall otherwise give
prior written consent, the Company will perform all covenants in this Section 7.
7.1 SECURED INDEBTEDNESS. Other than as permitted under Section 7.2, 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.
7.2 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:
-33-
(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 7.2; 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.
7.3 RESTRICTION ON FUNDAMENTAL CHANGES. (a) The Company shall not, and
shall not permit any of its Material Subsidiaries to, engage in any material
line of business substantially different from those lines of business carried on
by it on the date hereof; provided, however, that the Company may engage in the
-------- -------
production and sale of consumer software products related to the Company's
existing lines of business.
(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) any Material Subsidiary of the Company may merge with the
Company, provided that the Company shall be the continuing or surviving
corporation, or with any one or more Material Subsidiaries of the Company,
provided that if any transaction shall be between a Subsidiary and a
wholly-owned subsidiary, the wholly-owned subsidiary shall be the
continuing or surviving corporation; and
(ii) any Subsidiary of the Company may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise), to the Company or
another Wholly-Owned Subsidiary of the Company.
7.4 SALE OR DISCOUNT OF RECEIVABLES. The Company will not, and will not
permit any of its Domestic Subsidiaries to, directly or indirectly, sell with or
without recourse, or discount or otherwise sell for less than the face value
thereof any of its notes or accounts receivable, except:
(a) discounts offered in the ordinary course of business for early
payment of accounts receivable and negotiated settlements of bad debts and
disputed accounts receivable in the ordinary course of business;
(b) sales of accounts receivable under the Receivables Purchase
Agreement and agreements entered into in connection therewith;
-34-
(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 collectability of such accounts receivable is or may be
jeopardized by the distressed financial condition of the obligor under such
accounts receivable.
7.5 CONSOLIDATED FUNDED INDEBTEDNESS TO TOTAL CAPITALIZATION. The
Company shall not permit the ratio of the sum of (a) Consolidated Funded
Indebtedness plus (b) Combined Purchasers' Investments to the sum of (x)
----
Consolidated Funded Indebtedness plus (y) Combined Purchasers' Investments plus
---- ----
(z) Consolidated Tangible Net Worth to exceed 65% at the end of each of the
first three fiscal quarters in each fiscal year and 55% at the end of each
fiscal year.
7.6 INTEREST COVERAGE RATIO. The Company shall not permit, as of the last
day of each fiscal quarter, the ratio of (a) the sum of (i) its net income from
continuing operations, for the four consecutive fiscal quarters ending on such
date, before (A) special items, (B) minority interest, (C) gains on
reacquisition of debt, plus (ii) income taxes accrued for the four consecutive
----
fiscal quarters ending on such date, plus (iii) interest accrued for the four
----
consecutive fiscal quarters ending on such date, excluding capitalized interest
and without regard to interest income plus (iv) depreciation and amortization
----
for the four consecutive fiscal quarters ending on such date to (b) interest
incurred for the four consecutive fiscal quarters ending on such date, including
capitalized interest and without regard to interest income, to be less than 3.5
to 1.
7.7 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 7.8, the terms "actuarial present value" and "benefit liabilities" have
the meanings specified in Section 4001 of ERISA.
7.8 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 G,
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.
7.9 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.
-35-
SECTION 8.
EVENTS OF DEFAULT.
8.1 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 to pay any
required payment of principal under this Agreement or the Receivables Purchase
Agreement or of any Loan or any Notes, when due, whether at stated maturity, by
acceleration, by notice of prepayment or otherwise, (ii) failure to pay any
required payment of interest under this Agreement or the Receivables Purchase
Agreement or on any Loan or any Note or any fees payable pursuant to Section 2
for a period of five days or more after the date such payment is due, or (iii)
failure to pay any other amount due under this Agreement or the Receivables
Purchase Agreement within 90 days after written notice thereof; or
(b) DEFAULT IN OTHER AGREEMENTS. (i) Failure of the Company, ▇▇▇▇▇▇-
▇▇▇▇▇, Mattel Sales or any of its Material Subsidiaries to pay or any default in
the payment of any principal or interest on any Indebtedness in an amount
exceeding $15,000,000 or any default in any other obligation for the payment of
money in an amount in excess of $15,000,000 beyond any period of grace allowed;
or
(ii) any breach or default (unless cured or waived) with respect
to any other term of any evidence of such other Indebtedness for borrowed
money in an amount exceeding $15,000,000 or of any loan agreement,
mortgage, indenture or other agreement relating thereto, if the effect of
such failure, default or breach is to cause such Indebtedness for borrowed
money to become or be declared due prior to its stated maturity; or
(c) BREACH OF CERTAIN COVENANTS. Failure of the Company to perform or
comply with any term or condition contained in Sections 6.1(g), 6.2 or Section 7
of this Agreement; or
(d) BREACH OF WARRANTY. Any of the Company's, ▇▇▇▇▇▇-▇▇▇▇▇'▇ or
Mattel Sales' representations or warranties made in any Loan Document in writing
pursuant hereto or in connection herewith shall be false in any material respect
on the date as of which made; or
(e) OTHER DEFAULTS UNDER LOAN DOCUMENTS OR RECEIVABLES PURCHASE
AGREEMENT. Failure of the Company, ▇▇▇▇▇▇-▇▇▇▇▇, Mattel Sales or Mattel
Factoring, Inc., to perform or comply with any other term or condition contained
in any Loan Document or the Receivables Purchase Agreement, in each case to the
extent it is a party thereto, other than the conditions referred to in
Subsections (a), (b), (c) and (d) above, and such default shall not have been
remedied or waived within 30 days after receipt of notice from the Agent or any
Bank of such default; or
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) A court
having jurisdiction in the premises shall enter a decree or order for relief in
respect of the Company or any of its Material Subsidiaries in an involuntary
case under any applicable
-36-
bankruptcy, insolvency or other similar law now or hereafter in effect, which
decree or order is not stayed, or (ii) any other similar relief shall be granted
under any applicable federal or state or applicable foreign law; a petition for
an involuntary case shall be filed against the Company or any of its Material
Subsidiaries under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect or a decree or order of a court having jurisdiction
in the premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the Company or
any of its Material Subsidiaries, or over all or substantially all of its
property, shall have been entered; or an interim receiver, trustee or other
custodian of the Company or any of its Material Subsidiaries for all or
substantially all of the property of the Company or any of its Material
Subsidiaries shall be appointed involuntarily; and the continuance of any such
events in clause (ii) for 45 days unless dismissed, bonded or discharged; or
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Company
or any of its Material Subsidiaries shall have an order for relief entered with
respect to it or commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or shall consent to
the entry of an order for relief in any involuntary case, or to the conversion
from an involuntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator, sequestrator,
trustee or other custodian for all or substantially all of its property; the
making by the Company or any of its Material Subsidiaries of any assignment for
the benefit of creditors; or the inability or failure of the Company or any of
its Material Subsidiaries, or the admission by the Company or any of its
Material Subsidiaries in writing of its inability, to generally pay its debts as
such debts become due; or the Board of Directors of the Company or any of its
Material Subsidiaries adopts any resolution or otherwise takes action to approve
any of the foregoing; or
(h) JUDGMENTS. Any final money judgment involving in any case an
amount in excess of $20,000,000 or in excess of $40,000,000 in the aggregate at
any one time for all final judgments shall be entered or filed against the
Company or any Material Subsidiary or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 45 days or
in any event later than five days prior to the date of any proposed sale
thereunder; or
(i) DISSOLUTION. Any order, judgment or decree shall be entered
against the Company or any Material Subsidiary decreeing the dissolution or
split up of the Company and such order shall remain undischarged or unstayed for
a period in excess of 30 days; or
(j) ERISA. (i) any Pension Plan maintained by the Company or any of
its ERISA Affiliates shall be terminated within the meaning of Title IV of
ERISA, or (ii) a trustee shall be appointed by an appropriate United States
district court to administer any Pension Plan, or (iii) the Pension Benefit
Guaranty Corporation (or any successor thereto) shall institute proceedings to
terminate any Pension Plan or to appoint a trustee to administer any Pension
Plan, or (iv) the Company or any of its ERISA Affiliates shall withdraw (under
Section 4063 of ERISA) from a Pension Plan, if, as of the date of the event
listed in clauses (i)-(iv) above or any subsequent date, any of the Company or
its ERISA Affiliates has any liability (such liability to include, without
limitation, any liability to the Pension Benefit Guaranty Corporation, or any
successor thereto, or to any other party under Sections 4062, 4063 or 4064 of
ERISA or any
-37-
other provision of law) resulting from or otherwise associated with the events
listed in clauses (i)-(iv) above for unfunded guarantied vested benefits under
the Pension Plans which exceeds the current value of assets accumulated in such
Pension Plan by more than $10,000,000; or
(k) LOSS OF PROPERTY. All, or a substantial part of, the property,
assets or business of the Company or any Material Subsidiary shall be condemned
or seized and such condemnation or seizure shall have (after taking into account
any insurance or condemnation award) a Material Adverse Effect; or
(l) CESSATION OF BUSINESS. The Company or any Material Subsidiary
shall at any time voluntarily or involuntarily suspend its business or a
substantial part thereof which would constitute a substantial part of, and would
have a Material Adverse Effect; or
(m) SERVICER DEFAULT OR TERMINATION EVENT. A Servicer Default or a
Termination Event (as each is defined in the Receivables Purchase Agreement)
(other than as set forth in Section 10.1(h) of the Receivables Purchase
Agreement) shall occur and be continuing;
8.2 REMEDIES. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Requisite Banks, (a) declare the
Loan Commitment of each Bank to make Loans to be terminated, whereupon such Loan
Commitments shall forthwith be terminated; (b) declare the unpaid principal
amount of all outstanding Loans, all interest accrued and unpaid thereon, and
all other amounts owing or payable hereunder or under any other Loan Document to
be immediately due and payable; without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and remedies available
to it and the Banks under the Loan Documents or applicable law; provided,
--------
however, that upon the occurrence of any event specified in paragraph (f) or (g)
-------
of Section 8.1 above (in the case of clause (ii) of paragraph (f) upon the
expiration of the 45-day period mentioned therein), the obligation of each Bank
to make Loans shall automatically terminate and the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent or any
Bank.
8.3 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.
-38-
SECTION 9.
THE AGENT.
9.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably appoints,
designates and authorizes the 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 Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.
9.2 DELEGATION OF DUTIES. The 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 Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Banks for any recital, statement, representation or warranty made by
the Company or any Subsidiary or Affiliate of the Company, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or for the value of any Collateral or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person shall be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the Properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
9.4 RELIANCE BY AGENT.
(a) The 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 Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Requisite Banks as it deems appropriate and, if it
-39-
so requests, it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Requisite
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Sections 4.1 and 4.2, each Bank that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank, unless an
officer of the Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from the Bank prior to any borrowing
specifying its objection thereto and either such objection shall not have been
withdrawn by notice to the Agent to that effect or the Bank shall not have made
available to the Agent the Bank's ratable portion of such borrowing.
9.5 NOTICE OF DEFAULT. The 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 Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives such a notice, the
Agent shall give prompt notice thereof to the Banks and the Receivables Purchase
Agent. The Agent shall take such action with respect to such Default or Event of
Default as shall be requested by the Requisite Banks in accordance with Section
8; provided, however, that unless and until the Agent shall have received any
-------- -------
such request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
9.6 CREDIT DECISION. Each Bank expressly acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it and that no
act by the 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 Agent to any Bank. Each Bank represents to the Agent that it
has, independently and without reliance upon the Agent and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the Company and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Company hereunder. Each Bank also represents
that it will, independently and without reliance upon the Agent and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the Agent,
the Agent shall not have any duty or
-40-
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the possession
of any of the Agent-Related Persons.
9.7 INDEMNIFICATION. Whether or not the transactions contemplated
hereby shall be consummated, the Banks shall indemnify upon demand the 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 Agent) be imposed
on, incurred by or asserted against any such Person any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by any such Person under or in connection with any of
the foregoing; provided, however, that no Bank shall be liable for the payment
-------- -------
to the Agent-Related Persons of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including fees and expenses of counsel and the allocated cost of in-house
counsel) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein to the extent
that the 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 Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Bank (because the appropriate
form was not delivered, was not properly executed, or because such Bank failed
to notify the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Bank shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses (including
fees and expenses of counsel and the allocated cost of in-house counsel). The
obligation of the Banks in this Section shall survive the payment of all
Obligations hereunder.
9.8 AGENT IN INDIVIDUAL CAPACITY. Bank of America and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with the Company and its Subsidiaries and
Affiliates as though Bank of America were not the Agent hereunder and without
notice to or consent of the Banks. With respect to its Loans, Bank of America
shall have the same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Agent, and the terms "Bank" and
"Banks" shall include Bank of America in its individual capacity.
-41-
9.9 SUCCESSOR AGENT. The Agent may, and at the request of the Requisite
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
shall resign as Agent under this Agreement, the Requisite Banks shall appoint
from among the Banks a successor agent for the Banks which successor agent shall
be approved by the Company. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent from among the
Banks. Upon the acceptance of its appointment as successor agent ▇▇▇▇▇▇▇▇▇,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 9 and Sections 10.4 and 10.15 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Requisite Banks appoint a successor agent as provided for
above.
SECTION 10.
MISCELLANEOUS.
10.1 ASSIGNMENTS, PARTICIPATIONS, ETC. (a) Any Bank may, with the
advance written consent of the Company at all times other than during the
existence of an Event of Default and the Agent, which consent of the Company
shall not be unreasonably withheld, at any time assign and delegate to one or
more Eligible Assignees (provided that no consent of the Company or the Agent
shall be required in connection with any assignment and delegation by a Bank to
an Eligible Assignee that is an Affiliate of such Bank) (each an "Assignee")
--------
all, or any ratable part of all, of the Loans, the Commitments and the other
rights and obligations of such Bank hereunder, in a minimum amount of
$10,000,000 and such Bank shall concurrently therewith assign a ratable portion
in the Receivables Purchase Agreement; provided, however, that the Company and
-------- -------
the Agent may continue to deal solely and directly with such Bank in connection
with the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Bank and the Assignee; (ii) such Bank and its Assignee
shall have delivered to the Company and the Agent a Notice of Assignment and
Acceptance in the form of Exhibit I ("Notice of Assignment and Acceptance")
--------- -----------------------------------
together with any Note or Notes subject to such assignment and (iii) the
assignor Bank or Assignee has paid to the Agent a processing fee in the amount
of $2,500.
(b) From and after the date that the Agent notifies the assignor Bank
that it has received (and provided its consent with respect to) an executed
Notice of Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Notice of Assignment and Acceptance, shall have the rights and
obligations of a Bank under the Loan Documents, and (ii) the assignor Bank
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it
-42-
pursuant to such Notice of Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the Agent
that it has received an executed Notice of Assignment and Acceptance and payment
of the processing fee, (and provided that the consents to such assignment have
been obtained in accordance with Section 10.01(a)), the Company shall execute
and deliver to the Agent, any new Notes evidencing such Assignee's assigned
Loans and Commitment and, if the assignor Bank has retained a portion of its
Loans and its Commitments, any replacement Notes in the principal amount of the
Loans retained by the assignor Bank (such Notes to be in exchange for, but not
in payment of, the Notes held by such Bank). Immediately upon each Assignee's
making its processing fee payment under the Notice of Assignment and Acceptance,
this Agreement shall be deemed to be amended to the extent, but only to the
extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Bank pro tanto.
--- -----
(d) Upon advance written notice to the Company, any Bank may at any
time sell to one or more commercial banks or other Persons not Affiliates of the
Company (a "Participant") participating interests in any Loans, the Commitment
-----------
of that Bank and the other interests of that Bank (the "originating Bank")
hereunder and under the other Loan Documents; provided, however, that (i) such
-------- -------
Bank shall concurrently with any sale of a participation herein sell a ratable
participation in the Receivables Purchase Agreement and thereafter cause any
such participation herein to remain ratable with such participation in the
Receivables Purchase Agreement, (ii) the originating Bank's obligations under
this Agreement shall remain unchanged, (iii) the originating Bank shall remain
solely responsible for the performance of such obligations, (iv) the Company and
the Agent shall continue to deal solely and directly with the originating Bank
in connection with the originating Bank's rights and obligations under this
Agreement and the other Loan Documents, and (v) no Bank shall transfer or grant
any participating interest under which the Participant shall have rights to
approve any amendment to, or any consent or waiver with respect to this
Agreement except to the extent such amendment, consent or waiver would require
unanimous consent as described in the first proviso to Section 10.8. The
Company hereby acknowledges and agrees that any such disposition will give rise
to a direct obligation of the Company to the Participant and the Participant
shall be entitled to the benefit of Sections 3.1, 3.4 and 10.15 as if it were a
"Bank." In the case of any such participation, the Participant shall not have
any rights under this Agreement, or any of the other Loan Documents, and all
amounts payable by the Company hereunder shall be determined as if such Bank had
not sold such participation, except that if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Bank under
this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note(s) held by it in
favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or
U.S. Treasury Regulation 31 CFR (S)203.14, and such Federal
-43-
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
(f) Each Bank agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information provided to
it by the Company or any Subsidiary of the Company, or by the Agent on such
Company's or Subsidiary's behalf, in connection with this Agreement or any other
Loan Document, and neither it nor any of its Affiliates shall use any such
information for any purpose or in any manner other than pursuant to the terms
contemplated by this Agreement and the Receivables Purchase Agreement; except to
the extent such information (i) was or becomes generally available to the public
other than as a result of a disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided, however, that any Bank may disclose such
-------- -------
information (A) at the request or pursuant to any requirement of any
Governmental Person to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process and when required to do so in accordance with the provisions
of any applicable Governmental Rule; provided, that a Bank shall disclose only
--------
the information required by such request and shall notify the Company in advance
of such disclosure so that the Company may seek an appropriate protective order,
and (C) to such Bank's independent auditors and other professional advisors
provided such Persons are obligated to keep such information confidential.
Notwithstanding the foregoing, the Company authorizes each Bank to disclose to
any Assignee or Participant and to any prospective Assignee or Participant, such
financial and other information in such Bank's possession concerning the Company
or its Subsidiaries which has been delivered to Agent or the Banks pursuant to
this Agreement or which has been delivered to the Agent or the Banks by the
Company in connection with the Banks' credit evaluation of the Company prior to
entering into this Agreement; provided that, unless otherwise agreed by the
--------
Company, such Assignee or Participant agrees in writing to such Bank to keep
such information confidential to the same extent required of the Banks
hereunder.
10.2 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 2.9, 3, 10.4
and 10.15 and the agreements of the Banks set forth in Sections 2.13, 9, 10.1(b)
and 10.5 shall survive the payment of the Obligations by the Company and the
termination of this Agreement.
10.3 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of any Bank or any holder of any Note in the exercise of any
power, right or privilege hereunder or under any Note shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege. All rights and remedies existing under this Agreement or any
Notes are cumulative to and not exclusive of, any rights or remedies otherwise
available.
-44-
10.4 FEES AND EXPENSES. Whether or not the transactions contemplated
hereby shall be consummated, the Company agrees to pay within 30 days after
submission of an invoice therefor (a) all the actual and reasonable out-of-
pocket costs and expenses of preparation of the Loan Documents and all the costs
of furnishing all opinions by counsel for the Company (including without
limitation any opinions requested by the Banks as to any legal matters arising
hereunder), and of the Company's performance of and compliance with all
agreements and conditions contained therein on its part to be performed or
complied with; (b) the cost of delivering to the Banks any Notes pursuant to the
provisions of this Agreement; (c) the reasonable fees, expenses and
disbursements of the Agent and the Agent's counsel (including the allocated cost
of Agent's inhouse counsel and staff) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and the Loans
and any amendments and waivers hereto; and (d) after the occurrence of an Event
of Default, all actual and reasonable out-of-pocket costs and expenses
(including reasonable fees of law firms engaged by the Banks and the reasonable
estimate of the allocable costs of counsel in the staff of legal departments of
the Banks and costs of settlement) incurred by the Agent and each Bank in
enforcing any Obligations or in collecting any payments due from the Company
hereunder or under any Notes by reason of such Event of Default or in connection
with any refinancing or restructuring of any Loan Document in the nature of a
"work-out" or of any insolvency or bankruptcy proceeding.
10.5 SET OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of and during the continuance of any Event of Default (after the
giving of any notice and the expiration of any grace period contained in the
definition thereof), each Bank and each subsequent holder of any Note is hereby
authorized by the Company at any time or from time to time, without notice to
the Company, or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate any and all deposits (including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured but not including trust accounts) and any other indebtedness at any
time held or owing by that Bank or that subsequent holder or any Bank Affiliate
thereof to or for the credit or the account of the Company and to apply any such
amounts in accordance with the provisions of Section 2.13 irrespective of
whether or not that Bank or that subsequent holder shall have made any demand
hereunder and each such Bank Affiliate is hereby irrevocably authorized to
permit such setoff and appropriation.
10.6 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 10.6) shall
be as set forth under each party's name on Schedule 10.6 hereto.
10.7 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.
-45-
10.8 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Requisite Banks and the Company, and acknowledged
by the Agent, and then such waiver shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
-------- -------
no such waiver, amendment, or consent shall, unless in writing and signed by all
the Banks and the Company, and acknowledged by the Agent, do any of the
following:
(a) increase or extend any Bank's Loan Commitment or any Purchaser's
Purchaser Commitment or subject any Bank to any additional obligations;
(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Banks (or any of them) hereunder or
under any Loan Document;
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or of any fees or other amounts payable hereunder or under any Loan
Document;
(d) change any Bank's Pro Rata Share of the Aggregate Loan Commitment
or any Purchaser's Percentage of the Purchasers' Investment Limit or of the
aggregate unpaid principal amount of any extension of credit which shall be
required for the Banks or any of them to take any action hereunder;
(e) amend this Section 10.8 or Section 2.13;
(f) amend Section 2.1, the definitions of "Pro Rata Share" or
"Requisite Banks;" or
(g) discharge any Guarantor;
provided further, that no amendment, waiver or consent shall (i), unless in
-------- -------
writing and signed by the Agent in addition to the Requisite Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under any
Loan Document, or (ii) have the effect of making any Bank's Pro Rata Share
hereunder a different percentage than its Percentage under the Receivables
Purchase Agreement. No notice to or demand on the Company in any case shall
entitle the Company to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.8 shall be binding upon each holder
of any Notes at the time outstanding, each future holder of the Notes and, if
signed by the Company, on the Company.
10.9 OBLIGATIONS SEVERAL. The obligation of each Bank hereunder is
several, and no Bank shall be responsible for any obligation or commitment of
any other Bank hereunder. Nothing contained in this Agreement and no action
taken by Banks pursuant hereto shall be deemed to constitute Banks to be a
partnership, an association, a joint venture or another entity.
10.10 CERTAIN CHANGES. If (a) any changes in accounting principles from
those used in the preparation of the financial statements referred to in Section
5.8 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
-46-
successors thereto or agencies with similar functions) result in a change in the
method of calculation of financial covenants, standards or terms found in
Sections 1, 6 and 7, or (b) the Company changes the manner in which its fiscal
year, fiscal quarters and fiscal months are determined, the parties hereto agree
to enter into negotiations in order to amend the appropriate provisions of this
Agreement so as to equitably reflect such changes with the desired result that
the criteria for evaluating the Company's financial condition and operations or
establishing limitations hereunder shall be the same after such changes as if
such changes had not been made.
10.11 HEADINGS. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.12 APPLICABLE LAW. (a) This Agreement, any Notes and the other Loan
Documents shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the State of California, without regard to
conflicts of laws principles.
(b) Any legal action or proceeding with respect to this Agreement
and any other Loan Documents may be brought in the courts of the State of
California or of the United States for the Central District of California, and
by execution and delivery of this Agreement, each of the Company, the Agent and
the Banks consents, for itself and in respect of its property, to the non-
exclusive jurisdiction of those courts. Each of the Company, the Agent and the
Banks 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
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
Agent and the Banks each waive personal service of any summons, complaint or
other process, which may be made by any other means permitted by California law.
10.13 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank. No assignment or transfer of any Bank will
be permitted if such assignment or transfer would result in any Bank's Pro Rata
Share hereunder being a different percentage than its Percentage under the
Receivables Purchase Agreement.
10.14 COUNTERPARTS. This Agreement and any amendments, waivers, consents,
or supplements may be executed in any number of counterparts, and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
10.15 INDEMNITY. Whether or not the transactions contemplated hereby are
consummated, the Company shall indemnify and hold the Agent-Related Persons, and
each Bank and each of its respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
------------------
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
reasonable fees and out-of-pocket expenses of counsel and the allocated cost of
internal counsel) of any kind or nature whatsoever which may at any time
(including at any time
-47-
following repayment of the Loans and the termination, resignation or replacement
of the Agent or replacement of any Bank) be imposed on, incurred by or asserted
against any such Person arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any investigation, litigation or
proceeding (including any proceeding of the type referred to in Section 8.1(f)
or (g) or appellate proceeding) related to or arising out of this Agreement or
the Loans or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
-----------
Liabilities"); provided, that the Company shall have no obligation hereunder to
----------- --------
any Indemnified Person with respect to Indemnified Liabilities resulting from
the gross negligence or willful misconduct of such Indemnified Person.
The agreements in this Section shall survive payment of all other
Obligations.
10.16 AMENDMENT AND RESTATEMENT. This Agreement amends and restates the
Existing Agreement, and any loans and the revolving commitments outstanding
under the Existing Agreement shall be deemed Loans and the Loan Commitment
outstanding under this Agreement. Banks which are party to the Existing Credit
Agreement consent to The Northern Trust Company becoming a party hereto. The
Company represents and warrants that (a) there is no defense, counterclaim or
offset of any type or nature under the Mattel Sales Subordination Agreement or
the ▇▇▇▇▇▇ Price Subordination Agreement, (b) the same remain in full, force and
effect after giving effect hereto, and (c) all references to "Credit Agreement"
and "Loan Documents" therein shall be deemed references to this Agreement and
"Loan Documents" as defined herein.
-48-
IN WITNESS WHEREOF, the parties hereto have caused this 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/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President and
Treasurer
S-1
AGENT: BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
BANKS: BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Director
S-2
NATIONSBANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
---------------------------
S-3
THE CHASE MANHATTAN BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Title: Managing Director
---------------------------
S-4
BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Title: Director
---------------------------
S-5
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
---------------------------
S-6
TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
---------------------------
S-7
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President/Director
---------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
---------------------------
S-8
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------
Title: Vice President
---------------------------
S-9
BANQUE NATIONALE DE PARIS
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President & Manager
--------------------------------
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Vice President
--------------------------------
S-10
DRESDNER BANK AG, NEW YORK BRANCH AND
GRAND CAYMAN BRANCH
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Assistant Vice President
---------------------------
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Assistant Treasurer
---------------------------
S-11
ISTITUTO BANCARIO SAN PAOLO di
TORINO SpA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: Deputy General Manager
---------------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Title: Vice President
---------------------------
S-12
MANUFACTURERS & TRADERS TRUST CO.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Title: Vice President
---------------------------
S-13
CITICORP USA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: Attorney-In-Fact
---------------------------
S-14
SOCIETE GENERALE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Title: Vice President
---------------------------
S-15
THE INDUSTRIAL BANK OF JAPAN, LIMITED
LOS ANGELES AGENCY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Title: SVP & SDGM
---------------------------
S-16
THE NORTHERN TRUST COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Title: Second Vice President
---------------------------
S-17
EXHIBIT A
SECOND AMENDED AND RESTATED
PROMISSORY NOTE
$__________________ Los Angeles, California
March 11, 1998
FOR VALUE RECEIVED, MATTEL, INC., a Delaware corporation (the "Company"),
promises to pay to the order of ________________ (the "Payee"), the principal
amount of $____________ or, if different, the aggregate principal amount of
Loans made by the Payee to the Company under the Credit Agreement referred to
below outstanding on the Termination Date.
The Company also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid at the rates and at the times which shall
be determined in accordance with the provisions of the Second Amended and
Restated Credit Agreement dated as of March 11, 1998, among the Company, the
Banks named therein and Bank of America National Trust and Savings Association,
as Agent (as amended from time to time, the "Credit Agreement").
This Note (this "Note") is one of the Company's Notes issued pursuant to
and entitled to the benefits of the Credit Agreement to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Loans evidenced hereby are made and are to be repaid. Capitalized
terms used herein without definition shall have the meanings set forth in the
Credit Agreement. If the Payee was a party to the Existing Credit Agreement,
this Note amends and restates any promissory note executed and delivered by the
Company in favor of Payee in connection with such Existing Credit Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
office of Bank of America for credit to: BANCONTROL Account No. 12358-88449,
reference: Mattel, Inc., at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or at such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Each of the Payee and any
subsequent holder of this Note agrees that before disposing of this Note or any
part hereof it will make a notation hereon of all principal payments previously
made hereunder and of the date to which interest hereon has been paid; provided
--------
that the failure to make a notation of any payment made on this Note shall not
limit or otherwise affect the obligation of the Company hereunder with respect
to payments of principal or interest on this Note.
This Note is subject to prepayment as provided in the Credit Agreement.
Upon the occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The Company promises to pay all actual and reasonable costs and expenses,
including reasonable attorneys' fees and the reasonably allocated cost of
inhouse counsel and staff, incurred in the collection and enforcement of this
Note. The Company and endorsers of this Note hereby
A-1
consent to renewals and extensions of time at or after the maturity hereof,
without notice, and hereby waive diligence, presentment, protest, demand and
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
THE CREDIT AGREEMENT AND THIS NOTE 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.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year and the place
first above written.
MATTEL, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
A-2
TRANSACTIONS ON NOTE
Amount of
End of interest or Balance
Type of Amount of Interest principal principal Notation
Date Loan Made Loan Made Period paid this date made by
---- --------- --------- ------ ---- --------- -------
A-1
EXHIBIT B
NOTICE OF BORROWING
TO: Bank of America National Trust
and Savings Association, as Agent
Gentlemen:
Pursuant to Section 2.3 of that certain Second Amended and Restated Credit
Agreement dated as of March 11,1998 (the "Credit Agreement"; capitalized terms
used herein shall have the meanings assigned to them in the Credit Agreement),
among Mattel, Inc., a Delaware corporation (the "Company"), the Banks named
therein (the "Banks") and Bank of America National Trust and Savings
Association, as Agent (the "Agent"), this represents the Company's request to
borrow on __________, 19__ from the Banks on a pro rata basis the aggregate
principal amount of $__________ as [Base Rate] [Eurodollar Rate].
[The initial Interest period for such Eurodollar Rate Loan is requested to
_________ month/day period].
The proceeds of such Loans are to be deposited in the Company's account at
Bank of America.
The undersigned officer, to the best of his knowledge, and the Company
certifies that (i) the representations and warranties of the Company contained
in the Credit Agreement are true, correct and complete in all material respects
on and as of the date hereof to the same extent as though made on and as of the
date hereof; (ii) no Default or Event of Default has occurred and is continuing
under the Credit Agreement or will result from the proposed borrowing; and (iii)
the Company has performed in all material respects all agreements and satisfied
all conditions under the Credit Agreement required to be performed by it on or
before the date hereof.
DATED:
--------------------
MATTEL, INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
B-1
EXHIBIT C
NOTICE OF CONVERSION/CONTINUATION
TO: Bank of America National Trust
and Savings Association, as Agent
Gentlemen:
1. CONVERSION SELECTION. Pursuant to Section 2.4 of that certain Second
Amended and Restated Credit Agreement dated as of March 11, 1998 (the "Credit
Agreement") among Mattel, Inc., a Delaware corporation (the "Company"), the
Banks named therein (the "Banks") and Bank of America National Trust and Savings
Association, as Agent (the "Agent"), please convert an aggregate of $________of
existing [Base Rate, Eurodollar Rate] Loans, the final day of the current
Interest Period (if applicable) of which is __________, 19__, to [Base Rate,
Eurodollar Rate] Loans, as follows:
Requested Interest Period
Dollar Amount (Eurodollar Rate Loans)
------------- -----------------------
$________________ __________ months
Maturing on _________, 19___
2. CONTINUATION SELECTION. Pursuant to Section 2.4 of the Agreement,
please continue an aggregate of $_______of existing Eurodollar Rate Loans, the
final day of the current Interest Period of which is __________, 19____, as
follows:
Dollar Amount Requested Interest Period
------------- -------------------------
$________________ __________ months
Maturing on _________, 19___
Unless otherwise defined herein, capitalized terms used herein have the
meanings assigned to them in the Agreement.
DATED:
---------------------
MATTEL, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
C-1
EXHIBIT D
OFFICERS' CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) We are the duly elected [Chairman of the Board (if an officer),
President, Executive Vice President, Senior Vice Presidents] and [Chief
Financial Officer, Treasurer, Assistant Treasurer, Controller] of Mattel, Inc.,
a Delaware corporation (the "Company");
(2) We have reviewed the terms of the Second Amended and Restated Credit
Agreement dated as of March 11, 1998, among the Company, the Banks named therein
and Bank of America National Trust and Savings Association, as Agent (the
"Credit Agreement"; capitalized terms used herein without definition shall have
the meanings assigned them in the Credit Agreement), and we have made, or have
caused to be made under our supervision, a detailed review of the transactions
and conditions of the Company and its Subsidiaries during the accounting period
covered by the attached financial statements; and
(3) The examinations described in paragraph (2) did not disclose, and we
have no knowledge of, the existence of any condition or event which constitutes
a Default or Event of Default (as defined in the Credit Agreement) during or at
the end of the accounting period covered by the attached financial statements or
as of the date of this Officers' Certificate, except as set forth below.
Describe below (or in a separate attachment to this Officers' Certificate)
the exceptions, if any, to paragraph (3) by listing, in detail, the nature of
the condition or event and the period during which it has existed:
-----------------------------
-----------------------------
-----------------------------
-----------------------------
D-1
The foregoing certifications, together with the computations set forth in
Attachment No. 1 hereto and the financial statements delivered with this
Officers' Certificate in support hereof, are made and delivered this _____ day
of ______________, 19__ pursuant to subsection 6.1(c) of the Credit Agreement.
MATTEL, INC.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
By:
--------------------------
Name:
------------------------
Title:
-----------------------
D-2
ATTACHMENT NO. I TO
OFFICERS' CERTIFICATE
As of (Date)
----------
($000's Omitted Except Ratio Amounts)
I. CONSOLIDATED FUNDED INDEBTEDNESS TO TOTAL CAPITALIZATION AS OF ABOVE DATE.
(Section 7.5)
A. Consolidated Funded Indebtedness:
1. Total liabilities for borrowed money:
-Notes Payable $_____________
-Current Portion of Long-Term -Indebtedness: $_____________
-Term Loans: $_____________
-Subordinated Indebtedness: $_____________
-Senior Long-Term Indebtedness: $_____________
-Mortgages: $_____________
Total liabilities for borrowed money: $_____________
2. Capital Leases: $_____________
3. Guaranties of unconsolidated funded obligations for borrowed money: $_____________
4. Total Consolidated Funded Indebtedness (Lines A1+A2+A3): $_____________
B. Combined Total Outstanding Investments:
1. Purchasers' Investments under Receivables $_____________
Purchase Agreement:
2. Amount analogous to " Purchasers' Investments" under Other $_____________
Permitted Accounts Receivable Financing Facilities
relating to Domestic Subsidiaries (describe):
3. Combined Purchasers' Investments (Lines B1+B2): $_____________
C. Consolidated Funded Indebtedness plus Combined Purchasers' Investments (Lines A4+B3): $_____________
D. Consolidated Tangible Net Worth:
1. Net Worth: $_____________
2 Foreign exchange currency translation adjustments: $_____________
-1-
3. Intangible assets: $______________
4. Consolidated Tangible Net Worth (Line D1 - (D2+D3)): $
==============
E. Consolidated Funded Indebtedness plus Combined Purchasers' Investments plus $______________
Consolidated Tangible Net Worth (Lines C+D4):
F. Actual percentage of Consolidated Funded Indebtedness plus
Combined Purchasers' Investments to Consolidated Funded
Indebtedness plus Combined Purchasers' Investments
plus Consolidated Tangible Net Worth (Line CE): ________%
G. Permitted maximum percentage of Consolidated Funded Indebtedness
plus Combined Purchasers' Investments to Consolidated Funded
Indebtedness plus Combined Purchasers'
Investments plus Consolidated Tangible Net Worth: (55%) (65%)
II. INTEREST COVERAGE RATIO AS OF ABOVE DATE. (Section 7.6)
A. Company's net income
1. Company's net income from continuing operations, for the four
consecutive fiscal quarters ending on such date: $______________
2. Special items: $______________
3. Minority interest $______________
4. Gains on reacquisition of debt: $______________
5. Total (Line A1 - Line A1+A2+A3): $______________
B. Income taxes accrued for the four consecutive fiscal quarters ending on such $______________
date:
C. Interest accrued for the four consecutive fiscal quarters ending on such date, $______________
excluding capitalized interest and without regard to interest income:
D. Depreciation and amortization for the four consecutive fiscal quarters ending on $______________
such date:
E. Total (Lines A5+B+C+D): $______________
F. Interest incurred for the four consecutive fiscal quarters ending on such date, $______________
including capitalized interest and without regard to interest income:
G. Actual Ratio (Line ELine F): __ to 1
H. Required Minimum Ratio 3.5 to 1
-2-
EXHIBIT E
OPINION OF ASSISTANT
GENERAL COUNSEL OF COMPANY
UPDATED FORM TO COME
E-1
SCHEDULE A OPINION OF ASSISTANT
[ALL BANKS PARTY TO CREDIT AGREEMENT]
E-2
EXHIBIT F-1
▇▇▇▇▇▇-▇▇▇▇▇, INC.
FIRST AMENDED AND RESTATED CONTINUING GUARANTY
TO: Bank of America National Trust
and Savings Association, as Agent
PRELIMINARY STATEMENTS:
A. Concurrently herewith, Mattel, Inc., a Delaware corporation (the
"Company"), the Banks named therein (the "Domestic Banks") and Bank of America
National Trust and Savings Association, as agent (the "Agent"), are entering
into a First Amended and Restated Credit Agreement dated as of even date
herewith (said agreement, as it may hereafter be amended, supplemented, restated
or otherwise modified from time to time, is referred to herein as the "Credit
Agreement"; capitalized terms used herein without definition shall have the
meanings assigned those terms in the Credit Agreement).
B. Certain Subsidiaries of the Company that are incorporated in a
jurisdiction outside of the United States of America (the "Foreign
Subsidiaries") have entered into credit facilities with one or more Banks or
foreign affiliates of the Banks (the "Foreign Banks"), and the Company has
guarantied the obligations of such Foreign Subsidiaries under such credit
facilities pursuant to one or more guaranties (the "Foreign Subsidiary
Guaranties"), and it is contemplated that one or more Foreign Subsidiaries may
hereafter enter into such credit facilities with one or more Foreign Banks, and
that the Company may guaranty the obligations of such Foreign Subsidiaries
thereunder pursuant to one or more Foreign Subsidiary Guaranties.
C. It is a condition precedent to the effectiveness of the Credit
Agreement that the Guarantor enter into this Continuing Guaranty guarantying all
obligations of every nature of the Company and Mattel Sales from time to time
owed under or in respect of (i) the Credit Agreement, the Loans, and the other
Loan Documents (all such obligations are referred to herein as the "Domestic
Bank Obligations"), (ii) the Foreign Subsidiary Guaranties (such obligations are
referred to herein as the "Foreign Subsidiary Guaranty Obligations") and (iii)
any letters of credit issued by a Bank in its individual capacity for the
account of the Company outside the Credit Agreement (such obligations are
referred to herein as the "Company Letter of Credit Obligations"). This Guaranty
amends and restates the Continuing Guaranty dated as of March 10, 1995 delivered
by the Guarantor.
D. NOW, THEREFORE, the Guarantor agrees as follows:
1. For valuable consideration, the undersigned Guarantor unconditionally,
absolutely and irrevocably guarantees and promises to pay to the Agent, or
order, on demand, in lawful money of the United States and in immediately
available funds, any and all present or future Domestic Bank Obligations,
Foreign Subsidiary Guaranty Obligations and Company Letter of Credit Obligations
owing to the Agent, the Domestic Banks, the Foreign Banks and the Agent
(collectively, the "Guarantied Parties"). The terms Domestic Bank Obligations,
Foreign Subsidiary Guaranty Obligations and Company Letter of Credit Obligations
(hereinafter collectively referred to as the "Obligations") are used herein in
their most comprehensive sense
F-1-1
and include any and all advances, debts, obligations, and liabilities of the
Company, now, or hereafter made, incurred, or created, whether voluntary or
involuntarily, and however arising, including, without limitation, any and all
attorneys' fees (including the allocated cost of inhouse counsel), costs,
premiums, charges, or interest owed by the Company to the Guarantied Parties,
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, whether the Company may be liable individually or
jointly with others, whether recovery upon such indebtedness may be or hereafter
becomes barred by any statute of limitations or whether such indebtedness may be
or hereafter become otherwise unenforceable.
2. This Guaranty is a continuing guaranty which relates to any
Obligations, including those which arise under successive transactions which
shall either cause the Company to incur new Obligations, continue the
Obligations from time to time, or renew them after they have been satisfied.
The Guarantor agrees that nothing shall discharge or satisfy its obligations
created hereunder except for the full payment of the Obligations. Any payment
by the Guarantor shall not reduce its maximum obligation hereunder.
3. The Guarantor agrees that it is directly and primarily liable to the
Agent for the benefit of the Guarantied Parties, that its obligations hereunder
are independent of the Obligations of the Company, or of any other guarantor,
and that a separate action or actions may be brought and prosecuted against the
Guarantor, whether action is brought against the Company or whether the Company
is joined in any such action or actions. The Guarantor agrees that any releases
which may be given by the Agent and the Guarantied Parties to the Company or any
other guarantor shall not release it from this Guaranty.
4. The obligations of the Guarantor under this Guaranty shall not be
affected, modified or impaired upon the occurrence from time to time of any of
the following, whether or not with notice to or the consent of the Guarantor:
(a) the compromise, settlement, change, modification, amendment (whether
material or otherwise) or partial termination of any or all of the Obligations;
(b) the failure to give notice to the Guarantor of the occurrence of any
Event of Default under the terms and provisions of the Agreement;
(c) the waiver of the payment, performance or observance of any of the
Obligations;
(d) the taking or omitting to take any actions referred to in any Loan
Document or of any action under this Guaranty;
(e) any failure, omission or delay on the part of the Agent and/or the
Guarantied Parties to enforce, assert or exercise any right, power or remedy
conferred in this Guaranty, the Credit Agreement, any other Loan Document or any
other indulgence or similar act on the part of the Agent and/or the Guarantied
Parties in good faith and in compliance with applicable law;
(f) the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshalling of assets,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors or
readjustment of, or other similar proceedings which affect the Guarantor, any
other guarantor of any of the Obligations of the Company or any of the
F-1-2
assets of any of them, or any allegation of invalidity or contest of the
validity of this Guaranty in any such proceeding;
(g) to the extent permitted by law, the release or discharge of any other
guarantors of the Obligations from the performance or observance of any
obligation, covenant or agreement contained in any guaranties of the Obligations
by operation of law; or
(h) the default or failure of any other guarantors of the Obligations fully
to perform any of their respective obligations set forth in any such guaranties
of the Obligations.
To the extent any of the foregoing refers to any actions which the Agent or
the Guarantied Parties may take, the Guarantor hereby agrees that the Agent
and/or the Guarantied Parties may take such actions in such manner, upon such
terms, and at such times as the Agent or the Guarantied Parties, in their
discretion, deem advisable, without, in any way or respect, impairing,
affecting, reducing or releasing the Guarantor from its undertakings hereunder
and the Guarantor hereby consents to each and all of the foregoing actions,
events and occurrences.
5. The Guarantor hereby waives:
(a) any and all rights to require the Agent or the Guarantied Parties to
prosecute or seek to enforce any remedies against the Company or any other party
liable to the Agent or the Guarantied Parties on account of the Obligations;
(b) any right to assert against the Agent or the Guarantied Parties any
defense (legal or equitable), set-off, counterclaim, or claim which the
Guarantor may now or at any time hereafter have against the Company or any other
party liable to the Agent or the Guarantied Parties in any way or manner under
the Credit Agreement;
(c) all defenses, counterclaims and off-sets of any kind or nature, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity or enforceability of any Loan Document and the security
interest granted pursuant thereto;
(d) any defense arising by reason of any claim or defense based upon an
election of remedies by the Agent or the Guarantied Parties including, without
limitation, any direction to proceed by judicial or nonjudicial foreclosure or
by deed in lieu thereof, which, in any manner impairs, affects, reduces,
releases, destroys or extinguishes the Guarantor's subrogation rights, rights to
proceed against the Company for reimbursement, or any other rights of the
Guarantor to proceed against the Company, against any other guarantor, or
against any other security, with the Guarantor understanding that the exercise
by the Agent and/or the Guarantied Parties of certain rights and remedies may
offset or eliminate the Guarantor's right of subrogation against the Company,
and that the Guarantor may therefore incur partially or totally non-reimbursable
liability hereunder;
(e) all presentments, demands for performance, notices of non-performance,
protests, notices of protest, notices of dishonor, notices of default, notice of
acceptance of this Guaranty, and notices of the existence, creation, or
incurring of new or additional indebtedness, and all other notices or
formalities to which the Guarantor may be entitled; and
F-1-3
(f) without limiting the generality of the foregoing, the Guarantor hereby
expressly waives any and all benefits of California Civil Code Sections 2809,
2810, 2819, 2825, 2839 and 2845 through 2850.
6. The Guarantor hereby agrees that unless and until all Obligations have
been paid to the Agent and the Guarantied Parties in full, it shall not have any
rights of subrogation, reimbursement or contribution as against the Company or
any other guarantor, if any, and shall not seek to assert or enforce the same.
Guarantor understands that the exercise by Agent of certain rights and remedies
contained in the Loan Documents may affect or eliminate Guarantor's right of
subrogation if any, against the Company and that Guarantor may therefore incur a
partially or totally non-reimbursable liability hereunder; nevertheless,
Guarantor hereby authorizes and empowers the Agent and the Guarantied Parties to
exercise, in their sole discretion, any right and remedy, or any combination
thereof, which may then be available, since it is the intent and purpose of
Guarantor that the obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances.
7. The Guarantor is presently informed of the financial condition of the
Company and of all other circumstances which a diligent inquiry would reveal and
which bear upon the risk of nonpayment of the Obligations. The Guarantor hereby
covenants that it will continue to keep itself informed of the financial
condition of the Company, the status of other guarantors, if any, and of all
other circumstances which bear upon the risk of nonpayment. The Guarantor
hereby waives its right, if any, to require the Agent or the Guarantied Parties
to disclose to it any information which the Agent or any Bank may now or
hereafter acquire concerning such condition or circumstances including, but not
limited to, the release of any other guarantor.
8. The Agent and each Bank's books and records evidencing the Obligations
shall be admissible in any action or proceeding and shall be binding upon the
Guarantor for the purpose of establishing the terms set forth therein and shall
constitute prima facie proof thereof.
9. Notwithstanding anything to the contrary contained herein, the
Guarantor's liability pursuant to this Guaranty shall be limited to the greater
of: (a) the 'reasonably equivalent value,' received by the Guarantor or any of
its subsidiaries arising out of the Loan Documents (including, without
limitation, repayment of intercompany or third party debt of, investments made
in, and capital contributions, advances and loans made to, the Guarantor or any
of its subsidiaries, directly or indirectly, by Company or any other subsidiary
with, or as a direct or indirect result of obtaining, the proceeds of any credit
extended under the Loan Documents) in exchange for or in connection with the
Guarantor's guaranty of the Obligations, and (b) 95% of the excess of (i) a
'fair valuation' of the amount of the assets and other property of the Guarantor
and its subsidiaries taken as a whole as of the applicable date of determination
of the incurrence of the Guarantor's obligations hereunder over (ii) a 'fair
----
valuation' of the Guarantor's and its subsidiaries' debts taken as a whole as of
such date, but excluding liabilities arising under this Guaranty and excluding
all liabilities owing by Guarantor and its subsidiaries taken as a whole to the
Company or any other Subsidiary or otherwise subordinated to the Guarantor's
obligations hereunder, it being understood that a portion of such indebtedness
owing to Company shall be discharged on a dollar-for-dollar basis in an amount
equal to the amount paid by Guarantor hereunder. The meaning of the terms
'reasonably equivalent value' and 'fair valuation,' and the calculations of
assets and other property and debts, shall be determined in
F-1-4
accordance with the applicable federal and California state laws in effect on
the date hereof governing the determination of the insolvency of a debtor and to
further the intent of all parties hereto to maximize the amount payable by the
Guarantor without rendering it insolvent or leaving it with an unreasonably
small amount of capital in relation to its business, in either case, at the
applicable date for the determination of the incurrence of its obligations
hereunder; provided, however, the Guarantor agrees, to the maximum extent
-------- -------
permitted by law, that 'fair valuation' of the Guarantor's and its subsidiaries'
assets and other properties means the fair market sales price as would be
obtained in an arms-length transaction between competent, informed and willing
parties under no compulsion to sell or buy or collections thereof obtained in
the ordinary course of business and 'fair valuation' of its debts means the
amount, in light of the applicable circumstances, at the time, for which the
Guarantor or its subsidiaries is liable for matured known liquidated liabilities
or would reasonably be expected to become liable on contingent or unliquidated
liabilities as they mature and taking into consideration the nature of any such
contingency and the probability that liability would be imposed.
10. The Guarantor represents and warrants for and with respect to itself
that:
(a) The Guarantor is a corporation duly organized and existing under the
laws of the state of California, and is properly licensed and in good standing
in, and where necessary to maintain its rights and privileges have complied with
the fictitious name statute of, every jurisdiction in which it is doing
business, except where the failure to be licensed or be in good standing or
comply with any such statute will not have a material adverse effect on the
ability of the Guarantor to perform its obligations hereunder or under any
instrument or agreement required hereunder;
(b) The execution, delivery and performance of this Guaranty and any
instrument or agreement required hereunder are within the power of the
Guarantor, have been duly authorized by, and are not in conflict with the terms
of any charter, by-law or other organization papers of, the Guarantor;
(c) No approval, consent, exemption or other action by, or notice to or
filing with, any governmental authority is necessary in connection with the
execution, delivery, performance or enforcement of this Guaranty or any
instrument or agreement required hereunder, except as may have been obtained and
certified copies of which have been delivered to Agent and the Guarantied
Parties;
(d) There is no law, rule or regulation, nor is there any judgment, decree
or order of any court or governmental authority binding on the Guarantor, which
would be contravened by the execution, delivery, performance or enforcement of
this Guaranty or any instrument or agreement required hereunder;
(e) This Guaranty is a legal, valid and binding agreement of the Guarantor,
enforceable against the Guarantor in accordance with its terms, and any
instrument or agreement required hereunder, when executed and delivered, will be
similarly legal, valid, binding and enforceable, except where enforceability
thereof may be limited by applicable law relating to bankruptcy, insolvency,
moratorium or other similar laws affecting creditors' rights generally or by the
application of general principles of equity;
F-1-5
(f) There is no action, suit or proceeding pending against, or to the
knowledge of the Guarantor, threatened against or affecting the Guarantor,
before any court or arbitrator or any governmental body, agency or official
which in any manner draws into question the validity or enforceability of this
Guaranty; and
(g) The execution, delivery and performance by the Guarantor of this
Guaranty does not constitute, to the best knowledge of Guarantor, a "fraudulent
conveyance," "fraudulent obligation" or "fraudulent transfer" within the
meanings of the Uniform Fraudulent Conveyances Act or Uniform Fraudulent
Transfer Act, as enacted in any jurisdiction.
11. Any one of the following events shall constitute an "Event of
Bankruptcy:"
(a) The Guarantor or the Company is generally not paying or admits in
writing its inability to pay its debts as such debts become due, or files any
petition or action for relief under any bankruptcy, reorganization, insolvency,
or moratorium law or any other law for the relief of, or relating to, debtors,
now or hereafter in effect, or makes any assignment for the benefit of
creditors, or takes any corporate action in furtherance of any of the foregoing;
(b) An involuntary petition is filed against the Guarantor or the Company
under any bankruptcy statute now or hereafter in effect, or a custodian,
receiver, trustee, assignee for the benefit of creditors (or other similar
official) is appointed to take possession, custody or control of any property of
the Guarantor or the Company, unless such petition or appointment is set aside
or withdrawn or ceases to be in effect within sixty (60) days from the date of
said filing or appointment.
Upon the occurrence of an Event of Bankruptcy, without notice or demand,
any and all of the Guarantor's obligations under this Guaranty shall become due,
payable and enforceable against the Guarantor whether or not the Obligations are
then due and payable.
12. All notices and other communications hereunder shall be delivered, in
the manner and with the effect provided in the Credit Agreement and, in the case
of the Guarantor, in care of the Company.
13. This Guaranty shall be binding upon the successors and assigns of the
Guarantor and shall inure to the benefit of the Agent's and the Guarantied
Parties' successors and assigns. This Guaranty cannot be assigned by the
Guarantor without the prior written consent of the Agent and the Guarantied
Parties which shall be in the Agent's and the Guarantied Parties' sole and
absolute discretion.
14. No failure or delay by the Agent or the Guarantied Parties in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
15. The Guarantor shall pay (a) all reasonable out-of-pocket expenses of
the Agent and the Guarantied Parties, including reasonable fees and
disbursements of counsel (including the allocated cost of inhouse counsel and
staff) for the Agent, in connection with any waiver or
F-1-6
consent hereunder or any amendment hereof and (b) all out-of-pocket expenses
incurred by the Agent and the Guarantied Parties, including fees and
disbursements of counsel (including the allocated cost of inhouse counsel and
staff), in connection with the enforcement of this Guaranty (whether or not suit
is brought).
16. No modification of this Guaranty shall be effective for any purpose
unless it is in writing and executed by an officer of the Agent authorized to do
so. This Guaranty merges all negotiations, stipulations and provisions relating
to the subject matter of this Guaranty which preceded or may accompany the
execution of this Guaranty.
17. This Guaranty and the rights and obligations of the parties hereunder
shall be construed in accordance with and be governed by the laws of the State
of California without reference to the principles of conflicts of laws thereof.
18. This Guaranty may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
19. Terms not defined herein shall have the meanings assigned to them in
the Credit Agreement.
20. Any indebtedness of the Company now or hereafter held by Guarantor is
hereby subordinated to the indebtedness of the Company to the Agent and the
Guarantied Parties; and such indebtedness of the Company to the Guarantor if the
Agent so requests shall be collected, enforced and received by Guarantor as
trustee for the Agent and the Guarantied Parties and be paid over to the Agent
on account of the indebtedness of the Company to the Agent and the Guarantied
Parties but without reducing or affecting in any manner the liability of the
Guarantor under the other provisions of this guaranty.
21. It is not necessary for the Guarantied Parties to inquire into the
powers of any Guaranteed Party or of the officers, directors or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
Executed as of the 13th day of March 1997.
▇▇▇▇▇▇-▇▇▇▇▇, INC.
By:
---------------------
Name:
---------------------
Title:
---------------------
BANK OF AMERICA NATIONAL TRUST
SAVINGS ASSOCIATION, as Agent
By:
-------------------------
Vice President
F-1-7
EXHIBIT F-2
MATTEL SALES CORP.
FIRST AMENDED AND RESTATED CONTINUING GUARANTY
TO: Bank of America National Trust
and Savings Association, as Agent
PRELIMINARY STATEMENTS:
A. Concurrently herewith, Mattel, Inc., a Delaware corporation (the
"Company"), the Banks named therein (the "Domestic Banks") and Bank of America
National Trust and Savings Association, as agent (the "Agent"), are entering
into a First Amended and Restated Credit Agreement dated as of even date
herewith (said agreement, as it may hereafter be amended, supplemented, restated
or otherwise modified from time to time, is referred to herein as the "Credit
Agreement"; capitalized terms used herein without definition shall have the
meanings assigned those terms in the Credit Agreement).
B. Certain Subsidiaries of the Company that are incorporated in a
jurisdiction outside of the United States of America (the "Foreign
Subsidiaries") have entered into credit facilities with one or more Banks or
foreign affiliates of the Banks (the "Foreign Banks"), and the Company has
guarantied the obligations of such Foreign Subsidiaries under such credit
facilities pursuant to one or more guaranties (the "Foreign Subsidiary
Guaranties"), and it is contemplated that one or more Foreign Subsidiaries may
hereafter enter into such credit facilities with one or more Foreign Banks, and
that the Company may guaranty the obligations of such Foreign Subsidiaries
thereunder pursuant to one or more Foreign Subsidiary Guaranties.
C. It is a condition precedent to the effectiveness of the Credit
Agreement that the Guarantor enter into this Continuing Guaranty guarantying all
obligations of every nature of the Company and ▇▇▇▇▇▇-▇▇▇▇▇ from time to time
owed under or in respect of (i) the Credit Agreement, the Loans, and the other
Loan Documents (all such obligations are referred to herein as the "Domestic
Bank Obligations"), (ii) the Foreign Subsidiary Guaranties (such obligations are
referred to herein as the "Foreign Subsidiary Guaranty Obligations") and (iii)
any letters of credit issued by a Bank in its individual capacity for the
account of the Company outside the Credit Agreement (such obligations are
referred to herein as the "Company Letter of Credit Obligations").
D. This Guaranty amends and restates the Continuing Guaranty dated as of
March 10, 1995 delivered by the Guarantor.
NOW, THEREFORE, the Guarantor agrees as follows:
1. For valuable consideration, the undersigned Guarantor unconditionally,
absolutely and irrevocably guarantees and promises to pay to the Agent, or
order, on demand, in lawful money of the United States and in immediately
available funds, any and all present or future Domestic Bank Obligations,
Foreign Subsidiary Guaranty Obligations and Company Letter of Credit Obligations
owing to the Agent, the Domestic Banks, the Foreign Banks and the Agent
(collectively, the "Guarantied Parties"). The terms Domestic Bank Obligations,
Foreign
F-2-1
Subsidiary Guaranty Obligations and Company Letter of Credit Obligations
(hereinafter collectively referred to as the "Obligations") are used herein in
their most comprehensive sense and include any and all advances, debts,
obligations, and liabilities of the Company, now, or hereafter made, incurred,
or created, whether voluntary or involuntarily, and however arising, including,
without limitation, any and all attorneys' fees (including the allocated cost of
inhouse counsel), costs, premiums, charges, or interest owed by the Company to
the Guarantied Parties, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, whether the Company may
be liable individually or jointly with others, whether recovery upon such
indebtedness may be or hereafter becomes barred by any statute of limitations or
whether such indebtedness may be or hereafter become otherwise unenforceable.
2. This Guaranty is a continuing guaranty which relates to any
Obligations, including those which arise under successive transactions which
shall either cause the Company to incur new Obligations, continue the
Obligations from time to time, or renew them after they have been satisfied.
The Guarantor agrees that nothing shall discharge or satisfy its obligations
created hereunder except for the full payment of the Obligations. Any payment
by the Guarantor shall not reduce its maximum obligation hereunder.
3. The Guarantor agrees that it is directly and primarily liable to the
Agent for the benefit of the Guarantied Parties, that its obligations hereunder
are independent of the Obligations of the Company, or of any other guarantor,
and that a separate action or actions may be brought and prosecuted against the
Guarantor, whether action is brought against the Company or whether the Company
is joined in any such action or actions. The Guarantor agrees that any releases
which may be given by the Agent and the Guarantied Parties to the Company or any
other guarantor shall not release it from this Guaranty.
4. The obligations of the Guarantor under this Guaranty shall not be
affected, modified or impaired upon the occurrence from time to time of any of
the following, whether or not with notice to or the consent of the Guarantor:
(a) the compromise, settlement, change, modification, amendment (whether
material or otherwise) or partial termination of any or all of the Obligations;
(b) the failure to give notice to the Guarantor of the occurrence of any
Event of Default under the terms and provisions of the Agreement;
(c) the waiver of the payment, performance or observance of any of the
Obligations;
(d) the taking or omitting to take any actions referred to in any Loan
Document or of any action under this Guaranty;
(e) any failure, omission or delay on the part of the Agent and/or the
Guarantied Parties to enforce, assert or exercise any right, power or remedy
conferred in this Guaranty, the Credit Agreement, any other Loan Document or any
other indulgence or similar act on the part of the Agent and/or the Guarantied
Parties in good faith and in compliance with applicable law;
(f) the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshalling of assets,
receivership, insolvency, bankruptcy,
F-2-2
assignment for the benefit of creditors or readjustment of, or other similar
proceedings which affect the Guarantor, any other guarantor of any of the
Obligations of the Company or any of the assets of any of them, or any
allegation of invalidity or contest of the validity of this Guaranty in any such
proceeding;
(g) to the extent permitted by law, the release or discharge of any other
guarantors of the Obligations from the performance or observance of any
obligation, covenant or agreement contained in any guaranties of the Obligations
by operation of law; or
(h) the default or failure of any other guarantors of the Obligations fully
to perform any of their respective obligations set forth in any such guaranties
of the Obligations.
To the extent any of the foregoing refers to any actions which the Agent or
the Guarantied Parties may take, the Guarantor hereby agrees that the Agent
and/or the Guarantied Parties may take such actions in such manner, upon such
terms, and at such times as the Agent or the Guarantied Parties, in their
discretion, deem advisable, without, in any way or respect, impairing,
affecting, reducing or releasing the Guarantor from its undertakings hereunder
and the Guarantor hereby consents to each and all of the foregoing actions,
events and occurrences.
5. The Guarantor hereby waives:
(a) any and all rights to require the Agent or the Guarantied Parties to
prosecute or seek to enforce any remedies against the Company or any other party
liable to the Agent or the Guarantied Parties on account of the Obligations;
(b) any right to assert against the Agent or the Guarantied Parties any
defense (legal or equitable), set-off, counterclaim, or claim which the
Guarantor may now or at any time hereafter have against the Company or any other
party liable to the Agent or the Guarantied Parties in any way or manner under
the Credit Agreement;
(c) all defenses, counterclaims and off-sets of any kind or nature, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity or enforceability of any Loan Document and the security
interest granted pursuant thereto;
(d) any defense arising by reason of any claim or defense based upon an
election of remedies by the Agent or the Guarantied Parties including, without
limitation, any direction to proceed by judicial or nonjudicial foreclosure or
by deed in lieu thereof, which, in any manner impairs, affects, reduces,
releases, destroys or extinguishes the Guarantor's subrogation rights, rights to
proceed against the Company for reimbursement, or any other rights of the
Guarantor to proceed against the Company, against any other guarantor, or
against any other security, with the Guarantor understanding that the exercise
by the Agent and/or the Guarantied Parties of certain rights and remedies may
offset or eliminate the Guarantor's right of subrogation against the Company,
and that the Guarantor may therefore incur partially or totally non-reimbursable
liability hereunder;
(e) all presentments, demands for performance, notices of non-performance,
protests, notices of protest, notices of dishonor, notices of default, notice of
acceptance of this Guaranty,
F-2-3
and notices of the existence, creation, or incurring of new or additional
indebtedness, and all other notices or formalities to which the Guarantor may be
entitled; and
(f) without limiting the generality of the foregoing, the Guarantor hereby
expressly waives any and all benefits of California Civil Code Sections 2809,
2810, 2819, 2825, 2839 and 2845 through 2850.
6. The Guarantor hereby agrees that unless and until all Obligations have
been paid to the Agent and the Guarantied Parties in full, it shall not have any
rights of subrogation, reimbursement or contribution as against the Company or
any other guarantor, if any, and shall not seek to assert or enforce the same.
Guarantor understands that the exercise by Agent of certain rights and remedies
contained in the Loan Documents may affect or eliminate Guarantor's right of
subrogation if any, against the Company and that Guarantor may therefore incur a
partially or totally non-reimbursable liability hereunder; nevertheless,
Guarantor hereby authorizes and empowers the Agent and the Guarantied Parties to
exercise, in their sole discretion, any right and remedy, or any combination
thereof, which may then be available, since it is the intent and purpose of
Guarantor that the obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances.
7. The Guarantor is presently informed of the financial condition of the
Company and of all other circumstances which a diligent inquiry would reveal and
which bear upon the risk of nonpayment of the Obligations. The Guarantor hereby
covenants that it will continue to keep itself informed of the financial
condition of the Company, the status of other guarantors, if any, and of all
other circumstances which bear upon the risk of nonpayment. The Guarantor
hereby waives its right, if any, to require the Agent or the Guarantied Parties
to disclose to it any information which the Agent or any Bank may now or
hereafter acquire concerning such condition or circumstances including, but not
limited to, the release of any other guarantor.
8. The Agent and each Bank's books and records evidencing the Obligations
shall be admissible in any action or proceeding and shall be binding upon the
Guarantor for the purpose of establishing the terms set forth therein and shall
constitute prima facie proof thereof.
9. Notwithstanding anything to the contrary contained herein, the
Guarantor's liability pursuant to this Guaranty shall be limited to the greater
of: (a) the 'reasonably equivalent value,' received by the Guarantor or any of
its subsidiaries arising out of the Loan Documents (including, without
limitation, repayment of intercompany or third party debt of, investments made
in, and capital contributions, advances and loans made to, the Guarantor or any
of its subsidiaries, directly or indirectly, by Company or any other subsidiary
with, or as a direct or indirect result of obtaining, the proceeds of any credit
extended under the Loan Documents) in exchange for or in connection with the
Guarantor's guaranty of the Obligations, and (b) 95% of the excess of (i) a
'fair valuation' of the amount of the assets and other property of the Guarantor
and its subsidiaries taken as a whole as of the applicable date of determination
of the incurrence of the Guarantor's obligations hereunder over (ii) a 'fair
----
valuation' of the Guarantor's and its subsidiaries' debts taken as a whole as of
such date, but excluding liabilities arising under this Guaranty and excluding
all liabilities owing by Guarantor and its subsidiaries taken as a whole to the
Company or any other Subsidiary or otherwise subordinated to the Guarantor's
obligations hereunder, it being understood that a portion of such indebtedness
owing
F-2-4
to Company shall be discharged on a dollar-for-dollar basis in an amount
equal to the amount paid by Guarantor hereunder. The meaning of the terms
'reasonably equivalent value' and 'fair valuation,' and the calculations of
assets and other property and debts, shall be determined in accordance with the
applicable federal and California state laws in effect on the date hereof
governing the determination of the insolvency of a debtor and to further the
intent of all parties hereto to maximize the amount payable by the Guarantor
without rendering it insolvent or leaving it with an unreasonably small amount
of capital in relation to its business, in either case, at the applicable date
for the determination of the incurrence of its obligations hereunder; provided,
--------
however, the Guarantor agrees, to the maximum extent permitted by law, that
-------
'fair valuation' of the Guarantor's and its subsidiaries' assets and other
properties means the fair market sales price as would be obtained in an arms-
length transaction between competent, informed and willing parties under no
compulsion to sell or buy or collections thereof obtained in the ordinary course
of business and 'fair valuation' of its debts means the amount, in light of the
applicable circumstances, at the time, for which the Guarantor or its
subsidiaries is liable for matured known liquidated liabilities or would
reasonably be expected to become liable on contingent or unliquidated
liabilities as they mature and taking into consideration the nature of any such
contingency and the probability that liability would be imposed.
10. The Guarantor represents and warrants for and with respect to itself
that:
(a) The Guarantor is a corporation duly organized and existing under the
laws of the state of California, and is properly licensed and in good standing
in, and where necessary to maintain its rights and privileges have complied with
the fictitious name statute of, every jurisdiction in which it is doing
business, except where the failure to be licensed or be in good standing or
comply with any such statute will not have a material adverse effect on the
ability of the Guarantor to perform its obligations hereunder or under any
instrument or agreement required hereunder;
(b) The execution, delivery and performance of this Guaranty and any
instrument or agreement required hereunder are within the power of the
Guarantor, have been duly authorized by, and are not in conflict with the terms
of any charter, by-law or other organization papers of, the Guarantor;
(c) No approval, consent, exemption or other action by, or notice to or
filing with, any governmental authority is necessary in connection with the
execution, delivery, performance or enforcement of this Guaranty or any
instrument or agreement required hereunder, except as may have been obtained and
certified copies of which have been delivered to Agent and the Guarantied
Parties;
(d) There is no law, rule or regulation, nor is there any judgment, decree
or order of any court or governmental authority binding on the Guarantor, which
would be contravened by the execution, delivery, performance or enforcement of
this Guaranty or any instrument or agreement required hereunder;
(e) This Guaranty is a legal, valid and binding agreement of the Guarantor,
enforceable against the Guarantor in accordance with its terms, and any
instrument or agreement required hereunder, when executed and delivered, will be
similarly legal, valid, binding and
F-2-5
enforceable, except where enforceability thereof may be limited by applicable
law relating to bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by the application of general
principles of equity;
(f) There is no action, suit or proceeding pending against, or to the
knowledge of the Guarantor, threatened against or affecting the Guarantor,
before any court or arbitrator or any governmental body, agency or official
which in any manner draws into question the validity or enforceability of this
Guaranty; and
(g) The execution, delivery and performance by the Guarantor of this
Guaranty does not constitute, to the best knowledge of Guarantor, a "fraudulent
conveyance," "fraudulent obligation" or "fraudulent transfer" within the
meanings of the Uniform Fraudulent Conveyances Act or Uniform Fraudulent
Transfer Act, as enacted in any jurisdiction.
11. Any one of the following events shall constitute an "Event of
Bankruptcy:"
(a) The Guarantor or the Company is generally not paying or admits in
writing its inability to pay its debts as such debts become due, or files any
petition or action for relief under any bankruptcy, reorganization, insolvency,
or moratorium law or any other law for the relief of, or relating to, debtors,
now or hereafter in effect, or makes any assignment for the benefit of
creditors, or takes any corporate action in furtherance of any of the foregoing;
(b) An involuntary petition is filed against the Guarantor or the Company
under any bankruptcy statute now or hereafter in effect, or a custodian,
receiver, trustee, assignee for the benefit of creditors (or other similar
official) is appointed to take possession, custody or control of any property of
the Guarantor or the Company, unless such petition or appointment is set aside
or withdrawn or ceases to be in effect within sixty (60) days from the date of
said filing or appointment.
Upon the occurrence of an Event of Bankruptcy, without notice or demand,
any and all of the Guarantor's obligations under this Guaranty shall become due,
payable and enforceable against the Guarantor whether or not the Obligations are
then due and payable.
12. All notices and other communications hereunder shall be delivered, in
the manner and with the effect provided in the Credit Agreement and, in the case
of the Guarantor, in care of the Company.
13. This Guaranty shall be binding upon the successors and assigns of the
Guarantor and shall inure to the benefit of the Agent's and the Guarantied
Parties' successors and assigns. This Guaranty cannot be assigned by the
Guarantor without the prior written consent of the Agent and the Guarantied
Parties which shall be in the Agent's and the Guarantied Parties' sole and
absolute discretion.
14. No failure or delay by the Agent or the Guarantied Parties in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
F-2-6
15. The Guarantor shall pay (a) all reasonable out-of-pocket expenses of
the Agent and the Guarantied Parties, including reasonable fees and
disbursements of counsel (including the allocated cost of inhouse counsel and
staff) for the Agent, in connection with any waiver or consent hereunder or any
amendment hereof and (b) all out-of-pocket expenses incurred by the Agent and
the Guarantied Parties, including fees and disbursements of counsel (including
the allocated cost of inhouse counsel and staff), in connection with the
enforcement of this Guaranty (whether or not suit is brought).
16. No modification of this Guaranty shall be effective for any purpose
unless it is in writing and executed by an officer of the Agent authorized to do
so. This Guaranty merges all negotiations, stipulations and provisions relating
to the subject matter of this Guaranty which preceded or may accompany the
execution of this Guaranty.
17. This Guaranty and the rights and obligations of the parties hereunder
shall be construed in accordance with and be governed by the laws of the State
of California without reference to the principles of conflicts of laws thereof.
18. This Guaranty may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
19. Terms not defined herein shall have the meanings assigned to them in
the Credit Agreement.
20. Any indebtedness of the Company now or hereafter held by Guarantor is
hereby subordinated to the indebtedness of the Company to the Agent and the
Guarantied Parties; and such indebtedness of the Company to the Guarantor if the
Agent so requests shall be collected, enforced and received by Guarantor as
trustee for the Agent and the Guarantied Parties and be paid over to the Agent
on account of the indebtedness of the Company to the Agent and the Guarantied
Parties but without reducing or affecting in any manner the liability of the
Guarantor under the other provisions of this guaranty.
F-2-7
21. It is not necessary for the Guarantied Parties to inquire into the
powers of any Guaranteed Party or of the officers, directors or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
Executed as of the 13th day of March 1997.
MATTEL SALES CORP.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
BANK OF AMERICA NATIONAL TRUST
SAVINGS ASSOCIATION, AS AGENT
By:
----------------------------
Vice President
F-2-8
EXHIBIT G-1
▇▇▇▇▇▇-▇▇▇▇▇, INC.
FIRST AMENDED AND RESTATED SUBORDINATION AGREEMENT
TO: Bank of America National Trust
and Savings Association, as Agent
Gentlemen:
The undersigned, ___________________________, a _________________
corporation (hereinafter referred to as "Creditor") is a creditor of ▇▇▇▇▇▇-
▇▇▇▇▇, Inc., a Delaware corporation (hereinafter referred to as "▇▇▇▇▇▇-
▇▇▇▇▇").
A. Concurrently herewith, Mattel, Inc. (the "Company"), the Banks named
therein (the "Domestic Banks") and Bank of America, as agent (the "Agent"), are
entering into a First Amended and Restated Credit Agreement dated as of even
date herewith (said credit agreement, as it may hereafter be amended, continued,
renewed, supplemented, restated or otherwise modified from time to time, is
referred to herein as the "Credit Agreement"). Terms not defined herein have
the meanings assigned to them in the Credit Agreement.
B. Certain Subsidiaries of the Company that are incorporated in a
jurisdiction outside of the United States of America (the "Foreign
Subsidiaries") have entered, or may from time to time enter, into credit
facilities with one or more Banks or foreign affiliates of the Banks (the
"Foreign Banks"), and the Company has guarantied, or may from time to time
guaranty, the obligations of such Foreign Subsidiaries thereunder pursuant to
one or more guaranties (the Foreign Subsidiary Guaranties"). From time to time
▇▇▇▇▇ in their individual capacity may issue letters of credit for the account
of the Company outside the Credit Agreement (the "Company Letters of Credit").
The Domestic Banks and the Foreign Banks are collectively referred to herein as
the "Banks."
C. Concurrently herewith ▇▇▇▇▇▇-▇▇▇▇▇ is entering into a Continuing
Guaranty dated as of even date herewith guarantying all obligations of every
nature of the Company and Mattel Sales from time to time owed under or in
respect of the Credit Agreement, the loans thereunder, the other Loan Documents
(as defined therein) and the Foreign Subsidiary Guaranties and the Company
Letters of Credit.
D. This Agreement amends and restates the Subordination Agreement dated as
of March 10, 1995 delivered by the Creditor.
E. It is a condition precedent to the effectiveness of the Credit
Agreement that Creditor enter into this ▇▇▇▇▇▇-▇▇▇▇▇ Subordination Agreement.
For the purpose of inducing the Banks to grant, continue or renew such financial
accommodations to the Company, and in consideration thereof, Creditor agrees as
follows:
1. Any and all claims of Creditor against ▇▇▇▇▇▇-▇▇▇▇▇, now or hereafter
existing, are, and shall be at all times, subject and subordinate to any and all
claims, now or hereafter existing
G-1-1
which ▇▇▇▇▇ or Agent may have against ▇▇▇▇▇▇-▇▇▇▇▇ (including any claim by ▇▇▇▇▇
or Agent for interest accruing after any assignment for the benefit of creditors
by ▇▇▇▇▇▇-▇▇▇▇▇ or the institution by or against ▇▇▇▇▇▇-▇▇▇▇▇ of any proceedings
under the Bankruptcy Act, or any claim by Bank for any such interest which would
have accrued in the absence of such assignment or the institution of such
proceedings).
2. Creditor agrees not to sue upon, or to collect, or to receive payment
of the principal or interest of any claim or claims now or hereafter existing
which Creditor may hold against ▇▇▇▇▇▇-▇▇▇▇▇, and not to sell, assign, transfer,
pledge, hypothecate, or encumber such claim or claims except subject expressly
to this Agreement, and not to file or join in any petition to commence any
proceeding under the Bankruptcy Act, nor to take any lien or security on any of
▇▇▇▇▇▇-▇▇▇▇▇' property, real or personal, so long as any claim of Banks or Agent
against ▇▇▇▇▇▇-▇▇▇▇▇ shall exist.
3. In case of any assignment for the benefit of creditors by ▇▇▇▇▇▇-▇▇▇▇▇
or in case any proceedings under the Bankruptcy Act are instituted by or against
▇▇▇▇▇▇-▇▇▇▇▇, or in case of the appointment of any receiver for ▇▇▇▇▇▇-▇▇▇▇▇'▇
business or assets, or in case of any dissolution or winding up of the affairs
of ▇▇▇▇▇▇-▇▇▇▇▇: (a) Creditor and any assignee, trustee in bankruptcy,
receiver, debtor in possession or other person or persons in charge are hereby
directed to pay to Agent on behalf of itself and the Banks the full amount of
Banks' and Agent's claims against ▇▇▇▇▇▇-▇▇▇▇▇ (including interest to the date
of payment) before making any payment of principal or interest to Creditor under
any indebtedness, and insofar as may be necessary for that purpose, Creditor
hereby assigns and transfers to Agent on behalf of itself and the Banks all
security or the proceeds thereof and all rights to any payments, dividends or
other distributions, and (b) Creditor hereby irrevocably constitutes and
appoints Agent its true and lawful attorney to act in its name and stead: (i)
to file the appropriate claim or claims on behalf of Creditor if Creditor does
not do so prior to 30 days before the expiration of the time to file claims in
such proceeding and if Agent elects at its sole discretion to file such claim or
claims and (ii) to accept or reject any plan of reorganization or arrangement on
behalf of Creditor, and to otherwise vote Creditor's claim in respect of any
indebtedness now or hereafter owing from ▇▇▇▇▇▇-▇▇▇▇▇ to Creditor in any manner
Agent deems appropriate for its and the Banks' benefit and protection.
4. Agent on behalf of itself and the Banks is hereby authorized by
Creditor to from time to time: (a) renew, compromise, extend, accelerate or
otherwise change the time of payment, or any other terms, of any existing or
future claim of Banks against ▇▇▇▇▇▇-▇▇▇▇▇ or the Company or any part thereof,
(b) increase or decrease any rate of interest payable thereon, (c) exchange,
enforce, waive, release, or fail to perfect any security therefor, (d) apply
such security and direct the order or manner of sale thereof in such manner as
Agent acting on its behalf and on behalf of the Banks may at its discretion
determine, (e) release ▇▇▇▇▇▇-▇▇▇▇▇, the Company or any other guarantor of any
indebtedness of the Company from liability, and (f) make optional future
advances to the Company, all without notice to Creditor and without affecting
the subordination provided by this Agreement.
5. Creditor acknowledges and agrees that Creditor shall have the sole
responsibility for obtaining from ▇▇▇▇▇▇-▇▇▇▇▇ or the Company such information
concerning ▇▇▇▇▇▇-▇▇▇▇▇'▇ or the Company's financial condition or business
operations as Creditor may require, and that
G-1-2
neither the Agent nor the Banks has any duty at any time to disclose to Creditor
any information relating to the business operations or financial condition of
▇▇▇▇▇▇-▇▇▇▇▇ or the Company.
6. On request of Agent, Creditor shall deliver to the Agent the original
of any promissory note or other evidence of any existing or future indebtedness
of ▇▇▇▇▇▇-▇▇▇▇▇ to Creditor, and mark same with a conspicuous legend which reads
substantially as follows:
"THIS PROMISSORY NOTE IS SUBORDINATED TO ANY PRESENT OR FUTURE
INDEBTEDNESS OWING FROM THE MAKER TO BANK OF AMERICA NT&SA, AS AGENT,
AND ITS ASSIGNS, AND MAY BE ENFORCED ONLY IN ACCORDANCE WITH THAT
CERTAIN SUBORDINATION AGREEMENT DATED MARCH 13, 1997 BETWEEN [CREDITOR]
AND BANK OF AMERICA NT&SA, AS AGENT."
7. In the event that any payment or any cash or noncash distribution is
made to Creditor in violation of the terms of this Agreement, Creditor shall
receive same in trust for the benefit of Banks and Agent, and shall forthwith
remit it to Agent in the form in which it was received, together with such
endorsements or documents as may be necessary to effectively negotiate or
transfer same to Agent and/or Banks.
8. For violation of this Agreement, Creditor shall be liable for all loss
and damage sustained by reason of such breach, and upon any such violation
Agent, acting on behalf of the Banks, may accelerate the maturity of any of its
existing or future claims against ▇▇▇▇▇▇-▇▇▇▇▇.
9. This Agreement shall be binding upon the heirs, successors and assigns
of ▇▇▇▇▇▇-▇▇▇▇▇, Creditor and Bank. This Agreement and any existing or future
claim of Agent or the Banks against ▇▇▇▇▇▇-▇▇▇▇▇ may be assigned by Agent, the
Banks, in whole or in part, without notice to ▇▇▇▇▇▇-▇▇▇▇▇ or Creditor.
10. Notwithstanding the provisions of Section 2, so long as there has been
no occurrence of any default under any agreement between ▇▇▇▇▇▇-▇▇▇▇▇ or the
Company and the Agent and the Banks, now existing or hereafter entered into,
Creditor may receive regularly scheduled principal and interest payments on any
indebtedness.
--------------------------------
Creditor
By:
-----------------------------
G-1-3
ACCEPTANCE OF SUBORDINATION AGREEMENT BY ▇▇▇▇▇▇-▇▇▇▇▇
The undersigned being the company named in the foregoing Subordination
Agreement, hereby accepts and consents thereto and agrees to be bound by all the
provisions thereof and to recognize all priorities and other rights granted
thereby to Bank of America National Trust and Savings Association, as Agent, and
the Banks (as defined therein) and their respective successors and assigns, and
to perform in accordance therewith.
Dated:______________________ ▇▇▇▇▇▇-▇▇▇▇▇, INC.
By:
-----------------------------
G-1-4
EXHIBIT G-2
MATTEL SALES CORP.
FIRST AMENDED AND RESTATED SUBORDINATION AGREEMENT
TO: Bank of America National Trust
and Savings Association, as Agent
Gentlemen:
The undersigned, ___________________________, a _________________
corporation (hereinafter referred to as "Creditor") is a creditor of Mattel
Sales Corp., a California corporation (hereinafter referred to as "Mattel
Sales").
A. Concurrently herewith, Mattel, Inc. (the "Company"), the Banks named
therein (the "Domestic Banks") and Bank of America, as agent (the "Agent"), are
entering into a First Amended and Restated Credit Agreement dated as of even
date herewith (said credit agreement, as it may hereafter be amended, continued,
renewed, supplemented, restated or otherwise modified from time to time, is
referred to herein as the "Credit Agreement"). Terms not defined herein have
the meanings assigned to them in the Credit Agreement.
B. Certain Subsidiaries of the Company that are incorporated in a
jurisdiction outside of the United States of America (the "Foreign
Subsidiaries") have entered, or may from time to time enter, into credit
facilities with one or more Banks or foreign affiliates of the Banks (the
"Foreign Banks"), and the Company has guarantied, or may from time to time
guaranty, the obligations of such Foreign Subsidiaries thereunder pursuant to
one or more guaranties (the Foreign Subsidiary Guaranties"). From time to time
▇▇▇▇▇ in their individual capacity may issue letters of credit for the account
of the Company outside the Credit Agreement (the "Company Letters of Credit").
The Domestic Banks and the Foreign Banks are collectively referred to herein as
the "Banks."
C. Concurrently herewith Mattel Sales is entering into a Continuing
Guaranty dated as of even date herewith guarantying all obligations of every
nature of the Company and ▇▇▇▇▇▇-▇▇▇▇▇ from time to time owed under or in
respect of the Credit Agreement, the loans thereunder, the other Loan Documents
(as defined therein) and the Foreign Subsidiary Guaranties and the Company
Letters of Credit.
D. This Agreement amends and restates the Subordination Agreement dated as
of March 10, 1995 delivered by the Creditor.
E. It is a condition precedent to the effectiveness of the Credit
Agreement that Creditor enter into this Mattel Sales Subordination Agreement.
For the purpose of inducing the Banks to grant, continue or renew such financial
accommodations to the Company, and in consideration thereof, Creditor agrees as
follows:
1. Any and all claims of Creditor against Mattel Sales, now or hereafter
existing, are, and shall be at all times, subject and subordinate to any and all
claims, now or hereafter existing
G-2-1
which ▇▇▇▇▇ or Agent may have against ▇▇▇▇▇▇ ▇▇▇▇▇ (including any claim by ▇▇▇▇▇
or Agent for interest accruing after any assignment for the benefit of creditors
by ▇▇▇▇▇▇ ▇▇▇▇▇ or the institution by or against Mattel Sales of any proceedings
under the Bankruptcy Act, or any claim by Bank for any such interest which would
have accrued in the absence of such assignment or the institution of such
proceedings).
2. Creditor agrees not to sue upon, or to collect, or to receive payment
of the principal or interest of any claim or claims now or hereafter existing
which Creditor may hold against Mattel Sales, and not to sell, assign, transfer,
pledge, hypothecate, or encumber such claim or claims except subject expressly
to this Agreement, and not to file or join in any petition to commence any
proceeding under the Bankruptcy Act, nor to take any lien or security on any of
Mattel Sales' property, real or personal, so long as any claim of Banks or Agent
against Mattel Sales shall exist.
3. In case of any assignment for the benefit of creditors by ▇▇▇▇▇▇ ▇▇▇▇▇
or in case any proceedings under the Bankruptcy Act are instituted by or against
▇▇▇▇▇▇ ▇▇▇▇▇, or in case of the appointment of any receiver for ▇▇▇▇▇▇ ▇▇▇▇▇'s
business or assets, or in case of any dissolution or winding up of the affairs
of ▇▇▇▇▇▇ ▇▇▇▇▇: (a) Creditor and any assignee, trustee in bankruptcy,
receiver, debtor in possession or other person or persons in charge are hereby
directed to pay to Agent on behalf of itself and the Banks the full amount of
Banks' and Agent's claims against Mattel Sales (including interest to the date
of payment) before making any payment of principal or interest to Creditor under
any indebtedness, and insofar as may be necessary for that purpose, Creditor
hereby assigns and transfers to Agent on behalf of itself and the Banks all
security or the proceeds thereof and all rights to any payments, dividends or
other distributions, and (b) Creditor hereby irrevocably constitutes and
appoints Agent its true and lawful attorney to act in its name and stead: (i)
to file the appropriate claim or claims on behalf of Creditor if Creditor does
not do so prior to 30 days before the expiration of the time to file claims in
such proceeding and if Agent elects at its sole discretion to file such claim or
claims and (ii) to accept or reject any plan of reorganization or arrangement on
behalf of Creditor, and to otherwise vote Creditor's claim in respect of any
indebtedness now or hereafter owing from Mattel Sales to Creditor in any manner
Agent deems appropriate for its and the Banks' benefit and protection.
4. Agent on behalf of itself and the Banks is hereby authorized by
Creditor to from time to time: (a) renew, compromise, extend, accelerate or
otherwise change the time of payment, or any other terms, of any existing or
future claim of Banks against Mattel Sales or the Company or any part thereof,
(b) increase or decrease any rate of interest payable thereon, (c) exchange,
enforce, waive, release, or fail to perfect any security therefor, (d) apply
such security and direct the order or manner of sale thereof in such manner as
Agent acting on its behalf and on behalf of the Banks may at its discretion
determine, (e) release Mattel Sales, the Company or any other guarantor of any
indebtedness of the Company from liability, and (f) make optional future
advances to the Company, all without notice to Creditor and without affecting
the subordination provided by this Agreement.
5. Creditor acknowledges and agrees that Creditor shall have the sole
responsibility for obtaining from Mattel Sales or the Company such information
concerning Mattel Sales's or the Company's financial condition or business
operations as Creditor may require, and that
G-2-2
neither the Agent nor the Banks has any duty at any time to disclose to Creditor
any information relating to the business operations or financial condition of
Mattel Sales or the Company.
6. On request of Agent, Creditor shall deliver to the Agent the original
of any promissory note or other evidence of any existing or future indebtedness
of Mattel Sales to Creditor, and mark same with a conspicuous legend which reads
substantially as follows:
"THIS PROMISSORY NOTE IS SUBORDINATED TO ANY PRESENT OR FUTURE
INDEBTEDNESS OWING FROM THE MAKER TO BANK OF AMERICA NT&SA, AS AGENT,
AND ITS ASSIGNS, AND MAY BE ENFORCED ONLY IN ACCORDANCE WITH THAT
CERTAIN SUBORDINATION AGREEMENT DATED MARCH 13, 1997 BETWEEN [CREDITOR]
AND BANK OF AMERICA NT&SA, AS AGENT."
7. In the event that any payment or any cash or noncash distribution is
made to Creditor in violation of the terms of this Agreement, Creditor shall
receive same in trust for the benefit of Banks and Agent, and shall forthwith
remit it to Agent in the form in which it was received, together with such
endorsements or documents as may be necessary to effectively negotiate or
transfer same to Agent and/or Banks.
8. For violation of this Agreement, Creditor shall be liable for all loss
and damage sustained by reason of such breach, and upon any such violation
Agent, acting on behalf of the Banks, may accelerate the maturity of any of its
existing or future claims against ▇▇▇▇▇▇ ▇▇▇▇▇.
9. This Agreement shall be binding upon the heirs, successors and assigns
of ▇▇▇▇▇▇ ▇▇▇▇▇, Creditor and Bank. This Agreement and any existing or future
claim of Agent or the Banks against ▇▇▇▇▇▇ ▇▇▇▇▇ may be assigned by Agent, the
Banks, in whole or in part, without notice to Mattel Sales or Creditor.
10. Notwithstanding the provisions of Section 2, so long as there has been
no occurrence of any default under any agreement between Mattel Sales or the
Company and the Agent and the Banks, now existing or hereafter entered into,
Creditor may receive regularly scheduled principal and interest payments on any
indebtedness.
---------------------------
Creditor
By:
------------------------
G-2-3
ACCEPTANCE OF SUBORDINATION AGREEMENT BY ▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned being the company named in the foregoing Subordination
Agreement, hereby accepts and consents thereto and agrees to be bound by all the
provisions thereof and to recognize all priorities and other rights granted
thereby to Bank of America National Trust and Savings Association, as Agent, and
the Banks (as defined therein) and their respective successors and assigns, and
to perform in accordance therewith.
Dated:___________________ MATTEL SALES CORP.
By:
---------------------------
G-2-1
EXHIBIT H
CHANGE IN COMMITMENTS NOTICE
For Credit Agreement and
Receivables Purchase Agreement]
TO: Bank of America National Trust
and Savings Association, as Agent
NationsBank of Texas, N.A., as Receivables Purchase Agent
Gentlemen:
Pursuant to (a) Section 2.5 of that certain Second Amended and Restated
Credit Agreement dated as of March 11, 1998, as amended (the "Credit Agreement")
among Mattel, Inc., a Delaware corporation (the "Company"), the Banks named
therein (the "Banks") and Bank of America National Trust and Savings
Association, as Agent (the "Agent") and/or [ (b)that certain Receivables
Purchase Agreement dated as of March 11, 1998, as amended, among Mattel Sales
Corp. and ▇▇▇▇▇▇-▇▇▇▇▇, Inc., as transferors, the Company, as guarantor and
servicer, the purchasers named therein, and NationsBank of Texas, N.A., as the
Receivables Purchase Agent,] please effect the following changes in the
Purchasers' Investment Limit and/or the Aggregate Loan Commitment:
1. EFFECTIVE DATE OF CHANGE:
____________________, 19__
2. REQUESTED CHANGE:
a. Please permanently reduce the [Purchasers' Investment Limit]
------
[Aggregate Loan Commitment] by $ __________ .
---------------------
b. Please permanently terminate the [Purchasers' Investment
---------
Limit] [Aggregate Loan Commitment].
c. Please reallocate $ _____ from the [Purchasers'
---------- ----------------
Investment Limit] [Aggregate Loan Commitment] to the [Aggregate Loan
--
Commitment] [Purchasers' Investment Limit].
H-1
3. SUMMARY OF CHANGES:
BEFORE ABOVE CHANGES AFTER ABOVE CHANGES
Aggregate Loan Commitment $________________ $________________
Aggregate Outstandings under $________________ $________________
Credit Agreement
Purchasers' Investment Limit $________________ $________________
Purchasers' Investments $________________ $________________
Unless otherwise defined herein, capitalized terms used herein have the
meanings assigned to them in the Agreement.
DATED:
MATTEL, INC.
By:
_________________________
Name:
_________________________
Title:
_____________________
*Signature required only MATTEL SALES CORP.*
when Purchasers' Investment
Limit changed By:
_________________________
Name:
_________________________
Title:
______________________
*Signature required only ▇▇▇▇▇▇-▇▇▇▇▇, INC.*
when Purchasers' Investment
Limit changed By:
_________________________
Name:
______________________
Title:
______________________
H-2
EXHIBIT I
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_________, 19
TO: Bank of America National Trust
and Savings Association, as Agent
Reference is made to that certain Second Amended and Restated Credit
Agreement dated as of March 11, 1998 (the "Credit Agreement"; capitalized terms
used herein shall have the meanings assigned to them in the Credit Agreement),
among Mattel, Inc., a Delaware corporation (the "Company"), the Banks named
therein (the "Banks") and Bank of America National Trust and Savings
Association, as Agent (the "Agent").
1. We hereby give you notice of, and request your consent to, the
assignment by _____________ (the "Assignor") to _______________ (the "Assignee")
of ____% of the right, title and interest of the Assignor in and to the Loan
Documents, including without limitation the right, title and interest of the
Assignor in and to the Loan Commitment of the Assignor, and all outstanding
Loans made by the Assignor. Before giving effect to such assignment:
(a) the aggregate amount of the Assignor's Loan Commitment is
$___________; and
(b) as of the above date, the aggregate principal amount of its
outstanding Loans is $_____________.
2. The Assignor hereby represents and warrants that it has complied with
the requirements of Section 10.1 of the Credit Agreement in connection with this
assignment, including paying, or causing the payment of, the assignment fee
thereunder to the Agent and concurrently assigning a ratable portion in the
[Receivables Purchase Agreement].
3. The Assignee agrees that, upon receiving your consent to such
assignment and from and after ______________, the Assignee will be bound by the
terms of the Loan Documents, with respect to the interest in the Loan Documents
assigned to it as specified above, as fully and to the same extent as if the
Assignee were the Bank originally holding such interest in the Loan Documents.
4. The following administrative details apply to the Assignee:
(a) Designated Offshore Market Office:_____________________
I-1
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:___________________
Name:_________________
Title:________________
[NAME OF ASSIGNEE]
By:___________________
Name:_________________
Title:________________
We hereby consent to the
foregoing assignment:
MATTEL, INC.
By:___________________
Title:________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:___________________
Vice President
I-2
SCHEDULE 1.1
------------
BANK COMMITMENTS
BANK Pro Rata Loan Purchaser Facilities
Share Commitment Commitment Commitment
Bank of America National Trust and Savings Association 12.00% $ 84,000,000 $ 36,000,000 $ 120,000,000
-------------------------------------------------------------------------------------------------------------------
NationsBank of Texas, N.A. 9.00 63,000,000 27,000,000 90,000,000
The Chase Manhattan Bank 9.00 63,000,000 27,000,000 90,000,000
-------------------------------------------------------------------------------------------------------------------
ABN AMRO Bank N.V. 7.50 52,500,000 22,500,000 75,000,000
BankBoston, N.A. 7.50 52,500,000 22,500,000 75,000,000
Citicorp USA, Inc. 7.50 52,500,000 22,500,000 75,000,000
Toronto Dominion (Texas), Inc. 7.50 52,500,000 22,500,000 75,000,000
-------------------------------------------------------------------------------------------------------------------
Banque Nationale de Paris, Los Angeles Agency 5.00 35,000,000 15,000,000 50,000,000
Dresdner Bank AG, New York Branch and Grand Cayman Branch 5.00 35,000,000 15,000,000 50,000,000
Istituto Bancario San Paolo di Torino SpA 5.00 35,000,000 15,000,000 50,000,000
Manufacturers & Traders Trust Co. 5.00 35,000,000 15,000,000 50,000,000
PNC Bank, National Association 5.00 35,000,000 15,000,000 50,000,000
Societe Generale 5.00 35,000,000 15,000,000 50,000,000
Union Bank of California, N.A. 5.00 35,000,000 15,000,000 50,000,000
-------------------------------------------------------------------------------------------------------------------
Northern Trust Company 2.50 17,500,000 7,500,000 25,000,000
The Industrial Bank of Japan, Limited, Los Angeles Agency 2.50 17,500,000 7,500,000 25,000,000
===== ============ ============ =============
TOTAL 100% $700,000,000 $300,000,000 $1,000,000,00
1
SCHEDULE 5.3
MATERIAL SUBSIDIARIES OF THE COMPANY
Percentage of
Voting Securities
Subsidiaries/1/ Jurisdiction in Which Parent Owned Directly or
Organized Indirectly By Parent
-----------------------------------------------------------------------------------------------------------
Arco Toys, Limited Hong Kong Mattel, Inc. 100%
▇▇▇▇▇▇-▇▇▇▇▇, Inc. Delaware Mattel, Inc. 100%
Mattel Europa B.V. The Netherlands Mattel, Inc. 100%
Mattel Holding, Inc. Delaware Mattel, Inc. 100%
Mattel Sales Corp. California Mattel, Inc. 100%
Tyco Preschool Toys, Inc. Delaware Mattel, Inc. 100%
/1/All of the subsidiaries listed above are included in the Consolidated
Financial Statements. These subsidiaries meet the criteria defined in
Rule 1-02(w) of Regulation S-X.
1
SCHEDULE 5.11
MATERIAL LITIGATION
1. ▇▇▇▇▇▇▇▇▇ v. Mattel, Inc. (Case No. YC 025 008) filed October 13, 1995
------------------------
in the Superior Court of the State of California, County of Los Angeles.
2. Federal and state litigation related to In re Toys "R" Us, Inc. (FTC
----------------------
Docket No. 9278).
1
SCHEDULE 7.2
CERTAIN LIENS
1. Liens for taxes, assessments or governmental charges or claims the
payment of which is not at the time required by Section 6.3;
2. Statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested in good faith,
if such reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor;
3. Liens (other than any Lien imposed by ERISA) incurred or deposits made
in the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money);
4. Any attachment or judgment Lien, if the judgment or order it secures is
less than $20,000,000, or $40,000,000 in the aggregate for all such judgments or
orders in any calendar year; or any other attachment or judgment Lien, if the
judgment or order it secures shall, within 45 days after the entry thereof, have
been discharged or execution thereof stayed pending appeal, or shall have been
discharged within 45 days after the expiration of any such stay;
5. Leases or subleases granted to others not interfering with the ordinary
conduct of the business of the Company or any of its Subsidiaries;
6. Easements, rights-of-way, restrictions, minor defects or irregularities
in title and other similar charges or encumbrances not interfering with the
ordinary conduct of the business of the Company or any of its Subsidiaries; and
7. Any interest or title of a lessor under any lease.
-1-
SCHEDULE 10.6
ADDRESSES FOR NOTICES AND LENDING OFFICES
COMPANY
Mattel, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
El Segundo, California 90010
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President and Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the Corporate Counsel
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT
Notices of Borrowing and Notices of Conversion/Continuation):
Bank of America National Trust
and Savings Association
Agency Management Services #▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Bank of America National Trust
and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Vice President
Agency Management - Los Angeles #20529
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-1-
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS A BANK
Domestic and Eurodollar Lending Office:
Payment Services Operations #▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone:(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ or (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Bank of America National Trust
and Savings Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Director
Credit Products #5618
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-2-
NATIONSBANK OF TEXAS, N.A.
Domestic and Eurodollar Lending Office and Notices:
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-3714
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and Notices of
Conversion/Continuation):
NationsBank of Texas, N.A.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Senior Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
THE CHASE MANHATTAN BANK
Domestic and Eurodollar Lending Office and Notices:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
The Chase Manhattan Bank
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Vice President-Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-3-
BANKBOSTON, N.A.
Domestic and Eurodollar Lending Office and Notices:
BankBoston, ▇.▇.
▇.▇. Corporate Division, Mail Stop 01-09-06
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
BankBoston,. ▇.▇.
▇.▇. Corporate Division, Mail Stop 01-09-06
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PNC BANK, NATIONAL ASSOCIATION
Domestic and Eurodollar Lending Office and Notices:
PNC Bank, National Association
Corporate Banking Loan Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Stop P-1-▇▇▇▇-06-1
Pittsburgh, PA 15222-2707
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and Notices of
Conversion/Continuation):
PNC Bank, National Association
Corporate Banking Department
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ Floor
Mail Stop P-1-▇▇▇▇-02-2
Pittsburgh, PA 15222-2707
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-4-
TORONTO DOMINION (TEXAS), INC.
Domestic and Eurodollar Lending Office and Notices:
Toronto Dominion (Texas), Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Toronto Dominion (Texas), Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Director - Corporate Accounting
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ABN AMRO BANK N.V.
Domestic and Eurodollar Lending Office and Notices:
ABN AMRO Bank N.V.
Los Angeles International Branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Loan Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
Operations Manager
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-5-
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
ABN AMRO Bank N.V.
Los Angeles International Branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Group Vice President/Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
UNION BANK OF CALIFORNIA, N.A.
Domestic and Eurodollar Lending Office and Notices:
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Union Bank of California, N.A.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANQUE NATIONALE DE PARIS
Domestic and Eurodollar Lending Office and Notices:
Banque Nationale de Paris
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-6-
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Banque Nationale de Paris
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
DRESDNER BANK AG, NEW YORK BRANCH AND
Grand Cayman Branch
Domestic and Eurodollar Lending Office and Notices:
Dresdner Bank AG
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Credit Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Dresdner Bank AG
Los Angeles Agency
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-7-
ISTITUTO BANCARIO SAN PAOLO DI TORINO SPA
Domestic and Eurodollar Lending Office and Notices:
Istituto Bancario San Paolo di Torino SpA
New York Branch, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Istituto Bancario San Paolo di Torino SpA
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
FVP and Representative
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
MANUFACTURERS & TRADERS TRUST CO.
Domestic and Eurodollar Lending Office and Notices:
Manufacturers & Traders Trust Co.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ 14203-1495
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Manufacturers & Traders Trust Co.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ 14203-1495
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-8-
THE INDUSTRIAL BANK OF JAPAN, LIMITED
Los Angeles Agency
Domestic and Eurodollar Lending Office:
The Industrial Bank of Japan, Limited
Los Angeles Agency
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇/▇▇▇ ▇▇▇
Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇/6498
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
The Industrial Bank of Japan, Limited
Los Angeles Agency
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CITICORP USA, INC.
Domestic and Eurodollar Lending Office:
Citibank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Citicorp Securities Markets, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-9-
THE NORTHERN TRUST COMPANY
Domestic and Eurodollar Lending Office and Notices:
The Northern Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SOCIETE GENERALE
Domestic and Eurodollar Lending Office:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Notices of Borrowing and
Notices of Conversion/Continuation):
Societe Generale
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-10-
CONSENT OF MATTEL SALES CORP. AND ▇▇▇▇▇▇ PRICE, INC.
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
The undersigned Mattel Sales Corp. and ▇▇▇▇▇▇-▇▇▇▇▇, Inc. hereby consent to
the amendment and restatement of the First Amended and Restated Credit Agreement
dated as of March 13, 1997 among Mattel, Inc., the Banks named therein and Bank
of America National Trust and Savings Association, as Agent on the terms and
conditions set forth in the Second Amended and Restated Credit Agreement dated
as of March 11, 1998, among Mattel, Inc., the Banks named therein and Bank of
America National Trust and Savings Association, as Agent (the "Amended Credit
Agreement") and reaffirm their respective First Amended and Restated Continuing
Guaranties, dated as of March 13, 1997 to which it is a party and their consents
to the Mattel Sales Subordination Agreement and ▇▇▇▇▇▇ Price Subordination
Agreement, respectively, (the "Subordination Agreements"), and represent and
warrant that (a) there is no defense, counterclaim or offset of any type or
nature under such Continuing Guaranties or the Subordination Agreements, (b) the
same remain in full, force and effect after giving effect hereto, and (c) all
references to "Credit Agreement" and "Loan Documents" in such Continuing
Guaranties and the Subordination Agreements shall be deemed references to the
Amended Credit Agreement and "Loan Documents" as defined in the Amended Credit
Agreement.
Dated: March 11, 1998
▇▇▇▇▇▇-▇▇▇▇▇, INC.
By:
----------------------
Name:
--------------------
Title:
-------------------
MATTEL SALES CORP.
By:
----------------------
Name:
--------------------
Title:
-------------------
-11-