EXHIBIT 10.4 SECOND AMENDMENT TO SECOND AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT SECOND AMENDMENT TO SECOND AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (this "Amendment"), dated as of March 11, 1996, by and among MATTEL SALES CORP., a California corporation, and FISHER-PRICE, INC., a Delaware corporation, as transferors (each, a "Transferor"), MATTEL, INC., a Delaware corporation, as guarantor and servicer (the "Guarantor" and the "Servicer"), THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF (collectively, other than Marine Midland Bank, the "Banks") and NATIONSBANK OF TEXAS, N.A., a national banking association, as agent on behalf of the Banks (the "Agent") amending that certain Second Amended and Restated Transfer and Administration Agreement dated as of March 10, 1995, by and among the Transferors, the Guarantor, the Servicer, the Banks and the Agent (the "Original Agreement" and said agreement as amended through and including the date hereof, the "Agreement"). PRELIMINARY STATEMENTS WHEREAS, the Transferors have requested that the Banks agree to certain amendments to the Original Agreement and subject to the terms and conditions hereof the Banks have agreed to such amendments. NOW, THEREFORE, the parties hereby agree as follows: SECTION 1. Definitions. All capitalized terms used herein which are not otherwise defined are used as defined in the Original Agreement. SECTION 2. Amendments to Original Agreement. The Original Agreement is hereby amended as follows: (a) The definition of "Commitment Commission Rate" in Section 1.1 of the Original Agreement shall be amended by deleting the chart contained in such definition and by replacing it with the following chart: Toys "R" Us, Inc.'s long-term senior unsecured debt ratings Commitment S&P/Moody's/Duff Commission ---------------------- ---------- AA-/Aa3/AA-or higher 8.0 bps A/A2/A or higher 10.0 bps A-/A3/A- 12.0 bps The Commitment Commission Rate upon effectiveness of this Amendment will be 8 basis points. (b) The definition of "Commitment Fee" shall be deleted in its entirety and shall be replaced with the following: "Commitment Fee" means a fee equal to the applicable Commitment Commission Rate payable by the Transferors on each Remittance Date on the difference between the average Facility Limit and the average Total Outstanding Investment on each day for the one- year period preceding such date. (c) The definition of "Facility Limit" in Section 1.1 of the Original Agreement shall be amended by deleting the reference to "$250,000,000" and by replacing it with "$400,000,000". (d) The definition of "Participation Rate" in Section 1.1 of the Original Agreement shall be amended by deleting the chart contained in such definition and by replacing it with the following: Toys "R" Us, Inc.'s long-term senior unsecured debt ratings Spread S&P/Moody's/Duff -------------------- -------- AA-/Aa3/AA-or higher 20.0 bps A/A2/A or higher 22.5 bps A-/A3/A- 30.0 bps 2 The spread upon effectiveness of this Amendment will be 20 basis points. (e) The definition of "Remittance Date" in Section 1.1 of the Original Agreement shall be amended by deleting the reference to "December 18, 1995, December 17, 1996, and December 17, 1997," and by replacing it with "December 17, 1996, December 17, 1997, December 17, 1998, December 17, 1999 and December 17, 2000". (f) The definition of "Termination Date" in Section 1.1 of the Original Agreement shall be amended by deleting the reference to "December 17, 1997" and by replacing it with "December 17, 2000". (g) The definition of "Weekly Report" in Section 1.1 of the Original Agreement shall be renamed the "Servicer's Certificate" in such Section and shall be renamed as such for all purposes of the Original Agreement, and the reference in such definition to "weekly basis" shall be deleted and replaced with the words "monthly basis and prior to a Transfer". (h) Section 2.2 of the Original Agreement shall be amended (i) by deleting both references to "80%" in such Section and by replacing them with "90%" and (ii) in the 25th line of such Section after the word "Notice") and before the period by inserting the words ", and such Transferor shall, at the time of delivery of the Transfer Notice, cause the Servicer to prepare and deliver to the Agent a Servicer's Certificate covering the period from the last day specified in the most recent Servicer's Certificate delivered to the Agent to and including the day prior to the date of delivery of the related Transfer Notice". (i) Section 2.8 of the Original Agreement shall be amended (A) in the third line thereof by deleting the words "each subsequent Monday" and by replacing them with the words "the first Monday of each calendar month" and (B) in the seventh line thereof by deleting the words "for the preceding calendar week" and by replacing them with the words "covering a period from the later to occur of (A) the first day of the preceding calendar month and (B) the date on which the last such Servicer's Certificate was delivered in connection with a 3 Transfer pursuant to Section 2.2, through and including the last day of preceding calendar month". (j) Section 2.6 shall be amended by deleting the references to "125%" therein and by replacing them with "111%". (k) Section 7.3(h) of the Original Agreement shall be amended by deleting the references to "80%" therein and by replacing them with "90%". (l) Exhibit A to the Agreement shall be amended by (i) deleting the reference to "80%" in the fifth line of the second paragraph of such Exhibit and by replacing it with "90%" and (ii) deleting the reference to "20%" in the first line of the third paragraph of such Exhibit and by replacing it with "10%". (m) Exhibit B to the Agreement shall be amended by (i) deleting the reference to "FORM OF WEEKLY SERVICER'S CERTIFICATE" on the first page of such Exhibit and by replacing it with "FORM OF SERVICER'S CERTIFICATE", (ii) deleting the second line of such Exhibit in its entirety and by replacing it with the words "For the Period beginning ______, 199_ and ending _______, 200_", (iii) deleting all references to "calendar week" and "week" in such Exhibit and by replacing them with the word "period" in each instance and (iv) deleting the reference to "125%" in the second line of paragraph 10 of such Exhibit and by replacing it with "111%". (n) Exhibit C to the Agreement shall be amended by (i) deleting all references to "week" in such Exhibit and by replacing them with the word "period" and (ii) deleting the reference to "80%" in the third line of paragraph 13 of such Exhibit and by replacing it with "90%". SECTION 3. Amendment to Bank Commitments; Funding. (a) By its execution of this Amendment, each Bank a party to the Original Agreement hereby agrees that its Bank Commitment shall be amended as evidenced on the signature page hereto related to such Bank. Each Bank, each Transferor, the Guarantor and the Servicer further acknowledges that, as amended hereby, (i) the Bank Com- 4 mitment with respect to Marine Midland Bank has been reduced to zero, and and Marine Midland Bank has been terminated as a party to the Agreement and (ii) Societe Generale has become a Bank party to the Agreement (with the Percentage and Bank Commitment specified on its signature page hereto and all other rights, interests and obligations of a Bank under the Agreement) as evidenced by its execution of this Amendment (without any further action required pursuant to Section 11.9 of the Agreement). (b) In furtherance of the foregoing, the Transferors agree on the date hereof to remit, in immediately available funds, $100,869,352.09 to the Agent in the manner specified in Section 2.7 of the Original Agreement, whereupon the Agent shall immediately distribute such funds to the Banks party to the Original Agreement (and Marine Midland Bank) pro rata based on each such Bank's (and Marine Midland Bank's) respective Percentage. Following such distribution, each Bank a party to this Amendment (and, after giving effect to this Amendment, the Agreement) shall pay to the Agent its Percentage of $100,000,000.00, which amount shall be immediately remitted by the Agent to the Transferors, in each case in accordance with the procedures described in the second paragraph of Section 2.2 of the Original Agreement. SECTION 4. Representations and Warranties. The Transferors hereby make to each of the Banks, on and as of the date hereof, all of the representations and warranties set forth in Section 3.1 of the Original Agreement, except to the extent that any such representation or warranty relates to an earlier date. In addition, Mattel, Inc. hereby makes to each of the Banks, on and as of the date hereof, all the representations and warranties set forth in Section 3.2 of the Original Agreement, except to the extent that any such representation or warranty relates to an earlier date. SECTION 5. Conditions Precedent. This Amendment shall not become effective until the Agent shall have received the following: (a) An opinion of counsel to the Transferors with respect to certain corporate matters and the enforceability against the Transferors of the Original Agreement as amended hereby, in form and substance acceptable to the Agent; 5 (b) An opinion of counsel to Servicer and the Guarantor with respect to certain corporate matters and the enforceability against each of the Servicer and the Guarantor of the Original Agreement as amended hereby, in form and substance acceptable to the Agent; (c) An executed copy of the Written Agreement, in form and substance acceptable to the Agent; (d) Certified copies of resolutions of the Board of Directors of the Transferors authorizing this Amendment and the transactions contemplated hereby; and (e) Executed counterparts of this Amendment. SECTION 6. Amendment and Waiver. No provision hereof may be amended, waived, supplemented, restated, discharged or terminated without the written consent of the parties hereto. SECTION 7. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of Governmental Rules provisions thereof. This Amendment together with the Original Agreement contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire Agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings. SECTION 8. Severability; Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Amendment. Any provisions of this Amendment which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 6 SECTION 9. Captions. The captions in this Amendment are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. SECTION 10. Ratification. Except as expressly affected by the provisions hereof, the Original Agreement as amended by this Amendment shall remain in full force and effect in accordance with its terms and ratified and confirmed by the parties hereto. On and after the date hereof, each reference in the Original Agreement to "this Agreement", "hereunder", "herein" or words of like import shall mean and be a reference to the Original Agreement as amended by this Amendment. 7 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date and year first above written. MATTEL SALES CORP., as Transferor By: /s/ William Stavro ------------------ Name: William Stavro Title: Vice President and Treasurer FISHER-PRICE, INC., as Transferor By: /s/ William Stavro ------------------ Name: William Stavro Title: Treasurer MATTEL, INC., as Guarantor and Servicer By: /s/ William Stavro ------------------ Name: William Stavro Title: Sr. Vice President and Treasurer NATIONSBANK OF TEXAS, N.A., as Agent By: /s/ Tom F. Scharfenberg ----------------------- Name: Tom F. Scharfenberg Title: Vice President 8 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 10.000000000 40,000,000 NATIONSBANK OF TEXAS, N.A. By: /s/ Tom F. Scharfenberg ----------------------- Name: Tom F. Scharfenberg Title: Vice President Notice Address: 444 S. Flower Street, Suite 4100 Los Angeles, California 90071 Attn: Tom F. Scharfenberg 9 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 12.500000000 50,000,000 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: /s/ Robert W. Troutman ---------------------- Name: Robert W. Troutman Title: Managing Director Notice Address: 555 Flower Street, 11th Floor Los Angeles, California 90071 Attn: Robert W. Troutman 10 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 8.125000000 32,500,000 PNC BANK, NATIONAL ASSOCIATION By: /s/ Ted A. Dunn ----------------- Name: Ted A. Dunn Title: Assistant Vice President Notice Address: 55 South Lake Avenue, Suite 650 Pasadena, California 91101 Attn: Ted A. Dunn 11 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 10.000000000 40,000,000 CHEMICAL BANK By: /s/ Mary E. Cameron ------------------- Name: Mary E. Cameron Title: Vice President Notice Address: Corporate Banking Group 270 Park Avenue, 9th Floor New York, New York 10017 Attn: Mary E. Cameron 12 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 8.125000000 32,500,000 THE FIRST NATIONAL BANK OF BOSTON By: /s/ Debra Zurka --------------- Name: Debra Zurka Title: Vice President Notice Address: 100 Federal Street, MAIL STOP 01-09-05 Boston, Massachusetts 02110 Attn: Debra Zurka 13 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 8.125000000 32,500,000 TORONTO-DOMINION (TEXAS), INC. By: /s/ Diane Bailey ---------------- Name: Diane Bailey Title: Vice President Notice Address: 909 Fannin Houston, Texas 77010 Attn: Lisa Allison 14 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 5.000000000 20,000,000 CITICORP USA, INC. By: /s/ David L. Harris ------------------- Name: David L. Harris Title: Vice President Notice Addresses: c/o Citicorp North America, Inc. 725 South Figueroa Street 5th Floor Los Angeles, California 90017 Attn: Deborah Ironson c/o Citibank, N.A. One Court Square, 7th Floor Long Island City, New York 11120 Attn: Mark Wrigley 15 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 8.125000000 32,500,000 ABN AMRO BANK N.V. By: /s/ Matthew S. Thomson ---------------------- Name: Matthew S. Thomson Title: Group Vice President/Director By: /s/ Patrick A. Russo -------------------- Name: Patrick A. Russon Title: Assistant Vice President Notice Address: Los Angeles International Branch 300 South Grand Avenue, Suite 1115 Los Angeles, California 90071 Attn: Matthew S. Thomson 16 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 5.000000000 20,000,000 DRESDNER BANK AG Los Angeles Agency By: /s/ Sidney S. Jordan -------------------- Name: Sidney S. Jordan Title: Vice President By: /s/ Jon M. Bland ---------------- Name: Jon M. Bland Title: Senior Vice President Notice Address: Los Angeles Agency 725 South Figueroa Street, Suite 3950 Los Angeles, California 90017 Attn: Dennis Blank 17 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 5.000000000 20,000,000 MANUFACTURERS & TRADERS TRUST CO. By: /s/ Geoffrey R. Fenn -------------------- Name: Geoffrey R. Fenn Title: Vice President Notice Address: 1 Fountain Plaza Buffalo, New York 14203 Attn: Geoffrey R. Fenn 18 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 5.000000000 20,000,000 ISTITUTO BANCARIO SAN PAOLO DI TORINO SPA By: /s/ Donald W. Brown -------------------- Name: Donald W. Brown Title: Branch Manager By: /s/ Glen Binder --------------- Name: Glen Binder Title: Vice President Notice Address: 444 South Flower Street Suite 4550 Los Angeles, California 90071 Attn: Glen Binder 19 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 5.000000000 20,000,000 THE BANK OF CALIFORNIA, N.A. By: /s/ Lynn E. Vine ---------------- Name: Lynn E. Vine Title: Vice President Notice Address: 550 South Hope Street Fifth Floor Los Angeles, California 90071 Attn: Thomas Tegart 20 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 5.000000000 20,000,000 BANQUE NATIONALE DE PARIS By: /s/ Jean-Louis Tourne --------------------- Name: Jean-Louis Tourne Title: Vice President & Deputy Manager By: /s/ Mitchell M. Ozawa --------------------- Name: Mitchell M. Ozawa Title: Vice President Notice Address: 725 South Figueroa Street Suite 2090 Los Angeles, California 90017 Attn: Mitchell M. Ozawa 21 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 0.000000000 0.00 MARINE MIDLAND BANK By: /s/ Mary Ann Tappero -------------------- Name: Mary Ann Tappero Title: Vice President Notice Address: 140 Broadway, 4th Floor New York, New York 10005 Attn: William M. Holland 22 Dollar Amount of Percentage of Original Facility Percentage (%) Limit ($) - -------------- ------------- 5.000000000 20,000,000 SOCIETE GENERALE By: /s/ J. Staley Stewart --------------------- Name: J. Staley Stewart Title: Vice President Notice Address: 2029 Century Park East Suite 2900 Los Angeles, California 90067 23