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AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
among
MATTEL SALES CORP.,
as Transferor,
and
MATTEL, INC.,
as Guarantor and Servicer,
and
NATIONSBANK OF TEXAS, N.A.,
as Agent,
and
THE BANKS NAMED HEREIN
Dated as of March 18, 1994
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TABLE OF CONTENTS
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PAGE
----
ARTICLE I DEFINITIONS
1.1 Certain Defined Terms................... 1
1.2 Other Terms............................. 15
1.3 Computation of Time Periods............. 15
ARTICLE II PURCHASES AND SETTLEMENTS
2.1 Facility................................ 16
2.2 Transfers............................... 16
2.3 Discount, Fees and Other
Costs and Expenses...................... 18
2.4 Settlement Procedures................... 19
2.5 Protection of Ownership Interest
of the Banks............................ 19
2.6 Deemed Collections;
Application of Payments................. 21
2.7 Payments and Computations, Etc.......... 22
2.8 Reports................................. 22
2.9 Collection Account...................... 22
2.10 Deficiency Advances..................... 24
2.11 Adjustment of Facility Limit............ 24
2.12 Inability to Determine LIBOR............ 25
ARTICLE III REPRESENTATIONS AND WARRANTIES
3.1 Representations and
Warranties of the Transferor............ 26
3.2 Representations and Warranties
of Mattel, Inc.......................... 30
3.3 Reaffirmation of Representations
and Warranties.......................... 35
ARTICLE IV CONDITIONS PRECEDENT
4.1 Conditions to Closing................... 36
ARTICLE V COVENANTS
5.1 Affirmative Covenants
of the Transferor....................... 38
5.2 Negative Covenants of
the Transferor.......................... 40
5.3 Affirmative Covenants of
Mattel, Inc............................. 40
ARTICLE VI ADMINISTRATION AND COLLECTIONS
i
6.1 Appointment of Servicer................ 44
6.2 Duties of Servicer and Agent........... 44
6.3 Rights After Designation of
New Servicer........................... 45
6.4 Responsibilities of the
Transferor............................. 46
ARTICLE VII SERVICER DEFAULT AND TERMINATION EVENTS
7.1 Servicer Default....................... 47
7.2 Servicer Default Remedies.............. 47
7.3 Termination Events..................... 48
7.4 Termination Event Remedies............. 49
7.5 Potential Termination
Event Remedies......................... 49
ARTICLE VIII INDEMNIFICATION; EXPENSES; RELATED MATTERS
8.1 Indemnities by the Transferor.......... 51
8.2 Indemnity for Taxes,
Reserves and Expenses.................. 52
8.3 Other Costs, Expenses and
Related Matters........................ 54
8.4 Reconveyance Under Certain
Circumstances.......................... 55
ARTICLE IX THE AGENT
9.1 Appointment............................ 56
9.2 Attorneys-in-fact...................... 56
9.3 Limitation on Liability................ 56
9.4 Reliance............................... 57
9.5 Notice of Termination Event............ 57
9.6 No Representations..................... 58
9.7 Indemnification........................ 58
9.8 Bank................................... 59
9.9 Resignation............................ 59
9.10 Sharing of Payments, etc............... 60
9.11 Independent Agreements................. 61
ARTICLE X GUARANTY
10.1 Guaranty of Obligations................ 62
10.2 Guaranty Continuing.................... 62
10.3 Guarantor Directly Liable.............. 62
10.4 No Impairment.......................... 63
10.5 Waiver................................. 64
10.6 Subrogation............................ 65
10.7 Information............................ 65
ii
10.8 Evidence of Obligations............... 66
ARTICLE XI MISCELLANEOUS
11.1 Term of Agreement..................... 67
11.2 Waivers; Amendments................... 67
11.3 Notices............................... 68
11.4 Governing Governmental
Rule; Integration..................... 69
11.5 Severability; Counterparts............ 69
11.6 Successors and Assigns................ 70
11.7 Waiver of Confidentiality............. 70
11.8 Characterization of the Transactions
Contemplated by the Agreement......... 71
11.9 Sales of Participations................71
iii
EXHIBITS
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EXHIBIT A Form of Written Agreement
EXHIBIT B Form of Weekly Servicer's Certificate
EXHIBIT C Form of Transfer Notice
EXHIBIT D [Reserved]
EXHIBIT E List of Actions, Suits and Proceedings
against the Transferor
EXHIBIT F Location of Records
EXHIBIT G List of Tradenames
EXHIBIT H List of Actions, Suits and Proceedings
against the Guarantor
EXHIBIT I Form of Opinion of Counsel to the
Transferor
EXHIBIT J Form of Opinion of Counsel for the
Guarantor
iv
AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (this
"Agreement"), dated as of March 18, 1994, among MATTEL SALES CORP., a California
- ----------
corporation, as transferor (the "Transferor"), MATTEL, INC., a Delaware
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corporation, as guarantor and servicer (the "Guarantor" and the "Servicer"), THE
--------- --------
BANKS LISTED ON THE SIGNATURE PAGES HEREOF (collectively, the "Banks") and
-----
NATIONSBANK OF TEXAS, N.A., a national banking association, as agent on behalf
of the Banks (the "Agent").
-----
PRELIMINARY STATEMENTS
WHEREAS, the parties hereto intend to amend and restate that certain
Transfer and Administration Agreement, dated as of March 19, 1993, among the
Transferor, the Guarantor and Servicer, the Banks and the Agent, on the terms
and conditions set forth herein;
WHEREAS, the Transferor may desire to convey, transfer and assign,
from time to time, undivided percentage interests in certain accounts receivable
with respect to which Toys "R" Us, Inc. ("Toys "R" Us") is the named obligor,
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and the Agent, on behalf of and for the benefit of the Banks, shall accept such
conveyance, transfer and assignment of such undivided percentage interests,
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this Agreement, the
---------------------
following terms shall have the following meanings:
"Adjusted Certificate of Deposit Rate" means, with respect to a
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Tranche and the related Tranche Period, the sum (rounded upward to the next
highest 1/100 of 1%) of (i) the rate obtained by dividing (x) the Certificate of
Deposit Rate by (y) a percentage equal to 100% minus the full reserve
requirement percentage as specified by the Board of Governors of the Federal
Reserve System that the Agent determines would be applicable on the date of
determination to a certificate of deposit of the Agent in excess of $100,000
with a maturity comparable to the related Tranche Period (including, without
limitation, any marginal, emergency, supplemental, special or other reserves if
the Agent, in its sole discretion, determines that it is required to maintain
any such reserves on such day), plus (ii) the then daily net annual assessment
rate as estimated by the Agent for determining the current annual assessment
payable by the Agent to the Federal Deposit Insurance Corporation for insuring
certificates of deposit with a maturity comparable to the related Tranche
Period.
"Adverse Claim" means a lien, security interest, charge or
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encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"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" means NationsBank of Texas, N.A., a national banking
-----
association, in its capacity as agent on behalf of the Banks.
"Aggregate Unpaids" means at any time, an amount equal to the sum of
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(i) the aggregate accrued and unpaid Discount (including any additional Discount
due pursuant to Section 7.4) with respect to all Tranche Periods at such time,
(ii) the Total Outstanding
2
Investment at such time, and (iii) all amounts owed (whether due or accrued)
hereunder by the Transferor to the Agent or the Banks at such time.
"Alternate Rate" means a rate per annum equal to 2% in excess of the
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prime rate of interest announced by the Agent from time to time, changing when
and as said prime rate changes (such rate not necessarily being the lowest or
best rate charged by the Agent).
"Bank" means each of the banks listed on the signature pages hereto,
----
and any successors in accordance with Section 11.6.
"Bank Commitment" for each Bank means such Bank's Percentage of the
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Facility Limit.
"Base Rate" means a fluctuating rate per anuum which is the higher of
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(a) the Federal Funds Rate plus one-half of one percent (1/2%) per annum and (b)
the Reference Rate.
"Business Day" means any day excluding Saturday, Sunday and any day on
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which banks in Dallas, Texas, New York, New York, Pittsburgh, Pennsylvania, or
San Francisco, California are authorized or required by Governmental Rule to
close; provided, however, when used with respect to LIBOR, "Business Day" means
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any day on which dealings in deposits of United States dollars are transacted in
the applicable offshore United States dollar interbank market.
"Certificate of Deposit Rate" means, with respect to a Tranche and the
---------------------------
related Tranche Period, the average of the consensus bid rates determined by the
Agent on the date of determination of two or more New York certificate of
deposit dealers of recognized standing selected by the Agent for the purchase in
New York at face value from the Reference Banks of certificates of deposit of
the Reference Banks in an amount comparable to the amount of the related
Transfer Price to be funded by the Agent, and with a maturity comparable to the
related Tranche Period.
"Close-Out Collections" means Collections received with respect to any
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Close-Out Receivable.
3
"Close-Out Receivable" means any Receivable which is due and payable
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prior to the Remittance Date following the date of creation of such Receivable.
"Closing Date" means March 11, 1994.
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"Collection Account" means the account established and maintained by
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the Agent for the benefit of the Banks pursuant to Section 2.9.
"Collections" means, with respect to any Receivable, all cash
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collections and other cash proceeds of such Receivable including, without
limitation, any Deemed Collections and Close-Out Collections.
"Commitment Commission Rate" means the per annum rate payable by the
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Transferor to the Banks (calculated on the basis of actual number of days
elapsed divided by 360), determined in accordance with the following table, and
based upon the second highest of Toys "R" Us, Inc.'s long-term senior unsecured
debt ratings:
======================================
Toys "R" Us, Inc.'s
long-term senior
unsecured debt ratings Commitment
S&P/Moody's/Duff Commission
AA-/Aa3/AA-or higher 12.5 bps
A/A2/A or higher 18.75 bps
A-/A3/A- 20.0 bps
======================================
The Commitment Commission Rate as of the Closing Date is 12.5 basis
points. Upon a rating change, the Agent shall determine the applicable
Commitment Commission Rate and shall promptly notify the Banks and the
Transferor of the Commitment Commission Rate so determined. Such determination
by the Agent shall be conclusive absent manifest error. The new applicable
Commitment Commission Rate will be effective as of the date of notification to
the Banks.
"Commitment Fee" means a fee equal to the applicable Commitment
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Commission Rate payable by the Transferor on each Remittance Date on the
difference between the average Facility Limit as set forth on each
4
Weekly Report and the average Total Outstanding Investment as set forth on each
Weekly Report for the one year period preceding such date.
"Contingent Obligation", as applied to any Person, means, without
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duplication, any direct or indirect liability, contingent or otherwise, of that
Person (i) with respect to any indebtedness, lease, dividend or other obligation
of another if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such obligation
of another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof or (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings. Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another and
(b) any liability of such Person for the obligations of another through any
agreement (contingent or otherwise) (x) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise) or (y) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another, if in the case of any agreement described under subclauses (x) or (y)
of this sentence the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported. The amount
of any Contingent Obligation denominated in a currency other than United States
dollars shall be equal to the United States dollar equivalent of such Contingent
Obligation.
"Contract" means, with respect to any Receivable, both the Written
--------
Agreement and the invoice related thereto, pursuant to or under which the
Obligor shall be obligated to pay for merchandise sold by the Transferor to the
Obligor.
5
"Contractual Obligation", as applied to any Person, means any
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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.
"Credit Agreements" means collectively the Credit Agreement (364-Day
-----------------
Facility) and the Credit Agreement (Multi-Year Facility), each dated as of March
18, 1994, among Mattel, Inc., the banks named therein and Bank of America
National Trust and Savings Association, as Agent, as such agreements may be
amended and supplemented and, in the case of the Credit Agreement (364-Day
Facility) renewed or replaced, from time to time.
"Credit and Collection Policy" means the Transferor's credit and
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collection policies and practices relating to Contracts and Receivables existing
on the date hereof, as modified from time to time in compliance with Section
5.2(c).
"Deemed Collections" means any Collections on any Receivable deemed to
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have been received pursuant to Section 2.6(a) or (b).
"Defaulted Receivable" means a Receivable: (i) as to which any
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payment, or part thereof, remains unpaid as of the close of business on the
Remittance Date next succeeding the date such Receivable is created; (ii) as to
which an Event of Bankruptcy has occurred with respect to the Obligor; (iii)
which has been identified by the Transferor or the Servicer as uncollectible; or
(iv) which, consistent with the Credit and Collection Policy, should be written
off the Transferor's books as uncollectible.
"Deficiency Advance" has the meaning specified in Section 2.10.
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"Discount" means, for each Tranche, an amount equal to the product of
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(a) the related Transfer Price
(minus any amounts released from the Collection Account by the Agent pursuant to
Section 2.9(b) to fund all or a portion of such Transfer Price) and (b) the
applicable Participation Rate and (c) a fraction, the numerator of
6
which is the number of days in such Tranche Period and the denominator of which
is 360; provided, however, that no provision of this Agreement shall require the
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payment or permit the collection of Discount in excess of the maximum permitted
by applicable Governmental Rule; and provided, further, that Discount shall not
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be considered paid by any distribution of Collections if at any time such
distribution is rescinded or must be returned for any reason.
"Discount Reserve" means, at any time, the aggregate amount of
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Discount for all outstanding Tranches.
"Duff" means Duff & Phelps Credit Ratings Co.
----
"Eligible Receivable" means, at any time, any Receivable:
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(i) the Obligor of which is Toys "R" Us, Inc.;
(ii) which is not a Defaulted Receivable at the time of the
initial creation of an interest of the Agent, on behalf of the Banks,
therein;
(iii) which is an "account" within the meaning of Section 9-106
of the UCC of all applicable jurisdictions;
(iv) which is denominated and payable only in United States
dollars in the United States;
(v) which, together with the Contract related thereto, is in
full force and effect and constitutes the legal, valid and binding
obligation of the Obligor enforceable against the Obligor in accordance
with its terms and subject to no offset, counterclaim or other defense;
(vi) which, together with the Contract related thereto, does not
contravene in any material respect any Governmental Rules applicable
thereto and with respect to which no part of the Contract related thereto
is in violation of any such Governmental Rule in any material respect;
7
(vii) for which the Obligor has been directed and has agreed to
remit all payments to the Collection Account;
(viii) which satisfies all applicable requirements of the Credit
and Collection Policy;
(ix) the term of which does not extend beyond the Remittance
Date next succeeding the date such Receivable is created; and
(x) which was generated in the ordinary course of the
Transferor's business.
"ERISA" means, at any time, the Employee Retirement Income Security
-----
Act of 1974, as amended from time to time, and any successor statute.
"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 of 1986, as amended.
"Event of Bankruptcy", with respect to any Person, means (i) that such
-------------------
Person shall generally not pay its debts as such debts become due or shall admit
in writing its inability to pay its debts generally or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against such Person seeking to adjudicate it as bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any Governmental Rule
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
or (ii) if such Person is a corporation, such Person shall take any corporate
action to authorize any of the actions set forth in the preceding clause (i).
"Facility Limit" means $250,000,000, as such amount may be adjusted as
--------------
provided herein.
8
"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.
"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 Board of
Governors of the Federal Reserve System, any central bank or any comparable
authority.
"Governmental Rule" means any law, statute, rule, regulation,
-----------------
ordinance, order, judgment, guidelines or decision of any Governmental Person.
"Guarantor" means Mattel, Inc.
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"Indemnified Amounts" has the meaning specified in Section 8.1.
-------------------
"Indemnified Parties" has the meaning specified in Section 8.1.
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"LIBOR" means, with respect to a Tranche and the related Tranche
-----
Period, the average of the quotations (rounded upwards to the nearest 1/100 of
1%) as of 10:00 a.m. New York time on the second Business Day prior to the
commencement of such Tranche Period, if any, offered to first class banks in the
offshore dollar market by the Reference Banks for U.S. Dollar deposits of
amounts in same day funds comparable to the Transfer Price of such Tranche (net
of amounts payable in accordance with Section 2.9(b)), with a maturity
comparable to such Tranche Period to which LIBOR will apply.
9
"Material Adverse Effect" means (i) a material adverse effect upon the
-----------------------
business, operations, properties, assets, business prospects or condition
(financial or otherwise) of Mattel, Inc. (together with its Subsidiaries), taken
as a whole, or (ii) a material impairment of the ability of Mattel, Inc. to
perform its obligations under this Agreement.
"Moody's" means Moody's Investors Service, Inc.
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"Multiemployer Plan" means a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA which is maintained for employees of a Person or any
ERISA Affiliate of such Person.
"Notice of Termination" means a notice delivered by the Agent to the
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Transferor, the Guarantor and the Banks pursuant to Section 7.4.
"Obligations" has the meaning set forth in Section 10.1.
-----------
"Obligor" means Toys "R" Us, Inc., a Delaware corporation, which is
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obligated to the Transferor to make payments for the provision of goods pursuant
to a Contract.
"Participant" has the meaning set forth in Section 11.9.
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"Participation Rate" means, for any Tranche and related Tranche
------------------
Period, LIBOR (or the Adjusted Certificate of Deposit Rate pursuant to Section
2.12) plus the applicable spread. Such spread shall mean the per annum rate
(calculated on the basis of the actual number of days elapsed divided by 360),
determined in accordance with the following table, and based upon the second
highest of Toys "R" Us, Inc.'s long-term unsecured senior debt ratings:
Toys "R" Us, Inc.'s long-
term senior unsecured
debt ratings Spread
S&P/Moody's/Duff
AA-/Aa3/AA-or higher 25.0 bps
10
A/A2/A or higher 25.0 bps
A-/A3/A- 37.5 bps
=======================================
Such spread as of the Closing Date is 25 basis points. Upon a rating
change, the Agent shall determine the applicable spread and shall promptly
notify the Banks and the Transferor of the spread so determined. Such
determination by the Agent shall be conclusive absent manifest error. The new
applicable spread will be effective as of the date of notification to the Banks
and will be applicable to all Tranches.
"Pension Plan" means any employee plan which is subject to Section 412
------------
of the Internal Revenue Code of 1986, as amended, and which is maintained for
employees of a Person or any ERISA Affiliate of such Person other than a
Multiemployer Plan.
"Percentage" means, with respect to any Bank at any time, the
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percentage set forth next to its name on the signature page hereof, which is the
equivalent of a fraction the numerator of which is equal to such Bank's Bank
Commitment, and the denominator of which is equal to the Facility Limit.
"Percentage Factor" means the percentage computed at any time of
-----------------
determination as follows:
TOI + DR
------------
ERB
Where:
TOI = the Total Outstanding Investment at the time of such computation.
DR = the Discount Reserve at the time of such computation.
ERB = the aggregate outstanding balance of the Eligible Receivables at the
time of such computation.
In no event shall the Percentage Factor exceed one hundred percent.
The Percentage Factor shall be
11
calculated by the Agent on the day of the initial Transfer hereunder.
Thereafter, the Percentage Factor shall remain constant from the time as of
which any such computation is made until the time as of which a subsequent
Transfer shall be made pursuant to Section 2.2. The Percentage Factor, as
calculated at the close of business on the date as of which any such Transfer is
made shall remain constant at all times thereafter until such time as an
additional Transfer is made or until such time as the Banks shall have received
the full amount of the Aggregate Unpaids, at which time the Percentage Factor
shall be recomputed.
"Person" means any corporation, natural person, firm, joint venture,
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partnership, trust, unincorporated organization, enterprise, government or any
department or agency of any government.
"Potential Termination Event" means any condition or event which, with
---------------------------
the giving of notice or the lapse of time or both, would constitute a
Termination Event.
"Proceeds" means "proceeds" as defined in Section 9.306(1) of the UCC.
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"Receivable" means the indebtedness denominated in United States
----------
dollars to the Transferor by the Obligor (without giving effect to any purchase
hereunder by the Agent, on behalf of the Banks, at any time) under a Contract
whether constituting an account, chattel paper, instrument or general
intangible, including all other obligations of the Obligor with respect thereto.
Notwithstanding the foregoing, once a Receivable has been deemed collected
pursuant to Section 2.6 hereof, it shall no longer constitute a Receivable
hereunder.
"Records" means all Contracts and other documents, books, records and
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other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related
property and rights) maintained with respect to Receivables and the Obligor.
"Reference Banks" means Bank of America National Trust and Savings
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Association, NationsBank of Texas, N.A. and PNC Bank, National Association. In
the event
12
that at any time of determination only two Banks designated as "Reference Banks"
are providing rates for deposits referred to in the definition of "LIBOR", those
two Banks shall be the "Reference Banks" or, if only one such Bank is providing
such rates, that Bank shall be the "Reference Banks" for purposes of this
Agreement.
"Reference Rate" means the rate of interest publicly announced from
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time to time by NationsBank of Texas, N.A. in Dallas as its reference rate, as
in effect on such date of determination. The reference rate is set by
NationsBank of Texas, N.A. based on various factors including NationsBank of
Texas, N.A.'s costs and desired return, general economic conditions, and other
factors, and is used as a reference point for pricing some loans. NationsBank of
Texas, N.A. may make loans at, above or below the rate announced as its
reference rate.
"Remittance Date" means December 16, 1994, December 18, 1995, and
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December 17, 1996, as applicable, or, if such day is not a Business Day, the
next succeeding Business Day.
"Requisite Banks" means, at any date of determination, Banks having at
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least 66-2/3% of the aggregate Bank Commitments at such time.
"S&P" means Standard & Poor's Ratings Group.
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"Servicer" means Mattel, Inc. or, after a Servicer Default, a servicer
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appointed by the Agent.
"Servicer Default" has the meaning specified in Section 7.1.
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"Subsidiary" means any corporation, association or other business
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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 the earlier of (i) December 17, 1996, unless
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such date is otherwise extended, or (ii) the date on which the Agent delivers a
Notice of Termination to the Transferor.
13
"Termination Event" means an event described in Section 7.3.
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"Total Outstanding Investment" means the sum of the Transfer Prices
----------------------------
paid to the Transferor for all Transfers less any amounts released from the
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Collection Account by the Agent pursuant to Section 2.9(b) to fund all or a
portion of any such amounts paid to the Transferor and less the aggregate amount
----
of Collections received and applied by the Agent to reduce such Total
Outstanding Investment pursuant to Section 2.4 or 2.9(b); provided that the
--------
Total Outstanding Investment shall be restored in the amount of any Collections
so received and applied if at any time the distribution of such Collections is
rescinded or must otherwise be returned for any reason; and provided further
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that the Total Outstanding Investment shall at no time exceed the Facility
Limit.
"Tranche" means a portion of the Total Outstanding Investment
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allocated to a Tranche Period.
"Tranche Period" means, with respect to a Tranche, the period from the
--------------
date of the Transfer related thereto to the following Remittance Date.
"Transaction Costs" has the meaning specified in Section 8.3.
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"Transfer" means a conveyance, transfer and assignment by the
--------
Transferor to the Agent, on behalf of the Banks, of an undivided percentage
ownership interest in Receivables hereunder.
"Transfer Date" means, with respect to each Transfer, the Business Day
-------------
on which such Transfer is made.
"Transfer Price" means, with respect to any Transfer, the amount paid
--------------
to the Transferor by the Banks as described in the Transfer Notice related to
such Transfer.
"Transfer Notice" has the meaning given to it in Section 2.2.
---------------
"Transferred Interest" means, at any time of determination, an
--------------------
undivided percentage ownership interest
14
in (i) each and every then outstanding Receivable, (ii) all Collections with
respect thereto, and (iii) other Proceeds of the foregoing, equal to the
Percentage Factor at such time. The Transferred Interest in each Receivable and
the Collections and Proceeds with respect thereto, shall at all times be in
proportion to the Transferred Interest in each other Receivable, and Collections
and Proceeds with respect thereto.
"UCC" means, with respect to any state, the Uniform Commercial Code as
---
from time to time in effect in such state.
"Weekly Report" means a report prepared on a Weekly basis by the
-------------
Servicer in the form attached hereto as Exhibit B and delivered to the Agent in
accordance with Section 2.8.
"Written Agreement" means the agreement between the Obligor and the
-----------------
Transferor in the form of Exhibit A.
SECTION 1.2. Other Terms. All accounting terms not specifically
-----------
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of California, and not specifically defined
herein, are used herein as defined in such Article 9. All other terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreements.
SECTION 1.3. Computation of Time Periods. Unless otherwise stated in
---------------------------
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."
15
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility. Upon the terms and subject to the conditions
--------
herein set forth the Transferor may, at its option, convey, transfer and assign
to the Agent, on behalf of the Banks, and the Banks shall, subject to the terms
and conditions hereof, accept such conveyance, transfer and assignment from the
Transferor, without recourse except as provided herein, undivided percentage
ownership interests in the Receivables, together with Collections with respect
thereto, from time to time.
SECTION 2.2. Transfers. Upon the terms and subject to the conditions
---------
herein set forth, the Transferor may, prior to the Termination Date, convey,
transfer and assign to the Agent, on behalf of the Banks, and the Banks shall,
subject to the terms and conditions hereof, accept such conveyance, transfer and
assignment from the Transferor, without recourse except as otherwise provided
herein, undivided percentage ownership interests in Receivables, together with
Collections with respect thereto (each, a "Transfer") from time to time for an
--------
aggregate Transfer Price (less any amounts released from the Collection Account
pursuant to Section 2.9(b) to fund all or a portion of any Transfer) not to
exceed the Facility Limit; provided that in no event may there be more than one
--------
Transfer per week, and no Transfer shall be made by the Transferor between two
Business Days prior to any Remittance Date and the next succeeding March 15.
The Transferor shall convey, transfer and assign to the Agent, on behalf of the
Banks, undivided percentage ownership interests in Receivables by delivering to
the Agent, not later than 1:00 p.m., Dallas, Texas time, on the third Business
Day prior to the proposed date of transfer, notice of each Transfer in
substantially the form of Exhibit C hereto (a "Transfer Notice"). Each Transfer
---------------
Notice shall specify (i) the Transfer Price based on an estimated Participation
Rate, (ii) an initial estimate of the Discount relating to such Transfer based
on an estimated Participation Rate, (iii) the date of such Transfer, (iv) the
Tranche Period related thereto, (v) the aggregate outstanding balance of the
Eligible Receivables as of the day of such notice and (vi) the estimated
Percentage Factor after giving effect to such
16
Transfer. After giving effect to such Transfer, the Total Outstanding
Investment plus the Discount Reserve shall not be greater than 80% of the
aggregate outstanding balance of the Eligible Receivables. Promptly after 10:00
a.m., Dallas, Texas time, on the second Business Day prior to the date of a
proposed Transfer, the Agent will notify the Transferor of the LIBOR (or the
Adjusted Certificate of Deposit Rate, if applicable pursuant to Section 2.12)
and the Participation Rate applicable to such Transfer, and the Transferor will
notify the Agent in writing of the finalized Transfer Price and the finalized
Percentage Factor. The finalized Transfer Price shall be an amount not in
excess of the amount which, when added to the Total Outstanding Investment
immediately prior to such Transfer, would cause the Total Outstanding Investment
plus the Discount Reserve to be greater than 80% of the aggregate outstanding
balance of the Eligible Receivables. The Transfer Price (net of any amounts
released from the Collection Account pursuant to Section 2.9(b) to fund all or a
portion of any Transfer) with respect to each Transfer shall not be less than
$5,000,000 and shall be in increments of $500,000 in excess thereof. Each
Transfer Notice shall be executed by a duly authorized officer of the
Transferor. The Agent, on behalf of the Banks, shall accept such offer to
convey, transfer and assign undivided percentage ownership interests in writing.
The terms of each Transfer shall be as set forth herein and in the related
Transfer Notice.
Promptly after receipt of a Transfer Notice, the Agent shall notify
each Bank of the proposed Transfer (such notice to normally be given within two
hours of receipt by the Agent). Each Bank shall make available to the Agent its
pro rata share of the Transfer Price by remitting such funds to the Agent for
credit to NationsBank of Texas, N.A., ABA No. 111000025, Attention: Commercial
Loan Operations, Account No. 0180019828, Ref. Mattel Sales Inc., no later than
2:00 p.m., Dallas, Texas time on the date of such Transfer. The Agent shall make
available to the Transferor on the date of such Transfer the aggregate of the
amounts so made available by the Banks by causing an amount of same-day funds
equal to such aggregate amount received by the Agent to be credited to the
account of the Transferor at Bank of America National Trust and Savings
Association (ABA No. 121000358, Account No. 1292000883, reference: Mattel Sales
Receivables); provided that, upon prior written notice to the Agent, the
--------
17
Transferor may at any time direct the Agent to credit such amounts to another
account of the Transferor.
Each Transfer Notice shall be irrevocable and binding on the
Transferor, and the Transferor shall indemnify the Agent and the Banks against
any loss or expense incurred by the Agent or the Banks arising from or relating
to any failure by the Transferor to complete such Transfer including, without
limitation, any loss or expense incurred by the Agent or the Banks by reason of
the liquidation or reemployment of funds acquired by the Banks in anticipation
of funding such Transfer.
Each Transfer shall constitute a purchase of undivided percentage
ownership interests in each and every Receivable, together with all Collections
and Proceeds with respect thereto. The aggregate undivided percentage ownership
interest of the Agent, on behalf of the Banks, in the Receivables, together with
all Collections and Proceeds with respect thereto, shall equal the Percentage
Factor in effect from time to time.
SECTION 2.3. Discount, Fees and Other Costs and Expenses. (a)
-------------------------------------------
Notwithstanding any limitation on recourse contained herein, the Transferor
shall pay to the Agent (i) on each Remittance Date and on each day thereafter
until the Total Outstanding Investment has been reduced to zero, the amounts
required pursuant to Section 7.4 hereof, and (ii) as and when due in accordance
with this Agreement, all amounts payable pursuant to Article VIII hereof, if
any.
(b) Notwithstanding any limitation on recourse contained in this
Agreement, Mattel, Inc. and the Transferor, as appropriate, shall pay the
following non-refundable fees calculated on the basis of the actual number of
days elapsed divided by 360:
(i) on each Remittance Date occurring from the date of execution
hereof, the Transferor shall pay the Commitment Fee; and
(ii) the Transferor shall pay to the Agent the fee referenced in
that certain letter agreement, dated March 19, 1993, between the Transferor
and the Agent.
18
(c) Nothing in this Agreement shall limit in any way the obligations
of the Transferor to pay the amounts set forth in this Section 2.3.
SECTION 2.4. Settlement Procedures. On each Remittance Date and each
---------------------
day thereafter until the Aggregate Unpaids have been paid in full, the Agent
shall apply (i) amounts on deposit in the Collection Account pursuant to Section
2.6 or 7.3(h) and (ii) the Percentage Factor of all remaining amounts on deposit
in the Collection Account in the following order of priority: first, in payment
-----
of the accrued Discount for each Tranche Period, second, in payment of the
------
Commitment Fee, third, in payment of any additional Discount due pursuant to
-----
Section 7.4, fourth, in payment of the aggregate of all other amounts then owed
------
(whether due or accrued) hereby by Transferor to the Banks or the Agent (other
than the Total Outstanding Investment), and fifth, in reduction of the Total
-----
Outstanding Investment. In the event that on any Remittance Date and any day
thereafter, the Aggregate Unpaids have not been paid in full after giving effect
to the preceding sentence, the Agent shall apply any other amounts on deposit in
the Collection Account to the payment in full of the Aggregate Unpaids in
accordance with the foregoing priority. Following the date on which the Total
Outstanding Investment has been reduced to zero, all accrued Discount and
applicable fees have been paid in full, all other Aggregate Unpaids have been
paid in full and this Agreement shall have terminated pursuant to Section 11.1,
(i) the Agent shall recompute the Percentage Factor, (ii) the Agent, on behalf
of the Banks, shall be considered to have reconveyed to the Transferor any
interest in the Receivables (including the Transferred Interest), (iii) the
Agent shall release to the Transferor any remaining Collections held in the
Collection Account pursuant to this Section 2.4 and (iv) the Agent, on behalf of
the Banks, shall execute and deliver to the Transferor, such documents or
instruments as are necessary to terminate the Agent's interest in the
Receivables. Any such documents shall be prepared by or on behalf of the
Transferor.
SECTION 2.5. Protection of Ownership Interest of the Banks. The
---------------------------------------------
Transferor agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents and take all action necessary,
and such other actions as may be reasonably
19
requested by the Agent, in order to perfect or protect the Transferred Interest
or to enable the Agent to exercise or enforce any of its or any Bank's rights
hereunder. Without limiting the foregoing, the Transferor will, in order to
accurately reflect this purchase and sale transaction, execute and file such
financing or continuation statements or amendments thereto or assignments
thereof as are necessary or as may be requested by the Agent in order to
protect, perfect and preserve the Transferred Interest of the Agent, and agrees
to mark its master data processing records and other documents with a legend
describing the purchase by the Agent, on behalf of the Banks, of the Transferred
Interest. The Transferor shall, upon request of the Agent, obtain such
additional search reports as the Agent shall reasonably request. To the fullest
extent permitted by applicable Governmental Rule, the Agent shall be permitted
to sign and file continuation statements and amendments thereto and assignments
thereof without the Transferor's signature. Carbon, photographic or other
reproduction of this Agreement or any financing statement shall be sufficient as
a financing statement. The Transferor shall neither change its name, identity or
corporate structure (within the meaning of Section 9-402(7) of the UCC as in
effect in the State of California) nor relocate its chief executive office or
any office where Records are kept unless it shall have: (i) given the Agent at
least thirty (30) days' prior written notice thereof and (ii) prepared at
Transferor's expense and delivered to the Agent all financing statements,
instruments and other documents necessary to preserve, perfect and protect the
Transferred Interest of the Agent or reasonably requested by the Agent in
connection with such change or relocation. Any filings under the UCC or
otherwise that are occasioned by such change in name or location shall be made
at the expense of Transferor. As of the date hereof, the Transferor has
instructed the Obligor to cause all Collections to be deposited directly into
the Collection Account and the Transferor shall not change such arrangement
unless the Agent shall have given its prior written consent thereto. If the
Transferor receives any Collections or is deemed to receive any Collections
pursuant to Section 2.6, the Transferor shall immediately remit such Collections
to the Collection Account administered by the Agent for the benefit of the
Banks.
20
SECTION 2.6. Deemed Collections; Application of Payments. (a) In
-------------------------------------------
the event that on any day the outstanding balance of a Receivable is either (x)
reduced as a result of any defective or returned merchandise, any cash discount
or any adjustment by the Transferor, or (y) reduced or canceled as a result of a
setoff in respect of any claim by any Person (whether such claim arises out of
the same or a related transaction or an unrelated transaction), then within ten
(10) days, either (i) the Servicer shall deliver a Weekly Report evidencing that
the aggregate outstanding balance of Eligible Receivables is at least 125% of
the Total Outstanding Investment and the Discount Reserve or (ii) the Transferor
shall deposit to the credit of the Collection Account the amount of such
reduction or cancellation and the Agent shall be considered to have reconveyed
to the Transferor any interest in such Receivables (including the Transferred
Interest therein). The Agent agrees that it shall execute and return to the
Transferor such documents or instruments as are reasonably requested by the
Transferor and necessary to terminate the Agent's interest on behalf of the
Banks in such Receivables. Any such documents shall be prepared by or on behalf
of the Transferor.
(b) In the event that on any day any of the representations or
warranties in Article III is no longer true with respect to a Receivable, then
within ten (10) days of such occurrence, either (i) the Transferor shall cure
the breach of the applicable representation or warranty or (ii) the Servicer
shall deliver a Weekly Report evidencing that the aggregate outstanding balance
of Eligible Receivables (not including the aggregate outstanding balance of the
Receivables subject to any such breach of a representation or warranty) is at
least 125% of the Total Outstanding Investment and the Discount Reserve or (iii)
the Transferor shall deposit to the credit of the Collection Account the
outstanding balance of such Receivable in full and the Agent, on behalf of the
Banks, shall be considered to have reconveyed to the Transferor any interest in
such Receivables (including the Transferred Interest therein). The Agent agrees
that it shall execute and return to the Transferor such documents or instruments
as are reasonably requested by the Transferor and necessary to terminate the
Agent's interest on behalf of the Banks in such Receivables. Any such documents
shall be prepared by or on behalf of the Transferor.
21
SECTION 2.7. Payments and Computations, Etc. All amounts to be paid
------------------------------
or deposited by the Transferor hereunder shall be paid or deposited in
accordance with the terms hereof no later than 1:00 p.m. (New York City time) on
the day when due in immediately available funds; if such amounts are payable to
the Agent, on behalf of the Banks, they shall be paid or deposited in the
Collection Account, until otherwise notified by the Agent. The Transferor
shall, to the extent permitted by Governmental Rule, pay to the Agent, for the
benefit of the Banks, upon demand, interest on all amounts not paid or deposited
when due to the Banks hereunder at a rate equal to the highest Participation
Rate applicable to any Tranche then outstanding plus 2% or, if no Tranche is
then outstanding, the Alternate Rate. All computations of discount, interest
and all per annum fees hereunder shall be made on the basis of a year of 360
days for the actual number of days (including the first but excluding the last
day) elapsed. Any computations by the Agent of amounts payable by the
Transferor hereunder to the Banks or the Agent shall be binding absent manifest
error. All payments made to the Agent in respect of the Total Outstanding
Investment and Discount shall be made to the Agent for the account of the Banks
pro rata based on their respective Percentages. The Agent shall promptly remit
- --- ----
to each Bank such Bank's pro rata share of such payments (such payments to
normally be remitted within two hours of receipt by the Agent).
SECTION 2.8. Reports. At any time the Total Outstanding Investment
-------
is greater than zero, commencing on the date hereof, and on each subsequent
Monday (or, if such day is not a Business Day, the next succeeding Business Day)
the Servicer shall prepare and forward to the Agent a Weekly Report for the
preceding calendar week, and (ii) such other information as the Agent may
reasonably request. On the second Business Day prior to each Remittance Date,
the Transferor shall provide the Agent and each Bank with a certificate
detailing the amount of Collections expected as of that Remittance Date,
together with the Total Outstanding Investment and the Discount Reserve.
SECTION 2.9. Collection Account. (a) There shall be established on
------------------
the day of the initial Transfer hereunder and maintained, in the name of the
Agent for the benefit of the Banks, a segregated account (the "Collection
----------
Account"), at NationsBank of Texas, N.A., bearing a designation clearly
- -------
indicating that the funds deposited therein are held for the benefit of the
Banks.
22
(The wiring instructions for deposits to such account are: ABA No.
111000025, Account No. 1290154724.) Any interest and earnings (net of losses
and investment expenses) on funds on deposit in the Collection Account shall be
retained in the Collection Account and be available to make any payments
required to be made hereunder (including Discount) to the Agent or the Banks.
On the date on which the Total Outstanding Investment is zero and the Aggregate
Unpaids have been paid in full to the Banks, any funds remaining on deposit in
the Collection Account shall be released to the Transferor in same-day funds.
(b) Close-Out Collections deposited to the credit of the Collection
Account shall be retained in the Collection Account by the Agent until the
earlier of (w) the next succeeding Remittance Date, at which time such amounts
shall be applied pursuant to Section 2.4, and (x) the next succeeding Transfer
Date, at which time the Agent shall release to the Transferor the amount of such
Collections minus the Percentage Factor (as calculated as of the latest Transfer
-----
Date) of such Collections. In the event that Collections of Close-Out
Receivables are to be applied pursuant to clause (x) above, the Transferor may
request that the Percentage Factor of such Collections be applied toward (i) all
or a portion of the Transfer Price of the Transfer occurring on such Transfer
Date (in which case such amounts shall be paid to the Transferor) or (ii) the
reduction of the Total Outstanding Investment (in which case such amounts shall
be paid to the Banks). In the case of any such reduction of the Total
Outstanding Investment, the Agent shall, in its sole discretion, determine the
Tranche(s) with respect to which such reduction shall be applied; provided
--------
further, however, that in the case of any such reduction of the Total
- ------- -------
Outstanding Investment, the Transferor agrees to reimburse each Bank and to hold
each Bank harmless from any loss or expense which such Bank may sustain or incur
as a consequence of such reduction of the Total Outstanding Investment,
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its funding hereunder or from fees payable
to terminate the deposits from which such funds were obtained. This covenant
shall survive the payment in full of the Aggregate Unpaids.
23
SECTION 2.10. Deficiency Advances. No Bank shall be responsible for
-------------------
any default of any other Bank in respect of such other Bank's obligation to fund
any portion of a Transfer hereunder, nor shall the commitment of any Bank
hereunder be increased as a result of such default by any other Bank. Without
limiting the generality of the foregoing, in the event any Bank shall fail to
advance funds as provided herein, the Agent may, in its discretion but shall not
be obligated to, advance as a Bank all or any portion of such amount (the
"Deficiency Advance") and shall thereafter be entitled to payments on such
- -------------------
Deficiency Advance in the same manner and at the same rate(s) to which such
other Bank would have been entitled had it made such advance itself; provided
--------
that, upon payment to the Agent from such other Bank of the entire outstanding
amount of such Deficiency Advance, together with interest thereon, at the
Participation Rate applicable to the related Tranche, then such payment shall be
credited against the Agent's share of the Total Outstanding Investment in full
payment of such Deficiency Advance. Acceptance by the Transferor of a
Deficiency Advance from the Agent shall in no way limit the rights of the
Transferor against the Bank failing to fund its pro rata portion (based on its
--- ----
Percentage) of the Transfer Price of any Transfer hereunder.
SECTION 2.11. Adjustment of Facility Limit. (a) The Transferor
----------------------------
shall have the right, at any time and from time to time; to terminate in whole
or permanently reduce in part, without premium or penalty, the Facility Limit;
provided that the Facility Limit, as reduced, shall equal or exceed the Total
- --------
Outstanding Investment as of the date of such reduction.
(b) The Transferor shall give not less than three Business Days' prior
written notice to the Agent designating the date (which shall be a Business Day)
and the amount of such termination or reduction. Any partial reduction shall be
in an aggregate minimum amount of $10,000,000 and integral multiples of
$1,000,000 in excess of that amount. Promptly after receipt of a notice of such
termination or partial reduction, the Agent shall notify each Bank and Bank of
America National Trust and Savings Asssociation as agent under the Credit
Agreements of the proposed termination or reduction. Such termination or
reduction shall be effective on the date specified in the Transferor's notice
and
24
shall terminate or reduce the dollar amount of each Bank's Bank Commitment.
SECTION 2.12. Inability to Determine LIBOR. If for any reason the
----------------------------
Reference Banks shall have determined that for any reason adequate and
reasonable means do not exist for ascertaining LIBOR for any proposed Tranche
Period, or if the Requisite Banks advise the Agent in writing that LIBOR for any
proposed Tranche Period does not adequately and fairly reflect the cost to such
Banks of funding the Total Outstanding Investment during such Tranche Period,
the Agent will forthwith give notice of such determination to the Transferor and
each Bank. In such event, the Participation Rate with respect to such proposed
Tranche Period and related Tranche shall be determined by reference to the
Adjusted Certificate of Deposit Rate. If for any reason the Reference Banks
shall have determined that for any reason adequate and reasonable means do not
exist for ascertaining the Adjusted Certificate of Deposit Rate for any proposed
Tranche Period, or if the Requisite Banks advise the Agent in writing that the
Adjusted Certificate of Deposit Rate for any proposed Tranche Period does not
adequately and fairly reflect the cost to such Banks of funding the Total
Outstanding Investment during such Tranche Period, the Agent will forthwith give
notice of such determination to the Transferor and each Bank. In such event,
the Participation Rate with respect to such proposed Tranche Period and related
Tranche shall be determined by reference to the Base Rate.
25
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Transferor. The
------------------------------------------------
Transferor hereby represents and warrants to each of the Banks that:
(a) Perfection. Immediately preceding each Transfer hereunder, the
----------
Transferor shall be the owner of all of the Receivables which are the subject of
each such Transfer, free and clear of all liens, encumbrances, security
interests, preferences or other security arrangements of any kind or nature
whatsoever. On or prior to each Transfer, all financing statements and other
documents required to be recorded or filed in order to perfect the Transferred
Interest against all creditors and purchasers from the Transferor will have been
duly filed in each filing office necessary for such purpose and all filing fees
and taxes, if any, payable in connection with such filings have been paid in
full.
(b) Accuracy of Information. All information heretofore furnished by
-----------------------
the Transferor to the Banks or the Agent for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Transferor to the Banks or the Agent will
be, true and accurate in every material respect, on the date such information is
stated or certified.
(c) Place of Business. The chief place of business and chief
-----------------
executive office of the Transferor are located at the address of the Transferor
indicated in Section 11.3, and the offices where the Transferor keeps its
Records are located at the address of the Transferor indicated in Section 11.3
and listed on Exhibit F hereto or at such other locations notified to the Agent
in accordance with Section 2.5 in jurisdictions where all action required by
Section 2.5 has been taken and completed.
(d) Payments. The Obligor has, with respect to each Receivable, been
--------
directed by the Transferor to remit all payments in respect of such Receivable
26
directly to the Collection Account administered by the Agent.
(e) Good Title. Upon each Transfer and each recomputation of the
----------
Transferred Interest, the Agent, on behalf of the Banks, shall acquire a valid
and perfected first priority undivided percentage ownership interest to the
extent of the Transferred Interest or a first priority perfected security
interest in each Receivable which exists on the date of such Transfer and
recomputation and all Collections with respect thereto free and clear of any
Adverse Claim.
(f) Tradenames, etc.. As of the date hereof: (i) the Transferor has
----------------
no subsidiaries or divisions; and (ii) the Transferor has not, within the last
five (5) years, operated under any tradenames except as set forth on Exhibit G
hereto and, within the last five (5) years, has not changed its name, merged
with or into or consolidated with any other corporation or been the subject of
any proceeding under Title 11 of the United States Code (Bankruptcy).
(g) No Termination Event. No event has occurred and is continuing,
--------------------
and no condition exists, which constitutes a Termination Event.
(h) Organization and Powers. The Transferor is a corporation duly
-----------------------
organized, validly existing and in good standing under the laws of the State of
California and 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 to enter into this Agreement and to carry out the
transactions contemplated hereby and thereby.
(i) Good Standing. The Transferor 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.
(j) Authorization. The execution, delivery and performance of this
-------------
Agreement have been duly authorized by all necessary corporate action by the
Transferor.
27
(k) No Conflict. The execution, delivery and performance by the
-----------
Transferor of this Agreement do not and will not (a) violate the Certificate of
Incorporation or Bylaws of the Transferor, (b) violate any provision of law
applicable to the Transferor, or any material order, judgment or decree of any
court or other agency of government binding on the Transferor, 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 Transferor, (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, other than Liens created in favor of the Agent, or (e) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of the Transferor.
(l) Governmental Consents. The execution, delivery and performance
---------------------
by the Transferor of this Agreement, and each agreement, document, or instrument
required hereunder 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.
(m) Binding Obligation. This Agreement when executed and delivered
------------------
will be the legally valid and binding obligation of the Transferor, enforceable
against it in accordance with its 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.
(n) Changes, Etc. Since December 31, 1993 there has been no event or
------------
events that have, either individually or in the aggregate, resulted in a
Material Adverse Effect.
(o) Litigation; Adverse Facts. There is no action, suit, proceeding
-------------------------
or arbitration (whether or not purportedly on behalf of the Transferor) 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
28
or, to the knowledge of the Transferor, threatened against or affecting the
Transferor or any of the Transferor's properties which, in the reasonable
judgment of the Transferor and its executive officers (assuming adverse
determination of facts which the Transferor in good faith believes it would not
successfully prove, and considering damages which in their best judgment is the
maximum that would be awarded upon, and the likelihood of, an adverse
determination of the claim or the amount which reflects their best judgment as
to that required to be paid to settle the claims) would result in a Material
Adverse Effect and there is no basis known to such executive officers for any
such action, suit or proceeding. The Transferor is not (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
Transferor, threatened against or affecting the Transferor which provides a
reasonable basis for questioning the validity or the enforceability of this
Agreement.
(p) Payment of Taxes. All tax returns and reports of the Transferor
----------------
required to be filed by any of them have been timely filed, and all taxes,
assessments, fees and other governmental charges upon the Transferor and upon
its 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 of the Credit Agreements. The Transferor knows
of no proposed tax assessment against it that would result in a Material Adverse
Effect.
(q) Agreements. The Transferor is not a party to nor is it subject
----------
to any material agreement or instrument or charter or other internal restriction
which results in a Material Adverse Effect.
(r) Performance. The Transferor is not in default in the
-----------
performance, observance or fulfillment of any of the obligations, covenants or
conditions
29
contained in any Contractual Obligation of the Transferor, 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.
(s) Governmental Regulation. The Transferor is not subject to
-----------------------
regulation under the Public Utility Holding Transferor Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Transferor Act of 1940
or to any Federal or state statute or regulation limiting its ability to
transfer interests in the Receivables hereunder.
(t) Employee Benefit Plans. The Transferor 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 Transferor 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.
(u) Disclosure. No representation or warranty of the Transferor
----------
contained in this Agreement or any other document, certificate or written
statement furnished to the Banks by the Transferor since January 1, 1994 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 Transferor 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 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.
SECTION 3.2. Representations and Warranties of Mattel, Inc. Mattel,
----------------------------------------------
Inc. represents and warrants to the Banks that:
30
(a) Servicing. Since January 4, 1994, there has been no material
---------
change in the ability of Mattel, Inc. to service the Receivables.
(b) Organization and Powers. Mattel, Inc. is a corporation duly
-----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and 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 to enter into this Agreement and to carry out the transactions
contemplated hereby and thereby.
(c) Good Standing. Mattel, Inc. 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.
(d) Authorization. The execution, delivery and performance of this
-------------
Agreement have been duly authorized by all necessary corporate action by Mattel,
Inc.
(e) No Conflict. The execution, delivery and performance by Mattel,
-----------
Inc. of this Agreement do not and will not (a) violate the Restated Certificate
of Incorporation or Bylaws of Mattel, Inc., (b) violate any provision of law
applicable to Mattel, Inc., or any material order, judgment or decree of any
court or other agency of government binding on Mattel, Inc., 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 Mattel, Inc., (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, other than Liens created in favor of the Agent, or (e) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Mattel, Inc.
(f) Governmental Consents. The execution, delivery and performance
---------------------
by Mattel, Inc. of this Agreement, and each agreement, document, or instrument
required hereunder do not and will not require any
31
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.
(g) Binding Obligation. This Agreement when executed and delivered
------------------
will be the legally valid and binding obligation of Mattel, Inc., enforceable
against it in accordance with its 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.
(h) Financial Condition. Mattel, Inc. has heretofore delivered to
-------------------
the Banks a consolidated balance sheet of Mattel, Inc. and its Subsidiaries for
the fiscal year ended December 31, 1993 and related consolidated statements of
income, shareholders' equity and changes in financial position of Mattel, Inc.
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 Mattel, Inc. and its Subsidiaries as at the
date thereof and the consolidated results of operations and statement of cash
flow of Mattel, Inc. and its Subsidiaries for the period then ended. Neither
Mattel, Inc. 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.
(i) Changes, Etc. Since December 31, 1992 there has been no event or
------------
events that have, either individually or in the aggregate, resulted in a
Material Adverse Effect.
(j) Title to Properties. Mattel, Inc. 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 of the Credit
Agreements 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 or the Credit Agreements since December
31, 1993.
32
(k) Litigation; Adverse Facts. There is no action, suit, proceeding
-------------------------
or arbitration (whether or not purportedly on behalf of Mattel, Inc.) 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 Mattel, Inc., threatened against or
affecting Mattel, Inc. or any of its Subsidiaries or any of Mattel, Inc.'s or
such Subsidiaries' properties which, in the reasonable judgment of Mattel, Inc.
and its executive officers (assuming adverse determination of facts which
Mattel, Inc. in good faith believes it would not successfully prove, and
considering damages which in their best judgment is the maximum that would be
awarded upon, and the likelihood of, an adverse determination of the claim or
the amount which reflects their best judgment as to that required to be paid to
settle the claims) would result in a Material Adverse Effect and there is no
basis known to such executive officers for any such action, suit or proceeding.
Neither Mattel, Inc. 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
Mattel, Inc., threatened against or affecting Mattel, Inc. or any of its
Subsidiaries which provides a reasonable basis for questioning the validity or
the enforceability of this Agreement.
(l) Payment of Taxes. All tax returns and reports of Mattel, Inc.
----------------
and its Subsidiaries required to be filed by any of them have been timely filed,
and all taxes, assessments, fees and other governmental charges upon Mattel,
Inc. 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 of the Credit
Agreements. Mattel, Inc. knows of no proposed tax assessment against it or any
of its Subsidiaries that would result in a Material Adverse Effect.
33
(m) Agreements. Neither Mattel, Inc. 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.
(n) Performance. Neither Mattel, Inc. 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
Mattel, Inc., 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.
(o) Governmental Regulation. Neither Mattel, Inc. 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 the Transferor's ability to transfer interests in the Receivables
hereunder.
(p) Employee Benefit Plans. Mattel, Inc. 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 Mattel, Inc. 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.
(q) Disclosure. No representation or warranty of Mattel, Inc.
----------
contained in this Agreement or any other document, certificate or written
statement furnished to the Banks by Mattel, Inc. since January 1, 1994 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 Mattel, Inc. 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
34
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.
SECTION 3.3. Reaffirmation of Representations and Warranties. On
-----------------------------------------------
each day that a Transfer is made hereunder (a) the Transferor, by accepting the
proceeds of such Transfer shall be deemed to have certified that (i) all
representations and warranties described in Section 3.1 are correct on and as of
such day as though made on and as of such day, and (ii) no event has occurred or
is continuing or would result from any such Transfer, which constitutes a
Termination Event or a Potential Termination Date and (b) Mattel, Inc. as
Guarantor and as Servicer shall be deemed to have certified that (i) all
representations and warranties described in Section 3.2 are correct on and as of
such day as though made on and as of such day and (ii) if Mattel, Inc. is then
the Servicer, that no event has occurred or is continuing or would result from
any such Transfer, which constitutes, or with the passage of time or the giving
of notice or both, would constitute a Servicer Default.
35
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. On or prior to the date of
---------------------
execution hereof and prior to the effectiveness of this Agreement, the
Transferor and the Guarantor shall have delivered to the Agent and the Banks
originally executed copies of this Agreement, together with originals to the
Agent and copies to the Banks of the following documents and instruments, all in
form and substance acceptable to the Agent:
(a) a Certificate of the Secretary of Mattel, Inc. (i) certifying
that, since March 19, 1993, there have been no changes in the Restated
Certificate of Incorporation, by-laws and incumbency signatures of Mattel, Inc.
(or, if changes have been made with respect thereto, specifying the nature of
such changes and attaching copies thereof to such Certificate) and (ii)
attaching copies of resolutions of the Board of Directors authorizing the
execution, delivery and performance of this Agreement and related documents to
which it is a party;
(b) good standing certificates of Mattel, Inc. from each of the
Secretaries of State of Delaware and California, each to be dated a recent date
prior to the Closing Date;
(c) a Certificate of the Secretary of the Transferor (i) certifying
that, since March 19, 1993, there have been no changes in the Certificate of
Incorporation, by-laws and incumbency signatures of the Transferor (or, if
changed have been made with respect thereto, specifying the nature of such
changes and attaching copies thereof to such Certificate) and (ii) attaching
copies of resolutions of the Board of Directors authorizing the execution,
delivery and performance of this Agreement and related documents to which it is
a party;
(d) good standing certificate of the Transferor from the Secretary of
State of California to be dated a recent date prior to the Closing Date;
36
(e) proper financing statements (Form UCC-1) naming the Transferor as
the debtor/transferor and the Agent, as agent on behalf of the Banks, as
purchaser or other similar instruments or documents as may be necessary or in
the opinion of the Agent desirable under the UCC of all appropriate
jurisdictions or any comparable Governmental Rule to perfect the ownership
interest of the Agent, on behalf of the Banks, in all Receivables;
(f) certified copies of request for information or copies (Form UCC-
11) (or a similar search report certified by parties acceptable to the Banks)
dated a date reasonably near the date of the initial Transfer listing all
effective financing statements which name the Transferor (under its present name
and any previous name) as Debtor and which are filed in jurisdictions in which
the filings were made pursuant to item (i) above together with copies of such
financing statements (none of which shall cover any Receivables or Contracts);
(g) a favorable opinion of Robert J. Normile, counsel for the
Transferor, in substantially the form of Exhibit I hereto and as to such other
matters as the Agent may reasonably request;
(h) a favorable opinion of Robert J. Normile, counsel for the
Guarantor, in substantially the form of Exhibit J hereto and as to such other
matters as the Agent may reasonably request; and
(i) an executed copy of the Written Agreement.
37
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of the Transferor. At all times
---------------------------------------
for the term of this Agreement, unless the Requisite Banks shall otherwise
consent in writing:
(a) Conduct of Business. The Transferor will carry on and conduct
-------------------
its business in substantially the same manner and in substantially the same
fields of enterprise as it is presently conducted and will do all things
necessary to remain duly incorporated, validly existing and in good standing as
a domestic corporation in its jurisdiction of incorporation and will maintain
all requisite authority to conduct its business in each jurisdiction in which
its business is presently conducted.
(b) Compliance with Governmental Rules. The Transferor will comply
----------------------------------
with all Governmental Rules, writs, judgments, injunctions, decrees or awards to
which it may become subject.
(c) Furnishing of Information and Inspection of Records. The
---------------------------------------------------
Transferor will furnish to the Agent and the Banks from time to time such
information with respect to the Receivables as the Agent or the Banks may
reasonably request, including, without limitation, listings identifying the
outstanding balance for each Receivable. The Transferor will at any time and
from time to time during regular business hours permit the Agent or the Banks,
or their agents or representatives, (i) to examine and make copies of and
abstracts from all Records and (ii) to visit the offices and properties of the
Transferor for the purpose of examining such Records, and to discuss matters
relating to the Receivables or the Transferor's performance hereunder with any
of the officers, directors, employees, agents or independent public accountants
of the Transferor having knowledge of such matters.
(d) Keeping of Records and Books of Account. The Transferor will
---------------------------------------
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records
38
evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain, all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
Receivable). The Transferor will give the Agent notice of any material change
in the administrative and operating procedures referred to in the previous
sentence.
(e) Performance and Compliance with Receivables and Contracts. The
---------------------------------------------------------
Transferor will at its expense timely and fully perform and comply with all
material provisions, covenants and other promises required to be observed by it
under the Contracts related to the Receivables.
(f) Credit and Collection Policies. The Transferor will comply in
------------------------------
all material respects with its Credit and Collection Policy in regard to each
Receivable and the related Contract.
(g) Accounting Treatment. The Transferor shall report the
--------------------
transactions contemplated by the Agreement on its financial statements as a sale
of the Transferred Interest to the Agent on behalf of the Banks.
(h) Knowledge. Promptly upon any executive officer of the Transferor
---------
obtaining knowledge of any condition or event which constitutes a Termination
Event or Potential Termination Event or becoming aware that the Agent or any
Bank has given any notice or taken any other action with respect to a claimed
Termination Event or Potential Termination Event under this Agreement, the
Transferor shall provide to the Agent an officer's certificate specifying the
nature and period of existence of any such condition or event, or specifying the
notice given and the nature of such claimed Termination Event or Potential
Termination Event, together with what action the Transferor has taken, is taking
and proposes to take with respect thereto.
(i) Written Agreement. For so long as this Agreement is in effect,
-----------------
and prior to the delivery by the Transferor of the initial Transfer Notice of
each calendar year, the Transferor shall provide the Agent and
39
the Banks with a copy of a Written Agreement in the form of Exhibit A hereto,
duly executed by the Transferor and the Obligor and appropriately revised to
reflect the Remittance Date of such calendar year.
SECTION 5.2. Negative Covenants of the Transferor. At all times
------------------------------------
during the term of this Agreement, unless the Requisite Banks shall otherwise
consent in writing:
(a) No Sales, Liens, etc. Except as otherwise provided herein, the
--------------------
Transferor will not sell, assign (by operation of Governmental Rule or
otherwise) or otherwise dispose of, or create or knowingly suffer to exist any
Adverse Claim upon (or the filing of any financing statement) or with respect
to, any Receivable, or upon or with respect to any account to which any
Collections of any Receivable are sent.
(b) Extension or Amendment of Receivables. The Transferor will not
-------------------------------------
extend the term of any Receivable beyond the Remittance Date next succeeding the
date such Receivable was created. The Transferor will not amend or modify any
Receivable or amend, modify or waive any term or condition of any Contract
related thereto except in accordance with its normal business practices as
reflected in the Credit and Collection Policy.
(c) No Change in Business or Credit and Collection Policy. The
-----------------------------------------------------
Transferor will not make any change in the character of its business or in the
Credit and Collection Policy without the prior written consent of the Agent at
the written direction of the Requisite Banks.
(d) No Modification of Written Agreement. The Transferor will not
------------------------------------
amend, supplement, alter or otherwise modify the Written Agreement.
SECTION 5.3. Affirmative Covenants of Mattel, Inc. At all times
-------------------------------------
during the term of this Agreement, unless the Requisite Banks shall otherwise
consent in writing:
(a) Financial Information. Mattel, Inc. will maintain a system of
---------------------
accounting established and
40
administered in accordance with generally accepted accounting principles, and
will furnish to the Agent and the Banks:
(i) as soon as practicable and in any event not later than
forty-five (45) days after the end of each of the first three (3) fiscal
quarters of Mattel, Inc., consolidated balance sheets of Mattel, Inc. and
its Subsidiaries as at the end of such period and for the fiscal year to
date and the related consolidated and consolidating 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 or the Treasurer of Mattel, Inc. that the consolidated statements
(and to the best of his belief, the consolidating statements) and other
materials required by this clause (a)(i) fairly present the financial
condition of Mattel, Inc. and its Subsidiaries as at the dates indicated
and the results of their operations for the periods indicated, subject to
changes resulting from year-end audit and normal year-end adjustments;
(ii) as soon as practicable and in any event not later than
ninety (90) days after the end of each fiscal year of Mattel, Inc.,
consolidated and consolidating balance sheets of Mattel, Inc. and its
Subsidiaries as at the end of such year (such consolidating statements
shall specifically detail the Transferor) and the related consolidated
(and, as to statements of income only, consolidated and consolidating)
statements of income, stockholders' equity and cash flow of Mattel, Inc.
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 (x) 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 Mattel,
Inc., which report shall state that such consolidated financial statements
present fairly the financial position of Mattel, Inc. 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 generally accepted
41
accounting principles 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 (y) in the case
of such consolidating financial statements, certified by the chief
financial or accounting officer of Mattel, Inc.; and
(iii) together with each delivery of financial statements of
Mattel, Inc. and its Subsidiaries as provided above in clauses (i) and
(ii), an officer's certificate stating that the signers thereof have
reviewed the terms of this Agreement and have made, or caused to be made
under their supervision, a review in reasonable detail of the transactions
and condition of Mattel, Inc. 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
the signers do not have knowledge of the existence as of the date of such
officer's certificate, of any condition or event which constitutes a
Termination Event or Potential Termination Event or, if any such condition
or event existed or exists, specifying the nature and period of existence
thereof.
(b) Conduct of Business. Mattel, Inc. will carry on and conduct its
-------------------
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted and will do all things necessary to
remain duly incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and will maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
presently conducted.
(c) Compliance with Governmental Rule. Mattel, Inc. will comply with
---------------------------------
all Governmental Rules, writs, judgments, injunctions, decrees or awards to
which it may become subject.
(d) Furnishing of Information and Inspection of Records. Mattel,
---------------------------------------------------
Inc. will furnish to the Agent from time to time such information with respect
to its obligations as Guarantor and Servicer hereunder as may be
42
reasonably requested by the Agent. Mattel, Inc. will at any time and from time
to time during regular business hours permit the Agent, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
Records and (ii) to visit the offices and properties of Mattel, Inc. for the
purpose of examining such Records, and to discuss matters relating to the
Receivables or Mattel, Inc.'s performance hereunder as Guarantor and as
Servicer, as the case may be, with any of the officers, directors, employees,
agents or independent public accounts of Mattel, Inc. having knowledge of such
matters.
(e) Keeping of Records and Books of Account. Mattel, Inc. will
---------------------------------------
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each Receivable and all
Collections of and adjustments to each Receivable). Mattel, Inc. will give the
Agent notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
(f) Knowledge. Promptly upon any executive officer of Mattel, Inc.
---------
obtaining knowledge of any condition or event which constitutes a Termination
Event or Potential Termination Event or becoming aware that the Agent or any
Bank has given any notice or taken any other action with respect to a claimed
Termination Event or Potential Termination Event under this Agreement, Mattel,
Inc. shall provide to the Agent an officer's certificate specifying the nature
and period of existence of any such condition or event, or specifying the notice
given and the nature of such claimed Termination Event or Potential Termination
Event, together with what action Mattel, Inc. has taken, is taking and proposes
to take with respect thereto.
43
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Servicer. The servicing and
-----------------------
administering of the Receivables shall be conducted by the Servicer. Until the
Agent gives notice to the Transferor of the designation of a new Servicer,
Mattel, Inc. is hereby designated as, and hereby agrees to perform the duties
and obligations of, the Servicer pursuant to the terms hereof. On and after the
occurrence of a Servicer Default, the Agent, on behalf of the Banks, may
designate as Servicer any Person (including the Agent) to succeed Mattel, Inc.
or any successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer
pursuant to the terms hereof.
SECTION 6.2. Duties of Servicer and Agent. (a) The Servicer shall
----------------------------
take or cause to be taken all such action as may be necessary or advisable to
facilitate the collection of each Receivable from time to time, all in
accordance with applicable Governmental Rules, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy. Each of the
Transferor, the Agent and the Banks hereby appoints as its agent the Servicer,
from time to time designated pursuant to Section 6.1, to enforce its respective
rights and interests in and under the Receivables and the Contracts. Neither the
Transferor nor the Servicer may extend the maturity of any Receivable beyond the
Remittance Date next succeeding the date of creation of such Receivable. The
Transferor shall deliver to the Servicer, and the Servicer shall hold in trust
for the Transferor and the Agent in accordance with their respective interests,
all Records which evidence or relate to any Receivables. Notwithstanding
anything to the contrary contained herein, the Agent shall have the absolute and
unlimited right to direct the Servicer to commence or settle any legal action to
enforce collection of any Receivable. In the event that the Obligor defaults in
the performance of the Written Agreement and the Servicer fails to take action
with respect to the Obligor as directed by the Agent pursuant to the preceding
sentence, notwithstanding anything to the contrary contained herein, the Agent
shall have the absolute and unlimited right
44
to take any and all steps in the Transferor's name and on behalf of the
Transferor necessary or desirable, in the determination of the Requisite Banks,
to collect all amounts due under any and all Receivables including, without
limitation, endorsing the Transferor's name on checks and other instruments
representing Collections and enforcing such Receivables and the Written
Agreement.
(b) The Agent shall, as soon as practicable following receipt
thereof, turn over to the Transferor any collections of any indebtedness of the
Obligor which is not a Receivable.
(c) On and after the occurrence of a Servicer Default, the Agent
shall have the right to require the Servicer to cause a firm of independent
public accountants (who may also render other services to the Servicer or the
Transferor) to furnish a report to the Agent to the effect that they have (i)
compared the information contained in the Transfer Notices and the Weekly
Reports with the information contained in the Records and the Servicer's records
and computer systems for such period, and that, on the basis of such examination
and comparison, such firm is of the opinion that the information contained in
such Transfer Notices and Weekly Reports reconciles with the information
contained in the Receivables and the Servicer's records and computer system and
that the servicing of the Receivables has been conducted in compliance with this
Agreement, (ii) confirmed the Eligible Receivables balance as set forth on such
Transfer Notices and Weekly Reports, and (iii) confirmed that the Receivables
treated by the Agent as Eligible Receivables in fact satisfied the requirements
of the definition thereof contained herein, except, in each case for (a) such
exceptions as such firm shall believe to be immaterial (which exceptions need
not be enumerated) and (b) such other exceptions as shall be set forth in such
statement.
SECTION 6.3. Rights After Designation of New Servicer. At any time
----------------------------------------
following the designation of a Servicer pursuant to Section 6.1:
(i) The Transferor shall, at the Agent's request and at the
Transferor's expense, give notice of the Banks' ownership of Receivables to
the Obligor and direct that payments be made directly to the
45
Agent or its designee or designate a new Collection Account.
(ii) The Transferor shall, at the Agent's request, (A) assemble
all of the Records, and shall make the same available to the Agent at a
place selected by the Agent or its designee, and (B) segregate all cash,
checks and other instruments received by it from time to time constituting
Collections of Receivables in a manner reasonably acceptable to the Agent
and shall, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer,
to the Agent or its designee.
(iii) The Transferor hereby authorizes the Agent to take any and
all reasonable steps in the Transferor's name and on behalf of the
Transferor necessary or desirable, in the determination of the Agent, to
collect all amounts due under any and all Receivables including, without
limitation, endorsing the Transferor's name on checks and other instruments
representing Collections and enforcing such Receivables and the Written
Agreement.
SECTION 6.4. Responsibilities of the Transferor. Anything herein to
----------------------------------
the contrary notwithstanding, the Transferor shall (i) perform all of its
obligations under the Contracts related to the Receivables to the same extent as
if interests in such Receivables had not been sold hereunder and the exercise by
the Agent of its rights hereunder shall not relieve the Transferor from such
obligations and (ii) pay when due any taxes, including without limitation, any
sales taxes payable in connection with the Receivables and their creation and
satisfaction. Neither the Agent nor the Banks shall have any obligation or
liability with respect to any Receivable or related Contracts, nor shall they be
obligated to perform any of the obligations of the Transferor thereunder.
46
ARTICLE VII
SERVICER DEFAULT AND TERMINATION EVENTS
SECTION 7.1. Servicer Default. The occurrence of any one or more of
----------------
the following events shall constitute a default by the Servicer hereunder (each,
a "Servicer Default"):
----------------
(a) (i) the Servicer shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in this Section 7.1)
and such failure shall remain unremedied for ten (10) Business Days or (ii) the
Servicer shall fail to make any payment or deposit to be made by it hereunder
when due; or
(b) any representation, warranty, certification or statement made by
the Servicer in this Agreement or in any other document delivered pursuant
hereto shall prove to have been incorrect in any material respect when made or
deemed made; or
(c) the Agent, on behalf of the Banks, shall fail to have a valid and
perfected first priority ownership or security interest in and to the
Receivables; or
(d) any Event of Bankruptcy shall occur with respect to the Servicer;
or
(e) the Servicer shall merge with or into any entity whereby it is not
the surviving entity; or
(f) [reserved]
(g) an event of acceleration with respect to any indebtedness in
excess of $10,000,000 under any agreement to which the Servicer or any one of
its domestic subsidiaries is a party occurs.
SECTION 7.2. Servicer Default Remedies. If a Servicer Default
-------------------------
occurs, the Agent shall, upon written request of the Requisite Banks, by notice
to the Transferor, terminate the Servicer's rights as Servicer hereunder and
appoint a successor Servicer (which successor Servicer may be itself).
47
SECTION 7.3. Termination Events. The occurrence of any one or more
------------------
of the following events shall constitute a Termination Event hereunder:
(a) the occurrence of a Servicer Default; or
(b) the Transferor or the Guarantor shall fail to make any payment or
deposit required to be made by it hereunder when due; or
(c) any Event of Bankruptcy shall occur with respect to the Transferor
or the Guarantor; or
(d) the material breach of any representation or warranty contained
herein, or the failure to comply with any material covenant contained herein, by
the Transferor or the Guarantor; or
(e) the Agent, on behalf of the Banks, shall fail to have a valid and
perfected first priority ownership or security interest in and to the
Receivables; or
(f) the Transferor or the Guarantor shall merge with or into any
entity whereby it is not the surviving entity; provided that the merger of the
--------
Transferor or the Guarantor with or into the other shall not constitute a
Termination Event under this Section 7.3(f); or
(g) any material adverse change in the operations of the Transferor
or the Guarantor, or any other event which materially affects the ability of the
Transferor or the Guarantor to perform its obligations hereunder; or
(h) at any time the Percentage Factor exceeds 80% unless the
Transferor, within ten (10) days of such occurrence, either (i) deposits into
the Collection Account an amount equal to the amount by which the Total
Outstanding Investment plus the Discount Reserve exceeds 80% of the aggregate
----
outstanding balance of Eligible Receivables or (ii) otherwise reduces the
Percentage Factor to less than or equal to 80%; or
48
(i) the second highest short-term unsecured debt rating assigned to
the Obligor by S&P, Moody's or Duff falls below "A-1", "P-1" or "D-1",
respectively, or the second highest long-term senior unsecured debt rating
assigned to the Obligor by S&P, Moody's or Duff falls below "A-", "A3" or "A-",
respectively; or
(j) the Obligor fails to remit full payment in respect of the
Receivables on any Remittance Date to the Collection Account; or
(k) the occurrence of an event of acceleration with respect to any
indebtedness in excess of $10,000,000 under any agreement to which the Guarantor
or any one of its domestic subsidiaries is a party; or
(l) the occurrence of an Event of Default (as defined in the Credit
Agreements) under the Credit Agreements.
SECTION 7.4. Termination Event Remedies. Upon the occurrence of a
--------------------------
Termination Event described in clause (c) or (e) of Section 7.3 above, all
outstanding Tranches shall thereafter accrue additional Discount at a rate equal
to the difference, for each respective Tranche, between (x) the highest
Participation Rate applicable to any Tranche plus 2% and (y) the Participation
Rate applicable to such Tranche at the time of such Termination Event, and the
commitment of the Banks to purchase undivided interests in the Receivables from
the Transferor shall automatically terminate. Upon the occurrence of a
Termination Event other than an event described in clause (c) or (e) of Section
7.3, the Agent, upon the written request of the Requisite Banks, shall, by
written notice to the Transferor, the Guarantor and the Banks, (a "Notice of
---------
Termination") (i) specify that additional Discount with respect for each
- -----------
outstanding Tranche shall thereafter accrue as described in this Section 7.4
and/or (ii) terminate the commitment of the Banks to purchase undivided
interests in the Receivables from the Transferor. In the event that any Total
Outstanding Investment remains unpaid on and after any Remittance Date, such
Total Outstanding Investment will thereafter accrue Discount at the Alternate
Rate until paid in full.
SECTION 7.5. Potential Termination Event Remedies. Upon the
------------------------------------
occurrence of a Potential Termination
49
Event, the Agent, upon the written request of the Requisite Banks shall, by
notice to the Transferor, terminate the commitment of the Banks to purchase
undivided interests in the Receivables from the Transferor.
50
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor. Without limiting any
-----------------------------
other rights which the Agent or the Banks may have hereunder or under applicable
Governmental Rule, the Transferor hereby agrees to indemnify the Agent and the
Banks and any permitted assigns and their respective officers, directors and
employees (collectively, "Indemnified Parties") from and against any and all
-------------------
damages, losses, claims, liabilities, costs and expenses, including reasonable
attorneys' fees (which such attorneys may be employees of the Agent or any one
of the Banks) and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by any of them
-------------------
arising out of or as a result of this Agreement or the ownership, either
directly or indirectly, by the Agent or the Banks of a Transferred Interest,
excluding, however, (i) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of an Indemnified Party or (ii)
recourse (except as otherwise specifically provided in this Agreement) for
uncollectible Receivables. Without limiting the generality of the foregoing,
the Transferor shall indemnify each Indemnified Party for Indemnified Amounts
relating to or resulting from:
(i) reliance on any material representation or warranty made by
the Transferor or Mattel, Inc. (or any officers of the Transferor or
Mattel, Inc.) under or in connection with this Agreement, any Transfer
Notice, Weekly Report or any other information or report delivered by the
Transferor or Mattel, Inc. pursuant hereto, which shall have been false or
incorrect in any material respect when made or deemed made; or
(ii) the failure by the Transferor to comply with any applicable
Governmental Rule with respect to any Receivable or the related Contract,
or the nonconformity of any Receivable or the related Contract with any
such applicable Governmental Rule; or
(iii) the failure to vest and maintain vested in the Agent, on
behalf of the Banks, an
51
undivided percentage ownership interest, to the extent of a Transferred
Interest, in the Receivables included in such Transferred Interest, free
and clear of any Adverse Claim; or
(iv) the failure to file by the Transferor, or any delay in
filing by the Transferor, any required financing statements, continuation
statements, or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable Governmental Rules with respect
to any Receivable included in a Transferred Interest; or
(v) any dispute, claim, offset or defense (other than discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable included in the Transferred Interest (including, without
limitation, a defense based on such Receivable or the related Contract not
being legal, valid and binding obligation of the Obligor enforceable
against it in accordance with its terms), or any other claim resulting from
the sale of merchandise related to such Receivable or the furnishing or
failure to furnish such merchandise; or
(vi) any failure of Mattel, Inc., as Servicer or otherwise, to
perform its duties or obligations in accordance with the provisions of
Article VI; or
(vii) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of
whatever sort arising out of or in connection with merchandise or services
which are the subject of any Receivable.
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. (a) If
------------------------------------------
after the date hereof, the adoption of any Governmental Rule or bank regulatory
guideline or any amendment or change in the interpretation of any existing or
future Governmental Rule or bank regulatory guideline by any Governmental Person
charged with the administration, interpretation or application thereof, or the
compliance with any directive of any Governmental Person (in the case of any
bank regulatory guideline, whether or not having the force of Governmental
Rule):
52
(i) shall subject any Indemnified Party to any tax, duty or
other charge with respect to this Agreement, any Transferred Interest, the
Receivables or payments of amounts due hereunder, or shall change the basis
of taxation of payments to any Indemnified Party of amounts payable in
respect of this Agreement, any Transferred Interest, the Receivables or
payments of amounts due hereunder or otherwise in respect of this
Agreement, any Transferred Interest or the Receivables (except for changes
in the rate of general corporate, franchise, net income or other income tax
imposed on such Indemnified Party by the jurisdiction in which such
Indemnified Party's principal executive office or any funding office is
located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation, any
such requirement imposed by the Board of Governors of the Federal Reserve
System) against assets of, deposits with or for the account of, or credit
extended by, any Indemnified Party or shall impose on any Indemnified Party
or on the United States market for certificates of deposit or the
Eurodollar interbank market any other condition affecting this Agreement,
any Transferred Interest, the Receivables or payments of amounts due
hereunder or otherwise in respect of this Agreement, any Transferred
Interest or the Receivables; or
(iii) imposes upon any Indemnified Party any other expense
(including, without limitation, reasonable attorneys' fees and expenses,
and expenses of litigation or preparation therefor in contesting any of the
foregoing) with respect to this Agreement, any Transferred Interest, the
Receivables or payments of amounts due hereunder or otherwise in respect of
this Agreement, the Transferred Interests or the Receivables, and the
result of any of the foregoing is to increase the cost to such Indemnified
Party with respect to this Agreement, any Transferred Interest, the
Receivables, the obligations hereunder, or the funding of any purchases
hereunder, by an amount deemed by such Indemnified Party to be material,
then, within ten (10) days after demand by the Agent, the Transferor shall
pay
53
to such Indemnified Party such additional amount or amounts as will
compensate such Indemnified Party for such increased cost.
(b) If any Indemnified Party shall have determined that after the
date hereof, the adoption of any applicable Governmental Rule or bank regulatory
guideline regarding capital adequacy, or any change therein, or any change in
the interpretation thereof by any Governmental Person, or any directive
regarding capital adequacy (in the case of any bank regulatory guideline,
whether or not having the force of Governmental Rule) of any such Governmental
Person, has or would have the effect of reducing the rate of return on capital
of such Indemnified Party (or its parent) as a consequence of such Indemnified
Party's obligations hereunder or with respect hereto to a level below that which
such Indemnified Party (or its parent) could have achieved but for such
adoption, change, request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Indemnified Party
to be material, then from time to time, within ten (10) days after demand by
such Indemnified Party, the Transferor shall pay to such Indemnified Party such
additional amount or amounts as will compensate such Indemnified Party (or its
parent) for such reduction.
(c) Each Bank will promptly notify the Agent, and the Agent will
promptly notify the Transferor of any event of which such Bank has knowledge,
occurring after the date hereof, which will entitle an Indemnified Party to
compensation pursuant to this Section. Any notice by the Agent, acting on
behalf of a Bank, claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use
any reasonable averaging and attributing methods.
SECTION 8.3. Other Costs, Expenses and Related Matters. The
-----------------------------------------
Transferor agrees, upon receipt of a written invoice, to pay or cause to be
paid, and to save the Agent harmless against liability for the payment of,
all reasonable out-of-pocket expenses (including, without limitation,
attorneys', accountant's and other third parties' fees and expenses, any filing
fees and expenses incurred by officers or employees of the Agent) incurred
54
by or on behalf of the Agent (i) in connection with the negotiation, execution,
delivery and preparation of this Agreement and any documents or instruments
delivered pursuant hereto and the transactions contemplated hereby (including,
without limitation, the perfection or protection of the Transferred Interest)
and (ii) from time to time (a) relating to any amendments, waivers or consents
under this Agreement, (b) arising in connection with the Agent's or their
agents' enforcement or preservation of rights (including, without limitation,
the perfection and protection of the Transferred Interest under this Agreement),
or (c) arising in connection with any audit, dispute, disagreement, litigation
or preparation for litigation involving this Agreement (all of such amounts,
collectively, "Transaction Costs").
-----------------
SECTION 8.4. Reconveyance Under Certain Circumstances. The
----------------------------------------
Transferor agrees to accept the reconveyance from the Agent, on behalf of the
Banks, of the Transferred Interest if the Agent notifies the Transferor of a
material breach of any representation or warranty made or deemed made pursuant
to Article III of this Agreement, and Transferor shall fail to cure such breach
within ten (10) days (or, in the case of the representations and warranties in
Sections 3.1(a) and 3.1(e), five (5) days) of such notice. The reconveyance
price (which shall be an amount equal to the Aggregate Unpaids) shall be paid by
the Transferor directly to the Agent for the account of the Banks (and not to
the Collection Account) in immediately available funds on such tenth day (or
fifth day, if applicable).
55
ARTICLE IX
THE AGENT
SECTION 9.1. Appointment. Each Bank hereby irrevocably designates
-----------
and appoints NationsBank of Texas, N.A., as the Agent of the Banks under this
Agreement, and each of the Banks hereby irrevocably authorizes NationsBank of
Texas, N.A., as the Agent for such Bank, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers as are expressly
delegated to the Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any of the Banks, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Agent.
SECTION 9.2. Attorneys-in-fact. The Agent may execute any of its
-----------------
duties under this Agreement by or through agents 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 gross negligence or willful
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
SECTION 9.3. Limitation on Liability. Neither the Agent nor any of
-----------------------
its officers, directors, employees, agents or attorneys-in-fact shall be liable
to the Banks for any action lawfully taken or omitted to be taken by it or them
under or in connection with this Agreement except for its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its affiliates
shall be responsible in any manner to any of the Banks for any recitals,
statements, representations or warranties made by the Transferor, the Servicer
or the Guarantor, or any officer or partner thereof contained in this Agreement,
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 for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, or for any failure of the Transferor, the
Servicer or the Guarantor to perform their obligations thereunder.
56
The Agent shall not be under any obligation to any of the Banks to ascertain or
to inquire as to the observance or performance of any of the terms, covenants or
conditions of this Agreement on the part of the Transferor, the Servicer or the
Guarantor or to inspect the properties, books or records of the Transferor, the
Servicer or the Guarantor.
SECTION 9.4. Reliance. The Agent shall be entitled to rely, and
--------
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy or telex
message, statement, order 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, without
limitation, counsel to the Transferor, the Servicer or the Guarantor),
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 unless it shall first receive advice or concurrence of the Requisite
Banks as provided in this Agreement (or from all of the Banks if so specified
herein) or 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
in accordance with a request of the Requisite Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Banks.
SECTION 9.5. Notice of Termination Event. The Agent shall not be
---------------------------
deemed to have knowledge or notice of the occurrence of any Termination Event or
Servicer Default hereunder unless the Agent has received written notice from a
Bank, the Transferor, the Servicer or the Guarantor, describing such Termination
Event or Servicer Default. In the event that the Agent receives such a notice,
the Agent shall promptly give notice thereof to the Banks and Bank of America
National Trust and Savings Association as agent under the Credit Agreements.
Except as otherwise provided herein, the Agent shall take such action to enforce
this Agreement as shall be directed by the Requisite Banks. In the event that
any remedy is
57
exercised pursuant to Section 7.4 of this Agreement, each Bank and the Agent
shall pursue remedies designated by the Requisite Banks to the same extent as
though such demand was caused by the action of all Banks, and each Bank agrees
to act as expeditiously as possible so as to maximize recovery. Each Bank
agrees that no Bank shall have any right individually to take action with
respect to the Transferred Interest, it being understood and agreed that such
rights and remedies with respect to any portion of the Transferred Interest may
be exercised by the Agent as directed by the Requisite Banks for the ratable
benefit of the Banks.
SECTION 9.6. No Representations. Each Bank expressly acknowledges
------------------
that neither the Agent nor any of its affiliates has made any representations or
warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Transferor or the Guarantor, 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 or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
financial condition, creditworthiness, affairs, status and nature of the
Transferor and the Guarantor and made its own decision to enter into this
Agreement. Each Bank also represents that it will, independently and without
reliance upon the Agent or any other Bank, 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 to make such investigation as its deems necessary to inform
itself as to the status and affairs, financial or otherwise, of the Transferor
and the Guarantor. Except for notices, reports and other documents expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Transferor and the Guarantor which may come into the possession of the Agent or
any of its affiliates.
SECTION 9.7. Indemnification. The Banks agree to indemnify the Agent
---------------
in its capacity as such (to the extent not reimbursed by the Transferor or the
Guarantor
58
and without limiting any obligations of the Transferor or the Guarantor so to
do, ratably according to their respective Percentages as then in effect) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may at any time (including without limitation at any
time following the payment of the Aggregate Unpaids) be imposed on, incurred by
or asserted against the Agent in any way relating to or arising out of this
Agreement or any other document contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; provided that no Bank shall be
--------
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the termination of this Agreement.
SECTION 9.8. Bank. The Agent and its affiliates may make loans to,
----
accept deposits from and generally engage in any kind of business with the
Obligor, the Transferor and the Guarantor as though it were not the Agent
hereunder. With respect to its loans made or renewed by it and any note issued
to it, the Agent shall have the same rights and powers under this Agreement as
any Bank and may exercise the same as though it were not the Agent, and the
terms "Bank" and "Banks" shall, unless the context otherwise indicates, include
the Agent in its individual capacity.
SECTION 9.9. Resignation. If the Agent shall resign as Agent under
-----------
this Agreement, then the Requisite Banks may appoint a successor Agent for the
Banks, which shall be a commercial bank organized under the Governmental Rules
of the United States or any state thereof, having a combined surplus and capital
of not less than $500,000,000, whereupon such successor Agent shall succeed to
the rights, powers and duties of the former Agent and the obligations of the
former Agent shall be terminated and cancelled, without any other or further act
or deed on the part of such former Agent or any of the parties to this
Agreement; provided, however, that the former Agent's resignation shall not
-------- -------
become effective until such successor Agent has been appointed and has
59
succeeded of record to all right, title and interest of the former Agent in the
Receivables; provided, further however, if the Requisite Banks cannot agree as
-------- ------- -------
to a successor Agent within ninety (90) days after such resignation, the Agent
shall appoint a successor Agent and the parties hereto agree to execute whatever
documents are necessary to effect such action under this Agreement or any other
document executed pursuant to this Agreement; provided, however, in such event
-------- -------
all provisions of this Agreement shall remain in full force and effect. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article IX shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
SECTION 9.10. Sharing of Payments, etc. The Banks agree that (i)
-------------------------
with respect to all amounts received by each of them with respect to the
Aggregate Unpaids, whether in the nature of a return of any investment or
discount, or amounts due to a particular Bank in respect of any commitment fees
or facility fees hereunder, equitable adjustment will be made so that, in
effect, all such amounts will be shared among the Banks in proportion to the
portion of the Aggregate Unpaids due each Bank, whether received by voluntary
payment, or by the exercise of the right of set-off or banker's lien or secured
claims under the Bankruptcy Code as now or hereafter amended, altered, modified
or replaced, by counterclaim or cross-action or by the enforcement of this
Agreement; (ii) if any of them shall exercise any right of counterclaim, set-
off, banker's lien or otherwise or as adequate protection of a deposit treated
as cash collateral under the Bankruptcy Code, receives payment or reduction of
any amounts due to such Bank hereunder, which is greater than the proportion
received by any other Bank in respect of the amounts due hereunder to such other
Bank, then the Bank receiving such proportionately greater payment shall (x)
notify each other Bank and the Agent of such receipt and (y) purchase
participations (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in the amounts due hereunder to the other Banks so that
all such recoveries of amounts due hereunder shall be shared by the Banks in
proportion to the amounts due them hereunder; provided that the foregoing
--------
provisions shall not apply to any such amount received by a foreign branch,
subsidiary or affiliate of any Bank which is applied by that Bank to the payment
of any
60
indebtedness of a foreign subsidiary. If all or any portion of such payment is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
SECTION 9.11. Independent Agreements. The provisions contained in
----------------------
Sections 9.1 through 9.8 and 9.10 of this Article IX constitute independent
obligations and agreements of the Agent and the Banks, and the Transferor and
the Guarantor shall not be deemed parties thereto nor bound thereby. The
Transferor and the Guarantor do acknowledge the rights of the Banks and the
Agent under Section 9.8.
61
ARTICLE X
GUARANTY
SECTION 10.1. Guaranty of Obligations. For valuable consideration,
-----------------------
the 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 payment
and performance obligations of the Transferor hereunder owing to the Agent and
the Banks. The phrase "payment and performance obligations of the Transferor"
(hereinafter collectively referred to as the "Obligations") is used herein in
its most comprehensive sense and includes any and all advances, debts,
obligations, and liabilities of the Transferor, now, or hereafter made,
incurred, or created, whether voluntarily or involuntarily, and however arising,
including, without limitation, any and all attorneys' fees, costs, premiums,
charges, or interest owed by the Transferor to the Agent and/or the Banks,
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, whether the Transferor 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.
SECTION 10.2. Guaranty Continuing. This guaranty is a continuing
-------------------
guaranty which relates to any Obligations, including those which arise under
successive transactions which shall either cause the Transferor 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 with interest as applicable. Any payment by the Guarantor shall not
reduce its maximum obligation hereunder.
SECTION 10.3. Guarantor Directly Liable. The Guarantor agrees that
-------------------------
it is directly and primarily liable to the Agent for the benefit of the Banks,
that its obligations hereunder are independent of the Obligations of the
Transferor, 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
62
the Transferor or whether the Transferor is joined in any such action or
actions. The Guarantor agrees that any releases which may be given by the Agent
and the Banks to the Transferor or any other guarantor shall not release it from
this Guaranty.
SECTION 10.4. No Impairment. 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 Termination Event or Servicer Default under the terms and provisions of this
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 this
Agreement or of any action under this guaranty;
(e) any failure, omission or delay on the part of the Agent and/or
the Banks to enforce, assert or exercise any right, power or remedy conferred in
this Agreement or any other indulgence or similar act on the part of the Agent
and/or the Banks 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 Transferor 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; or
63
(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.
To the extent any of the foregoing refers to any actions which the
Agent or the Banks may take, the Guarantor hereby agrees that the Agent and/or
the Banks may take such actions in such manner, upon such terms, and at such
times as the Agent or the Banks, 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.
SECTION 10.5. Waiver. The Guarantor hereby waives:
------
(a) any and all rights to require the Agent or the Banks to prosecute
or seek to enforce any remedies against the Transferor or any other party liable
to the Agent or the Banks on account of the Obligations;
(b) any right to assert against the Agent or the Banks any defense
(legal or equitable), set-off, counterclaim, or claim which the Guarantor may
now or at any time hereafter have against the Transferor or any other party
liable to the Agent or the Banks in any way or manner under this 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 this Agreement 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 Banks 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 Transferor for reimbursement, or any other rights of the Guarantor to
proceed against the
64
Transferor, against any other guarantor, or against any other security, with the
Guarantor understanding that the exercise by the Agent and/or the Banks of
certain rights and remedies may offset or eliminate the Guarantor's right of
subrogation against the Transferor, 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) without limiting the generality of the foregoing, the Guarantor
hereby expressly waives any and all benefits of (i) California Civil Code
Sections 2809, 2810, 2819, 2825, 2839, 2845 through 2850, 2899 and 3433 and (ii)
California Code of Civil Procedure Sections 580(a), 580(b), 580(d) and 726.
SECTION 10.6. Subrogation. The Guarantor hereby agrees that unless
-----------
and until all Obligations have been paid to the Agent and the Banks in full, it
shall not have any rights of subrogation, reimbursement or contribution as
against the Transferor 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 this Agreement may affect or eliminate
Guarantor's right of subrogation if any, against the Transferor and that
Guarantor may therefore incur a partially or totally non-reimbursable liability
hereunder; nevertheless, Guarantor hereby authorizes and empowers the Agent and
the Banks 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.
SECTION 10.7. Information. The Guarantor is presently informed of
-----------
the financial condition of the Transferor 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
65
covenants that it will continue to keep itself informed of the financial
condition of the Transferor 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 Banks 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.
SECTION 10.8. Evidence of Obligations. 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.
66
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Term of Agreement. This Agreement shall terminate
-----------------
following the later of (i) the Termination Date or (ii) the date on which the
Total Outstanding Investment has been reduced to zero, all accrued Discount has
been paid in full and all other Aggregate Unpaids have been paid in full;
provided, however, that (i) the rights and remedies of the Banks with respect to
- -------- -------
any representation and warranty made or deemed to be made by Transferor pursuant
to this Agreement, (ii) the indemnification and payment provisions of Article
VIII and (iii) the agreement set forth in Section 9.10, shall be continuing and
shall survive any termination of this Agreement.
SECTION 11.2. Waivers; Amendments. No failure or delay on the part
-------------------
of the Agent or the Banks in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. No notice to or
demand on the Transferor, the Servicer or the Guarantor in any case shall
entitle the Transferor, the Servicer or the Guarantor, as the case may be, to
any other or further notice or demand in similar or other circumstances. The
rights and remedies herein provided shall be cumulative and nonexclusive of any
rights or remedies provided by Governmental Rule. Any provision of this
Agreement may be amended if, but only if, such amendment is in writing and is
signed by the Transferor, the Servicer, the Guarantor, the Agent and the
Requisite Banks; provided, however, that no such waiver, amendment or consent
-------- -------
shall, unless in writing and signed by all of the Banks, the Transferor, the
Servicer, the Guarantor and acknowledged by the Agent, (a) increase or extend
any Bank's Bank Commitment or subject any Bank to additional obligations; (b)
postpone or delay any date fixed for any payment of fees or any other amounts
due to the Banks (or any of them) hereunder; (c) reduce any fees or other
amounts payable to the Banks (or any Bank) hereunder; (d) change any Bank's
Percentage; (e) amend this Section 11.2 or Section 9.10; or (f) release the
Guarantor from any obligation undertaken by it pursuant to this Agreement;
provided, further, however, that no amendment, waiver or
- -------- ------- -------
67
consent shall require the consent of a Bank or, in the case of participations, a
participant, if any such amendment, waiver or consent would not change the
dollar amount of such participant's participation or would not decrease the
dollar amount of, or extend the maturity of, any Obligation owing to such Bank
or such participant.
SECTION 11.3. Notices. Except as provided below, all communications
-------
and notices provided for hereunder shall be in writing and shall be sent by
telecopy and shall be given to the other party at its telecopy number set forth
on the signature page hereof or at such other telecopy number as such party may
hereafter specify for the purposes of notice to such party. Each such notice or
other communication shall be effective when such telecopy is transmitted to the
telecopy number specified below and when confirmation of delivery is received:
If to the Transferor:
Mattel Sales Corp.
333 Continental Boulevard
El Segundo, California 90245
Attention: William Stavro
Telephone: (310) 524-3202
Telecopy: (310) 524-3215
If to the Guarantor or Servicer:
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245
Attention: William Stavro
Telephone: (310) 524-3202
Telecopy: (310) 524-3215
If to the Agent:
NationsBank of Texas, N.A.
901 Main Street
Dallas, Texas 75202
Attention: Ms. Kirsty Green
Telephone: (214) 508-2335
Telecopy: (214) 508-2515
68
If to the Banks, to their addresses set forth on the signature pages
hereto.
SECTION 11.4. Governing Law; Integration. (a) This Agreement 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 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.
(b) Any legal action or proceeding with respect to this Agreement 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 Guarantor, the Transferor and the Banks consents, for
itself and in respect of its property, to the non-exclusive jurisdiction of
those courts. Each of the Guarantor, the Transferor 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 Guarantor, the Transferor 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.
SECTION 11.5. Severability; Counterparts. This Agreement 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
Agreement. Any provisions of this Agreement 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.
69
SECTION 11.6. Successors and Assigns. This Agreement shall be
----------------------
binding on the parties hereto and their respective successors; provided,
--------
however, that subject to Section 11.9, no party to this Agreement may assign any
- -------
of its rights or delegate any of its duties hereunder.
SECTION 11.7. Confidentiality. 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 Guarantor or any Subsidiary of the
Guarantor, or by the Agent on such Guarantor's or Subsidiary's behalf, in
connection with this Agreement or any documents related hereto, and neither it
nor any of its Affiliates shall use any such information for any purpose or in
any manner other than pursuant to the terms contemplated by this Agreement;
except to the extent such information (i) was or becomes generally available to
the public other than as a result of a disclosure by the Bank, or (ii) was or
becomes available on a non-confidential basis from a source other than the
Guarantor, provided that such source is not bound by a confidentiality agreement
with the Guarantor 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 Guarantor in
advance of providing such information so that the Guarantor 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 Guarantor
authorizes each Bank to disclose to any Participant and to any prospective
Participant, such financial and other information in such Bank's possession
concerning the Guarantor or its Subsidiaries which has been delivered to the
Agent or the Banks pursuant to this Agreement or which has been delivered to the
Agent or the Banks by the Guarantor in connection with the Banks' credit
evaluation of the Guarantor prior to entering into this Agreement; provided
--------
that, unless otherwise agreed by the Guarantor, such
70
Participant agrees in writing to such Bank to keep such information confidential
to the same extent required of the Banks hereunder.
SECTION 11.8. Characterization of the Transactions Contemplated by
----------------------------------------------------
the Agreement. It is the intention of the parties that the transactions
- -------------
contemplated hereby constitute the sale of the Transferred Interest, conveying
good title thereto free and clear of any Adverse Claims to the Agent, on behalf
of the Banks, and that the Transferred Interest not be part of the Transferor's
estate in the event of an insolvency. If, notwithstanding the foregoing, the
transactions contemplated hereby should be deemed a financing, the parties
intend that the Transferor shall be deemed to have granted to the Agent on
behalf of the Banks, and the Transferor hereby grants to the Agent, on behalf of
the Banks, a first priority perfected security interest in all of the
Transferor's right, title and interest in, to and under the Receivables, and
that this Agreement shall constitute a security agreement under applicable law.
SECTION 11.9. Sales of Participations. Upon advance written notice
-----------------------
to the Transferor, each Bank shall have the right at any time to sell or
otherwise transfer participations in all or any part of their pro rata portion
of the Transferred Interest, to one or more Affiliates of such Bank or to one or
more commercial banks, merchant banks, savings and loan associations or (with
the consent of the Transferor) any other institution (a "Participant"); provided
--------
that any such disposition shall be in a minimum amount of $5,000,000 and such
Bank shall concurrently with any sale of a participation herein sell a ratable
participation under each of the Credit Agreements and thereafter cause any such
participation herein to remain ratable with such participation under each of the
Credit Agreements. The Transferor hereby acknowledges and agrees that any such
disposition will give rise to a direct obligation of the Transferor to the
Participant and the Participant shall be entitled to the benefit of Section 9.10
as if it were a "Bank"; provided further, that in the case of a participation,
-------- -------
(i) the Bank's obligations under this Agreement shall remain unchanged, (ii) the
Bank shall remain solely responsible for the performance of such obligations,
(iii) the Transferor and the Agent shall continue to deal solely and directly
with the Bank in connection with the
71
Bank's rights and obligations under this Agreement, and (iv) no Bank shall
transfer or grant any participating interest under which the Participant shall
have rights to approve any amendment to, or any consent or waiver with respect
to this Agreement except to the extent such amendment, consent or waiver would
require unanimous consent. In the case of any such participation, the
Participant shall not have any rights under this Agreement, or any documents
related hereto, and all amounts payable by the Transferor 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 a
Termination Event, 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.
72
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement this 18th day of March, 1994.
MATTEL SALES CORP.,
as Transferor
By: _______________________
Name:
Title:
MATTEL, INC., as Guarantor
and Servicer
By: _______________________
Name:
Title:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By: _______________________
Name:
Title:
73
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- --------------
13.0 32,500,00 NATIONSBANK OF TEXAS,
N.A.
By:
---------------------
Name:
Title:
Notice Address: 444 S. Flower Street, Suite 1500
Los Angeles, California 90071
Attn: J. Blake Seaton
74
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- --------------
13.0 32,500,000 BANK OF AMERICA
NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
--------------------
Name:
Title:
Notice Address: 1850 Gateway Boulevard, 4th Floor
Concord, California 94520
75
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- ---------------
10.0 25,000,000 PNC BANK, NATIONAL
ASSOCIATION
By:
--------------------
Name:
Title:
Notice Address: 55 South Lake Avenue, Suite 650
Pasadena, California 91101
Attn: Ted A. Dunn
76
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- ---------------
10.0 25,000,000 CHEMICAL BANK
By:
--------------------
Name:
Title:
Notice Address: Corporate Banking Group
270 Park Avenue, 10th Floor
New York, New York 10017
Attn: Ted Swarmer
77
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- ---------------
10.0 25,000,000 THE FIRST NATIONAL
BANK OF BOSTON
By:
--------------------
Name:
Title:
Notice Address: 100 Federal Street, 6th Floor
Boston, Massachusetts 02110
Attn: J. Peter Mitchell
78
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- ---------------
10.0 25,000,000 THE TORONTO-DOMINION
BANK
By:
--------------------
Name:
Title:
Notice Address: 909 Fannin
Houston, Texas 77010
Attn: Lisa Allison
79
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- -------------- --------------
6.0 15,000,000 CONTINENTAL BANK, N.A.
By:___________________
Name:
Title:
Notice Address: 231 S. LaSalle Street
Chicago, Ilinois 60697
Attn: Miriam L. Wiliams
80
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ---------------- ---------------
4.0 10,000,000 ABN AMRO BANK N.V.
By:
-------------------
Name:
Title:
Notice Address: Los Angeles International Branch
300 South Grand Avenue, Suite 1115
Los Angeles, California 90071
Attn: Sander Pruijs
81
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- --------------
4.0 10,000,000 DRESDNER BANK AG
Los Angeles Agency
By:
--------------------
Name:
Title:
Notice Address: Los Angeles Agency
725 South Figueroa Street, Suite 2090
Los Angeles, California
Attn: Dennis Blank
82
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- --------------
4.0 10,000,000 MANUFACTURERS &
TRADERS TRUST CO.
By:
---------------------
Name:
Title:
Notice Address: 1 Fountain Plaza
Buffalo, New York 14203
Attn: Geoffrey R. Fenn
83
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- --------------
4.0 10,000,000 ISTITUTO BANCARIO SAN
PAOLO DI TORINO SPA
By:
---------------------
Name:
Title:
By:
---------------------
Name:
Title:
Notice Address: 444 South Flower Street
Suite 4550
Los Angeles, California 90071
Attn: Glen Binder
84
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- --------------
4.0 10,000,000 THE BANK OF
CALIFORNIA, N.A.
By:
--------------------
Name:
Title:
Notice Address: 550 South Hope Street
Fifth Floor
Los Angeles, California
Attn: Thomas Tegart
85
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- --------------
4.0 10,000,000 BANQUE NATIONALE
DE PARIS
By:
--------------------
Name:
Title:
By:
--------------------
Name:
Title:
Notice Address: 725 South Figueroa Street
Suite 2090
Los Angeles, California 90017
Attn: Rafael C. Lumanlan
86
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
- ----------------- --------------
4.0 10,000,000 MARINE MIDLAND BANK
By:
--------------------
Name:
Title:
Notice Address: 140 Broadway, Sixth Floor
New York, New York 10005-1180
Attn: Mary Ann Tappero
87