EXHIBIT 99.1
RECEIVABLES PURCHASE AGREEMENT
among
MATTEL FACTORING, INC.,
as Transferor
MATTEL, INC.,
as Servicer and Guarantor
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Purchasers
and
NATIONSBANK OF TEXAS, N.A.,
as Agent
Dated as of March 11, 1998
RECEIVABLES PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS............................................ 1
Section 1.1. Certain Defined Terms........................... 1
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Section 1.2. Other Terms..................................... 9
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ARTICLE II. AMOUNTS AND TERMS OF THE PURCHASES.................... 9
Section 2.1. Purchase Facility............................... 9
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Section 2.2. Making Purchases................................ 9
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Section 2.3. Payments and Computations, Etc.................. 10
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Section 2.4. Collection Account.............................. 11
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Section 2.5. Facility Termination Date....................... 11
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Section 2.6. Adjustment of Facility Limit.................... 12
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Section 2.7. Deficiency Advances............................. 12
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Section 2.8. Commitment and Other Fees. (a)................. 12
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ARTICLE III. CONDITIONS OF PURCHASES.............................. 13
Section 3.1. Conditions Precedent to Initial Purchase......... 13
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Section 3.2. Conditions Precedent to All Purchases............ 13
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ARTICLE IV. SERVICING AND SETTLEMENT PROCEDURES................... 14
Section 4.1. Appointment of Servicer.......................... 14
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Section 4.2. Duties of Servicer............................... 14
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Section 4.3. Servicer Default................................. 15
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Section 4.4. Servicer Default Remedies........................ 15
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Section 4.5. Responsibilities of the Transferor............... 15
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ARTICLE V. REPRESENTATIONS AND WARRANTIES......................... 16
Section 5.1. Representations and Warranties................... 16
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ARTICLE VI. COVENANTS............................................. 18
Section 6.1. Covenants........................................ 18
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a. Compliance with Laws, Etc............................. 18
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b. Offices, Records and Books of Account; Etc............ 18
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c. Performance and Compliance with Contracts and Credit
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and Collection Policy.............................. 19
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d. Ownership Interest, Etc............................... 19
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e. Sales, Liens, Etc..................................... 19
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f. Extension or Amendment of Receivables................. 19
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g. Change in Business or Credit and Collection Policy.... 19
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h. Audits................................................ 19
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i. Status of Listed Receivables.......................... 20
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j. Reporting Requirements................................ 20
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k. General Restrictions.................................. 20
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l. Mergers, Acquisitions, Sales, Investments, Etc........ 21
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m. No Modification of the Purchase and Sale Agreement.... 21
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ARTICLE VII. INDEMNIFICATION...................................... 21
Section 7.1. Indemnification Generally........................ 21
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Section 7.2. Capital Adequacy, Etc............................ 23
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ARTICLE VIII. GUARANTY............................................ 24
Section 8.1. Guaranty of Obligations.......................... 24
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Section 8.2. Guaranty Continuing.............................. 24
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Section 8.3. Guarantor Directly Liable........................ 25
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Section 8.4. No Impairment.................................... 25
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Section 8.5. Waiver........................................... 25
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Section 8.6. Subrogation...................................... 26
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Section 8.7. Information...................................... 26
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Section 8.8. Evidence of Obligations.......................... 26
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ARTICLE IX. THE AGENT............................................. 26
Section 9.1. Appointment...................................... 26
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Section 9.2. Attorneys-in-fact................................ 27
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Section 9.3. Limitation on Liability.......................... 27
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Section 9.4. Reliance......................................... 27
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Section 9.5. Notice of Termination Event...................... 28
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Section 9.6. No Representations............................... 28
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Section 9.7. Indemnification.................................. 28
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Section 9.8. Purchaser........................................ 29
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Section 9.9. Resignation...................................... 29
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Section 9.10. Sharing of Payments, etc........................ 29
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Section 9.11. Independent Agreements.......................... 30
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ARTICLE X. TERMINATION EVENTS AND TERMINATION EVENT
REMEDIES...................................................... 30
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Section 10.1. Termination Events Defined...................... 30
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Section 10.2. Termination Event Remedies...................... 31
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ARTICLE XI. MISCELLANEOUS......................................... 31
Section 11.1. Waivers; Amendments, Etc........................ 31
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Section 11.2. Notices, Etc.................................... 32
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Section 11.3. Governing Law; Integration...................... 32
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Section 11.4. Severability; Counterparts...................... 32
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Section 11.5. Successors and Assigns.......................... 32
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Section 11.6. Confidentiality................................. 33
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Section 11.7. Assignments; Participations..................... 33
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Section 11.8. Termination of Prior Transfer and Administration
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Agreement....................................... 34
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Section 11.9. Set Off......................................... 35
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RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement (as amended, supplemented or otherwise
modified from time to time, the "Agreement") is entered into as of March 11,
1998, among Mattel Factoring, Inc., a Delaware corporation, as transferor (the
"Transferor"), Mattel, Inc., a Delaware corporation ("Mattel"), as servicer (the
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"Servicer") and as guarantor (the "Guarantor"), the financial institutions party
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hereto from time to time as purchasers (together with any successors and
assigns, the "Purchasers"), and NationsBank of Texas, N.A., a national banking
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association, as agent for the Purchasers (in such capacity, together with any
successors and assigns, the "Agent").
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
Section 1.1 Certain Defined Terms. The following terms used in this
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Agreement shall have the following meanings:
"Adverse Claim" means a lien, security interest or other charge or
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encumbrance, or any other type of right or claim (other than a lien or other
interest in favor of the Agent or the Purchasers pursuant to this Agreement).
"Agent" has the meaning set forth in the preamble.
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"Agent's Account" means Account No. 1292000883, reference "Mattel
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Factoring," ABA No. 111000025, Attention: Corporate Credit Services, maintained
at the Agent, or any other account designated in writing by the Agent to the
Purchasers, the Servicer and the Transferor, from time to time.
"Applicable Margin" means, for each Obligor, that margin set forth in the
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table below opposite the Obligor's second highest long-term unsecured debt
ratings issued by S&P, Moody's or Duff & Phelps:
S&P/Moody's/Duff & Phelps Applicable Margin
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AA-/Aa3/AA- or higher 17.0
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A/A2/A or higher 21.0
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A-/A3/A- or lower 24.0
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The Applicable Margins as of the date hereof are 17.0 for Wal-Mart Stores, Inc.
and 21.0 for Toys "R" Us, Inc.
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"Assignee" shall have the meaning set forth in Section 11.7.
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"Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978 (11
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U.S.C. (S) 101, et seq.), as amended from time to time.
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"Business Day" means any day other than Saturday, Sunday or other day on
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which commercial banks in Dallas, Texas, New York, New York, or San Francisco,
California, are authorized or required by law to close and, if the applicable
Business Day relates to the Eurodollar Rate, means such a day on which dealings
are carried on in the applicable offshore dollar interbank market.
"Collection Account" has the meaning set forth in Section 2.4.
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"Collections" means, with respect to any Listed Receivable, (a) all funds
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which are received by the Transferor, any Seller or the Servicer (or any sub-
servicer) in payment of any amounts owed in respect of such Listed Receivable
(including, without limitation, purchase price, finance charges, interest and
all other charges), or applied to amounts owed in respect of such Listed
Receivable (including, without limitation, insurance payments and net proceeds
of the sale or other disposition of repossessed goods or other collateral or
property of the applicable Obligor or any other Person directly or indirectly
liable for the payment of such Listed Receivable and available to be applied
thereon), and (b) all other proceeds of such Listed Receivable.
"Commitment Fee" has the meaning set forth in Section 2.8.
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"Contract" means, with respect to any Listed Receivable, any and all
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contracts, understandings, instruments, agreements, leases, invoices, notes, or
other writings pursuant to which such Listed Receivable arises or which
evidences such Listed Receivable or under which the applicable Obligor becomes
or is obligated to make payment in respect of such Listed Receivable.
"Credit and Collection Policy" means those receivables credit and
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collection policies and practices of the Sellers in effect on the date of this
Agreement, as amended from time to time to the extent not prohibited by this
Agreement or the Purchase and Sale Agreement.
"Deficiency Advance" has the meaning set forth in Section 2.7.
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"Dilution" means any adjustment in the outstanding principal balance of a
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Listed Receivable attributable to any credits, rebates, billing errors, sales or
similar taxes, discounts, setoffs, disputes, chargebacks, returns, allowances or
similar items.
"Dividend" means in respect of the Transferor, (i) cash distributions or
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any other distributions on, or in respect of, any class of capital stock of the
Transferor, and (ii) any and all funds, cash or other payments made in respect
of the redemption, repurchase or acquisition of such stock.
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"Due Date" means, with respect to any Purchase Date, a date selected by the
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Transferor which shall not be later than ninety days thereafter, excluding the
Purchase Date and including such Due Date.
"Eligible Receivables" means, on an applicable Purchase Date, any
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Receivable: (i) which has a stated maturity and which stated maturity is not
later than the related Due Date; (ii) which is an "account" as defined in the
UCC of any applicable jurisdiction; (iii) which is denominated and payable only
in United States dollars in the United States; (iv) which, together with the
Contract related thereto, is in full force and effect and constitutes the legal,
valid and binding obligation of the applicable Obligor enforceable against such
Obligor in accordance with its terms and subject to no offset, counterclaim or
other defense; (v) 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; (vi) which satisfies all
applicable requirements of the Credit and Collection Policy, including that the
Receivable not be delinquent or defaulted; and (vii) which was generated in the
ordinary course of the related Seller's business and which was purchased by the
Transferor from such Seller in accordance with the Purchase and Sale Agreement.
"Eurodollar Rate" means, for each Yield Period, a rate per annum (rounded
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upward to the nearest 1/16 of one percent) determined pursuant to the following
formula:
Eurodollar Rate = LIBOR
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1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means the maximum reserve percentage
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(expressed as a decimal rounded upward to the next 1/100 of one percent) in
effect on the date LIBOR for such Yield Period is determined (whether or
not applicable to any Purchaser) under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") having a term equal to such
Yield Period; and
"LIBOR" means the rate of interest per annum determined by the Agent
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to be the arithmetic mean (rounded upward to the nearest 1/16th of 1%) of
the rates of interest per annum notified to the Agent by each Reference
Bank as the rate of interest at which dollar deposits in the approximate
amount of the amount of the purchase to be made or continued as a
Eurodollar Rate purchase by such Reference Bank and having a maturity
comparable to such Yield Period would be offered to major banks in the
London interbank market at their request at or about 11:00 a.m. (London
Time) on the second Business Day prior to the commencement of such Yield
Period.
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"Facility Termination Date" means the earlier of (i) March 31, 2003, as
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such date may be extended pursuant to Section 2.5, or (ii) the date on which the
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Agent delivers a notice of termination as a result of a Termination Event in
accordance herewith.
"Fisher-Price" means Fisher-Price, Inc., a Delaware corporation.
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"Guarantor" has the meaning set forth in the preamble to this Agreement.
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"Guaranty" has the meaning set forth in Section 8.1.
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"Indemnified Amounts" means any and all claims, damages, costs, expenses,
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losses and liabilities (including all reasonable fees and other charges of any
law firm or other external counsel, the reasonable allocated cost of internal
legal services and all reasonable other charges of internal counsel).
"Indemnified Parties" means the Agent, the Purchasers and their respective
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Affiliates, together with each of their respective employees, agents,
successors, transferees and assigns.
"Insolvency Proceeding" means (a) any case, action or proceeding before any
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court or other Governmental Person relating to bankruptcy, reorganization,
insolvency, liquidations, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; and in the case of clause (a) or (b), undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.
"Listed Receivables" means the Receivables the outstanding principal
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balances of which were reflected in the applicable Purchase Notice and
subsequently identified pursuant to Section 2.2(a)(iii).
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"Material Adverse Effect" means (i) a material adverse effect upon the
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business, operations, properties, assets, business prospects or condition
(financial or otherwise) of the Transferor or Mattel and its Subsidiaries, taken
as a whole, or (ii) a material impairment of the ability of any Seller Party to
perform its obligations under this Agreement.
"Mattel" has the meaning set forth in the preamble to this Agreement.
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"Mattel Credit Agreement" means the Second Amended and Restated Credit
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Agreement dated as of March 11, 1998, among Mattel, the financial institutions
parties thereto, and Bank of America, as Agent, as such agreement may be
amended, amended and restated or otherwise modified from time to time. In the
event that any term of or section number in the Mattel Credit Agreement that is
incorporated by reference in this Agreement (including pursuant to Section 7.2
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of this Agreement) is changed by any amendment or amendment and restatement of
the Mattel Credit Agreement (e.g., an amendment and restatement that renumbers
Section 10.14 of the Mattel Credit Agreement as Section 10.16 of the amended and
restated agreement), the parties hereto shall cooperate in good faith to amend
this Agreement in order to correct the references
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herein to the applicable terms and section numbers of the Mattel Credit
Agreement incorporated by reference in this Agreement. In the event that the
Mattel Credit Agreement shall cease to be in effect, then all references herein
to the Mattel Credit Agreement shall be deemed to refer to the Mattel Credit
Agreement as in effect immediately prior to such cessation.
"Mattel Factoring" has the meaning set forth in the preamble to this
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Agreement.
"Mattel Sales" means Mattel Sales Corp., a California corporation.
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"Obligations" has the meaning set forth in Section 8.1.
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"Obligors" means Toys "R" Us, Inc., a Delaware corporation, and Wal-Mart
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Stores, Inc., a Delaware corporation.
"Participant" has the meaning set forth in Section 11.7.
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"Percentage" means, with respect to any Purchaser 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 Purchaser's
Purchaser Commitment, and the denominator of which is equal to the Purchasers'
Investment Limit.
"Permitted Accounts Receivable Financing Facilities" means this Agreement;
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the Purchase and Sale Agreement dated as of December 18, 1997, among Mattel
Sales and Fisher-Price, as sellers, Mattel, as servicer, and Mattel Factoring,
as buyer (as amended, supplemented or otherwise modified from time to time),
with respect to the purchase of certain Wal-Mart Stores, Inc. Receivables; the
Receivables Purchase Agreement dated as of December 18, 1997, among Mattel
Factoring, as transferor, Mattel, as servicer and guarantor, and Bank of
America, NT & SA, as purchaser (as amended, supplemented or otherwise modified
from time to time), with respect to the sale of certain Wal-Mart Stores, Inc.
Receivables; and the Other Permitted Accounts Receivable Financing Facilities.
"Prior Transfer and Administration Agreement" means that certain Transfer
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and Administration Agreement dated as of March 11, 1997, among Mattel Factoring,
as transferor, Mattel, as guarantor and servicer, certain financial institutions
party thereto from time to time, as purchasers, and NationsBank of Texas, N.A.,
as agent for such purchasers.
"Proofs of Claim" mean collectively, proofs of claim under the Bankruptcy
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Code or any analogous or similar item or items which may or shall be filed by or
on behalf of a creditor of any party to an Insolvency Proceeding.
"Purchase and Sale Agreement" means the Purchase and Sale Agreement dated
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as of the date hereof (as amended, amended and restated or otherwise modified
from time to time), among the Sellers, Mattel, as servicer thereunder, and the
Transferor, as buyer thereunder.
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"Purchase Date" means the proposed date on which the Transferor proposes to
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sell to the Purchasers an undivided percentage ownership interest in the Listed
Receivables identified on the related Purchase Notice.
"Purchase Notice" means a notice from the Servicer to the Agent
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substantially in the form attached hereto as Exhibit I.
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"Purchased Interest" means, at any time the undivided percentage ownership
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interest of the Purchasers acquired pursuant to this Agreement from the
Transferor in the Listed Receivables reflected on the applicable Purchase
Notice, Related Security with respect to such Receivables, Collections with
respect to such Receivables, and proceeds of, and amounts received or receivable
under any or all of, the foregoing. Such undivided percentage ownership
interest shall be computed as
PI+YR
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LRB
where:
PI = the Purchasers' Investment with respect to such
Purchased Interest at the related Purchase Date;
YR = the Yield Reserve of such Purchased Interest at the
related Purchase Date; and
LRB = the outstanding principal balance of the related
Listed Receivables as of the date the related
Purchase Notice is sent to the Agent;
provided, however, that the Purchased Interest shall never be more than 1.0.
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"Purchasers" has the meaning set forth in the preamble to this Agreement.
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"Purchase Rate" means a rate per annum equal to the Eurodollar Rate, plus
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the Applicable Margin. The Purchase Rate for a Yield Period shall be
established on the applicable day contemplated by the definition of Eurodollar
Rate.
"Purchaser Commitment" means, for each Purchaser, such Purchaser's
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Percentage of the Purchasers' Investment Limit.
"Purchasers' Investment" means the amount to be paid by the Purchasers for
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the account of the Transferor with respect to a Purchased Interest.
"Purchasers' Investment Limit" means Three Hundred Million Dollars
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($300,000,000).
"Receivable" means any indebtedness and other obligations owed to a Seller,
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or any right of a Seller to payment, from or on behalf of either Obligor
(determined prior to giving effect to any purchase by the Transferor under the
Purchase and Sale Agreement or to any purchase hereunder by the Purchasers)
whether constituting an account, chattel paper, instrument or
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general intangible, arising in connection with the sale or lease of goods or the
rendering of services by such Seller, and includes, without limitation, the
obligation to pay any finance charges, fees and other charges with respect
thereto.
"Reference Banks" means Bank of America National Trust and Savings
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Association and NationsBank of Texas, N.A. In the event that at any time of
determination only one bank designated as "Reference Banks" are providing rates
for deposits referred to in the definition of "Eurodollar Rate," that bank shall
be the "Reference Banks" for purposes of this Agreement.
"Related Security" means with respect to any Listed Receivable: (i) all of
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the Transferor's interest in any goods (including returned goods), and
documentation of title evidencing the shipment or storage of any goods
(including returned goods), relating to any sale giving rise to such Receivable;
(ii) all other security interests or liens and property subject thereto from
time to time purporting to secure payment of such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise, together with all UCC
financing statements or similar filings signed by any Obligor relating thereto;
and (iii) all guarantees, indemnities, insurance and other agreements (including
the related Contract) or arrangements of whatever character from time to time
supporting or securing payment of such Receivable or otherwise relating to such
Receivable whether pursuant to the Contract related to such Receivable or
otherwise, including, without limitation, all of the Transferor's rights with
respect to such Receivables under the Purchase and Sale Agreement.
"Requisite Purchasers" means, at any date of determination, Purchasers
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having at least 66 2/3% of the aggregate Purchaser Commitments at such time.
"Restricted Payments" has the meaning set forth in Section 6.1(k).
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"Seller Party" means each of the Transferor and Mattel (in its capacity as
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the Servicer or the Guarantor).
"Sellers" means, collectively, Mattel Sales and Fisher-Price. A reference
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to the "related" Seller means with respect to a Receivable, that such Receivable
by its original terms was owed to such Seller.
"Servicer" has the meaning set forth in the preamble to this Agreement;
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provided that following the appointment of a successor Servicer in accordance
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with this Agreement, all references herein to the Servicer shall be references
to such successor Servicer.
"Servicer Default" has the meaning set forth in Section 4.3.
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"Solvent" means, as to any Person at any time, that (a) the fair value of
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the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code and, in the alternative, for purposes of
applicable state fraudulent conveyance law; (b) the present fair saleable value
of the property of such Person is not less than the amount that shall be
required to pay the probable liability of such Person on its
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debts as they become absolute and matured; (c) such Person is able to realize
upon its property and pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not believe that it
shall, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature; and (e) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital.
"Specified Assets" means, whether now or hereafter owned, existing or
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arising: (A) Listed Receivables, (B) all Related Security with respect to such
Receivables, (C) all Collections with respect to such Receivables (including
Collections received on and after the date that the related Purchase Notice is
sent to the Agent and prior to the related Purchase Date), and (D) all proceeds
of, and all amounts received or receivable under any or all of, the foregoing.
"Subordinated Note" has the meaning specified in the Purchase and Sale
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Agreement.
"Termination Event" has the meaning set forth in Section 10.1.
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"Termination Event Day" means a day on which a Termination Event exists.
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"Transaction Documents" means this Agreement, the Purchase and Sale
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Agreement, the Subordinated Notes and all certificates, instruments, UCC
financing statements, reports, notices, letters, agreements and documents
executed or delivered by any Seller Party or a Seller under or in connection
with this Agreement, thereby excluding, for example, the Mattel Credit
Agreement, in each case as any such Transaction Documents may be amended,
amended and restated, extended or otherwise modified from time to time. The
Demand Note referred to in Section 3.1 to the Purchase and Sale Agreement will
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not be a Transaction Document for purposes of this Agreement.
"Transferor" has the meaning set forth in the preamble to this Agreement.
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"UCC" means the Uniform Commercial Code as from time to time in effect in
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the applicable jurisdiction.
"UCC Filing Date" means the first date on which any UCC financing statement
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is filed pursuant hereto.
"Yield," for any Purchased Interest for the related Yield Period, means an
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amount determined as follows:
PR x YP x 1/360
where:
PR = the Purchase Rate for such Yield Period; and
YP = the number of days in such Yield Period.
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"Yield Period" means each period from and including a Purchase Date to but
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excluding the related Due Date.
"Yield Reserve" means the Yield with respect to an applicable Purchased
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Interest, times the applicable Purchasers' Investment; provided that no
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provision in this Agreement shall require the payment or permit the collection
of Yield Reserve in excess of the maximum permitted by applicable law.
Section 1.2 Other Terms. All accounting terms not specifically defined
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herein shall be construed in accordance with generally accepted accounting
practices. All terms used in Division 9 of the UCC in the State of California,
and not specifically defined herein, are used herein as defined in such Division
9. Unless the context otherwise requires, (i) "or" means "and/or," (ii)
"including" (and with correlative meaning "include" and "includes") means
including, without limiting the generality of any description preceding such
term, (iii) the meanings of defined terms are equally applicable to the singular
and plural forms of such defined terms, and (iv) all other terms not otherwise
defined herein shall have the meanings assigned to such terms in the Mattel
Credit Agreement.
ARTICLE II. AMOUNTS AND TERMS OF THE PURCHASES
Section 2.1 Purchase Facility. On the terms and conditions hereinafter
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set forth, each Purchaser hereby agrees to purchase from time to time from the
Transferor, without recourse (except as expressly provided herein), undivided
percentage ownership interests in the Listed Receivables and other items
included in the related Purchased Interest.
Section 2.2 Making Purchases.
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(a) (i) Each purchase of undivided percentage ownership interests
hereunder shall be made upon the Servicer's delivery to the Agent of a Purchase
Notice, which notice shall be irrevocable. Each Purchase Notice must be
received by the Agent not later than 9:00 a.m., Los Angeles time, on the third
Business Day prior to the related Purchase Date. A Purchase Notice shall
specify for each Obligor (A) the aggregate amount of the Listed Receivables, (B)
the Purchase Date (which must be a Business Day), (C) the related Due Date, and
(D) the proposed amount of the Purchasers' Investment.
(ii) Not later than 9:00 a.m. (Los Angeles time) on the second
Business Day prior to the related Purchase Date, the Agent shall send to the
Servicer a notice setting forth a calculation of the related Purchased Interest,
including a description of the related Purchasers' Investment and the Yield
Reserve. The Agent shall calculate the Purchasers' Investment with respect to a
Purchased Interest as an amount which, when added to the related Yield Reserve,
is as close as reasonably practicable to (but not in excess of) the aggregate
outstanding principal balances of the related Eligible Receivables set forth in
the related Purchase Notice; it being understood and agreed that the aggregate
outstanding Purchasers' Investments shall not exceed the Purchasers' Investment
Limit.
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(iii) The Transferor shall send to the Agent for receipt by the
Agent not later than the Business Day prior to the related Purchase Date, a
schedule of the Listed Receivables, identifying the invoice number, outstanding
principal balance and maturity date of each such Receivable (in each case as of
the date of the related Purchase Notice). None of such Listed Receivables shall
have been the subject of a prior Purchase Notice.
(b) Promptly after receipt of a Purchase Notice, the Agent shall notify
each Purchaser of the proposed purchase (such notice to normally be given within
two hours of receipt by the Agent). Each Purchaser shall make available to the
Agent its pro rata share of the Purchase Price by remitting such funds to the
Agent's Account prior to 2:00 p.m., Dallas, Texas time on the Purchase Date. On
each Purchase Date, the Agent shall, upon satisfaction of the applicable
conditions set forth in Article III hereto, pay to the Servicer, for the account
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of the Transferor, in same day funds, an amount equal to the aggregate of the
amounts so made available by the Purchasers. The Agent shall cause an amount of
same-day funds equal to such aggregate amount received by the Agent to be
credited to the Transferor's account at Bank of America National Trust & Savings
Association, Account No. 1235906117, reference "Mattel Factoring," ABA No.
121000358, or any other account designated in writing by the Transferor or the
Servicer to the Agent from time to time. No Purchaser shall be obligated to
make a purchase in excess of its Purchase Commitment.
(c) On each Purchase Date, effective upon the payment contemplated by
Section 2.2(b) (and without the necessity of any formal or other instrument of
assignment or other further action), the Transferor hereby sells and assigns to
the Purchasers an undivided percentage ownership interest equal to the Purchased
Interest in each related Listed Receivable reflected on the applicable Purchase
Notice (and subsequently identified pursuant to Section 2.2(a)(iii)) and the
other Specified Assets related thereto.
(d) To secure all of the obligations (monetary or otherwise) of the
Transferor under this Agreement and the other Transaction Documents to which it
is a party, whether now or hereafter existing or arising, due or to become due,
direct or indirect, absolute or contingent, the Transferor hereby grants to the
Agent for the benefit of the Agent and the Purchasers a security interest in, to
and under all of the Transferor's right, title and interest (including any
undivided interest of the Transferor) in all of the Specified Assets. The
Agent, on behalf of itself and the Purchasers, shall have, with respect to the
Specified Assets, and in addition to all the other rights and remedies available
to the Agent, all the rights and remedies of a secured party under any
applicable UCC.
Section 2.3 Payments and Computations, Etc. All amounts to be paid or
------------------------------
deposited by a Seller Party hereunder shall be paid or deposited, without
setoff, counterclaim or reduction of any kind, no later than 10:00 a.m. (Los
Angeles time) on the day when due in same day funds to the Agent's Account. All
amounts received after noon (Los Angeles time) shall be deemed to have been
received on the immediately succeeding Business Day. The Transferor shall, to
the extent permitted by Governmental Rule, pay to the Agent, for the benefit of
the Purchasers, upon demand, interest on all amounts not paid or deposited when
due to the Purchasers hereunder at a rate per annum equal to 2% in excess of the
prime rate of interest announced by the Agent from
10
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). All
computations of Yield and Commitment Fee shall be made on the basis of a year of
360 days for the actual number of days elapsed. Whenever any payment or deposit
to be made hereunder shall be due on a day other than a Business Day, such
payment or deposit shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of such payment or
deposit. All payments received by the Agent or any Purchaser hereunder (other
than the Commitment Fee) on account of a Purchased Interest shall be applied by
the Agent, first to pay due and payable Yield Reserve with respect to the
related Purchasers' Investment, second to pay all due and payable fees and
expenses and other amounts due to the Purchasers and the Agent hereunder, and
third, to repay any such Purchasers' Investment. The amount of each Purchasers'
Investment shall be reduced by payments received by the Agent and applied on
account of such Purchasers' Investment pursuant to this Agreement.
Section 2.4 Collection Account. (a) At any time the second highest
------------------
long-term unsecured debt rating issued to the Servicer by S&P, Moody's or Duff &
Phelps is lower than BBB-, Baa3 or BBB-, respectively, there shall be
established and maintained, in the name of the Agent for the benefit of the
Purchasers, 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 Purchasers. 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 to the Agent or the Purchasers. Upon the
earlier of (i) the Servicer's second highest long-term unsecured debt rating
issued to the Servicer by S&P, Moody's or Duff & Phelps is BBB-, Baa3 or BBB-,
respectively, or higher or (ii) the date on which the Purchasers' Investment is
zero, any funds remaining on deposit in the Collection Account shall be released
to the Transferor in same-day funds.
(b) During such time that the second highest long-term unsecured debt
rating issued to the Servicer by S&P, Moody's or Duff & Phelps is lower than
BBB-, Baa3 or BBB-, respectively, the Servicer shall deposit within two Business
Days all Collections it receives into the Collection Account. Such Collections
shall be retained in the Collection Account by the Agent until the next
succeeding Due Date, at which time such amounts shall be applied pursuant to the
terms hereof.
Section 2.5 Facility Termination Date. The Facility Termination Date may
-------------------------
be extended to any subsequent date agreed upon from time to time by the parties
hereto in accordance with this Section. During the thirty (30) day period ending
on the thirtieth (30th) day before the then existing Facility Termination Date,
the Servicer, the Transferor and the Guarantor may, by sending a letter to the
Agent, request that the Facility Termination Date be extended for an additional
period of time, not to exceed 365 days. The Purchasers may, in their sole
discretion, agree to extend such Facility Termination Date. If the Agent and the
Purchasers agree to extend such Facility Termination Date, then they shall sign
a copy of such letter and send the same to the Servicer. The Facility
Termination Date shall then be extended to, and shall be deemed to have been
amended to be, the applicable date specified in such letter. If the Agent and
11
the Purchasers do not sign a copy of such letter and send the same to the
Servicer prior to the then existing Facility Termination Date, then the Agent
and the Purchasers shall be deemed to have declined to extend (and to have
declined to amend) the Facility Termination Date.
Section 2.6 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 Purchasers'
Investment Limit; provided that the Purchasers' Investment Limit, as reduced,
--------
shall equal or exceed the total outstanding Purchasers' 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 Purchaser and Bank
of America National Trust and Savings Association as agent under the Mattel
Credit Agreement of the proposed termination or reduction. Such termination or
reduction shall be effective on the date specified in the Transferor's notice
and shall terminate or reduce the dollar amount of each Purchaser's Purchase
Commitment.
Section 2.7 Deficiency Advances. No Purchaser shall be responsible for
-------------------
any default of any other Purchaser in respect of such other Purchaser's
obligation to fund any portion of a purchase hereunder, nor shall the commitment
of any Bank hereunder be increased as a result of such default by any other
Purchaser. Without limiting the generality of the foregoing, in the event any
Purchaser shall fail to advance funds as provided herein, the Agent may, in its
discretion but shall not be obligated to, advance as a Purchaser 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 Purchaser would have been entitled had it made
such advance itself; provided that, upon payment to the Agent from such other
--------
Purchaser of the entire outstanding amount of such Deficiency Advance, together
with interest thereon, at the Applicable Margin applicable to the related
Purchase, then such payment shall be credited against the Agent's share of the
total outstanding Purchaser' 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 Purchaser failing
to fund its pro rata portion (based on its Percentage) of the Purchase Price of
any purchase hereunder.
Section 2.8 Commitment and Other Fees. (a) The Transferor hereby agrees
-------------------------
to pay to the Agent for the rateable benefit of the Purchasers, for the period
from and including the date hereof through the Facility Termination Date, a non-
refundable fee (the "Commitment Fee") equal to six and one-half basis points
--------------
(0.065%) per annum on the excess of (i) the average Purchasers' Investment Limit
over (ii) the average outstanding amount of the Purchasers' Investments on each
day during each applicable period described below. The Commitment Fee shall be
payable in arrears on the first Business Day of each calendar quarter occurring
after the first Purchase Date, and on the Facility Termination Date; provided,
--------
however, that the
- -------
12
Commitment fee shall increase to eight and one-half basis points (0.085%) at any
time the second highest long-term unsecured debt rating of any Obligor issued by
S&P, Moody's or Duff & Phelps is lower than A, A2 or A, respectively.
(b) Mattel agrees to pay to the Agent on the date hereof and annually
thereafter such fees as are described in that certain fee letter between the
Agent and Mattel, dated January 29, 1998.
ARTICLE III. CONDITIONS OF PURCHASES
Section 3.1. Conditions Precedent to Initial Purchase. The initial purchase
----------------------------------------
of an undivided interest pursuant to this Agreement is subject to the conditions
precedent that the Agent shall have received on or before the related Purchase
Date the following, each in form and substance (including the date thereof)
satisfactory to the Agent: (a) a counterpart of this Agreement and the Purchase
and Sale Agreement duly executed by the Seller Parties and the Sellers, as the
case may be; (b) favorable opinions of (x) the General Counsel or an Assistant
General Counsel of Mattel, relating to the Seller Parties and (y) Latham &
Watkins, special counsel to the Seller Parties; (c) a certificate of the
Assistant Secretary of each Seller Party certifying in each case (i) the names
and signatures of its applicable officers that shall execute and deliver the
Transaction Documents (on which certificate the Agent may conclusively rely
until such time as the Agent shall receive a revised certificate meeting the
requirements of this clause), (ii) that attached thereto is a true and correct
copy of the certificate or articles of incorporation (certified by the Secretary
of State of Delaware or California, as the case may be), by-laws of such Seller
Party, in each case as in effect on the date of such certification, (iii) that
attached thereto are true and complete copies of excerpts of resolutions adopted
by the Board of Directors of such Seller Party, approving the execution,
delivery and performance of this Agreement and all other Transaction Documents
to which such Seller Party is a party; and (iv) that attached thereto are good
standing certificates issued by the Secretary of State of Delaware with respect
to Mattel and Mattel Factoring; (d) a UCC-1 financing statement signed by the
Transferor in form for filing with the Secretary of State of California; (f)
good standing certificates dated as of a recent date for each Seller Party from
the Secretary of State of the States of Delaware and California; (g) copies of
searches of financing statements filed with the (i) Secretary of State of the
State of California, naming each of the Transferor and Mattel Sales as the
debtor, and (ii) the Secretary of State of the State of New York, naming Fisher-
Price as the debtor; (h) all accrued and outstanding amounts owing under the
Prior Transfer and Administration Agreement which have been detailed in writing
and delivered to the transferor or servicer thereunder shall have been paid in
full, and (i) each other item to be delivered pursuant to Section 3.1 of the
Purchase and Sale Agreement.
Section 3.2. Conditions Precedent to All Purchases. Each purchase
-------------------------------------
(including the initial purchase) of undivided interests pursuant to this
Agreement shall be subject to the further conditions precedent that: (a) on the
Purchase Date applicable to such purchase the following statements shall be true
(and acceptance of the proceeds of such purchase shall be deemed a
representation and warranty by the Transferor that such statements are then
true): (i) the representations and warranties contained in Section 5.1 are true
-----------
and correct on and as of such Purchase Date as though made on and as of such
date (except to the extent any representation and
13
warranty is expressly made as of an earlier date); and (ii) no event has
occurred and is continuing, or would result from such purchase, that constitutes
a Termination Event or that would constitute a Termination Event but for the
requirement that notice be given or time elapse or both; (b) after giving effect
to the payment contemplated by Section 2.2 on the date of such purchase, the
-----------
aggregate outstanding Purchasers' Investments shall not exceed the Purchasers'
Investment Limit; (c) the Agent shall have received a list of Eligible
Receivables in accordance with Section 2.2; (d) such Purchase Date is also a
-----------
"Purchase Date" as defined in the Purchase and Sale Agreement; (e) the related
Due Date is prior to the Facility Termination Date; and (f) after giving effect
to the Yield Period in connection with such purchase, there are no other Yield
Periods in effect.
ARTICLE IV. SERVICING AND SETTLEMENT PROCEDURES
Section 4.1. Appointment of Servicer. Until the Agent gives notice to the
-----------------------
Transferor of the designation of a new Servicer in accordance with the last
sentence of this Section, Mattel is hereby designated as, and hereby agrees to
perform the duties and obligations of, the Servicer pursuant to the terms
hereof; provided that, with respect to any group of Listed Receivables, Mattel
--------
(solely in its capacity as Servicer) may, at any time, upon prior written notice
to the Agent, designate any Affiliate of Mattel as sub-servicer hereunder;
provided, however, that such Affiliate shall not become the Servicer and,
- -------- -------
notwithstanding any such delegation, Mattel shall remain liable for the
performance of the duties and obligations of the Servicer in accordance with the
terms of this Agreement without diminution of such liability by virtue of such
delegation and to the same extent and under the same terms and conditions as if
Mattel alone were performing such duties and obligations. Subject to the
foregoing, Mattel hereby delegates to Fisher-Price all of Mattel's duties and
obligations under Section 4.2 below with respect to the Listed Receivables
-----------
originated by Fisher-Price. Mattel acknowledges that the Agent and the
Purchasers have relied on the agreement of Mattel to act as the Servicer
hereunder in making their decision to execute and deliver this Agreement.
Accordingly, Mattel agrees that it shall not voluntarily resign as the Servicer.
In the event that a new "Servicer" has been designated pursuant to the Purchase
and Sale Agreement or upon the occurrence of a Servicer Default as contemplated
by Section 4.4, the Agent may designate as Servicer any Person (including the
-----------
Agent) to succeed Mattel 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 4.2. Duties of Servicer. The Servicer shall take or cause to be
------------------
taken all such action as may be necessary or advisable to collect each Listed
Receivable from time to time, all in accordance with this Agreement and all
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy; provided, however, that the
-------- -------
Servicer shall not extend the maturity of any Listed Receivable. The Transferor
shall deliver to the Servicer and the Servicer shall hold for the benefit of the
Transferor and the Agent for the benefit of the Purchasers in accordance with
their respective interests, all records and documents (including computer tapes
or disks) with respect to such Listed Receivables. Notwithstanding anything to
the contrary contained herein, the Agent, with the consent or direction of the
Requisite Purchasers, may direct the Servicer to commence or settle any legal
action to enforce collection of any Listed Receivable or to foreclose upon or
repossess any
14
Related Security; provided, however, that no such direction may be given unless
-------- -------
(x) a Termination Event has occurred and is continuing, and (y) the Requisite
Purchasers believe in good faith that failure to commence, settle, or effect
such legal action, foreclosure or repossession could materially and adversely
affect a material portion of the Listed Receivables. Subject to Section 2.4, the
-----------
Servicer shall hold (and shall cause each sub-servicer to hold) in trust (and,
during the continuance of a Termination Event, at the request of the Agent,
segregate) for the Agent for the benefit of the Purchasers, from Collections
received by the Transferor, any Seller or the Servicer (or any sub-servicer)
with respect to the Listed Receivables, the percentage of such Collections
represented by the related Purchased Interest. On each Due Date, the Servicer
shall deposit into the Agent's Account the amount of Collections required to be
held for the Agent for the benefit of the Purchasers pursuant to the preceding
sentence.
Section 4.3. Servicer Default. The occurrence of any one or more of
----------------
the following events shall constitute a Servicer Default hereunder:
(a) (i) the Servicer shall fail to perform or observe any term, covenant
or agreement hereunder (other than as referred to in this Section) 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 Transaction Document shall prove to
have been incorrect in any material respect when made or deemed made; or
(c) an Insolvency Proceeding shall have commenced and be continuing with
respect to the Servicer; or
(d) an Event of Default under and as defined in the Mattel Credit
Agreement shall have occurred and be continuing.
Section 4.4. Servicer Default Remedies. Notwithstanding any other
-------------------------
provision of this Agreement, during the continuation of a Servicer Default, the
Agent, upon the written request of the Requisite Purchasers, shall, by written
notice to the Transferor, the Guarantor and the Servicer:
(i) direct the Obligors that payment of all amounts payable under
any Listed Receivable be made directly to the Agent or its designee;
(ii) instruct the Transferor to give notice of the Purchasers'
Interest in the Listed Receivables to the Obligors, which notice shall be
given at the Transferor's expense and shall direct that payments be made
directly to the Agent or its designee; or
(iii) terminate and replace the Servicer.
Section 4.5. Responsibilities of the Transferor. Anything herein to the
----------------------------------
contrary notwithstanding, the Transferor shall (x) perform all of its
obligations (if any) under the Contracts related to Listed Receivables to the
same extent as if interests in such Listed
15
Receivables had not been transferred hereunder and the exercise by the Agent of
its rights hereunder shall not relieve any Seller or Seller Party from such
obligations and (y) pay when due any taxes payable by the Transferor under
applicable law, including any sales taxes payable in connection with the Listed
Receivables and their creation and satisfaction. The Transferor shall provide to
the Servicer on a timely basis all information needed for such servicing,
administration and collection, including notice of the occurrence of any
Termination Event Day. Neither the Agent nor any Purchaser shall have any
obligation or liability with respect to any Listed Receivable, any Related
Security or any related Contract, nor shall the Agent or any Purchaser be
obligated to perform any of the obligations of any Seller or Seller Party under
any of the foregoing.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties. Each Seller Party severally
------------------------------
represents and warrants, as to itself alone, as applicable, to the Agent and the
Purchasers as follows:
(a) Such Seller Party is a corporation duly incorporated, validly existing
and in good standing under the laws of the state of its incorporation, and is
duly qualified to do business, and is in good standing, as a foreign corporation
in every jurisdiction where the nature of its business requires it to be so
qualified, except in jurisdictions in which the failure to be qualified or in
good standing has or will have no Material Adverse Effect.
(b) The execution, delivery and performance by such Seller Party of this
Agreement and the other Transaction Documents to which it is a party, including
such Seller Party's use of the proceeds of purchases, (i) are within such Seller
Party's corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) do not contravene or result in a default under or
conflict with (1) such Seller Party's charter or by-laws, (2) any law, rule or
regulation applicable to such Seller Party, the violation of which would result
in a Material Adverse Effect, (3) any Contractual Obligation of such Seller
Party the violation of which would have a Material Adverse Effect or (4) any
order, writ, judgment, award, injunction or decree binding on or affecting such
Seller Party or its property, the violation of which would result in a Material
Adverse Effect, and (iv) do not result in or require the creation of any
material Adverse Claim upon or with respect to any of its material properties or
upon or with respect to the Listed Receivables (other than pursuant to the
Transaction Documents). This Agreement and the other Transaction Documents to
which it is a party have been duly executed and delivered by such Seller Party.
(c) No authorization or approval or other action by, and no notice to or
filing with any or other Person is required for the due execution, delivery and
performance by such Seller Party of this Agreement or any other Transaction
Document to which it is a party, other than UCC financing statements related
hereto or to the Purchase and Sale Agreement.
(d) This Agreement and the other Transaction Documents to which it is a
party constitutes the legal, valid and binding obligation of such Seller Party
enforceable against such Seller Party in accordance with its terms, except as
enforcement may be limited by bankruptcy,
16
insolvency, reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally.
(e) There is no pending or, to the knowledge of such Seller Party,
threatened action or proceeding affecting such Seller Party or any of its
Subsidiaries before any Governmental Person or arbitrator which, in the
reasonable opinion of such Seller Party and its executive officers, would result
in a Material Adverse Effect, or which affects or purports to affect the
legality, validity or enforceability of this Agreement or the other Transaction
Documents.
(f) With respect to the Transferor, the Transferor is the legal and
beneficial owner of the Listed Receivables and all other Specified Assets, free
and clear of any Adverse Claim; upon each purchase, the Agent, for the benefit
of itself and the Purchasers, shall have a valid and enforceable first priority,
perfected undivided percentage ownership interest to the extent of the Purchased
Interest or a valid and enforceable first priority, perfected security interest
in each such Listed Receivable and other Specified Assets, in each case free and
clear of any Adverse Claim. No effective UCC financing statement or other
instrument similar in effect covering any of the Specified Assets is on file in
any recording office other than any UCC financing statement filed pursuant to
this Agreement in favor of the Agent.
(g) All exhibits, financial statements, documents, books, records,
Purchase Notices, other information or reports furnished or to be furnished at
any time by or on behalf of such Seller Party to the Agent in connection with
this Agreement are or will be accurate in all material respects as of their
respective dates or (except as otherwise disclosed to the Agent at such time) as
of the date so furnished, and no such item contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading, except to the extent
that any such statement or omission that was untrue or misleading at the time
made or that subsequently became untrue or misleading has been superseded or
corrected by information provided to the Agent prior to the date of this
Agreement.
(h) With respect to the Transferor, the principal place of business and
chief executive office (as such terms are used in the UCC) of the Transferor and
the office where the Transferor keeps its records concerning the Listed
Receivables are located at the address referred to in Section 6.1(b).
--------------
(i) Each Seller Party is not in violation of any order of any court,
arbitrator or Governmental Person, which violation would have a Material Adverse
Effect.
(j) With respect to the Transferor, no proceeds of any purchase from the
Transferor shall be used for any purpose that violates any applicable law, rule
or regulation, including Regulations G or U of the Federal Reserve Board.
(k) No event has occurred and is continuing, or would result from a
purchase in respect of the related Purchased Interest or from the application of
the proceeds therefrom, which constitutes a Termination Event.
17
(1) With respect to the Transferor, the Transferor has accounted for each
sale of undivided percentage ownership interests in its Listed Receivables in
its books and financial statements as sales, consistent with generally accepted
accounting practices.
(m) With respect to each Seller Party, such Seller Party has complied with
all of the material terms, covenants and agreements contained in this Agreement
and the other Transaction Documents and applicable to it, except, in any such
case, where the consequences, direct or indirect, of any such noncompliance, if
any, would not result in a Material Adverse Effect.
(n) With respect to the Transferor, the Transferor's complete corporate
name is set forth in the preamble to this Agreement. The Transferor (i) does
not use, and has not during the last five years changed its name or used, any
other corporate name, trade name, doing business name or fictitious name, except
for names first used after the date of this Agreement and set forth in a notice
delivered to the Agent pursuant to of Section 6.1(b), and (ii) has never merged
--------------
with or into or consolidated with any other Person.
ARTICLE VI. COVENANTS
Section 6.1. Covenants. Until the latest of (i) the date on which no
---------
Purchasers' Investment or Yield Reserve in respect of any Purchased Interest
shall be outstanding and the Purchasers shall have no further obligation
hereunder to purchase interests in Listed Receivables, (ii) the date all other
amounts owed by the Transferor or the Servicer under this Agreement to the
Agent, any Purchasers and any other Indemnified Party shall be paid in full and
the Purchasers shall have no further obligation hereunder to purchase interests
in Listed Receivables, and (iii) the date on which this Agreement has been
terminated:
a. Compliance with Laws, Etc. Each Seller Party shall comply in all
-------------------------
material respects with all applicable laws, rules, regulations and orders, and
preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications, and privileges
would not result in a Material Adverse Effect and not result in any Adverse
Claim on the Listed Receivables.
b. Offices, Records and Books of Account; Etc. The Transferor (i) shall
-------------------------------------------
keep its principal place of business and chief executive office (as such terms
are used in the UCC) and the office where it keeps its records concerning the
Listed Receivables at the address of the Transferor set forth under its name on
the signature page hereto or, upon at least 15 days' prior written notice of a
proposed change to the Agent, at any other locations, so long as, prior to
making such a change, the Transferor shall have taken all actions in any
applicable jurisdiction that may be requested by the Agent in accordance with
Section 6.1(d)); and (ii) shall provide the Agent with at least 15 days' written
- ---------------
notice prior to making any change in the Transferor's name or making any other
change in the Transferor's identity or corporate structure (including a merger)
which could render any UCC financing statement theretofore filed with respect to
such Person by any other Person (including, if applicable, any UCC financing
statements filed in connection with this Agreement) "seriously misleading" as
such term is used in the UCC, so long as, prior to making such a change, the
Transferor shall have taken all actions in any applicable
18
jurisdiction that may be requested by the Agent in accordance with Section
-------
6.1(d)); each notice to the Agent pursuant to this Section shall set forth
- -------
the applicable change and the effective date thereof. The Transferor also will
maintain and implement administrative and operating procedures (including an
ability to recreate records evidencing Listed Receivables and related Contracts
in the event of the destruction of the originals thereof), and keep and maintain
all documents, books, records, computer tapes and disks and other information
reasonably necessary or advisable for the collection of all Listed Receivables
(including records adequate to permit the daily identification of each
Receivable and all Collections of and adjustments to each existing Listed
Receivable).
c. Performance and Compliance with Contracts and Credit and Collection
-------------------------------------------------------------------
Policy. Each Seller Party shall, at its expense, timely and fully perform and
- ------
comply in all material respects with all material provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Listed Receivables, and timely and fully comply in all material respects with
the Credit and Collection Policy with regard to each such Listed Receivable and
the related Contract.
d. Ownership Interest, Etc. The Transferor shall, at its expense, take
-----------------------
all action necessary or reasonably desirable to maintain a valid, enforceable
and first priority, perfected security interest in the Specified Assets in favor
of the Agent for the benefit of itself and the Purchasers, free and clear of any
Adverse Claim, including taking such action to protect and perfect or more fully
evidence the interest of the Agent and the Purchasers under this Agreement, as
the Agent may request.
e. Sales, Liens, Etc. The Transferor shall not sell, assign (by
-----------------
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, any or all of its right, title
or interest in, to or under the Specified Assets or upon or with respect to any
account to which any Collections of any Listed Receivables are deposited (except
as required by this Agreement or the rights of the depository institution that
maintains such account), or assign any right to receive income in respect of any
items contemplated by this Section.
f. Extension or Amendment of Receivables. Except as expressly provided in
-------------------------------------
this Agreement, no Seller Party shall adjust the outstanding principal balance
of, or otherwise modify the terms of, any of the Listed Receivables, or amend,
modify or waive any term or condition of any related Contract; provided that
--------
notwithstanding any other provision of this Agreement, no Seller Party shall
extend the maturity of any Listed Receivable.
g. Change in Business or Credit and Collection Policy. No Seller Party
--------------------------------------------------
shall make any change in the character of its business, or in the Credit and
Collection Policy, that would result in a Material Adverse Effect. No Seller
Party shall make any other change in the Credit and Collection Policy without
the prior written consent of the Agent.
h. Audits. Each Seller Party shall, from time to time during regular
------
business hours (and with reasonable advance notice) as requested by the Agent,
permit the Agent, or its agents or representatives, (x) to examine and make
copies of and abstracts from all books, records and
19
documents (including computer tapes and disks) in the possession or under the
control of such Seller Party relating to Listed Receivables and the Related
Security, including the related Contracts, and (y) to visit the offices and
properties of such Seller Party for the purpose of examining such materials
described in clause (x) above, and to discuss matters relating to Listed
Receivables and the Related Security or such Seller Party's performance
hereunder or under the Contracts with any of the officers, employees, agents or
contractors of such Seller Party having knowledge of such matters. Without
limiting the foregoing, such examinations, copies, abstracts, visits and
discussions may cover, among other things, maturity dates, agings, past dues,
charge-offs, and offsets with respect to the Listed Receivables.
i. Status of Listed Receivables. In the event that any third party and
----------------------------
any Seller Party enter into negotiations or discussions regarding the provision
of financing (whether in the form of a loan, purchase or otherwise) with respect
to any Listed Receivable, such Seller Party shall inform such third party that
the Transferor has sold an undivided percentage ownership interest in such
Listed Receivable to the Purchasers.
j. Reporting Requirements.
----------------------
(i) If a Purchasers' Investment with respect to an undivided
interest purchased by the Purchasers remains outstanding on the applicable
Due Date, then the Transferor or the Servicer shall provide to the Agent on
a weekly basis a report, in form and substance satisfactory to the Agent,
with respect to the related Listed Receivables (including with respect to
collection efforts pertaining thereto).
(ii) Each Seller Party shall provide to the Agent as soon as possible
and in any event within five Business Days after the occurrence of each
Termination Event or event which, with the giving of notice or lapse of
time, or both, would constitute a Termination Event, a statement of the
chief financial officer of such Seller Party setting forth details of such
Termination Event or event and the action that such Seller Party has taken
and proposes to take with respect thereto.
(iii) The Servicer shall provide to the Agent the financial statements
described in Section 6.1(a) and (b) of the Mattel Credit Agreement,
pursuant to the terms of such Sections.
(iv) Each Seller Party shall provide to the Agent such other
information respecting Listed Receivables or the condition or operations,
financial or otherwise, of the Transferor or any of its Affiliates as the
Agent may from time to time reasonably request (including listings
identifying the outstanding principal balance of each Listed Receivable).
k. General Restrictions. (i) The Transferor shall not (A) pay or
--------------------
declare any Dividend, (B) lend or advance any funds, or (C) repay any loans or
advances to, for or from any Seller or other Affiliate of the Transferor
(actions of the type described in clauses (A), (B) and (C) are herein
collectively called "Restricted Payments"), unless (i) in the case of Dividends,
such Dividends comply with applicable law, and (ii) in the case of any
Restricted Payment, the
20
Transferor would be Solvent after giving effect to such Restricted Payment.
l. Mergers, Acquisitions, Sales, Investments, Etc. The Transferor shall
-----------------------------------------------
not:
(i) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person;
(ii) sell, transfer, convey or lease any of its assets, other than
pursuant to or, as expressly permitted by this Agreement or any other
Permitted Accounts Receivable Financing Facilities; or
(iii) make, incur or suffer to exist any investment in, equity
contribution to, loan or advance to, or payment obligation in respect of
the deferred purchase price of property from, any other Person, (x) except
as expressly contemplated by the Purchase and Sale Agreement or any
Permitted Accounts Receivable Financing Facility and (y) except, in the
case of loans, under the Demand Note described in Section 3 to the Purchase
and Sale Agreement (or other similar demand notes delivered in connection
with Permitted Accounts Receivable Financing Facilities).
m. No Modification of the Purchase and Sale Agreement. The Transferor
--------------------------------------------------
will not agree to any amendment, supplement, waiver, alternation or other
modification of the Purchase and Sale Agreement which may have a material
adverse effect on the Agent's right, title and interest in the Receivables or
which may have a material adverse effect on the collectibility of the
Receivables.
ARTICLE VII. INDEMNIFICATION
Section 7.1. Indemnification Generally. (a) Without limiting any other
-------------------------
rights that the Indemnified Parties may have hereunder or under applicable law,
the Transferor hereby agrees (x) to indemnify each Indemnified Party from and
against any and all Indemnified Amounts awarded against or incurred by such
Indemnified Party arising out of or resulting from this Agreement or the use of
proceeds of purchases or the ownership of the Purchased Interest, or any
interest therein, or in respect of any Listed Receivable or any related
Contract, and (y) to pay within 15 days of demand to each Indemnified Party any
and all amounts necessary to indemnify such Indemnified Party from and against
such Indemnified Amounts, including Indemnified Amounts relating to or resulting
from any of the following: (i) the failure of any information provided to the
Agent with respect to Listed Receivables or the other Specified Assets; (ii) the
failure of any representation or warranty or statement made or deemed made by
the Transferor or the Servicer under or in connection with this Agreement to
have been true and correct in all respects when made (it being understood and
agreed that for purposes of this Section, in determining whether any such
representation or warranty or statement was true and correct in all respects
when made, any qualification in Article V as to materiality or to a Material
---------
Adverse Effect or to limitations on enforcement shall be disregarded); (iii) the
failure by the Transferor or the Servicer to comply with any applicable law,
rule or regulation with respect to any Listed Receivable or the related
Contract, or the failure of any Listed Receivable or the related Contract
21
to conform to any applicable law, rule or regulation; (iv) the failure to vest
in the Agent for the benefit of the Purchasers a valid and enforceable first
priority perfected (A) undivided percentage ownership interest, to the extent of
the related Purchased Interest, in the Specified Assets, and (B) security
interest in the Specified Assets, in each case free and clear of any Adverse
Claim; (v) any dispute, claim, counterclaim, offset or defense (other than
discharge in an Insolvency Proceeding in which an Obligor is a debtor, which
Insolvency Proceeding was Commenced prior to the Due Date for the applicable
Listed Receivable) of such Obligor to the payment of such any Listed Receivable
(including a defense based on such Listed Receivable or the related Contract not
being a legal, valid and binding obligation of such Obligor enforceable against
it in accordance with its terms), any Dilution or other adjustment with respect
to a Listed Receivable (excluding, however, adjustments required as a matter of
law because an Obligor is a debtor in any such Insolvency Proceeding), or any
claim resulting from the sale of the goods or services related to such Listed
Receivable or the furnishing or failure to furnish such goods or services or
relating to collection activities with respect to such Listed Receivable; (vi)
any failure of the Transferor or the Servicer to perform its duties or
obligations in accordance with the provisions of this Agreement (including,
without limitation, the failure to make any payment when due hereunder), or to
perform its duties or obligations (if any) under any Contract (it being
understood and agreed that for purposes of this Section, in determining whether
the Transferor or the Servicer has performed its duties or obligations in
accordance with the provisions of this Agreement or has performed its duties or
obligations (if any) under any Contract, any qualification in Article V or
---------
Article VI as to materiality or to a Material Adverse Effect or to the rights of
- ----------
any depository institution that maintains any account to which any Collections
of Listed Receivables are sent shall be disregarded); (vii) any breach of
warranty, products liability or other claim, investigation, litigation or
proceeding arising out of or in connection with goods or services which are the
subject of any Listed Receivables; (viii) the commingling of Collections of
Listed Receivables at any time with other funds; (ix) any investigation,
litigation or proceeding related to this Agreement or the use of proceeds of
purchases or the ownership of the related Purchased Interest or in respect of
any Listed Receivable or any related Specified Asset in respect thereof; (x)
subject to Section 7.1(b), the occurrence of any Termination Event; (xi) in the
--------------
event any Purchased Interest is greater than 1.0; (xii) the failure of any
Listed Receivables to be Eligible Receivables; (xiii) the failure of the
Transferor or the Servicer to comply with the terms of the Credit and Collection
Policy; (xiv) the failure of any Contract relating to Listed Receivables to have
terms that are consistent with customary terms for the related Seller's industry
and type of Receivable; (xv) the failure of any Seller to complete the sale and
delivery of the goods (or the performance of the services, if any) which are the
subject of any Listed Receivables; (xvi) the existence of any contingent
performance requirements of any Seller in respect of any Listed Receivables;
(xvii) subject to Section 7.1(b), the failure of an Obligor to make payment on
--------------
the Listed Receivables prior to or as of the Due Date; or (xviii) any action or
inaction by the Transferor or the Servicer which impairs the interest of the
Agent or any Purchaser in any Listed Receivables or other Specified Assets.
(b) Notwithstanding Section 7.1(a), the Transferor shall not be obligated
--------------
to indemnify any Indemnified Party at any time for (x) Receivables which are
uncollectible, or amounts paid over or repaid to any Person with respect to any
Receivable, as a result of the applicable Obligor being a debtor in an
Insolvency Proceeding Commenced as of or prior to the Due Date, it being
22
understood and agreed that this clause shall not limit the Transferor's
obligations under this Section arising out of or relating to any other event,
occurrence or circumstance which would give rise to an obligation of the
Transferor pursuant to this Section (to the extent that such event, occurrence
or circumstance adversely affects repayment of the Purchasers' Investments, plus
accrued Yield Reserve thereon during or in connection with such Insolvency
Proceeding), (y) any overall net income taxes or franchise taxes imposed on such
Indemnified Party by the jurisdiction under the laws of which such Indemnified
Party is organized or any political subdivision thereof or (z) Indemnified
Amounts resulting from the gross negligence or willful misconduct on the part of
the Indemnified Party proposed to be indemnified. Notwithstanding any other
provision of this Agreement, in the event that an Obligor becomes a debtor in an
Insolvency Proceeding that was Commenced prior to an applicable Due Date for any
Listed Receivables: (i) each Seller Party shall promptly (and in any event not
later than thirty days) after receipt provide to the Agent a copy of any
document, pleading, report, notice, information or other writing provided to
such Seller Party, during or in connection with such Insolvency Proceeding, by
or on behalf of such Obligor, any committee, court, other Governmental Person,
trustee, receiver, liquidator, custodian or similar official in such Insolvency
Proceeding, relating to the forms, procedures, bar date or other timing issues
with respect to the filing of a Proof of Claim in such Insolvency Proceeding;
provided, however, that this clause (i) shall not become effective until the
- -------- -------
Agent shall have sent a notice to the Servicer to the effect that the Agent
desires that the Seller Parties comply with this clause (i); (ii) the Servicer,
as agent for the Transferor, shall file Proofs of Claim, at the request and
direction of the Agent, with respect to the Listed Receivables with such court,
other Governmental Person, trustee, receiver, liquidator, custodian or similar
official, which Proofs of Claim shall be in form and substance reasonably
satisfactory to the Agent, it being understood and agreed that the Agent and the
Purchasers shall jointly and severally be liable for, and shall reimburse the
Servicer for, the Servicer's reasonable expenses in making such filing to the
extent that such expenses relate to the Listed Receivables; and (iii) the Agent,
as agent for the Transferor, shall have the right but not the obligation to file
Proofs of Claim with respect to the Listed Receivables with such court, other
Governmental Person, trustee, receiver, liquidator or similar official, it being
understood and agreed that the Agent shall not file such a Proof of Claim until
the earlier to occur of (x) the sixtieth day following the date on which the
Agent has sent a written request to the Transferor requesting the Transferor to
file such a Proof of Claim and (y) the thirtieth day prior to the bar date or
equivalent last day on which such a Proof of Claim may be filed in such
Insolvency Proceeding.
(c) If and to the extent the Agent or any Purchaser shall be required for
any reason to pay over to the Transferor, any Seller, the Servicer or an Obligor
(or any trustee, receiver, custodian or similar official in any Insolvency
Proceeding) any amount received by such Person hereunder, such amount shall be
deemed not to have been so received and, the Agent shall have a claim against
the Transferor to the extent provided herein.
Section 7.2. Capital Adequacy, Etc. Sections 3.1(a)-(e), 3.2, 3.3, 3.4,
--------------------- ------------------- --- --- ---
3.5 and 3.6 of the Mattel Credit Agreement are hereby incorporated by
- --- ---
reference as if set forth in full herein, except that for purposes of such
incorporation by reference: (i) all references to "the Company" shall be deemed
to be references to the Transferor; (ii) all references to "Bank" or "Banks"
shall be deemed to be references to "Purchaser" or "Purchasers," respectively;
(iii) all references to
23
"Lending Office" shall be deemed to be a reference to the office of the
Purchasers identified on the signature pages to this Agreement; (iv) all
references to "this Agreement" or "Loan Documents" shall be deemed to be
references to this Agreement or any other Transaction Documents; (v) all
references to "Loans" shall be deemed to be references to the Purchasers'
Investments; (vi) all references to "Eurodollar Rate Loans" shall be deemed to
be references to Purchasers' Investments with respect to which Yield Reserve
would then be calculated based on the Eurodollar Rate; (vii) all references to
"CD Rate" or "CD Rate Loans" shall be deemed to have been deleted; (viii) all
references to "interest" shall be deemed to be references to Yield and to any
"Interest Period" shall be deemed to be references to a "Yield Period"; (ix) the
following words in Section 3.3(b) of the Mattel Credit Agreement, "pursuant to
Section 2.4, either on the last day of the Interest Period thereof if the
- -----------
Bank may lawfully continue to maintain such Eurodollar Rate Loans to such day,
or promptly, if the Bank may not lawfully continue to maintain such Eurodollar
Rate Loans," shall be deemed to be replaced by the word "promptly"; (x) Section
3.5(b) of the Mattel Credit Agreement shall be deemed to be replaced by the
following: "(b) the failure of the Transferor to sell Listed Receivables after
the Transferor has delivered the related Purchase Notice pursuant to this
Agreement,"; and (xi) Section 3.5(c) of the Mattel Credit Agreement shall be
deemed deleted.
ARTICLE VIII. GUARANTY
Section 8.1. Guaranty of Obligations. For valuable consideration, the
-----------------------
Guarantor unconditionally, absolutely and irrevocably guarantees and promises to
pay to the Agent for the benefit of the Agent and the Purchasers 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 or the Purchasers (such guarantee and promise being
referred to as this "Guaranty"). The phrase "payment and performance obligations
--------
of the Transferor" (hereinafter collectively referred to in this Article 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 any and all reasonable attorneys' fees, costs,
charges, Yield Reserve or interest owed by the Transferor to the Purchasers,
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 advances, debts, obligations or
liabilities may be or hereafter becomes barred by any statute of limitations or
whether such advances, debts, obligations or liabilities may be or hereafter
become otherwise unenforceable.
Section 8.2. 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.
24
Section 8.3. Guarantor Directly Liable. The Guarantor agrees that it is
-------------------------
directly and primarily liable to the Agent and the Purchasers, 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 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 Purchasers to
the Transferor or any other guarantor shall not release it from this Guaranty.
Section 8.4. 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 Mattel 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 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 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, readjustment, assignment for the
benefit of creditors, or other similar proceedings which affect the Guarantor or
the Transferor, 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 (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
Purchasers may take, the Guarantor hereby agrees that the Agent or the
Purchasers may take such actions in such manner, upon such terms, and at such
times as the Agent or any Purchaser, in its discretion, deems 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 8.5. Waiver. The Guarantor hereby waives: (a) any and
------
all rights to require the Agent or the Purchasers to prosecute or seek to
enforce any remedies against the Transferor or any other Person liable to the
Agent or the Purchasers on account of the Obligations; (b) any right to assert
against the Agent or the Purchasers 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 Person liable to the Agent or the Purchasers
in any way or manner under this Agreement; (c) all defenses, counterclaims and
offsets 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 hereto; (d) any defense
arising by reason of any claim or defense based upon an election of remedies by
the Agent or the Purchasers, including any direction to proceed by judicial or
nonjudicial foreclosure or by deed
25
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 Transferor, against any other guarantor, or against any
other security, with the Guarantor understanding that the exercise by the Agent
or the Purchasers 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 nonreimbursable liability hereunder;
(e) except as otherwise provided herein, 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 advances,
debts, obligations or liabilities, and all other notices or formalities, in each
case, to which the Guarantor may be entitled; and (f) any and all benefits of
California Civil Code Sections 2809, 2810, 2819, 2825, 2839, 2845-2850, 2899 and
3433.
Section 8.6. Subrogation. The Guarantor hereby agrees that, unless and
-----------
until this Agreement has been terminated and all Obligations have been paid to
the Purchasers in full, it shall not have any rights of subrogation,
reimbursement or contribution as against the Transferor or any other guarantor,
if any, with respect to this Guaranty or any Obligations and shall not seek to
assert or enforce the same. The Guarantor understands that the exercise by the
Agent or the Purchasers of certain rights and remedies contained in this
Agreement may affect or eliminate the Guarantor's right of subrogation, if any,
against the Transferor and that the Guarantor may therefore incur a partially or
totally nonreimbursable liability hereunder. Nevertheless, the Guarantor hereby
authorizes and empowers the Agent and the Purchasers to exercise, in their
respective sole discretion, any right or remedy, or any combination thereof,
which may then be available, since it is the intent and purpose of the Guarantor
that the obligations hereunder shall be absolute, independent and unconditional
under any and all circumstances.
Section 8.7. Information. The Guarantor is presently informed of the
-----------
financial condition of the Transferor and of all other circumstances which
diligent inquiry would reveal and which bear upon the risk of nonpayment of the
Obligations. The Guarantor hereby covenants that it will continue to keep itself
informed of the financial condition of the Transferor and of all other
circumstances which bear upon such risk of nonpayment. The Guarantor hereby
waives its right, if any, to require the Agent or any Purchaser to disclose to
it any information which such Person may now or hereafter acquire concerning
such condition or circumstances including the release of any other guarantor.
Section 8.8. Evidence of Obligations. The Agent'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.
ARTICLE IX. THE AGENT
Section 9.1. Appointment. Each Purchaser hereby irrevocably designates
-----------
and appoints NationsBank of Texas, N.A., as the Agent of the Purchasers under
this Agreement, and each of
26
the Purchasers hereby irrevocably authorizes NationsBank of Texas, N.A., as the
Agent for such Purchaser, 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 Purchasers, 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 Purchasers 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 Purchasers 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. 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
Purchasers as provided in this Agreement (or from all of the Purchasers if so
specified herein) or it shall first be indemnified to its satisfaction by the
Purchasers 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 Purchasers, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Purchasers.
27
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 failed to receive on account of
any Purchaser such Purchaser's Purchasers' Investment, plus Yield Reserve, on or
before the applicable Due Date or has received written notice from a Purchaser,
the Transferor, the Servicer or the Guarantor, describing such Termination Event
or Servicer Default. In the event that the Agent fails to receive such amount or
receives such a notice, the Agent shall promptly give notice thereof to the
Purchasers and Bank of America National Trust and Savings Association as agent
under the Mattel Credit Agreement. Except as otherwise provided herein, the
Agent shall take such action to enforce this Agreement as shall be directed by
the Requisite Purchasers. In the event that any remedy is exercised pursuant to
Sections 4.2, 4.4 or 10.2 of this Agreement, each Purchaser and the Agent shall
- -------------------------
pursue remedies designated by the Requisite Purchasers to the same extent as
though such demand was caused by the action of all Purchasers, and each
Purchaser agrees to act as expeditiously as possible so as to maximize recovery.
Each Purchaser agrees that no Purchaser shall have any right individually to
take action with respect to the Purchased Interest, it being understood and
agreed that such rights and remedies with respect to any portion of the
Purchased Interest may be exercised by the Agent as directed by the Requisite
Purchasers for the ratable benefit of the Purchasers.
Section 9.6. No Representations. Each Purchaser 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 Purchaser. Each
Purchaser represents to the Agent that it has, independently and without
reliance upon the Agent or any other Purchaser, 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 Purchaser also represents that it will,
independently and without reliance upon the Agent or any other Purchaser, 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 Purchasers by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Purchaser 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 Purchasers agree to indemnify the Agent
---------------
in its capacity as such (to the extent not reimbursed by the Transferor or the
Guarantor 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 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
28
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 Purchaser 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 Section shall
survive the termination of this Agreement.
Section 9.8. Purchaser. The Agent and its Affiliates may make loans to,
---------
accept deposits from and generally engage in any kind of business with any
Obligor, the Transferor and the Guarantor as though it were not the Agent
hereunder. With respect to its purchases hereunder, the Agent shall have the
same rights and powers under this Agreement as any Purchaser and may exercise
the same as though it were not the Agent, and the terms "Purchaser" and
"Purchasers" 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 Purchasers may appoint a successor Agent for the
Purchasers, which shall be a commercial Purchaser 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 canceled, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. The former Agent's resignation shall not become
effective until such successor Agent-has been appointed and has succeeded of
record to all right, title and interest of the former Agent in the Purchased
Interest; provided, however, that if the Requisite Purchasers 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, further, 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 shall inure to its benefit as to any acaations taken
or omitted to be taken by it while it was Agent under this Agreement.
Section 9.10. Sharing of Payments, etc. The Purchasers agree that (i)
------------------------
with respect to all amounts received by each of them hereunder, whether in the
nature of a return of any investment or discount, or amounts due to a particular
Purchaser 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 Purchasers in proportion to the portion of the obligations due
each Purchaser hereunder shall be shared by the Purchasers in proportion to the
amounts due them hereunder, whether received by voluntary payment, or by the
exercise of the right of set-off or Purchaser'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, Purchaser'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 Purchaser
29
hereunder, which is greater than the proportion received by any other Purchaser
in respect of the amounts due hereunder to such other Purchaser, then the
Purchaser receiving such proportionately greater payment shall (x) notify each
other Purchaser 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 Purchasers so that all such
recoveries of amounts due hereunder. If all or any portion of such payment is
thereafter recovered from such Purchaser, 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 constitute independent
- ---------------------------------
obligations and agreements of the Agent and the Purchasers, 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 Purchasers and the
Agent under Section 9.8.
-----------
ARTICLE X. TERMINATION EVENTS AND TERMINATION EVENT REMEDIES
Section 10.1. Termination Events Defined. The occurrence of any one or
--------------------------
more of the following events shall constitute a Termination Event hereunder:
(a) any Seller Party shall fail (i) to make when due any payment or
deposit to be made by it under this Agreement with respect to any Purchased
Interest (including, in the case of the Servicer, failing to deliver to the
Agent on any Due Date an amount equal to the Purchasers' Investments plus
accrued Yield Reserve thereon) or (ii) to perform or observe in any material
respect, within 15 days after written notice thereof, any other material term,
covenant or agreement contained in any Transaction Document on its part to be
performed or observed;
(b) any representation or warranty made or deemed made by any Seller Party
(or any of its officers) under or in connection with any Transaction Document or
any material information or report delivered by any Seller Party pursuant to any
Transaction Document shall prove to have been incorrect or untrue in any
material respect when made or deemed made or delivered;
(c) an Event of Default or any other Servicer Default shall have occurred
and be continuing;
(d) an Insolvency Proceeding shall have been commenced and is continuing
in which any Seller Party or Seller is the debtor;
(e) an Insolvency Event shall have been commenced and is continuing in
which either Obligor is the debtor;
(f) the Transferor shall fail to have a valid and enforceable first
priority, perfected (i) ownership interest in, or (ii) security interest in,
each Listed Receivable and the other Specified Assets, in each case, free and
clear of any Adverse Claim (other than a lien or other interest in favor of the
Transferor pursuant to the Purchase and Sale Agreement);
30
(g) the Agent for the benefit of the Purchasers shall fail to have a valid
and enforceable first priority, perfected (i) undivided percentage ownership
interest in, or (ii) security interest in, each Listed Receivable and the other
Specified Assets, in each case free and clear of any Adverse Claim;
(h) a Seller Party shall merge with or into any other entity whereby it is
not the surviving entity;
(i) the second highest short-term unsecured debt rating assigned to an
Obligor by S&P, Moody's or Duff & Phelps is less than A-1, P-1 or D-1,
respectively, or the second highest long-term unsecured debt rating assigned to
an Obligor by S&P, Moody's or Duff & Phelps is less than A-, A3 or A-,
respectively; or
(j) there shall have occurred any event not otherwise covered by this
definition which has or will have a Material Adverse Effect.
Section 10.2. Termination Event Remedies. Any time during a Termination
--------------------------
Event, the Agent, upon the written request of the Requisite Purchasers, shall,
by written notice to the Transferor, the Guarantor, the Servicer and the
Purchasers, terminate the commitment of the Purchasers to purchase undivided
interests in the Receivables from the Transferor. Notwithstanding the foregoing,
upon the occurrence of a Termination Event described in Section 10.1(d), the
---------------
commitment of the Purchasers to purchase undivided interests in the Receivables
from the Transferor shall terminate automatically.
ARTICLE XI. MISCELLANEOUS
Section 11.1. Waivers; Amendments, Etc. No failure or delay on the part of
------------------------
the Agent or the Purchasers 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 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 Purchasers;
provided, however, that no such waiver, amendment or consent shall, unless in
- -------- -------
writing and signed by each of the affected Purchasers, the Transferor, the
Servicer, the Guarantor and acknowledged by the Agent, (a) increase or extend
such Purchaser's Purchaser Commitment or subject such Purchaser to additional
obligations; (b) postpone or delay any date fixed for any payment of fees or any
other amounts due to such Purchaser hereunder; (c) reduce any fees or other
amounts payable to such Purchaser hereunder; (d) change such Purchaser's
Percentage; (e) amend this Section or Section 9.10; or (f) release the Guarantor
------------
from any obligation undertaken by it pursuant to this Agreement.
31
Section 11.2. Notices, Etc. All notices and other communications hereunder
------------
shall, unless otherwise stated herein, be in writing (which shall include
facsimile communication) and sent or delivered, to each party hereto, at its
address set forth under its name on the signature pages attached hereto (except
that Purchase Notices shall be sent to the address set forth in the form of
Purchase Notice attached as Exhibit I) or at such other address as shall be
---------
designated by such party in a written notice to the other parties hereto.
Notices and communications to either Seller shall made in accordance with
Section 4.2 of the Purchase and Sale Agreement. Notices and communications by
facsimile shall be effective when sent (and shall be followed by hard copy sent
by first class mail), and notices and communications sent by other means shall
be effective when received.
Section 11.3. 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 hereto 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, the Agent and the Purchasers consents,
for itself and in respect of its property, to the non-exclusive jurisdiction of
those courts. Each of the Guarantor, the Transferor, the Agent and the
Purchasers irrevocably waives any objection to the laying 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 other
Transaction Document. The Guarantor, the Transferor, the Agent and the
Purchasers each waive personal service of any summons, complaint or other
process, which may be made by any other means permitted by California law.
Section 11.4. 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 the Agreement which are prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibitions or unenforceability without invalidating the remaining
provisions hereof, any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
Section 11.5. Successors and Assigns. This Agreement shall be binding on
----------------------
the parties hereto and their respective successors; provided, however, that,
-------- -------
subject to Article IV (with respect to the Servicer) and Section 11.7, no party
---------- ------------
to this Agreement may assign any of its rights or delegate any of its duties
hereunder. Any purported assignment in contravention of the foregoing shall be
null and void.
32
Section 11.6. Confidentiality. (i) Each of the Agent and each of the
---------------
Purchasers 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 any agent or representative
thereof, or by the Agent on such Guarantor's or Subsidiary's behalf, in
connection with this Agreement or any other Transaction Documents, 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 Agent or a Purchaser, or (ii) was
or becomes available on a non-confidential basis from a source other than the
Guarantor, so long as such source is not bound by a confidentiality agreement
with the Guarantor known to the Agent or Purchaser, as applicable. The Agent and
any Purchaser, however, may disclose such information (A) at the request or
pursuant to any requirement of any Governmental Person to which the Agent or
such Purchaser, as applicable is subject or in connection with an examination of
the Agent or such Purchaser, as applicable, 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 the Agent or
--------
such Purchaser, as applicable 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 another Purchaser or the Agent or any Affiliate thereof and the
independent auditors and other professional advisors of the Agent or such
Purchaser, as applicable, so long as such Persons are obligated to keep such
information confidential. Neither the Agent nor any Purchaser nor any of their
respective Affiliates shall use any information provided to any of the by or on
behalf of any Guarantor or any of its Subsidiaries for any purpose or in any
manner other than pursuant to the terms contemplated by this Agreement.
Notwithstanding the foregoing, the Guarantor authorizes each Purchaser to
disclose to any Participant or Assignee and to any prospective Participant or
Assignee, such financial and other information in such Purchaser's possession
concerning the Guarantor or its Subsidiaries which has been delivered to the
Agent or the Purchasers pursuant to this Agreement or which has been delivered
to the Agent or the Purchasers by the Guarantor in connection with the
Purchasers' credit evaluation of the Guarantor prior to entering into this
Agreement; provided that, unless otherwise agreed by the Guarantor, such
--------
Participant or Assignee agrees in writing to such Purchaser to keep such
information confidential to the same extent required of the Purchasers
hereunder.
Section 11.7. Assignments; Participations. (a) Any Purchaser may, with the
---------------------------
advance written consent of the Transferor at all times other than during the
existence of a Termination Event, which consent of the Transferor shall not be
unreasonably withheld, and the Agent, at any time assign and delegate to one or
more Eligible Assignees (provided that no consent of the Transferor or the Agent
shall be required in connection with any assignment and delegation by a
Purchaser to an Eligible Assignee that is an Affiliate of such Purchaser) (each
an "Assignee") all, or any ratable part of all, of the Purchased Interest and
--------
the other rights and obligations of such Purchaser hereunder, in a minimum
amount of $10,000,000 and such Purchaser shall concurrently therewith assign a
ratable portion in the Mattel Credit Agreement; provided, however, that the
-------- -------
Transferor and the Agent may continue to deal solely and directly with such
Purchaser in connection with the interest so assigned to an Assignee until (i)
written notice of
33
such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the
Transferor and the Agent by such Purchaser and the Assignee; (ii) such Purchaser
and its Assignee shall have delivered to the Transferor and the Agent an
executed assignment together with any note or notes subject to such assignment
and (iii) the assignor Purchaser or Assignee has paid to the Agent a processing
fee in the amount of $3,000.
(b) From and after the date that the Agent notifies the assignor Purchaser
that it has received (and provided its consent with respect to) an executed
assignment and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such assignment,
shall have the rights and obligations of a Purchaser under this Agreement, and
(ii) the assignor Purchaser shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such assignment, relinquish its
rights and be released from its obligations hereunder.
(c) Upon advance written notice to the Transferor, each Purchaser 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 Purchased Interest, to one or more
Affiliates of such Purchaser or to one or more commercial banks, merchant banks,
savings and loan associations or any other institution (a "Participant");
-----------
provided that such Purchaser shall concurrently with any sale of a participation
- --------
herein sell a ratable participation under the Credit Agreement and thereafter
cause any such participation herein to remain ratable with such participation
under the Credit Agreement. 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 "Purchaser"; provided further, that in the case of a
- ---- -------- -------
participation, (i) the Purchaser's obligations under this Agreement shall remain
unchanged, (ii) the Purchaser 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 Purchaser in connection with the
Purchaser's rights and obligations under this Agreement, and (iv) no Purchaser
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 Purchaser 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 Purchaser under this Agreement.
Section 11.8. Termination of Prior Transfer and Administration Agreement.
----------------------------------------------------------
Certain of the Purchasers party hereto are all of the purchasers party to
the Prior Transfer and Administration Agreement. Each of such purchasers hereby
consent to the termination of such Transfer and Administration Agreement and
agree to, and authorize and direct NationsBank of Texas, N.A., as agent
thereunder, upon payment by the Transferor of all amounts due thereunder
34
and described in reasonable detail in writing to Transferor, to take any action
necessary or reasonably requested by Mattel Factoring or Mattel to terminate
such Transfer and Administration Agreement (except those provisions thereof
which expressly survive).
Section 11.9. Set Off. In addition to any rights now or hereafter granted
-------
under applicable law and not by way of limitation of any such rights, upon the
occurrence of and during the continuance of any Termination Event (after the
giving of any notice and the expiration of any grace period contained in the
definition thereof), each Purchaser is hereby authorized by each Seller Party at
any time or from time to time, without notice to the Seller Parties or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate any and all deposits (including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other indebtedness at any time held or owing
by that Purchaser or any Affiliate thereof to or for the credit or the account
of a Seller Party and to apply any such amounts in accordance with the
provisions of Section 9.10 irrespective of whether or not that shall have made
------------
any demand hereunder, and each such Purchaser or Affiliate is hereby irrevocably
authorized to permit such set-off and appropriation.
[SIGNATURES FOLLOW]
35
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Receivables Purchase Agreement as of the date first above written.
MATTEL FACTORING, INC.,
as Transferor
By:/s/ William Stavro
-----------------------------------
Name: William Stavro
Title: Senior Vice President
and Treasurer
Notice Address: M.S. 24-199
2043 East Mariposa
El Segundo, CA 90245
Telecopy:
MATTEL, INC.,
as Guarantor and Servicer
By:/s/ William Stavro
-----------------------------------
Name: William Stavro
Title: Senior Vice President
and Treasurer
Notice Address: 333 Continental Blvd.
El Segundo, CA 90245
Telecopy:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By: /s/ Charles F. Lilygren
-----------------------------------
Name: Charles F. Lilygren
Title: Senior Vice President
Notice
Address: 444 S. Flower Street, Suite 4100
Los Angeles, California 90071
Telecopy:
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
-------------------- -------------------
9.000000000 27,000,000 NATIONSBANK OF TEXAS,
N.A.
By:/s/ Charles F. Lilygren
-----------------------
Name: Charles F. Lilygren
Title:Senior Vice President
Notice Address: 444 S. Flower Street, Suite 4100
Los Angeles, California 90071
Attn: Charles F. Lilygren
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
----------------------- ---------------------
12.000000000 36,000,000 BANK OF AMERICA
NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:/s/ Robert W. Troutman
----------------------
Name: Robert W. Troutman
Title: Managing Director
Notice Address: Credit Products Department #5618
555 S. Flower Street, 11th Floor
Los Angeles, California 90071
Attn: Robert W. Troutman
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
----------------------- ------------------------
9.000000000 27,000,000 THE CHASE MANHATTAN
BANK, N.A.
By:/s/ Lenard Weiner
-----------------
Name: Lenard Weiner
Title:M.D.
Notice Address: Banking & Corporate Finance
101 California Street, Suite 2725
San Francisco, California 94111
Attn:
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
--------------------- ----------------------------
7.500000000 22,500,000 TORONTO DOMINION
(TEXAS), INC.
By:/s/ Debbie A. Greene
--------------------
Name: DEBBIE A. GREENE
Title: VICE PRESIDENT
Notice Address: Houston Agency
900 Fanin Street, Suite 1700
Houston, Texas 77010
Attn:
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
----------------------- ------------------------
7.500000000 22,500,000 CITICORP USA, INC.
By:/s/ Deborah Ironson
-------------------
Name: Deborah Ironson
Title:Attorney-In-Fact
Notice Address: c/o Citicorp Securities, Inc.
725 South Figueroa Street, 5th Floor
Los Angeles, California 90017
Attn: Deborah Ironson
c/o Citibank, N.A.
2 Penn's Way, Suite 200
New Castle, Delaware 19720
Attn: Sally Schoenleber
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
---------------------- -------------------------
7.500000000 22,500,000 ABN AMRO BANK, N.V.
Los Angeles International
Branch
By:/s/ Ellen M. Coleman
--------------------
Name: ELLEN M. COLEMAN
Title: VICE PRESIDENT/
DIRECTOR
By:/s/ Heather F. Brandt
----------------------
Name: HEATHER F. BRANDT
Title: VICE PRESIDENT
Notice Address: Los Angeles International Branch
300 South Grand Avenue, Suite 1115
Los Angeles, California 90071
Attn:
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
--------------------- ------------------------
7.500000000 22,500,000 BANKBOSTON, N.A.
By:/s/ Debra L. Zurka
------------------
Name: Debra L. Zurka
Title: Director
Notice Address: U.S. Corporate Division
Mail Stop 01-09-05
100 Federal Street
Boston, Massaachusetts 02110
Attn: Debra L. Zurka
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
--------------------- --------------------------
5.000000000 15,000,000 SOCIETE GENERALE
By:/s/ J. Blaine Shaum
-------------------
Name: J. Blaine Shaum
Title:Regional Manager
Notice Address: 2029 Century Park East, Suite 2900
Los Angeles, California 90067
Attn: J. Staley Stewart
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
---------------------- ------------------------
5.000000000 15,000,000 BANQUE NATIONALE
DE PARIS
By:/s/ Clive Bettles
------------------
Name: Clive Bettles
Title: Senior Vice President
& Manager
By:/s/ Mitchell M. Ozawa
---------------------
Name: Mitchell M. Ozawa
Title: Vice President
Notice Address: 725 South Figueroa Street, Suite 2090
Los Angeles, California 90017-5420
Attn: Mitchell M. Ozawa
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Facility Limit ($)
-------------------- ------------------------
5.000000000 15,000,000 UNION BANK OF CALIFORNIA,
N.A.
By:/s/ Scott M. Lane
-------------------
Name: Scott M. Lane
Title: Vice President
Notice Address: 550 South Hope Street, 3rd Floor
Los Angeles, California 90071
Attn: Scott M. Lane
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Facility Limit ($)
--------------------- -------------------------
5.000000000 15,000,000 PNC BANK, NATIONAL
ASSOCIATION
By:/s/ Timothy J. Marchando
-------------------------
Name: Timothy J. Marchando
Title: Vice President
Notice Address: Mail Stop P-1-POPP-02-4
249 Fifth Avenue, 2nd Floor
Pittsburgh, Pennsylvania 15222-2707
Attn: Timothy J. Marchando
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
--------------------- ----------------------
5.000000000 15,000,000 MANUFACTURERS & TRADERS
TRUST CO.
By:/s/ Geoffrey R. Fenn
-----------------------
Name: Geoffrey R. Fenn
Title: Vice President
Notice Address: 1 Fountain Plaza, 12th Floor
Buffalo, New York 14203
Attn: Geoffrey R. Fenn
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
----------------------- -----------------------
5.000000000 15,000,000 ISTITUTO BANARIO SAN
PAOLO DI TORINO SPA
By:/s/ Carlo Persico
-----------------
Name: Carlo Persico
Title:Deputy Manager
By:/s/ Wendell Jones
-----------------
Name: Wendell Jones
Title:Vice President
Notice Address: 444 South Flower Street, Suite 4550
Los Angeles, California 90071
Attn: Donald W. Brown
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
--------------------- -----------------------
5.000000000 15,000,000 DRESDNER BANK AG
New York Branch
and
Grand Cayman Branch
By:/s/ John W. Sweeney
-------------------
Name: JOHN W. SWEENEY
Title:ASSISTANT VICE
PRESIDENT
By:/s/ Brigitte Sacin
-------------------
Name: BRIGITTE SACIN
Title:ASSISTANT VICE
PRESIDENT
Notice Address: Los Angeles Agency
333 South Grand Avenue, Suite 1700
Los Angeles, California 90071-5439
Attn: Jon M. Bland
Dollar Amount
of Percentage
of Original
Percentage (%) Facility Limit ($)
--------------------- ------------------------
2.500000000 7,500,000 NORTHERN TRUST COMPANY
By:/s/ Martin G. Alston
--------------------
Name: Martin G. Alston
Title:Vice President
Notice Address: 50 South LaSalle Street
Chicago, Illinois 60675
Attn:
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Facility Limit ($)
-------------------- -----------------------
2.500000000 7,500,000 THE INDUSTRIAL BANK OF
JAPAN, LIMITED
By:/s/ Vicente L. Timiraos
--------------------------
Name: Vicente L. Timiraos
Title:Senior Vice President
& Senior Deputy General
Manager
Notice Address: 350 South Grand Avenue, Suite 1500
Los Angeles, California 90071
Attn: J. Blake Seaton
EXHIBIT I
[FORM OF] PURCHASE NOTICE
[Date]
VIA FACSIMILE
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NationsBank of Texas, N.A.
[Address]
Attention: _________________
Facsimile: ______________
Ladies and Gentlemen:
This Purchase Notice is being delivered to you pursuant to Section 2.2 of
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the Receivables Purchase Agreement dated as of March ___, 1998 (as amended,
amended and restated or otherwise modified from time to time in accordance with
its terms, the "Receivables Purchase Agreement") among Mattel Factoring, Inc.,
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Mattel, Inc., the financial institutions party thereto from time to time as
Purchasers, and NationsBank of Texas, N.A., as agent for such Purchasers.
Capitalized terms used herein without definition shall have the meanings
assigned thereto in the Receivables Purchase Agreement.
The Servicer hereby notifies the Agent that the Transferor proposes to sell
to the Purchasers on [insert date] (the "Purchase Date") an undivided percentage
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ownership interest in the Eligible Receivables and other items contemplated by
Section 2.2(c) of the Receivables Purchase Agreement, which Eligible Receivables
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and other items shall be purchased by the
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Transferor on such Purchase Date from the Sellers pursuant to the Purchase and
Sale Agreement. The Due Date for such sale will be [insert date], and the
proposed amount of the Purchasers' Investment would be $__________. As of the
date of this Purchase Notice, the aggregate outstanding principal balances of
such Eligible Receivables is $____________.
Very truly yours,
MATTEL, INC., as the Servicer
By:_________________________________________
Name:_______________________________________
Title:______________________________________
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Attachment A to
[Form of] Purchase Notice
Obligor
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Toys "R" Us, Inc. Wal-Mart Stores, Inc.
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Eligible Receivables:
Mattel Sales Corp. $ $
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Fisher-Price, Inc. $ $
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Total Eligible Receivables: "A" $ $
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Purchase Date: ________ ________
Due Date: ________ ________
Yield Period in Number of Days: "B" ________ ________
Purchase Rate:
Estimated LIBOR ____% ___%
plus: Applicable Margin ________ ________
Total Purchase Rate: "C" ____% ___%
Yield [(B x C)/360]: "D" ____% ___%
Purchasers' Investments: "E" $ $
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Yield Reserve [D x E]: "F" ________ ________
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Purchased Interest [E + F)/A]: $ $
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/*/ Purchasers' Investment shall be less than[A/(1+D)].
/*/ Total Purchasers' Investment cannot exceed the Purchasers' Investment
Limit.
/*/ Purchased Interest cannot be more than 1.0.
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