EXHIBIT 99.1
________________________________________________________________________________
TRANSFER AND ADMINISTRATION AGREEMENT
by and among
MATTEL FACTORING, INC.,
as Transferor,
and
MATTEL, INC.,
as Guarantor and Servicer,
and
NATIONSBANK OF TEXAS, N.A.,
as Agent,
and
THE BANKS NAMED HEREIN
Dated as of March 11, 1997
Arranged By
NationsBanc Capital Markets, Inc.
________________________________________________________________________________
TABLE OF CONTENTS
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PAGE
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ARTICLE I DEFINITIONS.............................................................................. 1
1.1. Certain Defined Terms............................................................ 1
1.2. Other Terms...................................................................... 16
1.3. Computation of Time Periods...................................................... 16
ARTICLE II PURCHASES AND SETTLEMENTS................................................................ 18
2.1. Facility......................................................................... 17
2.2. Transfers........................................................................ 18
2.3. Discount, Fees and Other Costs and Expenses...................................... 20
2.4. Settlement Procedures............................................................ 21
2.5. Protection of Ownership Interest of the Banks.................................... 22
2.6. Deemed Collections; Application of Payments...................................... 23
2.7. Payments and Computations, Etc................................................... 24
2.8. Reports.......................................................................... 24
2.9. Collection Account............................................................... 25
2.10. Deficiency Advances.............................................................. 26
2.11. Adjustment of Facility Limit..................................................... 27
2.12. Inability to Determine LIBOR..................................................... 27
2.13. Transfer of Existing Receivables; Termination of Prior Agreement................. 28
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................... 29
3.1. Representations and Warranties of the Transferor................................. 29
3.2. Representations and Warranties of Mattel, Inc.................................... 34
3.3. Reaffirmation of Representations and Warranties.................................. 38
ARTICLE IV CONDITIONS PRECEDENT..................................................................... 39
4.1. Conditions to Closing............................................................ 39
ARTICLE V COVENANTS................................................................................ 42
5.1. Affirmative Covenants of the Transferor.......................................... 42
5.2. Negative Covenants of the Transferor............................................. 44
5.3. Affirmative Covenants of Mattel, Inc............................................. 45
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ARTICLE VI ADMINISTRATION AND COLLECTIONS........................................................... 50
6.1. Appointment of Servicer.......................................................... 50
6.2. Duties of Servicer and Agent..................................................... 50
6.3. Rights After Designation of New Servicer......................................... 52
6.4. Responsibilities of the Transferor............................................... 52
ARTICLE VII SERVICER DEFAULT AND TERMINATION EVENTS.................................................. 54
7.1. Servicer Default................................................................. 54
7.2. Servicer Default Remedies........................................................ 54
7.3. Termination Events............................................................... 55
7.4. Termination Event Remedies....................................................... 56
7.5. Potential Termination Event Remedies............................................. 57
ARTICLE VIII INDEMNIFICATION; EXPENSES; RELATED MATTERS............................................... 58
8.1. Indemnities by the Transferor.................................................... 58
8.2. Indemnity for Taxes, Reserves and Expenses....................................... 59
8.3. Other Costs, Expenses and Related Matters........................................ 61
8.4. Reconveyance Under Certain Circumstances......................................... 62
ARTICLE IX THE AGENT................................................................................ 63
9.1. Appointment...................................................................... 63
9.2. Attorneys-in-fact................................................................ 63
9.3. Limitation on Liability.......................................................... 63
9.4. Reliance......................................................................... 64
9.5. Notice of Termination Event...................................................... 64
9.6. No Representations............................................................... 65
9.7. Indemnification.................................................................. 65
9.8. Bank............................................................................. 66
9.9. Resignation...................................................................... 66
9.10. Sharing of Payments, etc......................................................... 67
9.11. Independent Agreements........................................................... 68
ARTICLE X GUARANTY................................................................................. 69
10.1. Guaranty of Obligations......................................................... 69
10.2. Guaranty Continuing............................................................. 69
10.3. Guarantor Directly Liable....................................................... 69
10.4. No Impairment................................................................... 70
10.5. Waiver.......................................................................... 71
10.6. Subrogation..................................................................... 72
10.7. Information..................................................................... 72
10.8. Evidence of Obligations......................................................... 73
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PAGE
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ARTICLE XI MISCELLANEOUS............................................................................ 74
11.1. Term of Agreement............................................................... 74
11.2. Waivers; Amendments............................................................. 74
11.3. Notices......................................................................... 75
11.4. Governing Law; Integration...................................................... 76
11.5. Severability; Counterparts...................................................... 76
11.6. Successors and Assigns.......................................................... 76
11.7. Confidentiality................................................................. 77
11.8. Characterization of the Transactions Contemplated by the Agreement.............. 78
11.9. Assignments; Participations..................................................... 78
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EXHIBITS
EXHIBIT A Form of Written Agreement
EXHIBIT B Form of Weekly Servicer's Certificate
EXHIBIT C Form of Transfer Notice
EXHIBIT D [Reserved]
EXHIBIT E List of Actions, Suits and Proceedings
against the Transferor
EXHIBIT F Location of Chief Executive Office and Records
EXHIBIT G List of Tradenames
EXHIBIT H List of Actions, Suits and Proceedings
against the Guarantor
EXHIBIT I Form of Opinion of Counsel to the
Transferor
EXHIBIT J Form of Opinion of Counsel for the
Guarantor/Servicer
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TRANSFER AND ADMINISTRATION AGREEMENT
TRANSFER AND ADMINISTRATION AGREEMENT (this "Agreement"), dated as of
---------
March 11, 1997, by and among MATTEL FACTORING, INC., a Delaware corporation, as
transferor (the "Transferor"), MATTEL, INC., a Delaware corporation, as
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guarantor and servicer (the "Guarantor" and the "Servicer"), THE BANKS LISTED ON
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THE SIGNATURE PAGES HEREOF (collectively, the "Banks") and NATIONSBANK OF TEXAS,
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N.A., a national banking association, as agent on behalf of the Banks (the
"Agent").
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PRELIMINARY STATEMENTS
WHEREAS, the Transferor may desire to convey, transfer and assign,
from time to time, undivided percentage interests in certain accounts
receivable with respect to which Toys "R" Us, Inc. ("Toys "R" Us") is the named
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obligor, and the Agent, on behalf of and for the benefit of the Banks, shall
accept such conveyance, transfer and assignment of such undivided percentage
interests, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings:
"Adjusted Certificate of Deposit Rate" means, with respect to a
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Tranche and the related Tranche Period, the sum (rounded upward to the next
highest 1/100 of 1%) of (i) the rate obtained by dividing (x) the Certificate of
Deposit Rate by (y) a percentage equal to 100% minus the full reserve
requirement percentage as specified by the Board of Governors of the Federal
Reserve System that
the Agent determines would be applicable on the date of determination to a
certificate of deposit of the Agent in excess of $100,000 with a maturity
comparable to the related Tranche Period (including, without limitation, any
marginal, emergency, supplemental, special or other reserves if the Agent, in
its sole discretion, determines that it is required to maintain any such
reserves on such day), plus (ii) the then daily net annual assessment rate as
estimated by the Agent for determining the current annual assessment payable by
the Agent to the Federal Deposit Insurance Corporation for insuring certificates
of deposit with a maturity comparable to the related Tranche Period.
"Adverse Claim" means a lien, security interest, charge or
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encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"Affiliate", as applied to any Person, means any other Person directly
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or indirectly controlling, controlled by or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agent" means NationsBank of Texas, N.A., a national banking
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association, in its capacity as agent on behalf of the Banks.
"Aggregate Unpaids" means at any time, an amount equal to the sum of
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(i) the aggregate accrued and unpaid Discount (including any additional Discount
due pursuant to Section 7.4) with respect to all Tranche Periods at such time,
(ii) the Total Outstanding Investment at such time, and (iii) all amounts owed
(whether due or accrued) hereunder by the Transferor to the Agent or the Banks
at such time.
"Alternate Rate" means a rate per annum equal to 2% in excess of the
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prime rate of interest announced by the Agent from time to time, changing when
and as said
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prime rate changes (such rate not necessarily being the lowest or best rate
charged by the Agent).
"Arranger" means NationsBanc Capital Markets, Inc.
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"Bank" means each of the financial institutions listed on the
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signature pages hereto, and any successors in accordance with Section 11.6.
"Bank Commitment" for each Bank means such Bank's Percentage of the
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Facility Limit.
"Base Rate" means a fluctuating rate per annum which is the higher of
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(a) the Federal Funds Rate plus one-half of one percent (1/2%) per annum and (b)
the Reference Rate.
"Business Day" means any day excluding Saturday, Sunday and any day on
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which banks in Dallas, Texas, New York, New York, Pittsburgh, Pennsylvania, or
San Francisco, California are authorized or required by Governmental Rule to
close; provided, however, when used with respect to LIBOR, "Business Day" means
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any day on which dealings in deposits of United States dollars are transacted in
the applicable offshore United States dollar interbank market.
"Certificate of Deposit Rate" means, with respect to a Tranche and the
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related Tranche Period, the average of the consensus bid rates determined by the
Agent on the date of determination of two or more New York certificate of
deposit dealers of recognized standing selected by the Agent for the purchase
in New York at face value from the Reference Banks of certificates of deposit of
the Reference Banks in an amount comparable to the amount of the related
Transfer Price to be funded by the Agent, and with a maturity comparable to the
related Tranche Period.
"Close-Out Collections" means Collections received with respect to any
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Close-Out Receivable.
"Close-Out Receivable" means any Receivable which is due and payable
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prior to the Remittance Date following the date of creation of such Receivable.
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"Closing Date" means March 13, 1997.
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"Collection Account" means the account established and maintained by
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the Agent for the benefit of the Banks pursuant to Section 2.9.
"Collections" means, with respect to any Receivable, all cash
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collections and other cash proceeds of such Receivable including, without
limitation, any Deemed Collections and Close-Out Collections.
"Commitment Commission Rate" means the per annum rate payable by the
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Transferor to the Banks (calculated on the basis of actual number of days
elapsed divided by 360), determined in accordance with the following table, and
based upon the second highest of Toys "R" Us, Inc.'s long-term senior unsecured
debt ratings:
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Toys "R" Us, Inc.'s
long-term senior
unsecured debt ratings Commitment
S&P/Xxxxx'x/Xxxx Commission
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AA-/Aa3/AA-or higher 7.0 bps
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A/A2/A or higher 8.0 bps
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A-/A3/A- 10.0 bps
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The Commitment Commission Rate as of the Closing Date is 8.0 basis
points. Upon a rating change, the Agent shall determine the applicable
Commitment Commission Rate and shall promptly notify the Banks and the
Transferor of the Commitment Commission Rate so determined. Such determination
by the Agent shall be conclusive absent manifest error. The new applicable
Commitment Commission Rate will be effective as of the date of notification to
the Banks.
"Commitment Fee" means a fee equal to the applicable Commitment
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Commission Rate payable by the Transferor on each Remittance Date on the
difference between the average Facility Limit and the average Total Outstanding
Investment on each day for the one-year period preceding such date.
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"Contingent Obligation", as applied to any Person, means, without
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duplication, any direct or indirect liability, contingent or otherwise, of that
Person (i) with respect to any indebtedness, lease, dividend or other obligation
of another if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such obligation
of another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof or (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings. Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another and
(b) any liability of such Person for the obligations of another through any
agreement (contingent or otherwise) (x) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise) or (y) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another, if in the case of any agreement described under subclauses (x) or (y)
of this sentence the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported. The amount
of any Contingent Obligation denominated in a currency other than United States
dollars shall be equal to the United States dollar equivalent of such Contingent
Obligation.
"Contract" means, with respect to any Receivable, both the Written
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Agreement and the invoice related thereto, pursuant to or under which the
Obligor shall be obligated to pay for merchandise sold by the related Seller to
the Obligor.
"Contractual Obligation", as applied to any Person, means any
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provision of any security issued by that Person or of any material indenture,
mortgage, deed
5
of trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
"Credit Agreement" means the First Amended and Restated Credit
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Agreement, dated as of March 11, 1997, by and among Mattel, Inc., the banks
named therein and Bank of America National Trust and Savings Association, as
Agent, as such agreement may be amended and supplemented from time to time.
"Credit and Collection Policy" means the Transferor's credit and
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collection policies and practices relating to Contracts and Receivables with
respect to the Transferor existing on the date hereof, as modified from time to
time in compliance with Section 5.2(c).
"Deemed Collections" means any Collections on any Receivable deemed to
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have been received pursuant to Section 2.6(a) or (b).
"Defaulted Receivable" means a Receivable: (i) as to which any
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payment, or part thereof, remains unpaid as of the close of business on the
Remittance Date next succeeding the date such Receivable is created; (ii) as to
which an Event of Bankruptcy has occurred with respect to the Obligor; (iii)
which has been identified by the Transferor or the Servicer as uncollectible; or
(iv) which, consistent with the Credit and Collection Policy, should be written
off the Transferor's books as uncollectible.
"Deficiency Advance" has the meaning specified in Section 2.10.
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"Discount" means, for each Tranche, an amount equal to the product of
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(a) the related Transfer Price (minus any amounts released from the Collection
Account by the Agent pursuant to Section 2.9(b) to fund all or a portion of such
Transfer Price) and (b) the applicable Participation Rate and (c) a fraction,
the numerator of which is the number of days in such Tranche Period and the
denominator of which is 360; provided, however, that no provision of this
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Agreement shall require the payment or permit the collection of Discount in
excess of the maximum permitted by applicable Governmental Rule; and
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provided, further, that Discount shall not be considered paid by any
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distribution of Collections if at any time such distribution is rescinded or
must be returned for any reason.
"Discount Reserve" means, at any time, the aggregate amount of
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Discount for all outstanding Tranches.
"Duff" means Duff & Xxxxxx Credit Ratings Co.
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"Eligible Receivable" means, at any time, any Receivable:
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(i) the Obligor of which is Toys "R" Us, Inc.;
(ii) which is not a Defaulted Receivable at the time of the
initial creation of an interest of the Agent, on behalf of the Banks,
therein;
(iii) which is an "account" within the meaning of Section 9-106
of the UCC of all applicable jurisdictions;
(iv) which is denominated and payable only in United States
dollars in the United States;
(v) which, together with the Contract related thereto, is in
full force and effect and constitutes the legal, valid and binding
obligation of the Obligor enforceable against the Obligor in accordance
with its terms and subject to no offset, counterclaim or other defense;
(vi) which, together with the Contract related thereto, does not
contravene in any material respect any Governmental Rules applicable
thereto and with respect to which no part of the Contract related thereto
is in violation of any such Governmental Rule in any material respect;
(vii) for which the Obligor has been directed and has agreed to
remit all payments to the Collection Account;
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(viii) which satisfies all applicable requirements of the Credit
and Collection Policy;
(ix) the remaining term of which at the time of transfer
hereunder does not extend beyond the next succeeding Remittance Date; and
(x) which was generated in the ordinary course of the related
Seller's business and purchased by the Transferor from such Seller in
accordance with the Purchase Agreement.
"Environmental Claims" means all claims, however asserted, by any
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Governmental Person or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
"Environmental Laws" means all federal, state or local laws, statutes,
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common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Person, in each case relating
to environmental, health, safety and land use matters.
"ERISA" means, at any time, the Employee Retirement Income Security
-----
Act of 1974, as amended from time to time, and any successor statute.
"ERISA Affiliate", as applied to any Person, means any trade or
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business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
Section 414(b) and 414(c) of the Internal Revenue Code of 1986, as amended.
"Event of Bankruptcy", with respect to any Person, means (i) that
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such Person shall generally not pay its debts as such debts become due or shall
admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against such Person seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any
Governmental Rule
8
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
or (ii) if such Person is a corporation, such Person shall take any corporate
action to authorize any of the actions set forth in the preceding clause (i).
"Facility Limit" means $400,000,000, as such amount may be adjusted as
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provided herein.
"Federal Funds Rate" means the weighted average of the rates on
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overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day of determination
(or if such day of determination is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transaction received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"GAAP" means generally accepted accounting principles set forth in the
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opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Governmental Person" means the government of the United States or the
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government of any state or locality therein, any political subdivision or any
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body or entity, or other regulatory bureau, authority, body or entity
of the United States or any state or locality therein, including the Federal
Deposit Insurance Company, the Comptroller of the Currency or the Board of
Governors of the Federal Reserve System, any central bank or any comparable
authority.
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"Governmental Rule" means any law, statute, rule, regulation,
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ordinance, order, judgment, guidelines or decision of any Governmental Person.
"Guarantor" means Mattel, Inc.
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"Indemnified Amounts" has the meaning specified in Section 8.1.
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"Indemnified Parties" has the meaning specified in Section 8.1.
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"LIBOR" means, with respect to a Tranche and the related Tranche
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Period, the average of the quotations (rounded upwards to the nearest 1/100 of
1%) as of 10:00 a.m. New York time on the second Business Day prior to the
commencement of such Tranche Period, if any, offered to first class banks in the
offshore dollar market by the Reference Banks for U.S. Dollar deposits of
amounts in same day funds comparable to the Transfer Price of such Tranche (net
of amounts payable in accordance with Section 2.9(b)), with a maturity
comparable to such Tranche Period to which LIBOR will apply.
"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 Mattel, Inc. (together with its Subsidiaries),
taken as a whole, or (ii) a material impairment of the ability of Mattel, Inc.
to perform its obligations under this Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc.
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"Multiemployer Plan" means a "multiemployer plan" as defined in
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Section 4001(a)(3) of ERISA which is maintained for employees of a Person or any
ERISA Affiliate of such Person.
"Notice of Termination" means a notice delivered by the Agent to the
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Transferor, the Guarantor and the Banks pursuant to Section 7.4.
"Obligations" has the meaning set forth in Section 10.1.
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"Obligor" means Toys "R" Us, Inc., a Delaware corporation.
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"Participant" has the meaning set forth in Section 11.9.
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"Participation Rate" means, for any Tranche and related Tranche
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Period, LIBOR (or the Adjusted Certificate of Deposit Rate pursuant to Section
2.12) plus the applicable spread. Such spread shall mean the per annum rate
(calculated on the basis of the actual number of days elapsed divided by 360),
determined in accordance with the following table, and based upon the second
highest of Toys "R" Us, Inc.'s long-term unsecured senior debt ratings:
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Toys "R" Us, Inc.'s long-
term senior unsecured
debt ratings Spread
S&P/Moody's/Xxxx
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AA-/Aa3/AA-or higher 18.0 bps
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A/A2/A or higher 22.0 bps
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A-/A3/A- 25.0 bps
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Such spread as of the Closing Date is 22 basis points. Upon a rating
change, the Agent shall determine the applicable spread and shall promptly
notify the Banks and the Transferor of the spread so determined. Such
determination by the Agent shall be conclusive absent manifest error. The new
applicable spread will be effective as of the date of notification to the Banks
and will be applicable to all Tranches.
"Pension Plan" means any employee plan which is subject to Section 412
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of the Internal Revenue Code of 1986, as amended, and which is maintained for
employees of a Person or any ERISA Affiliate of such Person other than a
Multiemployer Plan.
"Percentage" means, with respect to any Bank at any time, the
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percentage set forth next to its name on the signature page hereof, which is the
equivalent of a fraction the numerator of which is equal to such Bank's
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Bank Commitment, and the denominator of which is equal to the Facility Limit.
"Percentage Factor" means the percentage computed at any time of
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determination as follows:
TOI + DR
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XXX
Where:
TOI = the Total Outstanding Investment at the time of such computation.
DR = the Discount Reserve at the time of such computation.
XXX = the aggregate outstanding balance of the Eligible Receivables at the
time of such computation.
In no event shall the Percentage Factor exceed one hundred percent.
The Percentage Factor shall be calculated by the Agent on the day of the initial
Transfer hereunder. Thereafter, the Percentage Factor shall remain constant
from the time as of which any such computation is made until the time as of
which a subsequent Transfer shall be made pursuant to Section 2.2. The
Percentage Factor, as calculated at the close of business on the date as of
which any such Transfer is made shall remain constant at all times thereafter
until such time as an additional Transfer is made or until such time as the
Banks shall have received the full amount of the Aggregate Unpaids, at which
time the Percentage Factor shall be recomputed.
"Person" means any corporation, natural person, firm, joint venture,
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partnership, trust, unincorporated organization, enterprise, government or any
department or agency of any government.
"Potential Termination Event" means any condition or event which,
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with the giving of notice or the lapse of time or both, would constitute a
Termination Event.
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"Prior Agreement" has the meaning set forth in Section 2.13.
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"Prior Banks" means each of the "Banks" other than The Industrial Bank
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of Japan, Limited.
"Proceeds" means "proceeds" as defined in Section 9.306(1) of the UCC.
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"Purchase Agreement" means the Receivable Purchase Agreement, dated as
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of March 11, 1997 among each Seller, as seller, and the Transferor, as buyer, as
such agreement may be amended and supplemented from time to time.
"Receivable" means the indebtedness denominated in United States
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dollars to a Seller by the Obligor (without giving effect to any purchase by the
Transferor under the Purchase Agreement or to any purchase hereunder by the
Agent, on behalf of the Banks, at any time) under a Contract whether
constituting an account, chattel paper, instrument or general intangible,
including all other obligations of the Obligor with respect thereto;
"Receivable" shall include the indebtedness of the Obligor denominated in
United States dollars to Mattel Sales Corp. and Xxxxxx-Xxxxx, Inc. sold to
NationsBank of Texas, N.A., as agent, on behalf of certain financial
institutions, pursuant to the Second Amended and Restated Transfer and
Administration Agreement dated as of March 10, 1995, as amended from time to
time, and assigned by NationsBank of Texas, N.A., as agent on behalf of such
financial institutions, to the Agent, on behalf of the Banks, pursuant to
Section 2.13 hereof. Notwithstanding the foregoing, once a Receivable has been
deemed collected pursuant to Section 2.6 hereof, it shall no longer constitute a
Receivable hereunder.
"Records" means all Contracts and other documents, books, records and
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other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and rights)
maintained with respect to Receivables and the Obligor.
"Reference Banks" means Bank of America National Trust and Savings
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Association, NationsBank of Texas, N.A. and PNC Bank, National Association. In
the event
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that at any time of determination only two Banks designated as "Reference Banks"
are providing rates for deposits referred to in the definition of "LIBOR", those
two Banks shall be the "Reference Banks" or, if only one such Bank is providing
such rates, that Bank shall be the "Reference Banks" for purposes of this
Agreement.
"Reference Rate" means the rate of interest publicly announced from
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time to time by NationsBank of Texas, N.A. in Dallas as its reference rate, as
in effect on such date of determination. The reference rate is set by
NationsBank of Texas, N.A. based on various factors including NationsBank of
Texas, N.A.'s costs and desired return, general economic conditions, and other
factors, and is used as a reference point for pricing some loans. NationsBank of
Texas, N.A. may make loans at, above or below the rate announced as its
reference rate.
"Remittance Date" means December 17, 1997, December 17, 1998, December
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17, 1999, December 17, 2000 and December 17, 2001, as applicable, or, if such
day is not a Business Day, the next succeeding Business Day.
"Requisite Banks" means, at any date of determination, Banks having
---------------
at least 66-2/3% of the aggregate Bank Commitments at such time.
"S&P" means Standard & Poor's Ratings Group.
---
"Seller" means each of Mattel Sales Corp., a California corporation,
------
and Xxxxxx-Xxxxx, Inc., a Delaware corporation, and their successors and
assigns under the Purchase Agreement.
"Servicer" means Mattel, Inc. or, after a Servicer Default, a servicer
--------
appointed by the Agent.
"Servicer Default" has the meaning specified in Section 7.1.
----------------
"Servicer's Certificate" means a report prepared on a monthly basis
----------------------
and prior to a Transfer by the Servicer in the form attached hereto as Exhibit B
and delivered to the Agent in accordance with Section 2.8.
"Subsidiary" means any corporation, association or other business
----------
entity of which more than 50% of the
14
total voting power of shares of stock entitled to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more of the other Subsidiaries
of that Person or a combination thereof.
"Termination Date" means the earlier of (i) December 17, 2001, unless
----------------
such date is otherwise extended, or (ii) the date on which the Agent delivers a
Notice of Termination to the Transferor.
"Termination Event" means an event described in Section 7.3.
-----------------
"Total Outstanding Investment" means the sum of the Transfer Prices
----------------------------
paid to the Transferor for all Transfers plus the amount paid to the Prior
----
Banks on the Closing Date as described in Section 2.13 less any amounts released
----
from the Collection Account by the Agent pursuant to Section 2.9(b) to fund all
or a portion of any such amounts paid to the Transferor and less the aggregate
----
amount of Collections received and applied by the Agent to reduce such Total
Outstanding Investment pursuant to Section 2.4 or 2.9(b); provided that the
--------
Total Outstanding Investment shall be restored in the amount of any Collections
so received and applied if at any time the distribution of such Collections is
rescinded or must otherwise be returned for any reason; and provided further
-------- -------
that the Total Outstanding Investment shall at no time exceed the Facility
Limit.
"Tranche" means a portion of the Total Outstanding Investment
-------
allocated to a Tranche Period.
"Tranche Period" means, with respect to a Tranche, the period from the
--------------
date of the Transfer related thereto to the following Remittance Date.
"Transaction Costs" has the meaning specified in Section 8.3.
-----------------
"Transfer" means a conveyance, transfer and assignment by the
--------
Transferor to the Agent, on behalf of the Banks, of an undivided percentage
ownership interest in Receivables hereunder or the conveyance, transfer and
assignment by the "Agent", under and as defined in the Prior Agreement, to the
Agent, on behalf of the Banks, of
15
its interest in certain indebtedness of the Obligor as described in Section
2.13.
"Transfer Date" means, with respect to each Transfer, the Business Day
-------------
on which such Transfer is made.
"Transfer Price" means, with respect to any Transfer, the amount paid
--------------
to the Transferor by the Banks as described in the Transfer Notice related to
such Transfer.
"Transfer Notice" has the meaning given to it in Section 2.2.
---------------
"Transferred Interest" means, at any time of determination, an
--------------------
undivided percentage ownership interest in (i) each and every then outstanding
Receivable, (ii) all Collections with respect thereto, and (iii) other Proceeds
of the foregoing, equal to the Percentage Factor at such time. The Transferred
Interest in each Receivable and the Collections and Proceeds with respect
thereto, shall at all times be in proportion to the Transferred Interest in each
other Receivable, and Collections and Proceeds with respect thereto.
"UCC" means, with respect to any state, the Uniform Commercial Code as
---
from time to time in effect in such state.
"Written Agreement" means the agreement between the Obligor and the
-----------------
Transferor in the form of Exhibit A.
SECTION 1.2. Other Terms. All accounting terms not specifically
-----------
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of California, and not specifically defined
herein, are used herein as defined in such Article 9. All other terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
SECTION 1.3. Computation of Time Periods. Unless otherwise stated in
---------------------------
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and
16
including" and the words "to" and "until" each means "to but excluding."
17
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility. Upon the terms and subject to the conditions
--------
herein set forth, the Transferor may, at its option, convey, transfer and
assign to the Agent, on behalf of the Banks, and the Banks shall, subject to the
terms and conditions hereof, accept such conveyance, transfer and assignment
from the Transferor, without recourse except as provided herein, undivided
percentage ownership interests in the Receivables, together with Collections
with respect thereto, from time to time.
SECTION 2.2. Transfers. Upon the terms and subject to the conditions
---------
herein set forth, the Transferor may, prior to the Termination Date, convey,
transfer and assign to the Agent, on behalf of the Banks, and the Banks shall,
subject to the terms and conditions hereof, accept such conveyance, transfer and
assignment from the Transferor, without recourse except as otherwise provided
herein, undivided percentage ownership interests in Receivables, together with
Collections with respect thereto (each, a "Transfer") from time to time for an
--------
aggregate Transfer Price (less any amounts released from the Collection Account
pursuant to Section 2.9(b) to fund all or a portion of any Transfer) not to
exceed the Facility Limit; provided that in no event may there be more than one
--------
Transfer per week, and no Transfer shall be made by the Transferor between two
Business Days prior to any Remittance Date and the next succeeding December 27.
The Transferor shall convey, transfer and assign to the Agent, on behalf of the
Banks, undivided percentage ownership interests in its Receivables by delivering
to the Agent, not later than 1:00 p.m., Dallas, Texas time, on the third
Business Day prior to the proposed date of transfer, notice of each Transfer in
substantially the form of Exhibit C hereto (a "Transfer Notice"), and the
---------------
Transferor shall, at the time of delivery of the Transfer Notice, cause the
Servicer to prepare and deliver to the Agent a Servicer's Certificate covering
the period from the last day specified in the most recent Servicer's Certificate
delivered to the Agent to and including the day prior to the date of delivery of
the related Transfer Notice. Each Transfer Notice shall specify (i) the
Transfer Price based on an estimated Participation Rate,
18
(ii) an initial estimate of the Discount relating to such Transfer based on an
estimated Participation Rate, (iii) the date of such Transfer, (iv) the Tranche
Period related thereto, (v) the aggregate outstanding balance of the Eligible
Receivables as of the day of such notice and (vi) the estimated Percentage
Factor after giving effect to such Transfer. After giving effect to such
Transfer, the Total Outstanding Investment plus the Discount Reserve shall not
be greater than 90% of the aggregate outstanding balance of the Eligible
Receivables. Promptly after 10:00 a.m., Dallas, Texas time, on the second
Business Day prior to the date of a proposed Transfer, the Agent will notify the
Transferor of the LIBOR (or the Adjusted Certificate of Deposit Rate, if
applicable pursuant to Section 2.12) and the Participation Rate applicable to
such Transfer, and the Transferor will notify the Agent in writing of the
finalized Transfer Price and the finalized Percentage Factor. The finalized
Transfer Price shall be an amount not in excess of the amount which, when added
to the Total Outstanding Investment immediately prior to such Transfer, would
cause the Total Outstanding Investment plus the Discount Reserve to be greater
than 90% of the aggregate outstanding balance of the Eligible Receivables. The
Transfer Price (net of any amounts released from the Collection Account pursuant
to Section 2.9(b) to fund all or a portion of any Transfer) with respect to each
Transfer shall not be less than $5,000,000 and shall be in increments of
$500,000 in excess thereof. Each Transfer Notice shall be executed by a duly
authorized officer of the Transferor. The Agent, on behalf of the Banks, shall
accept such offer to convey, transfer and assign undivided percentage ownership
interests in writing. The terms of each Transfer shall be as set forth herein
and in the related Transfer Notice.
Promptly after receipt of a Transfer Notice, the Agent shall notify
each Bank of the proposed Transfer (such notice to normally be given within two
hours of receipt by the Agent). Each Bank shall make available to the Agent its
pro rata share of the Transfer Price by remitting such funds to the Agent for
credit to NationsBank of Texas, N.A., ABA No. 000000000, Attention: Corporate
Credit Services, Account No. 1292000883, Ref. Mattel Factoring, no later than
2:00 p.m., Dallas, Texas time on the date of such Transfer. The Agent shall
make available to the Transferor on the date of such Transfer
19
the aggregate of the amounts so made available by the Banks by causing an amount
of same-day funds equal to such aggregate amount received by the Agent to be
credited to the account of the Transferor at Bank of America National Trust and
Savings Association (ABA No. 000000000, Account No. 1235906117, reference:
Mattel Factoring Receivables); provided that, upon prior written notice to the
--------
Agent, the Transferor may at any time direct the Agent to credit such amounts to
another account of the Transferor; provided further that the Transfer Price
payable on the Closing Date shall be remitted to the "Agent" (under and as
defined in the Prior Agreement) in consideration for the assignment by the
Prior Banks to the Agent, on behalf of the Banks, of the "Transferred Interest"
and the "Total Outstanding Investment" existing under the Prior Agreement as of
the Closing Date.
Each Transfer Notice shall be irrevocable and binding on the
Transferor, and the Transferor shall indemnify the Agent and the Banks against
any loss or expense incurred by the Agent or the Banks arising from or relating
to any failure by the Transferor to complete such Transfer including, without
limitation, any loss or expense incurred by the Agent or the Banks by reason of
the liquidation or reemployment of funds acquired by the Banks in anticipation
of funding such Transfer.
Each Transfer shall constitute a purchase of undivided percentage
ownership interests in each and every Receivable, together with all Collections
and Proceeds with respect thereto. The aggregate undivided percentage ownership
interest of the Agent, on behalf of the Banks, in the Receivables, together with
all Collections and Proceeds with respect thereto, shall equal the Percentage
Factor in effect from time to time.
SECTION 2.3. Discount, Fees and Other Costs and Expenses. (a)
-------------------------------------------
Notwithstanding any limitation on recourse contained herein, the Transferor
shall pay to the Agent (i) on each Remittance Date and on each day thereafter
until the Total Outstanding Investment has been reduced to zero, the amounts
required pursuant to Section 7.4 hereof, and (ii) as and when due in accordance
with this Agreement, all amounts payable pursuant to Article VIII hereof, if
any.
20
(b) Notwithstanding any limitation on recourse contained in this
Agreement, Mattel, Inc. and the Transferor, as appropriate, shall pay the
following non-refundable fees calculated on the basis of the actual number of
days elapsed divided by 360:
(i) on each Remittance Date occurring from the date of execution
hereof, the Transferor shall pay the Commitment Fee; and
(ii) the Transferor shall pay to the Agent the fee referenced in
that certain letter agreement, dated February 4, 1997, between Mattel, Inc.
and the Agent.
(c) Nothing in this Agreement shall limit in any way the
obligations of the Transferor to pay the amounts set forth in this Section 2.3.
SECTION 2.4. Settlement Procedures. On each Remittance Date and each
---------------------
day thereafter until the Aggregate Unpaids have been paid in full, the Agent
shall apply (i) amounts on deposit in the Collection Account pursuant to Section
2.6 or 7.3(h) and (ii) the Percentage Factor of all remaining amounts on deposit
in the Collection Account in the following order of priority: first, in
-----
payment of the accrued Discount for each Tranche Period, second, in payment of
------
the Commitment Fee, third, in payment of any additional Discount due pursuant to
-----
Section 7.4, fourth, in payment of the aggregate of all other amounts then owed
------
(whether due or accrued) hereby by the Transferor to the Banks or the Agent
(other than the Total Outstanding Investment), and fifth, in reduction of the
-----
Total Outstanding Investment. In the event that on any Remittance Date and any
day thereafter, the Aggregate Unpaids have not been paid in full after giving
effect to the preceding sentence, the Agent shall apply any other amounts on
deposit in the Collection Account to the payment in full of the Aggregate
Unpaids in accordance with the foregoing priority. Following the date on which
the Total Outstanding Investment has been reduced to zero, all accrued Discount
and applicable fees have been paid in full, all other Aggregate Unpaids have
been paid in full and this Agreement shall have terminated pursuant to Section
11.1, (i) the Agent shall recompute the Percentage Factor, (ii) the Agent, on
behalf of the Banks, shall be considered to have reconveyed to the
21
applicable Transferor any interest in the Receivables (including the Transferred
Interest), (iii) the Agent shall release to the Transferor any remaining
Collections held in the Collection Account pursuant to this Section 2.4 and (iv)
the Agent, on behalf of the Banks, shall execute and deliver to the Transferor,
such documents or instruments as are necessary to terminate the Agent's interest
in the Receivables. Any such documents shall be prepared by or on behalf of the
Transferor.
SECTION 2.5. Protection of Ownership Interest of the Banks. The
---------------------------------------------
Transferor agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents and take all action
necessary, and such other actions as may be reasonably requested by the Agent,
in order to perfect or protect the Transferred Interest or to enable the Agent
to exercise or enforce any of its or any Bank's rights hereunder. Without
limiting the foregoing, the Transferor will, in order to accurately reflect this
purchase and sale transaction, execute and file such financing or continuation
statements or amendments thereto or assignments thereof as are necessary or as
may be requested by the Agent in order to protect, perfect and preserve the
Transferred Interest of the Agent, and agrees to xxxx its master data processing
records and other documents with a legend describing the purchase by the Agent,
on behalf of the Banks, of the Transferred Interest. The Transferor shall, upon
request of the Agent, obtain such additional search reports as the Agent shall
reasonably request. To the fullest extent permitted by applicable Governmental
Rule, the Agent shall be permitted to sign and file continuation statements and
amendments thereto and assignments thereof without the Transferor's signature.
Carbon, photographic or other reproduction of this Agreement or any financing
statement shall be sufficient as a financing statement. The Transferor shall
not change its name, identity or corporate structure (within the meaning of
Section 9-402(7) of the UCC as in effect in the State of California), nor
relocate its chief executive office or any office where Records are kept, unless
it shall have: (i) given the Agent at least thirty (30) days' prior written
notice thereof and (ii) prepared at the Transferor's expense and delivered to
the Agent all financing statements, instruments and other documents necessary to
preserve, perfect and protect the Transferred Interest of the Agent or
reasonably requested by
22
the Agent in connection with such change or relocation. Any filings under the
UCC or otherwise that are occasioned by such change in name or location shall
be made at the expense of the Transferor. As of the date hereof, the Transferor
has instructed the Obligor to cause all Collections to be deposited directly
into the Collection Account, and the Transferor shall not change such
arrangement unless the Agent shall have given its prior written consent thereto.
If the Transferor receives any Collections or is deemed to receive any
Collections pursuant to Section 2.6, the Transferor shall immediately remit such
Collections to the Collection Account administered by the Agent for the benefit
of the Banks.
SECTION 2.6. Deemed Collections; Application of Payments. (a) In
-------------------------------------------
the event that on any day the outstanding balance of a Receivable is either (x)
reduced as a result of any defective or returned merchandise, any cash discount
or any adjustment by either Seller or the Transferor, or (y) reduced or canceled
as a result of a setoff in respect of any claim by any Person (whether such
claim arises out of the same or a related transaction or an unrelated
transaction), then within ten (10) days, either (i) the Servicer shall deliver a
Servicer's Certificate evidencing that the aggregate outstanding balance of
Eligible Receivables is at least 111% of the Total Outstanding Investment and
the Discount Reserve or (ii) the Transferor shall deposit to the credit of the
Collection Account the amount of such reduction or cancellation and the Agent
shall be considered to have reconveyed to the Transferor any interest in such
Receivables (including the Transferred Interest therein). The Agent agrees that
it shall execute and return to the Transferor such documents or instruments as
are reasonably requested by the Transferor and necessary to terminate the
Agent's interest on behalf of the Banks in such Receivables. Any such documents
shall be prepared by or on behalf of the Transferor.
(b) In the event that on any day any of the representations or
warranties in Article III is no longer true with respect to a Receivable, then
within ten (10) days of such occurrence, either (i) the Transferor shall cure
the breach of the applicable representation or warranty or (ii) the Servicer
shall deliver a Servicer's Certificate evidencing that the aggregate outstanding
balance of Eligible Receivables (not including the aggre-
23
gate outstanding balance of the Receivables subject to any such breach of a
representation or warranty) is at least 111% of the Total Outstanding Investment
and the Discount Reserve or (iii) the Transferor shall deposit to the credit of
the Collection Account the outstanding balance of such Receivable in full and
the Agent, on behalf of the Banks, shall be considered to have recon veyed to
such Transferor any interest in such Receivables (including the Transferred
Interest therein). The Agent agrees that it shall execute and return to the
Transferor such documents or instruments as are reasonably requested by the
Transferor and necessary to terminate the Agent's interest on behalf of the
Banks in such Receivables. Any such documents shall be prepared by or on behalf
of the Transferor.
SECTION 2.7. Payments and Computations, Etc. All amounts to be paid
------------------------------
or deposited by the Transferor hereunder shall be paid or deposited in
accordance with the terms hereof no later than 1:00 p.m. (New York City time) on
the day when due in immediately available funds; if such amounts are payable to
the Agent, on behalf of the Banks, they shall be paid or deposited in the
Collection Account, until otherwise notified by the Agent. The Transferor shall,
to the extent permitted by Governmental Rule, pay to the Agent, for the benefit
of the Banks, upon demand, interest on all amounts not paid or deposited when
due to the Banks hereunder at a rate equal to the highest Participation Rate
applicable to any Tranche then outstanding plus 2% or, if no Tranche is then
outstanding, the Alternate Rate. All computations of discount, interest and all
per annum fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first but excluding the last day)
elapsed. Any computations by the Agent of amounts payable by the Transferor
hereunder to the Banks or the Agent shall be binding absent manifest error. All
payments made to the Agent in respect of the Total Outstanding Investment and
Discount shall be made to the Agent for the account of the Banks pro rata based
--- ----
on their respective Percentages. The Agent shall promptly remit to each Bank
such Bank's pro rata share of such payments (such payments to normally be
--- ----
remitted within two hours of receipt by the Agent).
SECTION 2.8. Reports. At any time the Total Outstanding Investment
-------
is greater than zero, commencing
24
on the date hereof, and on the first Monday of each calendar month (or, if such
day is not a Business Day, the next succeeding Business Day) the Servicer shall
prepare and forward to the Agent a Servicer's Certificate covering a period from
the later to occur of (A) the first day of the preceding calendar month and (B)
the date on which the last such Servicer's Certificate was delivered in
connection with a Transfer pursuant to Section 2.2, through and including the
last day of the preceding calendar month, and (ii) such other information as the
Agent may reasonably request. On the second Business Day prior to each
Remittance Date, the Transferor shall provide the Agent and each Bank with a
certificate detailing the amount of Collections expected as of that Remittance
Date, together with the Total Outstanding Investment and the Discount Reserve.
SECTION 2.9. Collection Account. (a) There shall be established on
------------------
the day of the initial Transfer hereunder and maintained, in the name of the
Agent for the benefit of the Banks, a segregated account (the "Collection
----------
Account"), at NationsBank of Texas, N.A., bearing a designation clearly
-------
indicating that the funds deposited therein are held for the benefit of the
Banks. (The wiring instructions for deposits to such account are: ABA No.
000000000, Account No. 1290154724.) Any interest and earnings (net of losses
and investment expenses) on funds on deposit in the Collection Account shall be
retained in the Collection Account and be available to make any payments
required to be made hereunder (including Discount) to the Agent or the Banks.
On the date on which the Total Outstanding Investment is zero and the Aggregate
Unpaids have been paid in full to the Banks, any funds remaining on deposit in
the Collection Account shall be released to the Transferor in same-day funds.
(b) Close-Out Collections deposited to the credit of the
Collection Account shall be retained in the Collection Account by the Agent
until the earlier of (w) the next succeeding Remittance Date, at which time such
amounts shall be applied pursuant to Section 2.4, and (x) the next succeeding
Transfer Date, at which time the Agent shall release to the Transferor the
amount of such Collections minus the Percentage Factor (as calculated as of the
-----
latest Transfer Date) of such Collections. In the event that Collections of
Close-Out Re-
25
ceivables are to be applied pursuant to clause (x) above, the Transferor may
request that the Percentage Factor of such Collections be applied toward (i) all
or a portion of the Transfer Price of the Transfer occurring on such Transfer
Date (in which case such amounts shall be paid to the Transferor) or (ii) the
reduction of the Total Outstanding Investment (in which case such amounts shall
be paid to the Banks). In the case of any such reduction of the Total
Outstanding Investment, the Agent shall, in its sole discretion, determine the
Tranche(s) with respect to which such reduction shall be applied; provided
--------
further, however, that in the case of any such reduction of the Total
------- -------
Outstanding Investment, the Transferor agrees to reimburse each Bank and to hold
each Bank harmless from any loss or expense which such Bank may sustain or incur
as a consequence of such reduction of the Total Outstanding Investment,
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its funding hereunder or from fees payable
to terminate the deposits from which such funds were obtained. This covenant
shall survive the payment in full of the Aggregate Unpaids.
SECTION 2.10. Deficiency Advances. No Bank shall be responsible for
-------------------
any default of any other Bank in respect of such other Bank's obligation to fund
any portion of a Transfer hereunder, nor shall the commitment of any Bank
hereunder be increased as a result of such default by any other Bank. Without
limiting the generality of the foregoing, in the event any Bank shall fail to
advance funds as provided herein, the Agent may, in its discretion but shall not
be obligated to, advance as a Bank all or any portion of such amount (the
"Deficiency Advance") and shall thereafter be entitled to payments on such
-------------------
Deficiency Advance in the same manner and at the same rate(s) to which such
other Bank would have been entitled had it made such advance itself; provided
--------
that, upon payment to the Agent from such other Bank of the entire outstanding
amount of such Deficiency Advance, together with interest thereon, at the
Participation Rate applicable to the related Tranche, then such payment shall be
credited against the Agent's share of the Total Outstanding Investment in full
payment of such Deficiency Advance. Acceptance by the Transferor of a
Deficiency Advance from the Agent shall in no way limit the rights of the
Transferor against the Bank failing to fund its
26
pro rata portion (based on its Percentage) of the Transfer Price of any
--- ----
Transfer hereunder.
SECTION 2.11. Adjustment of Facility Limit. (a) The Transferor
----------------------------
shall have the right, at any time and from time to time; to terminate in whole
or permanently reduce in part, without premium or penalty, the Facility Limit;
provided that the Facility Limit, as reduced, shall equal or exceed the Total
--------
Outstanding Investment as of the date of such reduction.
(b) The Transferor shall give not less than three Business Days'
prior written notice to the Agent designating the date (which shall be a
Business Day) and the amount of such termination or reduction. Any partial
reduction shall be in an aggregate minimum amount of $10,000,000 and integral
multiples of $1,000,000 in excess of that amount. Promptly after receipt of a
notice of such termination or partial reduction, the Agent shall notify each
Bank and Bank of America National Trust and Savings Association as agent under
the 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 Bank's Bank
Commitment.
SECTION 2.12. Inability to Determine LIBOR. If for any reason the
----------------------------
Reference Banks shall have determined that for any reason adequate and
reasonable means do not exist for ascertaining LIBOR for any proposed Tranche
Period, or if the Requisite Banks advise the Agent in writing that LIBOR for any
proposed Tranche Period does not adequately and fairly reflect the cost to such
Banks of funding the Total Outstanding Investment during such Tranche Period,
the Agent will forthwith give notice of such determination to the Transferor and
each Bank. In such event, the Participation Rate with respect to such proposed
Tranche Period and related Tranche shall be determined by reference to the
Adjusted Certificate of Deposit Rate. If for any reason the Reference Banks
shall have determined that for any reason adequate and reasonable means do not
exist for ascertaining the Adjusted Certificate of Deposit Rate for any
proposed Tranche Period, or if the Requisite Banks advise the Agent in writing
that the Adjusted Certificate of Deposit Rate for any proposed Tranche Period
does not adequately
27
and fairly reflect the cost to such Banks of funding the Total Outstanding
Investment during such Tranche Period, the Agent will forthwith give notice of
such determination to the Transferor and each Bank. In such event, the
Participation Rate with respect to such proposed Tranche Period and related
Tranche shall be determined by reference to the Base Rate.
SECTION 2.13. Transfer of Existing Receiv xxxxx; Termination of Prior
-------------------------------------------------------
Agreement. Prior to the date hereof, Mattel Sales Corp. and Xxxxxx-Xxxxx, Inc.
---------
transferred to NationsBank of Texas, N.A., as agent for certain financial
institutions, an undivided interest in certain indebtedness of the Obligor
denominated in United States dollars to Mattel Sales Corp. and Xxxxxx-Xxxxx,
Inc. Such transfer occurred pursuant to the terms of that certain Second
Amended and Restated Transfer and Administration Agreement dated as of March 10,
1995, as amended from time to time (the "Prior Agreement"). NationsBank of
---------------
Texas, N.A. as agent under the Prior Agreement, and each of the Prior Banks
hereby, effective as of the Closing Date, convey, transfer and assign to the
Agent, for the benefit of the Banks, all of its right, title and interest in the
"Transferred Interest" and the "Total Outstanding Investment" each as defined
and existing under the Prior Agreement as of the Closing Date. The Transferor
hereby assumes all Mattel Sales Corp.'s and Xxxxxx-Xxxxx, Inc.'s obligations
with respect to such "Total Outstanding Investment" and agrees that the amount
paid by the Banks on the Closing Date to the Agent under and as defined in the
Prior Agreement shall constitute part of the Total Outstanding Investment
hereunder. Each of the Prior Banks hereby consent to the termination of the
Prior Agreement and authorize and direct NationsBank of Texas, N.A., as agent
under the Prior Agreement, to (i) take any action necessary or reasonably
requested by Mattel Sales Corp. and Xxxxxx-Xxxxx, Inc. to terminate the Prior
Agreement (except those provisions thereof which expressly survive any
termination thereof) and (ii) assign to the Agent any and all Uniform Commercial
Code financing statements which may have been filed in its favor in connection
with the Prior Agreement.
28
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Transferor. The
------------------------------------------------
Transferor hereby represents and warrants to each of the Banks that:
(a) Perfection. Immediately preceding each Transfer hereunder,
----------
the Transferor shall be the owner of all of the Receivables which are the
subject of each such Transfer, free and clear of all liens, encumbrances,
security interests, preferences or other security arrangements of any kind or
nature whatsoever. On or prior to each Transfer, all financing statements and
other documents required to be recorded or filed in order to perfect the
Transferred Interest against all creditors and purchasers from the Transferor or
a Seller will have been duly filed in each filing office necessary for such
purpose and all filing fees and taxes, if any, payable in connection with such
filings have been paid in full.
(b) Accuracy of Information. All information heretofore
-----------------------
furnished by the Transferor to the Banks or the Agent for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Transferor to the Banks or the
Agent will be, true and accurate in every material respect, on the date such
information is stated or certified.
(c) Place of Business. The chief place of business and chief
-----------------
executive office of the Transferor is located at the address of the Transferor
indicated on Exhibit F hereto, and the offices where the Transferor keeps its
Records are located at the addresses of the Transferor indicated on Exhibit F
hereto or at such other locations notified to the Agent in accordance with
Section 2.5 in jurisdictions where all action required by Section 2.5 has been
taken and completed.
(d) Payments. The Obligor has, with respect to each Receivable,
--------
been directed by the Transferor to remit all payments in respect of such
Receivable directly to the Collection Account administered by the Agent.
29
(e) Good Title. Upon each Transfer and each recomputation of
----------
the Transferred Interest, the Agent, on behalf of the Banks, shall acquire a
valid and perfected first priority undivided percentage ownership interest to
the extent of the Transferred Interest or a first priority perfected security
interest in each Receivable which exists on the date of such Transfer and
recomputation and all Collections with respect thereto free and clear of any
Adverse Claim.
(f) Tradenames, etc.. As of the date hereof: (i) the
----------------
Transferor has no subsidiaries or divisions; and (ii) the Transferor has not,
within the last five (5) years, operated under any tradenames except as set
forth on Exhibit G hereto and, within the last five (5) years, has not changed
its name, merged with or into or consolidated with any other corporation or been
the subject of any proceeding under Title 11 of the United States Code
(Bankruptcy).
(g) No Termination Event. No event has occurred and is
--------------------
continuing, and no condition exists, which constitutes a Potential Termination
Event or Termination Event.
(h) Organization and Powers. The Transferor is a corporation
-----------------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted and to enter into this Agreement and the
Purchase Agreement and to carry out the transactions contemplated hereby and
thereby.
(i) Good Standing. The Transferor is in good standing wherever
-------------
necessary to carry on its present business and operations, except in
jurisdictions in which the failure to be in good standing has or will have no
Material Adverse Effect.
(j) Authorization. The execution, delivery and performance of
-------------
this Agreement and the Purchase Agreement have been duly authorized by all
necessary corporate action by the Transferor.
30
(k) No Conflict. The execution, delivery and performance by the
-----------
Transferor of this Agreement and the Purchase Agreement do not and will not (a)
violate the Certificate of Incorporation or Bylaws of the Transferor, (b)
violate any provision of law applicable to the Transferor, or any material
order, judgment or decree of any court or other agency of government binding on
the Transferor, the violation of which would result in a Material Adverse
Effect, (c) conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under any Contractual Obligation of the
Transferor, (d) result in or require the creation or imposition of any material
lien, security interest, charge or encumbrance of any nature whatsoever upon any
of its material properties or assets, other than Liens created in favor of the
Agent, or (e) require any approval of stockholders or any approval or consent
of any Person under any Contractual Obligation of the Transferor.
(l) Governmental Consents. The execution, delivery and
---------------------
performance by the Transferor of this Agreement and the Purchase Agreement, and
each agreement, document, or instrument required hereunder and thereunder do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any Federal, state or other governmental
authority or regulatory body or other such person.
(m) Binding Obligation. This Agreement when executed and
------------------
delivered will be the legally valid and binding obligation of the Transferor,
enforceable against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or limiting creditors' rights generally.
(n) Changes, Etc. Since December 31, 1995 there has been no
------------
event or events that have, either individually or in the aggregate, resulted in
a Material Adverse Effect.
(o) Litigation; Adverse Facts. There is no action, suit,
-------------------------
proceeding or arbitration (whether or not purportedly on behalf of the
Transferor) at law or in equity or before or by any Federal, state, municipal or
other governmental department, commission, board, bureau,
31
agency or instrumentality, domestic or foreign, pending or, to the knowledge of
the Transferor, threatened against or affecting the Transferor or any of its
properties which, in the reasonable judgment of the Transferor and its
executive officers (assuming adverse determination of facts which the
Transferor in good faith believes it would not successfully prove, and
considering damages which in their best judgment is the maximum that would be
awarded upon, and the likelihood of, an adverse determination of the claim or
the amount which reflects their best judgment as to that required to be paid to
settle the claims) would result in a Material Adverse Effect and there is no
basis known to such executive officers for any such action, suit or proceeding.
The Transferor is not (i) in violation of any applicable law which could result
in a Material Adverse Effect, or (ii) subject to or in default with respect to
any final judgment, writ, injunction, decree, rule or regulation of any court
or Federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which could
result in a Material Adverse Effect. There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Transferor, threatened against
or affecting the Transferor which provides a reasonable basis for questioning
the validity or the enforceability of this Agreement or the Purchase Agreement.
(p) Payment of Taxes. All tax returns and reports of the
----------------
Transferor required to be filed by any of them have been timely filed, and all
taxes, assessments, fees and other governmental charges upon the Transferor and
upon its properties, assets, income and franchises which are due and payable
have been paid when due and payable or bonded against, except to the extent
permitted by Section 6.3 of the Credit Agreement. The Transferor does not know
of any proposed tax assessment against it that would result in a Material
Adverse Effect.
(q) Agreements. The Transferor is not a party to nor is it
----------
subject to any material agreement or instrument or charter or other internal
restriction which results in a Material Adverse Effect.
(r) Performance. The Transferor is not in default in the
-----------
performance, observance or fulfillment
32
of any of the obligations, covenants or conditions contained in any Contractual
Obligation of the Transferor, and no condition exists which, with the giving of
notice or the lapse of time or both, would constitute such a default, except,
in any such case, where the consequences, direct or indirect, of such default or
defaults, if any, would not result in a Material Adverse Effect.
(s) Governmental Regulation. The Transferor is not subject to
-----------------------
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940
limiting its ability to transfer interests in its Receivables hereunder.
(t) Employee Benefit Plans. The Transferor and each of its
----------------------
respective ERISA Affiliates is in compliance in all material respects with any
applicable provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Pension Plans. Neither the Transferor nor any of
its ERISA Affiliates has participated in or participates in any Multiemployer
Plan the withdrawal from which may result in any liability to any party in an
amount in excess of $1,000,000.
(u) Disclosure. No representation or warranty of the Transferor
----------
contained in this Agreement or any other document, certificate or written
statement furnished to the Banks by the Transferor since January 1, 1997 for
use in connection with the transactions contemplated by this Agreement as of
the date of this Agreement contains any untrue statement of a material fact or
omits to state a material fact (known to the Transferor in the case of any
document or fact not furnished by it) necessary in order to make the statements
contained herein or therein not misleading except that any such statement or
omission that was untrue or misleading at the time made or that subsequently
became untrue or misleading has been superseded or corrected by information
provided to the Banks prior to the date of this Agreement.
(v) Environmental Matters. The Transferor conducts in the
---------------------
ordinary course of business a review of the effect of existing Environmental
Laws and existing Environmental Claims on its business, operations and
properties, and as a result thereof the Transferor
33
has reasonably concluded that such Environmental Laws and Environmental Claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
SECTION 3.2. Representations and Warranties of Mattel, Inc. Mattel,
----------------------------------------------
Inc. represents and warrants to the Banks that:
(a) Servicing. Since January 1, 1997, there has been no
---------
material change in the ability of Mattel, Inc. to service the Receivables.
(b) Organization and Powers. Mattel, Inc. is a corporation duly
-----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and proposed to be
conducted and to enter into this Agreement and to carry out the transactions
contemplated hereby and thereby.
(c) Good Standing. Mattel, Inc. is in good standing wherever
-------------
necessary to carry on its present business and operations, except in
jurisdictions in which the failure to be in good standing has or will have no
Material Adverse Effect.
(d) Authorization. The execution, delivery and performance of
-------------
this Agreement have been duly authorized by all necessary corporate action by
Mattel, Inc.
(e) No Conflict. The execution, delivery and performance by
-----------
Mattel, Inc. of this Agreement do not and will not (a) violate the Restated
Certificate of Incorporation or Bylaws of Mattel, Inc., (b) violate any
provision of law applicable to Mattel, Inc., or any material order, judgment or
decree of any court or other agency of government binding on Mattel, Inc., the
violation of which would result in a Material Adverse Effect, (c) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of Mattel, Inc., (d) result in
or require the creation or imposition of any material lien, security interest,
charge or encumbrance of any nature whatsoever upon any of its material proper-
34
ties or assets, other than Liens created in favor of the Agent, or (e) require
any approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Mattel, Inc.
(f) Governmental Consents. The execution, delivery and
---------------------
performance by Mattel, Inc. of this Agreement, and each agreement, document, or
instrument required hereunder do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
Federal, state or other governmental authority or regulatory body or other such
person.
(g) Binding Obligation. This Agreement when executed and
------------------
delivered will be the legally valid and binding obligation of Mattel, Inc.,
enforceable against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or limiting creditors' rights generally.
(h) Financial Condition. Mattel, Inc. has heretofore delivered
-------------------
to the Banks a consolidated balance sheet of Mattel, Inc. and its Subsidiaries
for the fiscal year ended December 31, 1995 and related consolidated statements
of income, shareholders' equity and changes in financial position of Mattel,
Inc. and its Subsidiaries for such fiscal year, audited by Price Waterhouse. All
such statements were prepared in accordance with GAAP and fairly present the
consolidated financial position of Mattel, Inc. and its Subsidiaries as at the
date thereof and the consolidated results of operations and statement of cash
flow of Mattel, Inc. and its Subsidiaries for the period then ended. Neither
Mattel, Inc. nor any of its Subsidiaries has any material Contingent Obligation,
liability for taxes or long-term lease which as of the date of this Agreement,
individually or in the aggregate, would, if it became absolute, result in a
Material Adverse Effect which is not reflected in the foregoing statements or
in the notes thereto.
(i) Changes, Etc. Since December 31, 1995 there has been no
------------
event or events that have, either individually or in the aggregate, resulted in
a Material Adverse Effect.
35
(j) Title to Properties. Mattel, Inc. and its Subsidiaries have
-------------------
good, sufficient and legal title to all the properties and assets reflected in
the consolidated balance sheet referred to in Section 5.8 of the Credit
Agreement except as set forth in said balance sheet or in the notes thereto,
except for assets acquired or disposed of in the ordinary course of business or
as otherwise permitted by this Agreement or the Credit Agreement since December
31, 1995 and, except for immaterial defects in title as could not, individually
or in the aggregate, have a Material Adverse Effect.
(k) Litigation; Adverse Facts. Other than with respect to the
-------------------------
matters set forth on Exhibit H hereto, there is no action, suit, proceeding or
arbitration (whether or not purportedly on behalf of Mattel, Inc.) at law or in
equity or before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of Mattel, Inc., threatened against or
affecting Mattel, Inc. or any of its Subsidiaries or any of Mattel, Inc.'s or
such Subsidiaries' properties which, in the reasonable judgment of Mattel, Inc.
and its executive officers (assuming adverse determination of facts which
Mattel, Inc. in good faith believes it would not successfully prove, and
considering damages which in their best judgment is the maximum that would be
awarded upon, and the likelihood of, an adverse determination of the claim or
the amount which reflects their best judgment as to that required to be paid to
settle the claims) would result in a Material Adverse Effect and there is no
basis known to such executive officers for any such action, suit or proceeding.
Neither Mattel, Inc. nor any of its Subsidiaries is (i) in violation of any
applicable law which could result in a Material Adverse Effect, or (ii) subject
to or in default with respect to any final judgment, writ, injunction, decree,
rule or regulation of any court or Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which could result in a Material Adverse Effect. There is
no action, suit, proceeding or investigation pending or, to the knowledge of
Mattel, Inc., threatened against or affecting Mattel, Inc. or any of its
Subsidiaries which provides a reasonable basis for questioning the validity or
the enforceability of this Agreement.
36
(l) Payment of Taxes. All tax returns and reports of Mattel,
----------------
Inc. and its Subsidiaries required to be filed by any of them have been timely
filed, and all taxes, assessments, fees and other governmental charges upon
Mattel, Inc. and its Subsidiaries and upon their respective properties, assets,
income and franchises which are due and payable have been paid when due and
payable or bonded against, except to the extent permitted by Section 6.3 of the
Credit Agreement. Mattel, Inc. knows of no proposed tax assessment against it or
any of its Subsidiaries that would result in a Material Adverse Effect.
(m) Agreements. Neither Mattel, Inc. nor any of its
----------
Subsidiaries is a party to or is subject to any material agreement or instrument
or charter or other internal restriction which results in a Material Adverse
Effect.
(n) Performance. Neither Mattel, Inc. nor any of its
-----------
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any Contractual
Obligation of Mattel, Inc., and no condition exists which, with the giving of
notice or the lapse of time or both, would constitute such a default, except, in
any such case, where the consequences, direct or indirect, of such default or
defaults, if any, would not result in a Material Adverse Effect.
(o) Governmental Regulation. Neither Mattel, Inc. nor any of
-----------------------
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or to any Federal or state statute or regulation
limiting its ability in any material way to transfer interests in the
Receivables hereunder.
(p) Employee Benefit Plans. Mattel, Inc. and each of its ERISA
----------------------
Affiliates is in compliance in all material respects with any applicable
provisions of ERISA and the regulations and published interpretations thereunder
with respect to all Pension Plans. Neither Mattel, Inc. nor any of its ERISA
Affiliates has participated in or participates in any Multiemployer Plan the
withdrawal
37
from which may result in any liability to any party in an amount in excess of
$1,000,000.
(q) Disclosure. No representation or warranty of Mattel, Inc.
----------
contained in this Agreement or any other document, certificate or written
statement furnished to the Banks by Mattel, Inc. since January 1, 1997 for use
in connection with the transactions contemplated by this Agreement as of the
date of this Agreement contains any untrue statement of a material fact or omits
to state a material fact (known to the officers of Mattel, Inc. in the case of
any document or fact not furnished by it) necessary in order to make the
statements contained herein or therein not misleading except that any such
statement or omission that was untrue or misleading at the time made or that
subsequently became untrue or misleading has been superseded or corrected by
information provided to the Banks prior to the date of this Agreement.
SECTION 3.3. Reaffirmation of Representations and Warranties. On
-----------------------------------------------
each day that a Transfer is made hereunder (a) the Transferor, by accepting the
proceeds of such Transfer, shall be deemed to have certified that (i) all
representations and warranties described in Section 3.1 are correct on and as of
such day as though made on and as of such day, and (ii) no event has occurred
or is continuing or would result from any such Transfer, which constitutes a
Termination Event or a Potential Termination Event and (b) Mattel, Inc. as
Guarantor and as Servicer shall be deemed to have certified that (i) all
representations and warranties described in Section 3.2 are correct on and as of
such day as though made on and as of such day and (ii) if Mattel, Inc. is then
the Servicer, that no event has occurred or is continuing or would result from
any such Transfer, which constitutes, or with the passage of time or the giving
of notice or both, would constitute a Servicer Default.
38
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. On or prior to the date of
---------------------
execution hereof and prior to the effectiveness of this Agreement, the
Transferor and the Guarantor shall have delivered to the Agent and the Banks
originally executed copies of this Agreement, together with originals to the
Agent and copies to the Banks of the following documents and instruments, all in
form and substance acceptable to the Agent:
(a) a Certificate of the Secretary of Mattel, Inc. attaching
copies of the Restated Certificate of Incorporation, by-laws and incumbency
signatures of Mattel, Inc., together with copies of resolutions of the Board of
Directors authorizing the execution, delivery and performance of this Agreement
and related documents to which it is a party;
(b) good standing certificates of Mattel, Inc. from each of the
Secretaries of State of Delaware and California, each to be dated a recent date
prior to the Closing Date;
(c) a Certificate of the Secretary of the Transferor attaching
copies of the Certificate of Incorporation, by-laws and incumbency signatures
of the Transferor, together with copies of resolutions of the Board of
Directors authorizing the execution, delivery and performance of this Agreement
and related documents to which it is a party;
(d) good standing certificate of the Transferor from the
Secretary of State of Delaware dated a recent date prior to the Closing Date;
(e) proper financing statements (Form UCC-1) naming each
Transferor as the debtor/transferor and the Agent, as agent on behalf of the
Banks, as purchaser or other similar instruments or documents as may be
necessary or in the opinion of the Agent desirable under the UCC of all
appropriate jurisdictions or any comparable Governmental Rule to perfect the
ownership
39
interest of the Agent, on behalf of the Banks, in all Receivables related to the
Transferor;
(f) proper financing statements (Form UCC-1) naming each Seller
as the debtor/transferor and the Transferor, as purchaser and the Agent, as
agent on behalf of the Banks, as assignee or other similar instruments or
documents as may be necessary or in the opinion of the Agent desirable under the
UCC of all appropriate jurisdictions or any comparable Governmental Rule to
perfect the ownership interest of the Transferor, in all Receivables related to
each Seller;
(g) certified copies of request for information or copies (Form
UCC-11) (or a similar search report certified by parties acceptable to the
Banks) dated a date reasonably near the date of the initial Transfer listing all
effective financing statements which name the Transferor and each Seller (under
their present names and any previous names) as Debtor and which are filed in
jurisdictions in which the filings were made pursuant to items (e) and (f) above
together with copies of such financing statements (none of which shall cover any
Receivables or Contracts);
(h) a favorable opinion of Xxxxxx X. Xxxxx, counsel for the
Sellers and the Transferor, in substantially the form of Exhibit I hereto and as
to such other matters as the Agent may reasonably request;
(i) a favorable opinion of Xxxxxx X. Xxxxx, counsel for the
Guarantor, in substantially the form of Exhibit J hereto and as to such other
matters as the Agent may reasonably request;
(j) a favorable opinion of Xxxxxx & Xxxxxxx, special counsel for
the Transferor, as to such matters as the Agent may reasonably request;
(k) an executed copy of the Written Agreement;
(l) an executed copy of the Purchase Agreement; and
(m) original copies of each document or instrument required to
be delivered by each Seller as a
40
condition precedent to the effectiveness of the Purchase Agreement.
41
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of the Transferor. At all times
---------------------------------------
for the term of this Agreement, unless the Requisite Banks shall otherwise
consent in writing:
(a) Conduct of Business. The Transferor will carry on and
-------------------
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as it is presently conducted and will do all things
necessary to remain duly incorporated, validly existing and in good standing as
a domestic corporation in its jurisdiction of incorporation and will maintain
all requisite authority to conduct its business in each jurisdiction in which
its business is presently conducted.
(b) Compliance with Governmental Rules. The Transferor will
----------------------------------
comply with all Governmental Rules, writs, judgments, injunctions, decrees or
awards to which it may become subject.
(c) Furnishing of Information and Inspection of Records. The
---------------------------------------------------
Transferor will furnish to the Agent and the Banks from time to time such
information with respect to the Receivables as the Agent or the Banks may
reasonably request, including, without limitation, listings identifying the
outstanding balance for each Receivable. The Transferor will at any time and
from time to time during regular business hours permit the Agent or the Banks,
or their agents or representatives, (i) to examine and make copies of and
abstracts from all Records and (ii) to visit the offices and properties of the
Transferor for the purpose of examining such Records, and to discuss matters
relating to the Receivables or the Transferor's performance hereunder with any
of the officers, directors, employees, agents or independent public accountants
of the Transferor having knowledge of such matters.
(d) Keeping of Records and Books of Account. The Transferor
---------------------------------------
will maintain and implement administrative and operating procedures (including,
42
without limitation, an ability to recreate records evidencing Receivables in
the event of the destruction of the originals thereof), and keep and maintain,
all documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each Receivable and all
Collections of and adjustments to each Receivable). The Transferor will give
the Agent notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
(e) Performance and Compliance with Receivables and Contracts.
---------------------------------------------------------
The Transferor will at its expense timely and fully perform and comply with all
material provisions, covenants and other promises required to be observed by it
under the Contracts related to the Receivables.
(f) Credit and Collection Policies. The Transferor will comply
------------------------------
in all material respects with its Credit and Collection Policy in regard to each
Receivable and the related Contract.
(g) Accounting Treatment. The Transferor shall report the
--------------------
transactions contemplated by the Agreement on its financial statements as a
sale of the Transferred Interest to the Agent on behalf of the Banks.
(h) Knowledge. Promptly upon any executive officer of the
---------
Transferor obtaining knowledge of any condition or event which constitutes a
Termination Event or Potential Termination Event or becoming aware that the
Agent or any Bank has given any notice or taken any other action with respect to
a claimed Termination Event or Potential Termination Event under this Agreement,
the Transferor shall provide to the Agent an officer's certificate specifying
the nature and period of existence of any such condition or event, or specifying
the notice given and the nature of such claimed Termination Event or Potential
Termination Event, together with what action the Transferor has taken, is taking
and proposes to take with respect thereto.
(i) Written Agreement. For so long as this Agreement is in
-----------------
effect, and prior to the delivery by the Transferor of the initial Transfer
Notice of each
43
calendar year, the Transferor shall provide the Agent and the Banks with a copy
of a Written Agreement in the form of Exhibit A hereto, duly executed by the
Transferor and the Obligor and appropriately revised to reflect the Remittance
Date of such calendar year.
(j) Environmental Laws. The Transferor shall, and shall cause
------------------
each Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws, expect where the failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(k) UCC Matters. The Transferor shall deliver to the Agent not
-----------
later than the tenth Business Day following the Closing Date (i) certified
copies of request for information or copies (Form UCC-11) (or a similar search
report certified by parties acceptable to the Agent) dated a date reasonably
near the Closing Date listing all effective financing statements which name
Xxxxxx-Xxxxx, Inc. (under its present name and any previous names) and FPI,
Inc. as Debtor and which are on file with the Secretary of State of the State of
New York (in the case of Xxxxxx-Xxxxx, Inc. such search may cover only calendar
year 1995) together with copies of such financing statements (none of which
shall cover any Receivables or Contracts) and (ii) an opinion letter of Xxxxxx &
Xxxxxxx, special counsel for the Transferor, in form and substance acceptable to
the Agent substantially to the effect that such searches do not evidence a
security interest in the Receivables which is prior to the security interest
granted by Xxxxxx-Xxxxx, Inc. in favor of the Transferor under the Purchase
Agreement) (which letter may take the form of a letter deleting or otherwise
modifying the opinion letter delivered by such firm on the Closing Date).
SECTION 5.2. Negative Covenants of the Transferor. At all times
------------------------------------
during the term of this Agreement, unless the Requisite Banks shall otherwise
consent in writing:
(a) No Sales, Liens, etc. Except as otherwise provided herein,
--------------------
the Transferor will not sell, assign (by operation of Governmental Rule or
otherwise) or otherwise dispose of, or create or knowingly suffer to exist any
Adverse Claim upon (or the filing of any fi-
44
nancing statement) or with respect to, any Receivable, or upon or with respect
to any account to which any Collections of any Receivable are sent.
(b) Extension or Amendment of Receivables. The Transferor
-------------------------------------
will not itself extend the term of any Receivable beyond the Remittance Date
next succeeding the date such Receivable was created, nor will the Transferor
agree to any such extension by a Seller pursuant to the Purchase Agreement. The
Transferor will not amend or modify any Receivable or amend, modify or waive any
term or condition of any Contract related thereto except in accordance with its
normal business practices as reflected in the Credit and Collection Policy, nor
will the Transferor permit any such amendment, modification or waiver by a
Seller pursuant to the Purchase Agreement.
(c) No Change in Business or Credit and Collection Policy. The
-----------------------------------------------------
Transferor will not make any change in the character of its business or in the
Credit and Collection Policy without the prior written consent of the Agent at
the written direction of the Requisite Banks, nor will the Transferor permit a
Seller to make any such change pursuant to the Purchase Agreement without the
prior written consent of the Agent at the written direction of the Requisite
Banks.
(d) No Modification of Written Agreement. The Transferor will
------------------------------------
not amend, supplement, alter or otherwise modify the Written Agreement, nor will
the Transferor permit a Seller to amend, supplement, alter or otherwise modify
the Written Agreement pursuant to the Purchase Agreement.
(e) No Modification of Purchase Agreement. The Transferor will
-------------------------------------
not agree to any amendment, supplement, waiver, alteration or other modification
of the Purchase 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 collectability of the Receivables.
SECTION 5.3. Affirmative Covenants of Mattel, Inc. At all times
-------------------------------------
during the term of this Agreement, unless the Requisite Banks shall otherwise
consent in writing:
45
(a) Financial Information. Mattel, Inc. will maintain a system
---------------------
of accounting established and administered in accordance with generally accepted
accounting principles, and will furnish to the Agent and the Banks:
(i) as soon as practicable and in any event not later than
fifty-five (55) days after the end of each of the first three (3) fiscal
quarters of Mattel, Inc., consolidated balance sheets of Mattel, Inc. and
its Subsidiaries as at the end of such period and for the fiscal year to
date and the related consolidated and consolidating statements of income,
consolidated statements of stockholders' equity and consolidated statements
of cash flow all in reasonable detail and certified by the Chief Financial
Officer, Executive Vice President -- Finance or the Treasurer of Mattel,
Inc. that the consolidated statements (and to the best of his belief, the
consolidating statements) and other materials required by this clause
(a)(i) fairly present the financial condition of Mattel, Inc. and its
Subsidiaries as at the dates indicated and the results of their operations
for the periods indicated, subject to changes resulting from year-end
audit and normal year-end adjustments;
(ii) as soon as practicable and in any event not later than one
hundred (100) days after the end of each fiscal year of Mattel, Inc.,
consolidated and consolidating balance sheets of Mattel, Inc. and its
Subsidiaries as at the end of such year (such consolidating statements
shall specifically detail the Transferor) and the related consolidated
(and, as to statements of income only, consolidated and consolidating)
statements of income, stockholders' equity and cash flow of Mattel, Inc.
and its Subsidiaries for such fiscal year, setting forth in each case, in
comparative form, the consolidated figures for the previous year, all in
reasonable detail and (x) in the case of such consolidated financial
statements, accompanied by a report thereon of Price Waterhouse or other
independent accountants of recognized national standing selected by
Mattel, Inc., which report shall state that such consolidated financial
statements present fairly the financial position of Mattel, Inc. and its
Subsid-
46
iaries as at the dates indicated and the results of their operations and
their cash flow for the periods indicated in conformity with generally
accepted accounting principles and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards and (y) in the case
of such consolidating financial statements, certified by the chief
financial or accounting officer of Mattel, Inc.; and
(iii) together with each delivery of financial statements of
Mattel, Inc. and its Subsidiaries as provided above in clauses (i) and
(ii), an officer's certificate stating that the signers thereof have
reviewed the terms of this Agreement and have made, or caused to be made
under their supervision, a review in reasonable detail of the transactions
and condition of Mattel, Inc. and its Subsidiaries during the accounting
period covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period, and
the signers do not have knowledge of the existence as of the date of such
officer's certificate, of any condition or event which constitutes a
Termination Event or Potential Termination Event or, if any such condition
or event existed or exists, specifying the nature and period of existence
thereof.
(b) Conduct of Business. Mattel, Inc. will carry on and
-------------------
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as it is presently conducted (provided, however, that
Mattel, Inc. may engage in the production and sale of CD-ROM products and coin-
operated arcade games related to its existing lines of business) and will do all
things necessary to remain duly incorporated, validly existing and in good
standing as a domestic corporation in its jurisdiction of incorporation and will
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is presently conducted.
(c) Compliance with Governmental Rule. Mattel, Inc. will
---------------------------------
comply with all Governmental Rules,
47
writs, judgments, injunctions, decrees or awards to which it may become subject.
(d) Furnishing of Information and Inspection of Records.
---------------------------------------------------
Mattel, Inc. will furnish to the Agent from time to time such information with
respect to its obligations as Guarantor and Servicer hereunder as may be
reasonably requested by the Agent. Mattel, Inc. will at any time and from time
to time during regular business hours permit the Agent, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
Records and (ii) to visit the offices and properties of Mattel, Inc. for the
purpose of examining such Records, and to discuss matters relating to the
Receivables or Mattel, Inc.'s performance hereunder as Guarantor and as
Servicer, as the case may be, with any of the officers, directors, employees,
agents or independent public accounts of Mattel, Inc. having knowledge of such
matters.
(e) Keeping of Records and Books of Account. Mattel, Inc. will
---------------------------------------
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each Receivable and all
Collections of and adjustments to each Receivable). Mattel, Inc. will give the
Agent notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
(f) Knowledge. Promptly upon any executive officer of Mattel,
---------
Inc. obtaining knowledge of any condition or event which constitutes a
Termination Event or Potential Termination Event or becoming aware that the
Agent or any Bank has given any notice or taken any other action with respect to
a claimed Termination Event or Potential Termination Event under this Agreement,
Mattel, Inc. shall provide to the Agent an officer's certificate specifying the
nature and period of existence of any such condition or event, or specifying the
notice given and the nature of such claimed Termination Event or Potential
Termination Event, together with what action Mattel, Inc.
48
has taken, is taking and proposes to take with respect thereto.
49
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Servicer. The servicing and
-----------------------
administering of the Receivables shall be conducted by the Servicer. Until the
Agent gives notice to the Transferor of the designation of a new Servicer,
Mattel, Inc. is hereby designated as, and hereby agrees to perform the duties
and obligations of, the Servicer pursuant to the terms hereof; provided that,
--------
with respect to any group of Receivables, Mattel, Inc. may, at any time, upon
prior notice to the Agent, designate any Affiliate of Mattel, Inc. as
subservicer hereunder, provided that such Affiliate shall not become the
--------
Servicer hereunder and Mattel, Inc. shall remain liable for the performance of
the duties and obligations of the Servicer in accordance with the terms hereof;
provided further that Mattel, Inc. hereby designates Xxxxxx-Xxxxx, Inc. as
-------- -------
subservicer with respect to Receivables sold by it to the Transferor under the
Purchase Agreement. On and after the occurrence of a Servicer Default, the
Agent, on behalf of the Banks, may designate as Servicer any Person (including
the Agent) to succeed Mattel, Inc. or any successor Servicer, on the condition
in each case that any such Person so designated shall agree to perform the
duties and obligations of the Servicer pursuant to the terms hereof.
SECTION 6.2. Duties of Servicer and Agent. (a) The Servicer shall
----------------------------
take or cause to be taken all such action as may be necessary or advisable to
facilitate the collection of each Receivable from time to time, all in
accordance with applicable Governmental Rules, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy. Each of the
Transferor, the Agent and the Banks hereby appoints as its agent the Servicer,
from time to time designated pursuant to Section 6.1, to enforce its respective
rights and interests in and under the Receivables and the Contracts. Neither the
Transferor nor the Servicer may extend the maturity of any Receivable beyond the
Remittance Date next succeeding the date of creation of such Receivable. The
Transferor shall deliver to the Servicer, and the Servicer shall hold in trust
for the Transferor and the Agent in accordance with their respective interests,
all Records which evidence or relate to
50
any Receivables. Notwithstanding anything to the contrary contained herein,
the Agent shall have the absolute and unlimited right to direct the Servicer to
commence or settle any legal action to enforce collection of any Receivable. In
the event that the Obligor defaults in the performance of the Written Agreement
and the Servicer fails to take action with respect to the Obligor as directed by
the Agent pursuant to the preceding sentence, notwithstanding anything to the
contrary contained herein, the Agent shall have the absolute and unlimited
right to take any and all steps in the Transferor's name and on behalf of the
Transferor necessary or desirable, in the determination of the Requisite Banks,
to collect all amounts due under any and all Receivables including, without
limitation, endorsing the Transferor's name on checks and other instruments
representing Collections and enforcing such Receivables and the Written
Agreement.
(b) The Agent shall, as soon as practicable following receipt
thereof, turn over to the Transferor any collections of any indebtedness of the
Obligor which is not a Receivable.
(c) On and after the occurrence of a Servicer Default, the Agent
shall have the right to require the Servicer to cause a firm of independent
public accountants (who may also render other services to the Servicer or the
Transferor) to furnish a report to the Agent to the effect that they have (i)
compared the information contained in the Transfer Notices and the Servicer's
Certificates with the information contained in the Records and the Servicer's
records and computer systems for such period, and that, on the basis of such
examination and comparison, such firm is of the opinion that the information
contained in such Transfer Notices and Servicer's Certificates reconciles with
the information contained in the Receivables and the Servicer's records and
computer system and that the servicing of the Receivables has been conducted in
compliance with this Agreement, (ii) confirmed the Eligible Receivables balance
as set forth on such Transfer Notices and Servicer's Certificates, and (iii)
confirmed that the Receivables treated by the Agent as Eligible Receivables in
fact satisfied the requirements of the definition thereof contained herein,
except, in each case for (a) such exceptions as such firm shall believe to be
immaterial
51
(which exceptions need not be enumerated) and (b) such other exceptions as shall
be set forth in such statement.
SECTION 6.3. Rights After Designation of New Servicer. At any time
----------------------------------------
following the designation of a Servicer pursuant to Section 6.1:
(i) The Transferor shall, at the Agent's request and at the
Transferor's expense, give notice of the Banks' ownership of Receivables to
the Obligor and direct that payments be made directly to the Agent or its
designee or designate a new Collection Account.
(ii) The Transferor shall, at the Agent's request, (A) assemble
all of the Records, and shall make the same available to the Agent at a
place selected by the Agent or its designee, and (B) segregate all cash,
checks and other instruments received by it from time to time constituting
Collections of Receivables in a manner reasonably acceptable to the Agent
and shall, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer,
to the Agent or its designee.
(iii) The Transferor hereby authorizes the Agent to take any and
all reasonable steps in such Transferor's name and on behalf of the
Transferor necessary or desirable, in the determination of the Agent, to
collect all amounts due under any and all Receivables including, without
limitation, endorsing the Transferor's name on checks and other instruments
representing Collections and enforcing such Receivables and the Written
Agreement.
SECTION 6.4. Responsibilities of the Transferor. Anything herein to
----------------------------------
the contrary notwithstanding, the Transferor shall (i) perform all of its
obligations under the Contracts related to its Receivables to the same extent as
if interests in such Receivables had not been sold hereunder and the exercise by
the Agent of its rights hereunder shall not relieve such Transferor from such
obligations and (ii) pay when due any taxes, including without limitation, any
sales taxes payable in connection with its Receivables and their creation and
satisfaction. Neither the Agent nor the Banks shall have
52
any obligation or liability with respect to any Receivable or related
Contracts, nor shall they be obligated to perform any of the obligations of the
Transferor thereunder.
53
ARTICLE VII
SERVICER DEFAULT AND TERMINATION EVENTS
SECTION 7.1. Servicer Default. The occurrence of any one or more of
----------------
the following events shall constitute a default by the Servicer hereunder
(each, a "Servicer Default"):
----------------
(a) (i) the Servicer shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in this Section 7.1)
and such failure shall remain unremedied for ten (10) Business Days or (ii) the
Servicer shall fail to make any payment or deposit to be made by it hereunder
when due; or
(b) any representation, warranty, certification or statement
made by the Servicer in this Agreement or in any other document delivered
pursuant hereto shall prove to have been incorrect in any material respect when
made or deemed made; or
(c) the Agent, on behalf of the Banks, shall fail to have a
valid and perfected first priority ownership or security interest in and to the
Receivables; or
(d) any Event of Bankruptcy shall occur with respect to the
Servicer; or
(e) the Servicer shall merge with or into any entity whereby it
is not the surviving entity; or
(f) [reserved]
(g) an event of acceleration with respect to any indebtedness in
excess of $20,000,000 under any agreement to which the Servicer or any one of
its domestic subsidiaries is a party occurs.
SECTION 7.2. Servicer Default Remedies. If a Servicer Default
-------------------------
occurs, the Agent shall, upon written request of the Requisite Banks, by notice
to the Transferor, terminate the Servicer's rights as Servicer hereunder and
appoint a successor Servicer (which successor Servicer may be itself).
54
SECTION 7.3. Termination Events. The occurrence of any one or more
------------------
of the following events shall constitute a Termination Event hereunder:
(a) the occurrence of a Servicer Default; or
(b) either the Transferor or the Guarantor shall fail to make
any payment or deposit required to be made by it hereunder when due; or
(c) any Event of Bankruptcy shall occur with respect to the
Transferor, either Seller or the Guarantor; or
(d) the material breach of any representation or warranty
contained herein, or the failure to comply with any material covenant contained
herein, by the Transferor or the Guarantor; or
(e) the Transferor shall fail to have a valid and perfected
first priority ownership interest in and to the Receivables or the Agent, on
behalf of the Banks, shall fail to have a valid and perfected first priority
ownership or security interest in and to the Receivables; or
(f) the Transferor or the Guarantor shall merge with or into any
entity whereby it is not the surviving entity; provided that the merger of the
--------
Transferor or the Guarantor with or into the other shall not constitute a
Termination Event under this Section 7.3(f); or
(g) any material adverse change in the operations of the
Transferor or the Guarantor, or any other event which materially affects the
ability of the Transferor or the Guarantor to perform its obligations hereunder;
or
(h) at any time the Percentage Factor exceeds 90% unless the
Transferor, within ten (10) days of such occurrence, either (i) deposits into
the Collection Account an amount equal to the amount by which the Total
Outstanding Investment plus the Discount Reserve exceeds 90% of the aggregate
----
outstanding balance of
55
Eligible Receivables or (ii) otherwise reduces the Percentage Factor to less
than or equal to 90%; or
(i) the second highest short-term unsecured debt rating
assigned to the Obligor by S&P, Xxxxx'x or Xxxx falls below "A-1", "P-1" or "D-
1", respectively, or the second highest long-term senior unsecured debt rating
assigned to the Obligor by S&P, Xxxxx'x or Duff falls xxxxx "X-", "X0" or "A-",
respectively; or
(j) the Obligor fails to remit full payment in respect of the
Receivables on any Remittance Date to the Collection Account; or
(k) the occurrence of an event of acceleration with respect to
any indebtedness in excess of $20,000,000 under any agreement to which the
Guarantor or any one of its domestic subsidiaries is a party; or
(l) the occurrence of an Event of Default (as defined in the
Credit Agreement) under the Credit Agreement.
SECTION 7.4. Termination Event Remedies. Upon the occurrence of a
--------------------------
Termination Event described in clause (c) or (e) of Section 7.3 above, all
outstanding Tranches shall thereafter accrue additional Discount at a rate equal
to the difference, for each respective Tranche, between (x) the highest
Participation Rate applicable to any Tranche plus 2% and (y) the Participation
Rate applicable to such Tranche at the time of such Termination Event, and the
commitment of the Banks to purchase undivided interests in the Receivables from
the Transferor shall automatically terminate. Upon the occurrence of a
Termination Event other than an event described in clause (c) or (e) of Section
7.3, the Agent, upon the written request of the Requisite Banks, shall, by
written notice to the Transferor, the Guarantor and the Banks, (a "Notice of
---------
Termination") (i) specify that additional Discount with respect for each
-----------
outstanding Tranche shall thereafter accrue as described in this Section 7.4
and/or (ii) terminate the commitment of the Banks to purchase undivided
interests in the Receivables from the Transferor. In the event that any Total
Outstanding Investment remains unpaid on and after any Remittance Date, such
Total Outstanding Investment will thereafter accrue Discount at the Alternate
Rate until paid in full.
56
SECTION 7.5. Potential Termination Event Remedies. Upon the
------------------------------------
occurrence of a Potential Termination Event, the Agent, upon the written request
of the Requisite Banks shall, by notice to the Transferor, terminate the
commitment of the Banks to purchase undivided interests in the Receivables from
the Transferor.
57
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor. Without limiting any
-----------------------------
other rights which the Agent or the Banks may have hereunder or under applicable
Governmental Rule, the Transferor hereby agrees to indemnify the Agent and the
Banks and any permitted assigns and their respective officers, directors and
employees (collectively, "Indemnified Parties") from and against any and all
-------------------
damages, losses, claims, liabilities, costs and expenses, including reasonable
attorneys' fees (which such attorneys may be employees of the Agent or any one
of the Banks) and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by any of
-------------------
them arising out of or as a result of this Agreement or the ownership, either
directly or indirectly, by the Agent or the Banks of a Transferred Interest,
excluding, however, (i) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of an Indemnified Party or (ii)
recourse (except as otherwise specifically provided in this Agreement) for
uncollectible Receivables. Without limiting the generality of the foregoing,
the Transferor shall indemnify each Indemnified Party for Indemnified Amounts
relating to or resulting from:
(i) reliance on any material representation or warranty
made by the Transferor or Mattel, Inc. (or any officers of the Transferor
or Mattel, Inc.) under or in connection with this Agreement, any Transfer
Notice, Servicer's Certificate or any other information or report delivered
by the Transferor or Mattel, Inc. pursuant hereto, which shall have been
false or incorrect in any material respect when made or deemed made; or
(ii) the failure by the Transferor to comply with any
applicable Governmental Rule with respect to any Receivable or the related
Contract, or the nonconformity of any Receivable or the related Contract
with any such applicable Governmental Rule; or
(iii) the failure to vest and maintain vested in the Agent,
on behalf of the Banks, an
58
undivided percentage ownership interest, to the extent of the Transferred
Interest, in the Receivables included in such Transferred Interest, free
and clear of any Adverse Claim; or
(iv) the failure to file by the Transferor, or any delay
in filing by the Transferor, any required financing statements,
continuation statements, or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable Governmental
Rules with respect to any Receivable included in a Transferred Interest; or
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of
any Receivable included in a Transferred Interest (including, without
limitation, a defense based on such Receivable or the related Contract not
being legal, valid and binding obligation of the Obligor enforceable
against it in accordance with its terms), or any other claim resulting from
the sale of merchandise related to such Receivable or the furnishing or
failure to furnish such merchandise; or
(vi) any failure of Mattel, Inc., as Servicer or otherwise,
to perform its duties or obligations in accordance with the provisions of
Article VI; or
(vii) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of
whatever sort arising out of or in connection with merchandise or services
which are the subject of any Receivable.
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. (a) If
------------------------------------------
after the date hereof, the adoption of any Governmental Rule or bank regulatory
guideline or any amendment or change in the interpretation of any existing or
future Governmental Rule or bank regulatory guideline by any Governmental Person
charged with the administration, interpretation or application thereof, or the
compliance with any directive of any Governmental Person (in the case of any
bank regulatory guideline, whether or not having the force of Governmental
Rule):
59
(i) shall subject any Indemnified Party to any tax, duty or
other charge with respect to this Agreement, any Transferred Interest, the
Receivables or payments of amounts due hereunder, or shall change the
basis of taxation of payments to any Indemnified Party of amounts payable
in respect of this Agreement, any Transferred Interest, the Receivables or
payments of amounts due hereunder or otherwise in respect of this
Agreement, any Transferred Interest or the Receivables (except for changes
in the rate of general corporate, franchise, net income or other income tax
imposed on such Indemnified Party by the jurisdiction in which such
Indemnified Party's principal executive office or any funding office is
located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation, any
such requirement imposed by the Board of Governors of the Federal Reserve
System) against assets of, deposits with or for the account of, or credit
extended by, any Indemnified Party or shall impose on any Indemnified
Party or on the United States market for certificates of deposit or the
Eurodollar interbank market any other condition affecting this Agreement,
any Transferred Interest, the Receivables or payments of amounts due
hereunder or otherwise in respect of this Agreement, any Transferred
Interest or the Receivables; or
(iii) imposes upon any Indemnified Party any other expense
(including, without limitation, reasonable attorneys' fees and expenses,
and expenses of litigation or preparation therefor in contesting any of the
foregoing) with respect to this Agreement, any Transferred Interest, the
Receivables or payments of amounts due hereunder or otherwise in respect of
this Agreement, the Transferred Interests or the Receivables, and the
result of any of the foregoing is to increase the cost to such Indemnified
Party with respect to this Agreement, any Transferred Interest, the
Receivables, the obligations hereunder, or the funding of any purchases
hereunder, by an amount deemed by such Indemnified Party to be material,
then, within ten (10) days after demand by the Agent, the applicable
Transferor
60
shall pay to such Indemnified Party such additional amount or amounts as
will compensate such Indemnified Party for such increased cost.
(b) If any Indemnified Party shall have determined that after
the date hereof, the adoption of any applicable Governmental Rule or bank
regulatory guideline regarding capital adequacy, or any change therein, or any
change in the interpretation thereof by any Governmental Person, or any
directive regarding capital adequacy (in the case of any bank regulatory
guideline, whether or not having the force of Governmental Rule) of any such
Governmental Person, has or would have the effect of reducing the rate of return
on capital of such Indemnified Party (or its parent) as a consequence of such
Indemnified Party's obligations hereunder or with respect hereto to a level
below that which such Indemnified Party (or its parent) could have achieved but
for such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such
Indemnified Party to be material, then from time to time, within ten (10) days
after demand by such Indemnified Party, the applicable Transferor shall pay to
such Indemnified Party such additional amount or amounts as will compensate such
Indemnified Party (or its parent) for such reduction.
(c) Each Bank will promptly notify the Agent, and the Agent will
promptly notify the Transferor of any event of which such Bank has knowledge,
occurring after the date hereof, which will entitle an Indemnified Party to
compensation pursuant to this Section. Any notice by the Agent, acting on
behalf of a Bank, claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use
any reasonable averaging and attributing methods.
SECTION 8.3. Other Costs, Expenses and Related Matters. The
-----------------------------------------
Transferor agrees, upon receipt of a written invoice, to pay or cause to be
paid, and to save the Agent harmless against liability for the payment of, all
reasonable out-of-pocket expenses (including, without limitation, attorneys',
accountant's and other third parties' fees and expenses, any filing fees and
expenses incurred by officers or employees of the Agent) incurred
61
by or on behalf of the Agent (i) in connection with the negotiation, execution,
delivery and preparation of this Agreement and any documents or instruments
delivered pursuant hereto and the transactions contemplated hereby (including,
without limitation, the perfection or protection of the Transferred Interest)
and (ii) from time to time (a) relating to any amendments, waivers or consents
under this Agreement, (b) arising in connection with the Agent's or their
agents' enforcement or preservation of rights (including, without limitation,
the perfection and protection of the Transferred Interest under this Agreement),
or (c) arising in connection with any audit, dispute, disagreement, litigation
or preparation for litigation involving this Agreement (all of such amounts,
collectively, "Transaction Costs").
-----------------
SECTION 8.4. Reconveyance Under Certain Circumstances. The
----------------------------------------
Transferor agrees to accept the reconveyance from the Agent, on behalf of the
Banks, of the Transferred Interest if the Agent notifies the Transferor of a
material breach of any representation or warranty made or deemed made pursuant
to Article III of this Agreement, and the Transferor shall fail to cure such
breach within ten (10) days (or, in the case of the representations and
warranties in Sections 3.1(a) and 3.1(e), five (5) days) of such notice. The
reconveyance price (which shall be an amount equal to the Aggregate Unpaids)
shall be paid by the Transferor directly to the Agent for the account of the
Banks (and not to the Collection Account) in immediately available funds on
such tenth day (or fifth day, if applicable).
62
ARTICLE IX
THE AGENT
SECTION 9.1. Appointment. Each Bank hereby irrevocably designates
-----------
and appoints NationsBank of Texas, N.A., as the Agent of the Banks under this
Agreement, and each of the Banks hereby irrevocably authorizes NationsBank of
Texas, N.A., as the Agent for such Bank, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers as are expressly
delegated to the Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any of the Banks, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Agent.
SECTION 9.2. Attorneys-in-fact. The Agent may execute any of its
-----------------
duties under this Agreement by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the gross negligence or willful
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
SECTION 9.3. Limitation on Liability. Neither the Agent nor any of
-----------------------
its officers, directors, employees, agents or attorneys-in-fact shall be liable
to the Banks for any action lawfully taken or omitted to be taken by it or them
under or in connection with this Agreement except for its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its affiliates
shall be responsible in any manner to any of the Banks for any recitals,
statements, representations or warranties made by the Transferor, the Servicer
or the Guarantor, or any officer or partner thereof contained in this
Agreement, or in any certificate, report, statement or other document referred
to or provided for in or received by the Agent under or in connection with this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, or for any failure of the Transferor, the
Servicer or the Guarantor to perform their obligations thereunder. The Agent
63
shall not be under any obligation to any of the Banks to ascertain or to inquire
as to the observance or performance of any of the terms, covenants or
conditions of this Agreement on the part of the Transferor, the Servicer or the
Guarantor or to inspect the properties, books or records of the Transferor, the
Servicer or the Guarantor.
SECTION 9.4. Reliance. The Agent shall be entitled to rely, and
--------
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy or telex
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Transferor, the Servicer or the Guarantor),
independent accountants and other experts selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action under this
Agreement unless it shall first receive advice or concurrence of the Requisite
Banks as provided in this Agreement (or from all of the Banks if so specified
herein) or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Requisite Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Banks.
SECTION 9.5. Notice of Termination Event. The Agent shall not be
---------------------------
deemed to have knowledge or notice of the occurrence of any Termination Event or
Servicer Default hereunder unless the Agent has received written notice from a
Bank, the Transferor, the Servicer or the Guarantor, describing such Termination
Event or Servicer Default. In the event that the Agent receives such a notice,
the Agent shall promptly give notice thereof to the Banks and Bank of America
National Trust and Savings Association as agent under the Credit Agreement.
Except as otherwise provided herein, the Agent shall take such action to enforce
this Agreement as shall be directed by the Requisite Banks. In the event that
any remedy is
64
exercised pursuant to Section 7.4 of this Agreement, each Bank and the Agent
shall pursue remedies designated by the Requisite Banks to the same extent as
though such demand was caused by the action of all Banks, and each Bank agrees
to act as expeditiously as possible so as to maximize recovery. Each Bank
agrees that no Bank shall have any right individually to take action with
respect to the Transferred Interest, it being understood and agreed that such
rights and remedies with respect to any portion of the Transferred Interest may
be exercised by the Agent as directed by the Requisite Banks for the ratable
benefit of the Banks.
SECTION 9.6. No Representations. Each Bank expressly acknowledges
------------------
that neither the Agent nor any of its affiliates has made any representations or
warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Transferor or the Guarantor, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
financial condition, creditworthiness, affairs, status and nature of the
Transferor and the Guarantor and made its own decision to enter into this
Agreement. Each Bank also represents that it will, independently and without
reliance upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and to make such investigation as its deems necessary to inform
itself as to the status and affairs, financial or otherwise, of the Transferor
and the Guarantor. Except for notices, reports and other documents expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or
other information concerning the affairs, financial condition or business of
the Transferor and the Guarantor which may come into the possession of the Agent
or any of its affiliates.
SECTION 9.7. Indemnification. The Banks agree to indemnify the Agent
---------------
in its capacity as such (to the extent not reimbursed by the Transferor or the
Guarantor
65
and without limiting any obligations of the Transferor or the Guarantor so to
do, ratably according to their respective Percentages as then in effect) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may at any time (including without limitation at any
time following the payment of the Aggregate Unpaids) be imposed on, incurred by
or asserted against the Agent in any way relating to or arising out of this
Agreement or any other document contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; provided that no Bank shall be
--------
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the termination of this Agreement.
SECTION 9.8. Bank. The Agent and its affiliates may make loans to,
----
accept deposits from and generally engage in any kind of business with the
Obligor, the Transferor and the Guarantor as though it were not the Agent
hereunder. With respect to its loans made or renewed by it and any note issued
to it, the Agent shall have the same rights and powers under this Agreement as
any Bank and may exercise the same as though it were not the Agent, and the
terms "Bank" and "Banks" shall, unless the context otherwise indicates, include
the Agent in its individual capacity.
SECTION 9.9. Resignation. If the Agent shall resign as Agent under
-----------
this Agreement, then the Requisite Banks may appoint a successor Agent for the
Banks, which shall be a commercial bank organized under the Governmental Rules
of the United States or any state thereof, having a combined surplus and capital
of not less than $500,000,000, whereupon such successor Agent shall succeed to
the rights, powers and duties of the former Agent and the obligations of the
former Agent shall be terminated and cancelled, without any other or further
act or deed on the part of such former Agent or any of the parties to this
Agreement; provided, however, that the former Agent's resignation shall not
-------- -------
become effective until such successor Agent has been appointed and has
66
succeeded of record to all right, title and interest of the former Agent in the
Receivables; provided, further however, if the Requisite Banks cannot agree as
-------- ------- -------
to a successor Agent within ninety (90) days after such resignation, the Agent
shall appoint a successor Agent and the parties hereto agree to execute whatever
documents are necessary to effect such action under this Agreement or any other
document executed pursuant to this Agreement; provided, however, in such event
-------- -------
all provisions of this Agreement shall remain in full force and effect. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article IX shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
SECTION 9.10. Sharing of Payments, etc. The Banks agree that (i)
-------------------------
with respect to all amounts received by each of them with respect to the
Aggregate Unpaids, whether in the nature of a return of any investment or
discount, or amounts due to a particular Bank in respect of any commitment fees
or facility fees hereunder, equitable adjustment will be made so that, in
effect, all such amounts will be shared among the Banks in proportion to the
portion of the Aggregate Unpaids due each Bank, whether received by voluntary
payment, or by the exercise of the right of set-off or banker's lien or secured
claims under the Bankruptcy Code as now or hereafter amended, altered, modified
or replaced, by counterclaim or cross-action or by the enforcement of this
Agreement; (ii) if any of them shall exercise any right of counterclaim, set-
off, banker's lien or otherwise or as adequate protection of a deposit treated
as cash collateral under the Bankruptcy Code, receives payment or reduction of
any amounts due to such Bank hereunder, which is greater than the proportion
received by any other Bank in respect of the amounts due hereunder to such other
Bank, then the Bank receiving such proportionately greater payment shall (x)
notify each other Bank and the Agent of such receipt and (y) purchase
participations (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in the amounts due hereunder to the other Banks so that
all such recoveries of amounts due hereunder shall be shared by the Banks in
proportion to the amounts due them hereunder; provided that the foregoing
--------
provisions shall not apply to any such amount received by a foreign branch,
subsidiary or affiliate of any Bank which is applied by that Bank to the payment
of any indebted-
67
ness of a foreign subsidiary. If all or any portion of such payment is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
SECTION 9.11. Independent Agreements. The provisions contained in
----------------------
Sections 9.1 through 9.8 and 9.10 of this Article IX constitute independent
obligations and agreements of the Agent and the Banks, and the Transferor and
the Guarantor shall not be deemed parties thereto nor bound thereby. The
Transferor and the Guarantor do acknowledge the rights of the Banks and the
Agent under Section 9.8.
68
ARTICLE X
GUARANTY
SECTION 10.1. Guaranty of Obligations. For valuable consideration,
-----------------------
the Guarantor unconditionally, absolutely and irrevocably guarantees and
promises to pay to the Agent, or order, on demand, in lawful money of the United
States and in immediately available funds, any and all present or future payment
and performance obligations of the Transferor hereunder owing to the Agent and
the Banks. The phrase "payment and performance obligations of the Transferor"
(hereinafter collectively referred to as the "Obligations") is used herein in
its most comprehensive sense and includes any and all advances, debts,
obligations, and liabilities of the Transferor, now, or hereafter made,
incurred, or created, whether voluntarily or involuntarily, and however arising,
including, without limitation, any and all attorneys' fees, costs, premiums,
charges, or interest owed by the Transferor to the Agent and/or the Banks,
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, whether the Transferor may be liable individually
or jointly with others, whether recovery upon such indebtedness may be or
hereafter becomes barred by any statute of limitations or whether such
indebtedness may be or hereafter become otherwise unenforceable.
SECTION 10.2. Guaranty Continuing. This guaranty is a continuing
-------------------
guaranty which relates to any Obligations, including those which arise under
successive transactions which shall either cause the Transferor to incur new
Obligations, continue the Obligations from time to time, or renew them after
they have been satisfied. The Guarantor agrees that nothing shall discharge or
satisfy its obligations created hereunder except for the full payment of the
Obligations with interest as applicable. Any payment by the Guarantor shall
not reduce its maximum obligation hereunder.
SECTION 10.3. Guarantor Directly Liable. The Guarantor agrees that
-------------------------
it is directly and primarily liable to the Agent for the benefit of the Banks,
that its obligations hereunder are independent of the Obligations of the
Transferor, or of any other guarantor, and that a separate action or actions may
be brought and prosecuted against the Guarantor, whether action is brought
against
69
the Transferor or whether the Transferor is joined in any such action or
actions. The Guarantor agrees that any releases which may be given by the Agent
and the Banks to the Transferor or any other guarantor shall not release it from
this Guaranty.
SECTION 10.4. No Impairment. The obligations of the Guarantor under
-------------
this Guaranty shall not be affected, modified or impaired upon the occurrence
from time to time of any of the following, whether or not with notice to or the
consent of the Guarantor:
(a) the compromise, settlement, change, modification, amendment
(whether material or otherwise) or partial termination of any or all of the
Obligations;
(b) the failure to give notice to the Guarantor of the
occurrence of any Termination Event or Servicer Default under the terms and
provisions of this Agreement;
(c) the waiver of the payment, performance or observance of any
of the Obligations;
(d) the taking or omitting to take any actions referred to in
this Agreement or of any action under this guaranty;
(e) any failure, omission or delay on the part of the Agent
and/or the Banks to enforce, assert or exercise any right, power or remedy
conferred in this Agreement or any other indulgence or similar act on the part
of the Agent and/or the Banks in good faith and in compliance with applicable
law;
(f) the voluntary or involuntary liquidation, dissolution, sale
or other disposition of all or substantially all of the assets, marshalling of
assets, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors or readjustment of, or other similar proceedings which affect the
Guarantor, any other guarantor of any of the Obligations of the Transferor or
any of the assets of any of them, or any allegation of invalidity or contest of
the validity of this Guaranty in any such proceeding; or
70
(g) to the extent permitted by law, the release or discharge of any
other guarantors of the Obligations from the performance or observance of any
obligation, covenant or agreement contained in any guaranties of the
Obligations by operation of law.
To the extent any of the foregoing refers to any actions which the
Agent or the Banks may take, the Guarantor hereby agrees that the Agent and/or
the Banks may take such actions in such manner, upon such terms, and at such
times as the Agent or the Banks, in their discretion, deem advisable, without,
in any way or respect, impairing, affecting, reducing or releasing the
Guarantor from its undertakings hereunder and the Guarantor hereby consents to
each and all of the foregoing actions, events and occurrences.
SECTION 10.5. Waiver. The Guarantor hereby waives:
------
(a) any and all rights to require the Agent or the Banks to prosecute
or seek to enforce any remedies against the Transferor or any other party liable
to the Agent or the Banks on account of the Obligations;
(b) any right to assert against the Agent or the Banks any defense
(legal or equitable), set-off, counterclaim, or claim which the Guarantor may
now or at any time hereafter have against the Transferor or any other party
liable to the Agent or the Banks in any way or manner under this Agreement;
(c) all defenses, counterclaims and off-sets of any kind or nature,
arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity or enforceability of this Agreement and the security
interest granted pursuant thereto;
(d) any defense arising by reason of any claim or defense based upon
an election of remedies by the Agent or the Banks including, without limitation,
any direction to proceed by judicial or nonjudicial foreclosure or by deed in
lieu thereof, which, in any manner impairs, affects, reduces, releases, destroys
or extinguishes the Guarantor's subrogation rights, rights to proceed against
the Transferor for reimbursement, or any other rights of the Guarantor to
proceed against the
71
Transferor, against any other guarantor, or against any other security, with the
Guarantor understanding that the exercise by the Agent and/or the Banks of
certain rights and remedies may offset or eliminate the Guarantor's right of
subrogation against the Transferor, and that the Guarantor may therefore incur
partially or totally non-reimbursable liability hereunder;
(e) all presentments, demands for performance, notices of non-
performance, protests, notices of protest, notices of dishonor, notices of
default, notice of acceptance of this Guaranty, and notices of the existence,
creation, or incurring of new or additional indebtedness, and all other notices
or formalities to which the Guarantor may be entitled; and
(f) without limiting the generality of the foregoing, the Guarantor
hereby expressly waives any and all benefits of (i) California Civil Code
Sections 2809, 2810, 2819, 2825, 2839, 2845 through 2850, 2899 and 3433 and (ii)
California Code of Civil Procedure Sections 580(a), 580(b), 580(d) and 726.
SECTION 10.6. Subrogation. The Guarantor hereby agrees that unless
-----------
and until this Agreement has terminated and all Obligations have been paid to
the Agent and the Banks in full, it shall not have any rights of subrogation,
reimbursement or contribution as against the Transferor or any other guarantor,
if any, and shall not seek to assert or enforce the same. Guarantor understands
that the exercise by Agent of certain rights and remedies contained in this
Agreement may affect or eliminate Guarantor's right of subrogation if any,
against the Transferor and that Guarantor may therefore incur a partially or
totally non-reimbursable liability hereunder; nevertheless, Guarantor hereby
authorizes and empowers the Agent and the Banks to exercise, in their sole
discretion, any right and remedy, or any combination thereof, which may then be
available, since it is the intent and purpose of Guarantor that the obligations
hereunder shall be absolute, independent and unconditional under any and all
circumstances.
SECTION 10.7. Information. The Guarantor is presently informed of
-----------
the financial condition of the Transferor and of all other circumstances which a
diligent inquiry would reveal and which bear upon the risk of
72
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 the risk of nonpayment. The
Guarantor hereby waives its right, if any, to require the Agent or the Banks to
disclose to it any information which the Agent or any Bank may now or hereafter
acquire concerning such condition or circumstances including, but not limited
to, the release of any other guarantor.
SECTION 10.8. Evidence of Obligations. The Agent and each Bank's
-----------------------
books and records evidencing the Obligations shall be admissible in any action
or proceeding and shall be binding upon the Guarantor for the purpose of
establishing the terms set forth therein and shall constitute prima facie proof
thereof.
73
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Term of Agreement. This Agreement shall terminate
-----------------
following the later of (i) the Termination Date or (ii) the date on which the
Total Outstanding Investment has been reduced to zero, all accrued Discount has
been paid in full and all other Aggregate Unpaids have been paid in full;
provided, however, that (i) the rights and remedies of the Banks with respect to
-------- -------
any representation and warranty made or deemed to be made by the Transferor
pursuant to this Agreement, (ii) the indemnification and payment provisions of
Article VIII and (iii) the agreement set forth in Section 9.10, shall be
continuing and shall survive any termination of this Agreement.
SECTION 11.2. Waivers; Amendments. No failure or delay on the part
-------------------
of the Agent or the Banks in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. No notice to or
demand on the Transferor, the Servicer or the Guarantor in any case shall
entitle the Transferor, the Servicer or the Guarantor, as the case may be, to
any other or further notice or demand in similar or other circumstances. The
rights and remedies herein provided shall be cumulative and nonexclusive of any
rights or remedies provided by Governmental Rule. Any provision of this
Agreement may be amended if, but only if, such amendment is in writing and is
signed by the Transferor, the Servicer, the Guarantor, the Agent and the
Requisite Banks; provided, however, that no such waiver, amendment or consent
-------- -------
shall, unless in writing and signed by all of the Banks, the Transferor, the
Servicer, the Guarantor and acknowledged by the Agent, (a) increase or extend
any Bank's Bank Commitment or subject any Bank to additional obligations; (b)
postpone or delay any date fixed for any payment of fees or any other amounts
due to the Banks (or any of them) hereunder; (c) reduce any fees or other
amounts payable to the Banks (or any Bank) hereunder; (d) change any Bank's
Percentage; (e) amend this Section 11.2 or Section 9.10; or (f) release the
Guarantor from any obligation undertaken by it pursuant to this Agreement.
74
SECTION 11.3. Notices. Except as provided below, all communications
-------
and notices provided for hereunder shall be in writing and shall be sent by
telecopy and shall be given to the other party at its telecopy number set forth
on the signature page hereof or at such other telecopy number as such party may
hereafter specify for the purposes of notice to such party. Each such notice or
other communication shall be effective when such telecopy is transmitted to the
telecopy number specified below and when confirmation of delivery is received:
If to the Transferor:
Mattel Factoring, Inc.
2043 East Mariposa
M.S. 00-000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Guarantor or Servicer:
Mattel, Inc.
000 Xxxxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Agent:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to either Seller, to its address set forth in the Purchase
Agreement.
If to the Banks, to their addresses set forth on the signature pages
hereto.
75
SECTION 11.4. Governing Law; Integration. (a) This Agreement shall
--------------------------
be governed by and construed in accordance with the laws of the State of
California, without regard to the conflicts of Governmental Rules provisions
thereof. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire Agreement among the parties hereto with
respect to the subject matter hereof superseding all prior oral or written
understandings.
(b) Any legal action or proceeding with respect to this Agreement
may be brought in the courts of the State of California or of the United States
for the Central District of California, and by execution and delivery of this
Agreement, each of the Guarantor, the Transferor and the Banks consents, for
itself and in respect of its property, to the non-exclusive jurisdiction of
those courts. Each of the Guarantor, the Transferor and the Banks irrevocably
waives any objection, including any objection to the laying of venue or based on
the grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any action or proceeding in such jurisdiction in respect of this
Agreement or any document related hereto. The Guarantor, the Transferor and the
Banks each waive personal service of any summons, complaint or other process,
which may be made by any other means permitted by California law.
SECTION 11.5. Severability; Counterparts. This Agreement may be
--------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 11.6. Successors and Assigns. This Agreement shall be
----------------------
binding on the parties hereto and their respective successors; provided,
--------
however, that
-------
76
subject to Section 11.9, no party to this Agreement may assign any of its rights
or delegate any of its duties hereunder.
SECTION 11.7. Confidentiality. Each Bank agrees to take normal and
---------------
reasonable precautions and exercise due care to maintain the confidentiality of
all information provided to it by the Guarantor or any Subsidiary of the
Guarantor, or by the Agent on such Guarantor's or Subsidiary's behalf, in
connection with this Agreement or any documents related hereto, and neither it
nor any of its Affiliates shall use any such information for any purpose or in
any manner other than pursuant to the terms contemplated by this Agreement;
except to the extent such information (i) was or becomes generally available to
the public other than as a result of a disclosure by the Bank, or (ii) was or
becomes available on a non-confidential basis from a source other than the
Guarantor, provided that such source is not bound by a confidentiality agreement
with the Guarantor known to the Bank; provided, however, that any Bank may
-------- -------
disclose such information (A) at the request or pursuant to any requirement of
any Governmental Person to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process and when required to do so in accordance with the provisions
of any applicable Governmental Rule; provided, that a Bank shall disclose only
the information required by such request and shall notify the Guarantor in
advance of providing such information so that the Guarantor may seek an
appropriate protective order, and (C) to such Bank's independent auditors and
other professional advisors provided such Persons are obligated to keep such
information confidential.
Notwithstanding the foregoing, the Guarantor authorizes each Bank to disclose to
any Participant or Assignee and to any prospective Participant or Assignee, such
financial and other information in such Bank's possession concerning the
Guarantor or its Subsidiaries which has been delivered to the Agent or the Banks
pursuant to this Agreement or which has been delivered to the Agent or the Banks
by the Guarantor in connection with the Banks' credit evaluation of the
Guarantor prior to entering into this Agreement; provided that, unless otherwise
--------
agreed by the Guarantor, such Participant or Assignee agrees in
77
writing to such Bank to keep such information confidential to the same extent
required of the Banks hereunder.
SECTION 11.8. Characterization of the Transactions Contemplated by
----------------------------------------------------
the Agreement. It is the intention of the parties that the transactions
-------------
contemplated hereby constitute the sale of the Transferred Interest, conveying
good title thereto free and clear of any Adverse Claims to the Agent, on behalf
of the Banks, and that the Transferred Interest not be part of the Transferor's
estate in the event of an insolvency. If, notwithstanding the foregoing, the
transactions contemplated hereby should be deemed a financing, the parties
intend that the Transferor shall be deemed to have granted to the Agent on
behalf of the Banks, and the Transferor hereby grants to the Agent, on behalf of
the Banks, a first priority perfected security interest in all of the
Transferor's right, title and interest in, to and under the Receivables, and
that this Agreement shall constitute a security agreement under applicable law.
SECTION 11.9. Assignments; Participations. (a) Any Bank may, with
---------------------------
the advance written consent of the Transferor at all times other than during the
existence of a Termination Event and the Agent, which consent of the Transferor
shall not be unreasonably withheld, 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
Bank to an Eligible Assignee that is an Affiliate of such Bank) (each an
"Assignee") all, or any ratable part of all, of the Transferred Interest and the
other rights and obligations of such Bank hereunder, in a minimum amount of
$10,000,000 and such Bank shall concurrently therewith assign a ratable portion
in the Credit Agreement; provided, however, that the Transferor and the Agent
may continue to deal solely and directly with such Bank in connection with the
interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the
Transferor and the Agent by such Bank and the Assignee; (ii) such Bank 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
78
Bank or Assignee has paid to the Agent a processing fee in the amount of $2,500.
(b) From and after the date that the Agent notifies the assignor Bank
that it has received (and provided its consent with respect to) an executed
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 Bank under this Agreement, and (ii)
the assignor Bank 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 Bank shall
have the right at any time to sell or otherwise transfer participations in all
or any part of their pro rata portion of the Transferred Interest, to one or
--- ----
more Affiliates of such Bank or to one or more commercial banks, merchant banks,
savings and loan associations or any other institution (a "Participant");
provided that such Bank 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 "Bank"; provided further, that in the case of a
-------- -------
participation, (i) the Bank's obligations under this Agreement shall remain
unchanged, (ii) the Bank shall remain solely responsible for the performance of
such obligations, (iii) the Transferor and the Agent shall continue to deal
solely and directly with the Bank in connection with the Bank's rights and
obligations under this Agreement, and (iv) no Bank shall transfer or grant any
participating interest under which the Participant shall have rights to approve
any amendment to, or any consent or waiver with respect to this Agreement except
to the extent such amendment, consent or waiver would require unanimous consent.
In the case of any such participation, the Participant shall not have any rights
under this Agreement, or any docu-
79
ments related hereto, and all amounts payable by the Transferor hereunder shall
be determined as if such Bank had not sold such participation, except that if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of a
Termination Event, each Participant shall be deemed to have the right of set-off
in respect of its participating interest in amounts owing under this Agreement
to the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement.
80
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
MATTEL FACTORING, INC.,
as Transferor
By: /s/ Xxxxxxx Xxxxxx
------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
and Treasurer
MATTEL, INC., as Guarantor
and Servicer
By: /s/ Xxxxxxx Xxxxxx
------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
and Treasurer
NATIONSBANK OF TEXAS, N.A.,
as Agent
By: _______________________
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
MATTEL FACTORING, INC.,
as Transferor
By: ________________________
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
and Treasurer
MATTEL, INC., as Guarantor
and Servicer
By: ________________________
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
and Treasurer
NATIONSBANK OF TEXAS, N.A.,
as Agent
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
--------------- --------------
9.000000000 36,000,000 NATIONSBANK OF TEXAS
N.A.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Notice Address: 000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
--------------- -------------
12.000000000 48,000,000 BANK OF AMERICA
NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
Notice Address: 000 Xxxxx Xxxxxx Xxxxxx, 00xx Floor
Credit Products #5618
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
--------------- -------------
9.000000000 36,000,000 THE CHASE MANHATTAN
BANK
By: /s/ Xxxx X. Xxxxxxx
---------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
Notice Address: Corporate Banking Group
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx
Xxxxxx Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
--------------- -------------
7.500000000 30,000,000 ABN AMRO BANK N.V.
Los Angeles
International Branch
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxx X. Stimfle
-----------------------
Name: Xxxx X. Stimfle
Title: Vice President
Notice Address: Los Angeles International Branch
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
--------------- --------------
7.500000000 30,000,000 THE FIRST NATIONAL
BANK OF BOSTON
By: /s/ Xxxxx Xxxxx
-----------------------
Name: Xxxxx Xxxxx
Title: Vice President
Notice Address: 000 Xxxxxxx Xxxxxx
MAIL STOP 01-09-05
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
--------------- -------------
7.500000000 30,000,000 PNC BANK,
NATIONAL
ASSOCIATION
By: /s/ Xxxx Xxxxxxxxx
----------------------
Name: Xxxx Xxxxxxxxx
Title: Corporate Banking Officer
Notice Address: 000 Xxxxx Xxxxxx
0 XXX Xxxxx
Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
-------------- -------------
7.500000000 30,000,000 TORONTO DOMINION
(TEXAS), INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------
Name: XXXXXXX XXXXXX
Title: VICE PRESIDENT
Notice Address: 000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Manager, Credit Administration
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
-------------- -------------
5.000000000 20,000,000 BANQUE NATIONALE
DE PARIS
By: /s/ Xxxxx Xxxxxxx
------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
and Manager
By: /s/ Xxxxxxxx X. Xxxxx
----------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
Notice Addresses: 000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
-------------- --------------
5.000000000 20,000,000 DRESDNER BANK AG
New York Branch
and
Grand Cayman Branch
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
By: /s/ Xxxxxx X. Xxxx
------------------------
Name: Xxxxxx X. Xxxx
Title: Assistant Treasurer
Notice Address: 000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx X. Xxxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
-------------- --------------
5.000000000 20,000,000 CITICORP USA, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Attorney In Fact
Notice Address: x/x Xxxxxxxx Xxxxx Xxxxxxx, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
c/o Citicorp N.A.
Xxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxxxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
-------------- -------------
5.000000000 20,000,000 THE INDUSTRIAL BANK OF
JAPAN, LIMITED
By: /s/ Xxxxxx Xxxxx
---------------------
Name: Xxxxxx Xxxxx
Title: Joint General Manager
Notice Address: Los Angeles Agency
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: J. Xxxxx Xxxxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
-------------- -------------
5.000000000 20,000,000 ISTITUTO BANCARIO SAN
PAOLO DI TORINO SPA
By: /s/ Xxxxxx Xxxxxxx
----------------------
Name: Xxxxxx Xxxxxxx
Title: First Vice President
By: /s/ Xxxxxxx Xx Xxxxxx
-----------------------
Name: Xxxxxxx Xx Xxxxxx
Title: First Vice President
Notice Address: 000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
-------------- -------------
5.000000000 20,000,000 MANUFACTURERS &
TRADERS TRUST CO.
By: /s/ Xxxxxxxx X. Xxxx
-----------------------
Name: Xxxxxxxx X. Xxxx
Title: Vice President
Notice Address: 0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxx
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
-------------- -------------
5.000000000 20,000,000 SOCIETE GENERALE
By: /s/ X. Xxxxxx Xxxxxxx
-------------------------
Name: X. Xxxxxx Xxxxxxx
Title: Vice President
Notice Address: 0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: X. Xxxxxx Xxxxxxx
Vice President
Dollar Amount
of Percentage
of Original
Facility
Percentage (%) Limit ($)
-------------- -------------
5.000000000 20,000,000 UNION BANK OF
CALIFORNIA, N.A.
By: /s/ Xxxxx Xxxx
---------------------
Name: Xxxxx Xxxx
Title: Vice President
Notice Address: 000 Xxxxx Xxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxx
EXHIBIT A
[Toys "R" Us, Inc. Letterhead]
[Date]
Xx. Xxxxxxx Xxxxxx
Senior Vice President and Treasurer
Mattel, Inc.
000 Xxxxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, XX 00000-0000
Dear Xxxx:
With reference to the Accounts Receivable Purchase Agreement, dated as of March
11, 1997 among Mattel Sales Corp., Xxxxxx-Xxxxx, Inc. and Mattel Factoring,
Inc., it is our understanding that Mattel and Xxxxxx-Xxxxx would like to sell
from time to time their domestic accounts receivable from TOYS "R" US to Mattel
Factoring, Inc. and that under the Transfer and Administration Agreement, dated
as of March 11, 1997, among Mattel Factoring, Inc. NationsBank of Texas, N.A.,
and a syndicate of banks, it is our understanding that Mattel Factoring, Inc.
would like to sell from time to time undivided interests in the domestic
accounts receivable from TOYS "R" US and that to do so, it is necessary that
TOYS "R" US commit for the benefit of the banks to certain payment terms which
will apply regardless of any contrary language in any purchase order or other
document.
TOYS "R" US hereby consents to such sales of accounts receivable and agrees,
unconditionally, to pay by wire transfer of immediately available funds on or
before [current Remittance Date] to the account designated by you an amount
equal to not less than ninety percent (90%) of the total amount of all invoices,
supported by bills of lading, issued by Mattel and Xxxxxx-Xxxxx to TOYS "R" US
in the United States that are outstanding at such date. Modification or
revocation of the terms of this letter shall be effective only if in writing and
signed by you or the Chief Financial Officer of Mattel and by one of the
following duly authorized officers of TOYS "R" US: Xxxxx Xxxxxxxxx, Xxx
Xxxxxxxx and Xxx Xxxxxxx.
1
It is our intent that the remaining ten percent (10%) of invoiced amounts will
be settled in accordance with normal settlement procedures between Mattel,
Xxxxxx-Xxxxx and TOYS "R" US. TOYS "R" US agrees that any invoiced amounts
remaining after settlement in accordance with normal settlement procedures will
be paid by TOYS "R" US to the account referenced in the prior paragraph.
Very truly yours,
Xxx Xxxxxxx
Vice President and Treasurer
Agreed to and accepted by:
Mattel, Inc.
By: ________________________
Xxxxxxx Xxxxxx
Senior Vice President and Treasurer
A-2
EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
For the Period beginning ___________, 199_
and ending ___________, 200_
The undersigned, a duly authorized representative of Mattel, Inc. as
Servicer, pursuant to the Transfer and Administration Agreement, dated as of
March 11, 1997 (as amended and modified from time to time, the "TAA"), among
Mattel Factoring, Inc., as Transferor, Mattel, Inc., as Guarantor and Servicer,
NationsBank of Texas, N.A., as Agent, and the Banks, does hereby certify as
follows:
1. Eligible Receivables as of the last day
of the previous period.......................... $______
2. plus Eligible Receivables generated during
----
the period...................................... $______
3. less Close-Out Collections received during
----
the period...................................... $______
4. less Deemed Collections during the period....... $______
----
5. Eligible Receivables as of the last day
of the period................................... $______
6. Total Outstanding Investment as of the
last day of the period.......................... $______
7. Discount Reserve as of the last day of
the period...................................... $______
8. Percentage Factor as of the last day of
the period ([line 6 + line 7] / line 5)......... _____%
9. Average Facility Limit during the period........ $______
10. [Eligible Receivables as of the last day of the period are equal to at least
111% of the sum of the Total Outstanding Investment and the Discount
Reserve] or [The Transferor is depositing to the credit of the Collection
B - 1
Account the outstanding balance of certain Receivables as required by
Section 2.6(b) of the TAA, and such amount is equal to $____].
11. As of the date hereof, no Termination Event or Potential Termination Event
has occurred under the TAA.
12. As of the date hereof, no default in the performance of the obligations of
the Servicer under the TAA has occurred or is continuing except as follows:
[if applicable, insert "none"]
13. As of the date hereof, no lien has been placed on the Receivables other than
pursuant to the TAA.
Capitalized terms used herein have their respective meanings as set forth in the
TAA.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this certificate this ___ day of _______, 19__.
MATTEL, INC.
as Servicer
By:________________________
Name:
Title:
B - 2
EXHIBIT C
FORM OF TRANSFER NOTICE
MATTEL FACTORING, INC. (the "Transferor") hereby conveys, transfers
and assigns to the Agent, on behalf of the Banks, pursuant to the terms and
conditions of the Transfer and Administration Agreement, dated as of March 11,
1997 (the "TAA"), among Mattel Factoring, Inc., Mattel, Inc., as Guarantor and
Servicer, NationsBank of Texas, N.A., as Agent, and the Banks, an undivided
percentage ownership interest in the Receivables, together with Collections with
respect thereto. The terms of such Transfer shall be as follows:
Transfer Date: __________
Transfer Price: $_________ (line 5 + line 6)
Receivables related to Mattel Sales Corp ............ $______
Receivables related to Xxxxxx-Xxxxx, Inc............. $______
THE TRANSFEROR DOES HEREBY CERTIFY AS FOLLOWS:
1. Eligible Receivables as of the last day
of the prior period.............................. $______
2. Total Outstanding Investment as of the
last day of the prior period..................... $______
3. Discount Reserve as of the last day of the
prior period..................................... $______
4. Funds on deposit in the Collection Account
as of the date hereof............................ $______
5. Close-Out Collections to be released from the
Collection Account on the Transfer Date to
fund a portion of the Transfer Price............. $______
6. Tranche amount (Transfer Price less line 5) $______
7. Tranche Period related to this Tranche........... __ days
8. Estimated LIBOR related to this Tranche.......... ______%
C - 1
9. Estimated Participation Rate related to this
Tranche (line 8 + applicable spread)............. ______%
10. Discount related to this Tranche (line 6 x
line 9 x line 7 / 360)........................... $______
11. Total Outstanding Investment after giving
effect to the requested Tranche amount
(line 2 + line 6)................................ $______
12. Discount Reserve after giving effect to the
requested Transfer (line 3 + line 10)............ $______
13. The Percentage Factor after giving effect
to the requested Tranche Amount and Discount
will be (should not exceed 90%) ([line 11 +
line 12] / line 1)............................... ______%
This Transfer Notice is irrevocable and may be accepted by the Agent, on behalf
of the Banks, at any time prior to 1:00 PM (Dallas, Texas time) on the third
Business Day immediately preceding the Transfer Date specified above. Upon such
acceptance of the terms of this Transfer Notice, the Transferor shall have
conveyed, transferred and assigned an undivided percentage ownership interest
in the Receivables, together with Collections with respect thereto to the Agent
on behalf of the Banks. The Transferor and the Banks intend that this transfer
of Receivables constitutes a sale of accounts under Section 9-102(1)(b) of the
Uniform Commercial Code as in effect in all applicable jurisdictions ("UCC").
In the event that the conveyance hereunder is characterized as a financing, this
notice shall be a security agreement under the UCC and the Transferor hereby
grants a security interest (as defined in the UCC) in the Receivables related to
each of them and the proceeds thereof to secure the payment to the Banks of the
Aggregate Unpaids. The Banks' rights with respect to such undivided ownership
interest shall be as set forth in the TAA. Capitalized terms used herein have
their respective meanings as set forth in the TAA.
C - 2
IN WITNESS WHEREOF, the undersigned has executed this Transfer Notice
on this ___ day of __________, 199__.
MATTEL FACTORING, INC.,
as Transferor
By:_______________________
Name:
Title:
Agreed and accepted:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By:_______________________
Name:
Title:
C - 3
EXHIBIT D
[Reserved]
D - 1
EXHIBIT E
List of Actions, Suits and Proceedings
against the Transferor
Mattel Factoring, Inc.
----------------------
NONE.
E - 1
EXHIBIT F
Location of Chief Executive Office and Records
----------------------------------------------
Chief Executive Office:
Mattel Factoring, Inc.
2043 East Mariposa
M.S. 00-000
Xx Xxxxxxx, Xxxxxxxxxx 00000
000 Xxxxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, XX 00000
Mattel Computer Center
0000 Xxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
F - 1
EXHIBIT G
List of Tradenames
------------------
Mattel Factoring, Inc.
G - 1
EXHIBIT H
List of Actions, Suits and Proceedings
--------------------------------------
against the Guarantor
---------------------
Xxxxxxxxx v. Mattel, Inc. (Case No. YC 025 008) filed October 13, 1995 in
-------------------------
Superior Court of the State of California, County of Los Angeles.
Xxxxx x. Xxxxxxxxxx et. al. (Case No. 14954) filed April 23, 1996 in the
---------------------------
Xxxxxxxx Xxxxx xx Xxxxxxxx, Xxx Xxxxxx Xxxxxx.
H - 1
EXHIBIT I
[Letterhead of Counsel to the Transferor]
March 11, 1997
NationsBank of Texas, N.A.,
as Agent
[Address]
[Bank]
[Bank]
Re: Transfer and Administration Agreement,
dated as of March 11, 1997, among
Mattel Factoring, Inc., Mattel, Inc.,
NationsBank of Texas, N.A. and
the banks named therein
-------------------------------------
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 4.1(g) of the
Transfer and Administration Agreement dated as of March 11, 1997 (the
"Agreement") among Mattel Factoring, Inc., a Delaware corporation (the
"Transferor"), Mattel, Inc., a Delaware corporation, as servicer and as
guarantor (the "Guarantor") and NationsBank of Texas, N.A., as agent (the
"Agent") on behalf of the banks named therein (collectively, the "Banks").
Terms defined in this Agreement and not otherwise defined herein are used in
this opinion with the meanings so defined.
I am Senior Vice President -- General Counsel for Mattel, Inc. and
have acted as counsel to the Transferor and the Sellers in connection with the
preparation of the Agreement and the Purchase Agreement and the transactions and
other documents contemplated thereby.
I-1
I have examined, on the date hereof, the Purchase Agreement and all
exhibits thereto, the Agreement and all exhibits thereto (including the form of
Transfer Notice attached thereto as Exhibit C), the form of initial Transfer
Notice, [to be] dated ___________ 1997, relating to the initial transfers of
Receivables (each, an "Initial Transfer Notice"), certificates of public
officials and of officers of the Transferor and the Sellers and certified copies
of the Transferor's and the Sellers' certificate of incorporation, by-laws, the
Boards of Directors' resolutions authorizing the Transferor's and the Sellers'
participation in the transactions contemplated by the Agreement and the
Purchase Agreement, copies of each of the above having been delivered to you,
copies of the financing statements on Form UCC-l filed in the filing offices of
the Secretary of State of the State[s] of California [and _______] [and
_________] [refer to the local filing office(s), if applicable] (together, the
"Seller Filing Offices") executed by the Sellers, as debtor, in favor of the
Transferor and assigned to the Agent on behalf of the Banks, substantially in
the form attached hereto as Exhibit A (the "Seller Financing Statements"),
copies of the financing statements on Form UCC-l filed in the filing offices of
the Secretary of State of the State of California [and _________] [this is
intended to refer to the local filing office, if applicable] (together, the
"Transferor Filing Offices") executed by the Transferor, as debtor, in favor of
the Agent on behalf of the Banks, substantially in the form attached hereto as
Exhibit A (the "Transferor Financing Statements") [and copies of the financing
statements on Form UCC-3 filed in the Filing Offices executed by ______ and
______, substantially in the form attached hereto as Exhibit B (the
"Releases")]. I have also examined the closing documents delivered pursuant to
the Agreement and copies of all such documents and records, and have made such
investigations of law, as I have deemed necessary and relevant as a basis for
our opinion. With respect to the accuracy of material factual matters which
were not independently established, I have relied on certificates and statements
of officers of the Sellers and the Transferor.
Certain of the opinions rendered herein are qualified by the
discussion following the numbered paragraphs of this opinion.
On the basis of the foregoing, and in reliance thereon, I am of the
opinion that:
1. The Transferor is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, has
the power and authority to own
I-2
its properties and to carry on its business as now being conducted, and had at
all relevant times, and now has, all necessary power, authority, and legal right
to acquire and own the Receivables, and is duly qualified, in good standing and
is authorized to do business in each foreign jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization, except for qualifications and authorizations the
lack of which, singly or in the aggregate, has not had and will not have a
materially adverse effect upon the business properties of the Transferor or its
ability to perform its obligations under the Purchase Agreement and the
Agreement.
2. Each Seller is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, has the
power and authority to own its properties and to carry on its business as now
being conducted, and had at all relevant times, and now has, all necessary
power, authority, and legal right to acquire and own the Receivables, and is
duly qualified, in good standing and is authorized to do business in each
foreign jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization, except for
qualifications and authorizations the lack of which, singly or in the aggregate,
has not had and will not have a materially adverse effect upon the business
properties of such Seller or its ability to perform its obligations under the
Purchase Agreement.
3. The Transferor has the corporate power and has taken all
necessary corporate action to execute, deliver and perform the Purchase
Agreement, the Agreement, the Initial Transfer Notice and each other Transfer
Notice delivered pursuant to the Agreement, each in accordance with its
respective terms, and to consummate the transactions contemplated thereby. The
Purchase Agreement, the Agreement and the Initial Transfer Notice have been
duly executed and delivered by the Transferor and constitute, and each Transfer
Notice subsequently delivered by the Transferor pursuant to the Agreement, when
executed and delivered by the Transferor, will constitute the legal, valid and
binding obligations of the Transferor, enforceable against the Transferor in
accordance with their respective terms, except as enforcement thereof may be
limited by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
4. Each Seller has the corporate power and has taken all necessary
corporate action to execute, deliver and perform the Purchase Agreement in
accordance with its terms, and to
I-3
consummate the transactions contemplated thereby. The Purchase Agreement has
been duly executed and delivered by each Seller and constitutes the legal, valid
and binding obligations of each Seller, enforceable against each Seller in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
5. The execution, delivery and performance in accordance with their
terms by the Transferor of the Purchase Agreement, the Agreement, the Initial
Transfer Notice and each other Transfer Notice delivered pursuant to the
Agreement, and the consummation of the transactions contemplated thereby, do not
and will not (i) require (a) any governmental approval or (b) any consent or
approval of any stockholder of the Transferor that has not been obtained, (ii)
violate or conflict with, result in a breach of, or constitute a default under
(a) the certificate of incorporation or the by-laws of the Transferor, (b) any
other agreement to which the Transferor is a party or by which the Transferor or
any of its properties may be bound, or (c) any applicable law, or any order,
rule, or regulation applicable to the Transferor of any court or of any federal
or state regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Transferor or any of its
properties, or (iii) result or require in the creation or imposition of any lien
upon any of the assets, property or revenue of the Transferor other than as
contemplated by the Agreement.
6. The execution, delivery and performance in accordance with their
terms by each Seller of the Purchase Agreement and the consummation of the
transactions contemplated thereby, do not and will not (i) require (a) any
governmental approval or (b) any consent or approval of any stockholder of
either Seller that has not been obtained, (ii) violate or conflict with, result
in a breach of, or constitute a default under (a) the certificate of
incorporation or the by-laws of either Seller, (b) any other agreement to which
either Seller is a party or by which either Seller or any of their respective
properties may be bound, or (c) any applicable law, or any order, rule, or
regulation applicable to either Seller of any court or of any federal or state
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over either Seller or any of their respective properties, or
(iii) result or require in the creation or imposition of any lien upon any of
the assets, property or revenue of either Seller other than as contemplated by
the Purchase Agreement.
I-4
7. [Except as set forth on Exhibit E to the Agreement,] [and]
[T][t]o the best of my knowledge, there are not, in any court or before any
arbitrator of any kind or before or by any governmental or non-governmental
body, any actions, suits, proceedings or investigations, pending or threatened,
(i) against the Transferor or the business or any property of the Transferor
except actions, suits or proceedings that, if adversely determined, would not,
singly or in the aggregate, have a materially adverse effect on the Transferor,
or on the ability of the Transferor to perform its obligations under the
Purchase Agreement or the Agreement, the Initial Transfer Notice and each other
Transfer Notice delivered pursuant to the Agreement or (ii) relating to the
Purchase Agreement, the Agreement, the Initial Transfer Notice or each other
Transfer Notice delivered pursuant to the Agreement.
8. [Except as set forth on Exhibit [E] to the Purchase Agreement,]
[and] [T][t]o the best of my knowledge, there are not, in any court or before
any arbitrator of any kind or before or by any governmental or non-governmental
body, any actions, suits, proceedings or investigations, pending or threatened,
(i) against either Seller or the business or any property of either Seller
except actions, suits or proceedings that, if adversely determined, would not,
singly or in the aggregate, have a materially adverse effect on either Seller,
or on the ability of either Seller to perform its obligations under the Purchase
Agreement or (ii) relating to the Purchase Agreement.
9. The Agreement and each Initial Transfer Notice create a valid
"security interest" (as such term is defined in Section 1-201(37) of the Uniform
Commercial Code as in effect in the State of California (the "California UCC"),
under Article 9 of the California UCC in favor of the Agent, on behalf of the
Banks, in the Receivables in existence and thereafter created and the proceeds
thereof, subject to the provisions of Section 9-306 of the California UCC. The
Transferor Financing Statements have been filed in the filing office located in
the State of California and _____, which are the only offices in which filings
are required under the California UCC to perfect the Agent's security interest
in such Receivables and the proceeds thereof, and accordingly the Agent's
security interest in the Receivables in existence and thereafter created and the
proceeds thereof will, on the date[s] of the Initial Transfer Notice, be
perfected under Article 9 of the California UCC. All filing fees and all taxes
required to be paid as a condition to or upon the filing of the Transferor
Financing Statements in the State of California and ______ have been paid in
full. As of the date hereof, there were
I-5
no (i) UCC financing statements naming the Transferor as debtor, seller or
assignor and covering any Receivables or any interest therein or (ii) notices of
the filing of any federal tax lien (filed pursuant to Section 6323 of the
Internal Revenue Code) or lien of the Pension Benefit Guaranty Corporation
(filed pursuant to Section 4068 of the Employment Retirement Insurance Act)
covering any Receivable or any interest therein. The filing of the Transferor
Financing Statements in the Filing Offices will create a first priority security
interest in each Receivable and the proceeds thereof. Such perfection and
priority will continue, provided that appropriate continuation statements are
timely filed where and when required under the California UCC.
10. The Purchase Agreement creates a valid "security interest" (as
such term is defined in Section 1-201(37) of the Uniform Commercial Code as in
effect in the State of California (the "California UCC"), under Article 9 of the
California UCC in favor of the Transferor, in the Receivables in existence and
thereafter created and the proceeds thereof, subject to the provisions of
Section 9-306 of the California UCC. The Seller Financing Statements have been
filed in the filing office located in the State of California and _____, which
are the only offices in which filings are required under the California UCC [and
the _________ UCC] to perfect the Transferor's security interest in such
Receivables and the proceeds thereof, and accordingly the Transferor's security
interest in the Receivables in existence and thereafter created and the proceeds
thereof will, on the date[s] of the Initial Transfer Notice, be perfected under
Article 9 of the California UCC [and the ________ UCC]. All filing fees and all
taxes required to be paid as a condition to or upon the filing of the Seller
Financing Statements in the State of California and ______ have been paid in
full. As of the date hereof, there were no (i) UCC financing statements naming
either Seller as debtor, seller or assignor and covering any Receivables or any
interest therein or (ii) notices of the filing of any federal tax lien (filed
pursuant to Section 6323 of the Internal Revenue Code) or lien of the Pension
Benefit Guaranty Corporation (filed pursuant to Section 4068 of the Employment
Retirement Insurance Act) covering any Receivable or any interest therein. The
filing of the Seller Financing Statements in the Filing Offices will create a
first priority security interest in each Receivable and the proceeds thereof.
Such perfection and priority will continue, provided that appropriate
continuation statements are timely filed where and when required under the
California UCC [and the _______ UCC].
I-6
11. Neither the Transferor nor either Seller is an "investment
company" or a company "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
With respect to my opinion in paragraphs 9 and 10 (i) I call your
attention to the necessity of filing continuation statements from time to time
under the applicable provisions of the California UCC [and the _________ UCC]
and to the fact that additional filings under the California UCC [and the
___________ UCC] may be required, among other things, upon the change of
location of the debtor as provided in Section 9-l03(3)(e) of the California UCC
[and the ________ UCC] or the change of the name of the debtor as provided in
Section 9-402(7) thereof; and (ii) I call your attention to the fact that under
certain circumstances described in Section 9-306(4) of the California UCC and
the [________ UCC] , the right of a secured party to enforce a perfected
security interest in the cash proceeds of collateral may be limited.
To the extent that the obligations of the Transferor may be dependent
upon such matters, I assume for purposes of this opinion that the parties to the
Agreement (other than the Transferor and the Guarantor) are duly incorporated,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation; that the Agreement has been duly authorized,
executed and delivered by the parties to the Agreement (other than the
Transferor and the Guarantor), and constitutes their legally valid and binding
obligations, enforceable against them in accordance with their respective terms;
and that the parties to the Agreement (other than the Transferor and the
Guarantor) have the requisite corporate or other organizational power and
authority to perform their respective obligations under the Agreement. I am not
expressing any opinion as to the effect of compliance of the parties to the
Agreement (other than the Transferor and the Guarantor) with any state or
federal laws or regulations applicable to the transactions.
I am admitted to the bar of the State of California, and I express no
opinion herein other than with respect to the laws of the State of California
and the Federal laws of the United States of America. This opinion is rendered
only to you and is solely for your benefit in connection with the above
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by any other person, firm or corporation for any purpose without
my prior written consent; except that this opinion may be furnished or quoted to
your legal counsel and
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independent auditors in connection with the above transactions, to regulatory
authorities having jurisdiction over you, and as otherwise compelled by legal
process.
Very truly yours,
Xxxxxx X. Xxxxx
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EXHIBIT J
[Letterhead of Counsel to the Guarantor/Servicer]
March 11, 1997
NationsBank of Texas, N.A.,
as Agent
[Address]
[Bank]
[Bank]
Re: Transfer and Administration Agreement,
dated as of March 11, 1997, among
Mattel Factoring, Inc., Mattel, Inc.,
NationsBank of Texas, N.A. and
the banks named therein
------------------------------------
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 4.1(m) of the
Transfer and Administration Agreement dated as of March 11, 1997 (the
"Agreement") among Mattel Factoring, Inc., a Delaware corporation (the
"Transferor"), Mattel, Inc., a Delaware corporation, as servicer and as
guarantor (the "Guarantor") and NationsBank of Texas, N.A., as agent (the
"Agent") on behalf of the banks named therein (collectively, the "Banks").
Terms defined in this Agreement and not otherwise defined herein are used in
this opinion with the meanings so defined.
I am Senior Vice President -- General Counsel for the Guarantor and
have acted as counsel to the Guarantor in connection with the preparation of
the Agreement and the transactions and other documents contemplated thereby.
I have examined, on the date hereof, the Agreement and all exhibits
thereto, certificates of public officials and of officers of the Guarantor and
certified copies of the Guarantor's
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certificate of incorporation, by-laws, the Board of Directors' resolutions
authorizing the Guarantor's participation in the transactions contemplated by
the Agreement, copies of each of the above having been delivered to you. I have
also examined the closing documents delivered pursuant to the Agreement and
copies of all such documents and records, and have made such investigations of
law, as we have deemed necessary and relevant as a basis for our opinion. With
respect to the accuracy of material factual matters which were not independently
established, I have relied on certificates and statements of officers of the
Guarantor.
Certain of the opinions rendered herein are qualified by the
discussion following the numbered paragraphs of this opinion.
On the basis of the foregoing, and in reliance thereon, I am of the
opinion that:
1. The Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, has the power and
authority to own its properties and to carry on its business as now being
conducted, and had at all relevant times, and now has, all necessary power,
authority, and legal right to perform its obligations under the Agreement, and
is duly qualified, in good standing and is authorized to do business in each
foreign jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization, except for
qualifications and authorizations the lack of which, singly or in the aggregate,
has not had and will not have a materially adverse effect upon the business
properties of the Guarantor or its ability to perform its obligations under the
Agreement.
2. The Guarantor has the corporate power and has taken all necessary
corporate action to execute, deliver and perform the Agreement in accordance
with its terms, and to consummate the transactions contemplated thereby. The
Agreement has been duly executed and delivered by the Guarantor and constitutes
the legal, valid and binding obligation of the Guarantor, enforceable against
the Guarantor in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
3. The execution, delivery and performance in accordance with its
terms by the Guarantor of the Agreement, and the
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consummation of the transactions contemplated thereby, do not and will not (i)
require (a) any governmental approval or (b) any consent or approval of any
stockholder of the Guarantor that has not been obtained, (ii) violate or
conflict with, result in a breach of, or constitute a default under (a) the
certificate of incorporation or the by-laws of the Guarantor, (b) any other
agreement to which the Guarantor is a party or by which the Guarantor or any of
its properties may be bound, or (c) any applicable law, or any order, rule, or
regulation applicable to the Guarantor of any court or of any federal or state
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Guarantor or any of its properties, or (iii)
result or require in the creation or imposition of any lien upon any of the
assets, property or revenue of the Guarantor other than as contemplated by the
Agreement.
4. [Except as set forth on Exhibit H to the Agreement,]
[and][T][t]o the best of my knowledge, there are not, in any court or before any
arbitrator of any kind or before or by any governmental or non-governmental
body, any actions, suits, proceedings or investigations, pending or threatened,
(i) against the Guarantor or the business or any property of the Guarantor
except actions, suits or proceedings that, if adversely determined, would not,
singly or in the aggregate, have a materially adverse effect on the Guarantor,
or on the ability of the Guarantor to perform its obligations under the
Agreement or (ii) relating to the Agreement.
5. The Guarantor is not an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
To the extent that the obligations of the Guarantor may be dependent
upon such matters, I assume for purposes of this opinion that the parties to the
Agreement (other than the Guarantor and the Transferor) are duly incorporated,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation; that the Agreement has been duly authorized,
executed and delivered by the parties to the Agreement (other than the Guarantor
and the Transferor), and constitutes their legally valid and binding
obligations, enforceable against them in accordance with their respective terms;
and that the parties to the Agreement (other than the Guarantor and the
Transferor) have the requisite corporate or other organizational power and
authority to perform their respective obligations under the Agreement. I am not
expressing any opinion as to the effect of compliance of the parties to the
Agreement (other than the
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Guarantor and the Transferor) with any state or federal laws or regulations
applicable to the transactions.
I am admitted to the bar of the State of California, and I express no
opinion herein other than with respect to the corporate laws of the State of
Delaware and the Federal laws of the United States of America.
This opinion is rendered only to you and is solely for your benefit in
connection with the above transactions. This opinion may not be relied upon by
you for any other purpose, or relied upon by any other person, firm or
corporation for any purpose without my prior written consent; except that this
opinion may be furnished or quoted to your legal counsel and independent
auditors in connection with the above transactions, to regulatory authorities
having jurisdiction over you, and as otherwise compelled by legal process.
Very truly yours,
Xxxxxx X. Xxxxx
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