AMENDMENT NO. 1 TO FIRST AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

Exhibit 99.1

 

AMENDMENT NO. 1 TO

FIRST AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

 

This Amendment No. 1 to First Amended and Restated Receivables Purchase Agreement (this “ Amendment ”) dated as of March 19, 2004 is made by and among MATTEL FACTORING, INC., a Delaware corporation, as transferor (the “ Transferor ”), MATTEL, INC., a Delaware corporation (“ Mattel ”), as servicer (the “ Servicer ”), THE FINANCIAL INSTITUTIONS SIGNATORY HERETO as purchasers (together with any successors and assigns, the “ Purchasers ”), BANK OF AMERICA, N.A., a national banking association, as agent for the Purchasers (in such capacity, together with any successors and assigns, the “ Administrative Agent ”), BANC OF AMERICA SECURITIES LLC, as sole lead arranger and sole book manager (in such capacity, the “ Arranger ”), CITICORP USA, INC. and BARCLAYS BANK PLC, as co-syndication agents (in such capacity, the “ Syndication Agents ”) and SOCIÉTÉ GÉNÉRALE and BNP PARIBAS as co-documentation agents (in such capacity, the “ Documentation Agents ”). Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Receivables Purchase Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS , the Transferor, the Servicer, the Purchasers, the Administrative Agent, the Arranger, the Syndication Agents, and the Documentation Agents entered into that certain First Amended and Restated Receivables Purchase Agreement dated as of March 20, 2002 (as has been and may be amended, restated, amended and restated, modified or supplemented from time to time, the “ Receivables Purchase Agreement ”); and

 

WHEREAS , the Transferor, the Servicer, the Purchasers, the Administrative Agent, the Arranger, the Syndication Agents and the Documentation Agents desire to and have agreed to amend the Receivables Purchase Agreement, in order to, among other things, extend the facility termination date, and to make certain other amendments on the terms and conditions set forth herein, and the Administrative Agent, Purchasers, the Syndication Agents and the Documentation Agents are agreeable to such amendments, subject to the terms and conditions contained in this Amendment;

 

NOW, THEREFORE , in consideration of the premises and further valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

Section 1 . Amendments to Receivables Purchase Agreement . Subject to the terms and conditions set forth herein, the Receivables Purchase Agreement is hereby amended as follows:

 

(a) The Preamble of the Receivables Purchase Agreement is hereby amended by deleting such Preamble in its entirety and replacing it as follows:

 

This FIRST AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, the “ Agreement ”) is entered into as of March 20 2002, among MATTEL FACTORING, INC., a Delaware corporation, as transferor (the “ Transferor ”), MATTEL, INC., a Delaware corporation (“ Mattel ”), as servicer (the “ Servicer ”), THE FINANCIAL INSTITUTIONS PARTY HERETO FROM TIME TO TIME as purchasers (together with any successors and assigns, the “ Purchasers ”), and BANK OF AMERICA, N.A., a national banking association, as agent for the Purchasers (in such capacity, together with any successors and assigns, the “ Administrative Agent ”), BANC OF AMERICA SECURITIES LLC, as sole lead arranger and sole book manager (in such capacity, the “Arranger”), CITICORP USA, INC., and BARCLAYS BANK PLC, as co-syndication agents (in such capacity, the “ Syndication Agents ”) and SOCIÉTÉ GÉNÉRALE, and BNP PARIBAS as co-documentation agents (in such capacity, the “ Documentation Agents ”), and amends and restates the Receivables Purchase Agreement dated as of March 11, 1998 (the “ Existing Receivables Purchase Agreement ”).

 

(b) Section 1 of the Receivables Purchase Agreement is hereby amended by deleting such Section in its entirety and replacing it as follows:

 

SECTION 1. DEFINITIONS

 

1.01 Certain Defined Terms . The following terms used in this Agreement shall have the following meanings:

 

“ Administrative Agent ” means Bank of America in its capacity as administrative agent under any of the Transaction Documents, or any successor administrative agent.

 

“ Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account set forth on Schedule 10.02 to the Mattel Credit Agreement, or such other address or account as the Administrative Agent may from time to time notify to the Purchasers, the Servicer and the Transferor.

 

“ Administrative Agent-Related Persons ” means the Administrative Agent, together with its Affiliates (including, in the case of Bank of America, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

 

“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

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“ Adverse Claim ” means a lien, security interest or other charge or encumbrance, or any other type of right or claim (other than a lien or other interest in favor of the Administrative Agent or the Purchasers pursuant to this Agreement).

 

“ Applicable Margin ” means, for each Obligor, that margin set forth in the table below opposite the Obligor’s second highest long term unsecured debt ratings issued by S&P, Moody’s or Fitch:

 

 

“ Assignment and Assumption ” means an Assignment and Assumption substantially in the form of Exhibit F to the Mattel Credit Agreement.

 

“ Bank of America ” means Bank of America, N.A. and its successors.

 

“ Bankruptcy Code ” means the United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq .), as amended from time to time.

 

“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, California or the state where the Administrative Agent’s Office is located (which, as of the date hereof, is California) and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

“ Collection Account ” has the meaning set forth in Section 2.04 .

 

“ Collections ” means, with respect to any Listed Receivable, (a) all funds which are received by the Transferor, any Seller or the Servicer (or any sub-servicer) in payment of any amounts owed in respect of such Listed Receivable (including, without limitation, purchase price, finance charges, interest and all other charges), or applied to amounts owed in respect of such Listed Receivable (including, without limitation, insurance payments and net proceeds of the sale or other disposition of repossessed goods or other collateral or property of the applicable Obligor or any other person directly or indirectly liable for payment of such Listed Receivable and available to be applied thereon), and (b) all other proceeds of such Listed Receivable.

 

“ Contract ” means, with respect to any Listed Receivable, any and all contracts, understandings, instruments, agreements, leases, invoices, notes, or other writings pursuant to which such Listed Receivable arises or which evidences such Listed Receivable or under which the applicable Obligor becomes or is obligated to make payment in respect of such Listed Receivable.

 

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“ Credit and Collection Policy ” means those receivables credit and collection polices and practices of the Sellers in effect on the date of this Agreement, as amended from time to time to the extent not prohibited by this Agreement or the Purchase and Sale Agreement.

 

“ Default Rate ” means an interest rate equal to the Base Rate plus 2% per annum; provided , however , that with respect to the Purchasers’ Investment prior to the end of the Yield Period therefor, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Margin) otherwise applicable thereto plus 2% per annum, in each case to the fullest extent permitted by applicable laws.

 

“ Defaulting Purchaser ” means any Purchaser that (a) has failed to fund any portion of its Loans under the Mattel Credit Agreement or Purchasers’ Investment hereunder required to be funded by it within one Business Day of the date required to be funded by it, (b) has otherwise failed to pay over to the Administrative Agent or any other Purchaser any other amount required to be paid by it hereunder or under the Mattel Credit Agreement within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent by the Federal Deposit Insurance Company, the Comptroller of the Currency or the Federal Reserve Board or become the subject of a bankruptcy or insolvency proceeding.

 

“ Deficiency Advance ” has the meaning set forth in Section 2.06 .

 

“ Dilution ” means any adjustment in the outstanding principal balance of a Listed Receivable attributable to any credits, rebates, billing errors, discounts, setoffs, disputes, chargebacks, returns, allowances or similar items.

 

“ Dividend ” means in respect of the Transferor, (i) cash distributions or any other distributions on, or in respect of, any class of capital stock of the Transferor, and (ii) any and all funds, cash or other payments made in respect of the redemption, repurchase or acquisition of such stock.

 

“ Due Date ” means, with respect to any Purchase Date, a date selected by the Transferor which shall not be later than ninety days thereafter, excluding the Purchase Date and including such Due Date.

 

“ Eligible Assignee ” has the meaning specified in Section 10.05(g) .

 

“ Eligible Receivables ” means, on an applicable Purchase Date, any Receivable: (i) which has a stated maturity and which stated maturity is not later than the related Due Date; (ii) which is an “ account ” or “ payment intangible ” as defined in the UCC of any applicable jurisdiction; (iii) which is denominated and payable only in United States dollars in the United States; (iv) which, together with the Contract related thereto, is in full force and effect and constitutes the legal, valid and binding obligation of the applicable Obligor enforceable against such Obligor in accordance with its terms and subject to no offset, counterclaim or other defense; (v) which, together with the Contract related thereto, does not contravene in any material respect any Laws applicable thereto and with respect to which no part of the Contract related thereto is in violation of any such Law in any material respect; (vi) which satisfies all applicable requirements of the

 

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Credit and Collection Policy, including that the Receivable not be delinquent or defaulted; and (vii) which was generated in the ordinary course of the related Seller’s business and which was purchased by the Transferor from such Seller in accordance with the Purchase and Sale Agreement.

 

“ Eurodollar Rate ” means for any Yield Period with respect to any Purchase Rate:

 

(a) the rate per annum equal to the rate determined by Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Yield Period) with a term equivalent to such Yield Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Yield Period, or

 

(b) if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not to be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Yield Period) with a term equivalent to such Yield Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Yield Period, or

 

(c) if the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest at which deposits in Dollars for delivery on the first day of such Yield Period in same day funds in the approximate amount of the purchase to be made or continued by the Administrative Agent (or its Affiliate) in its capacity as a Lender and with a term equivalent to such Yield Period would be offered by the Administrative Agent’s (or it’s Affiliate’s) London Branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) two Business Days prior to the first day of such Yield Period.

 

The determination of the Eurodollar Rate by Administrative Agent shall be conclusive in the absence of manifest error.

 

“ Existing Receivables Purchase Agreement ” has the meaning given to such term in the recitals hereto.

 

“ Facility Termination Date ” means the earliest to occur of (a) March 19, 2007, (b) the date upon which the Purchaser Commitments are terminated in accordance with the terms hereof, and (c) the Termination Date under and as defined in the Mattel Credit Agreement.

 

“ Fisher Price ” means Fisher Price, Inc., a Delaware corporation.

 

“ Fitch ” means Fitch ICBA or any successor thereto.

 

“ Governmental Person ” means the government of the United States or any foreign government or the government of any state or locality therein, any political

 

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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, any foreign government or any state or locality therein, including the Federal Deposit Insurance Company, the Comptroller of the Currency or the Federal Reserve Board.

 

“ Guarantor ” means Mattel as guarantor under the Purchase and Sale Agreement.

 

“ Indemnified Amounts ” means any and all obligations, claims, damages, costs, expenses, losses, liabilities, penalties, demands, actions, judgments, suits and disbursements (including Attorney Costs).

 

“ Indemnified Parties ” means the Administrative Agent, each Administrative Agent-Related Person, each Purchasers and their respective Affiliates, together with each of their respective employees, directors, employees, counsel, attorneys-in-fact, agents, successors, transferees and assigns.

 

“ Insolvency Proceeding ” means, with respect to any Person, (a) (i) a court having jurisdiction in the premises entering a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, which decree or order is not stayed, or (ii) any other similar relief being granted under any applicable federal or state or applicable foreign law; a petition for an involuntary case being filed against such Person under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over such Person, or over all or substantially all of its property, being entered; or an interim receiver, trustee or other custodian of such Person for all or substantially all of the property of such Person being appointed involuntarily; and the continuance of any such events in clause (ii) for 45 days unless dismissed, bonded or discharged; or (b) such Person having an order for relief entered with respect to it or commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consenting to the entry of an order for relief in any involuntary case, or to the conversion from an involuntary case, under any such law, or consenting to the appointment of or taking possession by a receiver, liquidator, sequestrator, trustee or other custodian for all or substantially all of its property; the making by such Person of any assignment for the benefit of creditors; or the inability or failure of such Person, or the admission by such Person in writing of its inability, to generally pay its debts as such debts become due; or the Board of Directors of such Person adopting any resolution or otherwise takes action to approve any of the foregoing.

 

“ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and the rules and regulations promulgated thereunder.

 

“ Law ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by

 

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any Governmental Person charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Person, in each case whether or not having the force of law.

 

“ Lending Office ” means, as to any Purchaser, the office or offices of such Purchaser described as such in such Purchaser’s Administrative Questionnaire, or such other office or offices as a Purchaser may from time to time notify the Transferor and the Administrative Agent in writing.

 

“ Listed Receivables ” means the Receivables the outstanding principal balances of which were reflected in the applicable Purchase Notice and subsequently identified pursuant to Section 2.02(a)(iii) .

 

“ Material Adverse Effect ” means (i) a material adverse effect upon the business, operations, properties, liabilities, assets or condition (financial or otherwise) of the Transferor or Mattel and its Subsidiaries, taken as a whole, or (ii) a material impairment of the ability of any Seller Party to perform its obligations under this Agreement.

 

“ Mattel ” has the meaning set forth in the preamble to this Agreement.

 

“ Mattel Credit Agreement ” means the Second Amended and Restated Credit Agreement dated as of March 19, 2004, among Mattel, the financial institutions parties thereto, and Bank of America, as Administrative Agent, as such agreement may be amended, amended and restated or otherwise modified from time to time. In the event that any term of or section number in the Mattel Credit Agreement that is incorporated by reference in this Agreement (including pursuant to Section 9.02 of this Agreement) is changed by any amendment or amendment and restatement of the Mattel Credit Agreement (e.g., an amendment and restatement that renumbers Section 9.14 of the Mattel Credit Agreement as Section 9.16 of the amended and restated agreement), the parties hereto shall cooperate in good faith to amend this Agreement in order to correct the references herein to the applicable terms and section numbers of the Mattel Credit Agreement incorporated by reference in this Agreement. In the event that the Mattel Credit Agreement shall cease to be in effect, then all references herein to the Mattel Credit Agreement shall be deemed to refer to the Mattel Credit Agreement as in effect immediately prior to such cessation.

 

“ Mattel Factoring ” has the meaning set forth in the preamble to this Agreement.

 

“ Mattel Sales ” means Mattel Sales Corp., a California corporation.

 

“ Obligors ” means Wal-Mart Stores, Inc., a Delaware corporation, and Target Corporation, a Minnesota corporation.

 

“ Participant ” has the meaning set forth in Section 10.05(d) .

 

“ Percentage ” means with respect to each Purchaser the percentage set forth opposite such Purchaser’s name on Schedule 1.01 to the Mattel Credit Agreement. Each

 

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Purchaser’s Percentage shall at all times be equal to its Pro Rata Share as a Lender under and as defined in the Mattel Credit Agreement.

 

“ Proofs of Claim ” means collectively, proofs of claim under the Bankruptcy Code or any analogous or similar item or items which may or shall be filed by or on behalf of a creditor of any party to an Insolvency Proceeding.

 

“ Purchase and Sale Agreement ” means the Purchase and Sale Agreement dated as of March 20, 2002 (as has been and may be amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among the Sellers, Mattel, as servicer and Guarantor thereunder, and the Transferor, as buyer thereunder.

 

“ Purchase Date ” means the proposed date on which the Transferor proposes to sell to the Purchasers an undivided percentage ownership interest in the Listed Receivables identified on the related Purchase Notice.

 

“ Purchase Notice ” means a notice from the Servicer to the Administrative Agent substantially in the form attached hereto as Exhibit A .

 

“ Purchase Rate ” means a rate per annum equal to the Eurodollar Rate, plus the Applicable Margin. The Purchase Rate for a Yield Period shall be established on the applicable day contemplated by the definition of Eurodollar Rate.

 

“ Purchasers ” has the meaning set forth in the preamble to this Agreement.

 

“ Purchaser Commitment ” means, for each Purchaser, such Purchaser’s Percentage of the Purchasers’ Investment Limit.

 

“ Purchased Interest ” means, at any time the undivided percentage ownership interest of the Purchasers acquired pursuant to this Agreement from the Transferor in the Listed Receivables reflected on the applicable Purchase Notice, Related Security with respect to such Receivables, Collections with respect to such Receivables, and proceeds of, and amounts received or receivable under any or all of, the foregoing. Such undivided percentage ownership interest shall be computed as

 

PI + YR

LRB

 

 

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provided , however , that the Purchased Interest shall never be more than 1.0.

 

“ Purchasers’ Investment ” means the amount to be paid by the Purchasers for the account of the Transferor with respect to a Purchased Interest.

 

“ Purchasers’ Investment Limit ” means Three Hundred Million Dollars ($300,000,000) as such amount may be reduced or terminated pursuant to Section 2.05 or otherwise pursuant to the terms hereof.

 

“ Receivable ” means any indebtedness and other obligations owed to a Seller, or any right of a Seller to payment, from or on behalf of either Obligor (determined prior to giving effect to any purchase by the Transferor under the Purchase and Sale Agreement or to any purchase hereunder by the Purchasers) whether constituting an account, chattel paper, instrument or general intangible, arising in connection with the sale or lease of goods or the rendering of services by such Seller, and includes, without limitation, the obligation to pay any finance charges, fees and other charges with respect thereto.

 

“ Related Security ” means with respect to any Listed Receivable: (i) all of the Transferor’s interest in any goods (including returned goods), and documentation of title evidencing the shipment or storage of any goods (including returned goods), relating to any sale giving rise to such Receivable; (ii) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all UCC financing statements or similar filings signed by any Obligor relating thereto; and (iii) all guarantees, indemnities, insurance and other agreements (including the related Contract) or arrangements of whatever character from time to time supporting or securing payment of such Receivable or otherwise relating to such Receivable whether pursuant to the Contract related to such Receivable or otherwise, including, without limitation, all of the Transferor’s rights with respect to such Receivables under the Purchase and Sale Agreement.

 

“ Requisite Purchasers ” means, as of any date of determination, Purchasers having more than 50% of the Purchasers’ Investment Limit or, if the Purchaser Commitments have been terminated, Purchasers holding in the aggregate more than 50% of all Loans and Purchasers’ Investment; provided that the Purchaser Commitment of, and the outstanding principal amount of any Loans and portion of Purchasers’ Investment held by any Defaulting Purchaser shall be excluded for purposes of making a determination of Requisite Purchasers.

 

“ Restricted Payments ” has the meaning set forth in Section 6.01(k) ).

 

“ Seller Party ” means each of the Transferor and the Servicer.

 

“ Sellers ” means, collectively, Mattel Sales and Fisher-Price. A reference to the “ related ” Seller means with respect to a Receivable, that such Receivable by its original terms was owed to such Seller.

 

“ Servicer ” has, the meaning set forth in the preamble to this Agreement; provided that following the appointment of a successor Servicer in accordance with this

 

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Agreement, all references herein to the Servicer shall be references to such successor Servicer.

 

“ Servicer Default ” has the meaning set forth in Section 4.03 .

 

“ Servicing Fee ” has the meaning set forth in Section 4.06 .

 

“ Solvent ” means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of applicable state fraudulent conveyance law; (b) the present fair saleable value of the property of such Person is not less than the amount that shall be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it shall, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital.

 

“ Specified Assets ” means, whether now or hereafter owned, existing or arising: (A) Listed Receivables, (B) all Related Security with respect to such Receivables, (C) all Collections with respect to such Receivables (including Collections received on and after the date that the related Purchase Notice is sent to the Administrative Agent and prior to the related Purchase Date), and (D) all proceeds of, and all amounts received or receivable under any or all of, the foregoing.

 

“ Subordinated Note ” has the meaning specified in the Purchase and Sale Agreement.

 

“ Termination Event ” has the meaning set forth in Section 7.01 .

 

“ Transaction Documents ” means this Agreement, the Purchase and Sale Agreement, the Subordinated Notes and all certificates, amendments, instruments, UCC financing statements, reports, notices, letters, agreements and documents executed or delivered by any Seller Party or a Seller under or in connection with this Agreement, in each case as any such Transaction Documents may be amended, amended and restated, extended or otherwise modified from time to time, and includes all Prior Transaction Documents and any amendments thereof executed in connection with this Agreement unless such have been fully restated, substituted for or terminated. The Loan Documents will not be Transaction Documents for purposes of this Agreement. The Demand Note dated March 11, 1998 made by Mattel to the Buyer in the amount of approximately $9,000,000 will not be a Transaction Document for purposes of this Agreement.

 

“ Transferor ” has the meaning set forth in the preamble to this Agreement.

 

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“ UCC ” means the Uniform Commercial Code as from time to time in effect in the applicable jurisdiction.

 

“ UCC Filing Date ” means the first date on which any UCC financing statement is filed pursuant hereto.

 

“ Unmatured Termination Event ” means an event that, with the giving of any notice, the passage of time, or both, would be a Termination Event.

 

“ Yield ” for any Purchased Interest for the related Yield Period, means an amount determined as follows:

 

PR x YP x 1/360

 

 

“ Yield Period ” means each period from and including a Purchase Date to but excluding the related Due Date.

 

“ Yield Reserve ” means the Yield with respect to an applicable Purchased Interest, times the applicable Purchasers’ Investment; provided that no provision in this Agreement shall require the payment or permit the collection of Yield Reserve in excess of the maximum permitted by applicable law.

 

1.02 Other Terms. All accounting terms not specifically defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, as in effect from time to time (subject to Section 1.03 of the Mattel Credit Agreement) and applied in a manner consistent with that used in preparing the financial statements referred to in Section 5.08 of the Mattel Credit Agreement. All terms used in Division 9 of the UCC in the State of California, and not specifically defined herein, are used herein as defined in such Division 9. Unless the context otherwise requires, (i) “or” means “and/or,” (ii) “including” (and with correlative meaning “include” and “includes”) means including, without limiting the generality of any description preceding such term, (iii) the meanings of defined terms are equally applicable to the singular and plural forms of such defined terms, and (iv) all other terms not otherwise defined herein shall have the meanings assigned to such terms in the Mattel Credit Agreement.

 

(c) Section 2.02 of the Receivables Purchase Agreement is hereby amended by adding subsection (e) to Section 2.02 as follows:

 

(e) The purchase price of the Listed Receivables shall be increased by, and the Transferor shall pay to each Purchaser, as long as such Purchaser shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), an additional amount equal to the actual costs of such reserves allocated to the Yield on such

 

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Purchased Interest by such Purchaser (as determined by such Purchaser in good faith, which determination shall be conclusive), which additional purchase price amount shall be due and payable on the Due Date applicable to such purchase, provided the Transferor shall have received at least 15 days’ prior notice (with a copy to the Administrative Agent) of such additional amount of the Listed Receivables purchase price from such Purchaser. If a Purchaser fails to give notice 15 days prior to the relevant Due Date, such additional amount of the Listed Receivables purchase price shall be due and payable 15 days from receipt of such notice.

 

(d) Section 2.03 of the Receivables Purchase Agreement is hereby amended by deleting such Section in its entirety and replacing it as follows:

 

2.03 Payments and Computation, Etc . All amounts to be paid or deposited by a Seller Party hereunder shall be paid or deposited, without setoff, counterclaim or reduction of any kind, no later than 10:00 a.m. (California time) on the day when due in same day funds to the Administrative Agent’s Office. All amounts received after noon (California time) shall be deemed to have been received on the immediately succeeding Business Day. The Transferor shall, to the extent permitted by Law, pay to the Administrative Agent, for the benefit of the Purchasers, upon demand, interest on all amounts not paid or deposited when due to the Purchasers hereunder at a rate per annum equal to the Default Rate. Notwithstanding the foregoing, interest shall not commence accruing at the Default Rate until the Administrative Agent, at the direction of the Requisite Purchasers, has notified the Transferor thereof; provided , however , that upon the occurrence of a Termination Event specified in Section 7.01(d) or (k) , the Default Rate shall thereupon automatically commence accruing and be due and payable without further act of or demand by the Administrative Agent or any Purchaser. All computations of Yield shall be made on the basis of a year of 360 days for the actual number of days elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit. All payments received by the Administrative Agent or any Purchaser hereunder on account of a Purchased Interest shall be applied by the Administrative Agent, first to pay due and payable Yield Reserve with respect to the related Purchasers’ Investment, second to pay all due and payable fees and expenses and other amounts due to the Purchasers and the Administrative Agent hereunder, and third , to repay any such Purchasers’ Investment. The amount of each Purchasers’ Investment shall be reduced by payments received by the Administrative Agent and applied on account of such Purchasers’ Investment pursuant to this Agreement.

 

(e) Section 2.06 of the Receivables Purchase Agreement is hereby amended by deleting such Section in its entirety and replacing it as follows:

 

2.06 Deficiency Advances . No Purchaser shall be responsible for any default of any other Purchaser in respect of such other Purchaser’s obligation to fund any portion of a purchase hereunder, nor shall the commitment of any Purchaser hereunder be increased as a result of such default by any other Purchaser. Without limiting the generality of the foregoing, in the event any Purchaser shall fail to advance funds as provided herein, the Administrative Agent may, in its discretion but shall not be

 

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obligated to, advance as a Purchaser all or any portion of such amount (the “ Deficiency Advance ”) and shall thereafter be entitled to payments on such Deficiency Advance in the same manner and at the same rate(s) to which such other Purchaser would have been entitled had it made such advance itself; provided that, upon payment to the Administrative Agent from such other Purchaser of the entire outstanding amount of such Deficiency Advance, together with interest thereon, at the Eurodollar Rate plus the Applicable Margin applicable to the related Purchase, then such payment shall be credited against the Administrative Agent’s share of the total outstanding Purchasers’ Investment in full payment of such Deficiency Advance. Acceptance by the Transferor of a Deficiency Advance from the Administrative Agent shall in no way limit the rights of the Transferor against the Purchaser failing to fund its pro rata portion (based on its Percentage) of the purchase price of any purchase hereunder.

 

(f) Section 3.02 of the Receivables Purchase Agreement is hereby amended by deleting subsection (a)(iii) from Section 3.02 in its entirety and replacing it as follows:

 

(iii) no event has occurred and is continuing, or would result from such purchase, that constitutes a Termination Event or an Unmatured Termination Event or that would constitute a Termination Event or an Unmatured Termination Event with respect to the Obligor in each case, other than a Termination Event or an Unmatured Termination Event as described in Sections 7.01(e) or (i) hereof with respect to an Obligor whose Receivables are not included in the Listed Receivables being purchased on such Purchase Date;

 

(g) Section 5.01 of the Receivables Purchase Agreement is hereby amended by deleting subsection (n) from Section 5.01 in its entirety and replacing it as follows:

 

(n) With respect to the Transferor, the Transferor’s complete corporate name is set forth in the preamble to this Agreement. The Transferor (i) does not use, and has not during the last five years changed its name or used, any other corporate name, trade name, doing business name or fictitious name, except for names first used after the date of this Agreement and set forth in a notice delivered to the Administrative Agent pursuant to of Section 6.01(b) , (ii) has never merged with or into or consolidated with any other Person and (iii) has not during the last five years changed its jurisdiction of incorporation from the jurisdiction set forth in the preamble to this Agreement.

 

(h) Section 6.01 of the Receivables Purchase Agreement is hereby amended by deleting subsection (j)(ii) from Section 6.01 in its entirety and replacing it as follows:

 

(ii) Each Seller Party shall provide to the Administrative Agent as soon as possible and in any event within five Business Days after the occurrence of each Termination Event or Unmatured Termination Event a statement of the chief financial officer of such Seller Party setting forth details of such Termination Event or Unmatured Termination Event and the action that such Seller Party has taken and proposes to take with respect thereto.

 

(i) Section 7.01 of the Receivables Purchase Agreement is hereby amended by deleting subsection (e) from Section 7.01 in its entirety and replacing it as follows:

 

(e) an Insolvency Proceeding shall have been commenced and is continuing in which either Obligor is the debtor;

 

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(j) Section 8 of the Receivables Purchase Agreement is hereby amended by deleting such Section in its entirety and replacing it as follows:

 

SECTION 8. THE ADMINISTRATIVE AGENT

 

8.01 Appointment and Authorization . Each Purchaser hereby irrevocably appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Transaction Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Transaction Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Transaction Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any of the Purchasers or participants, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Transaction Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term “ agent ” herein and in the other Transaction Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

8.02 Delegation of Duties . The Administrative Agent may execute any of its duties under this Agreement or any other Transaction Document by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.

 

8.03 Liability of Administrative Agent . None of the Administrative Agent-Related Persons shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Transaction Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (ii) be responsible in any manner to any of the Purchasers or participants for any recital, statement, representation or warranty made by the Transferor or the Guarantor, or any officer thereof, contained in this Agreement or in any other Transaction Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Transaction Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document, or for any failure of the Transferor or the Guarantor or any other to any Transaction Document to perform its

 

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obligations hereunder or thereunder. No Administrative Agent-Related Person shall be under any obligation to any Purchaser or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Transferor, the Servicer or the Guarantor or any of their respective Subsidiaries or Affiliates.

 

8.04 Reliance by Administrative Agent .

 

(a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Transferor, Servicer or the Guarantor), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Requisite Purchasers as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Purchasers against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Document in accordance with a request or consent of the Requisite Purchasers and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Purchasers.

 

(b) For purposes of determining compliance with the conditions specified in Sections 3.01 and 3.02 , each Purchaser that has executed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Purchaser, unless the Administrative Agent shall have received notice from such Purchaser prior to any purchase specifying its objection thereto.

 

8.05 Notice of Termination Event or Servicer Default . The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Termination Event or Servicer Default unless the Administrative Agent has failed to receive on account of any Purchaser such Purchaser’s Purchasers’ Investment, plus Yield Reserve, on the applicable Due Date, or unless the Administrative Agent shall have received written notice from a Purchaser, the Transferor, Servicer or the Guarantor referring to this Agreement, describing such Termination Event or Servicer Default and stating that such notice is a “ notice of termination event and/or servicer default. ” The Administrative Agent will notify the Purchasers of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Termination Event or Servicer Default as may be directed by the Requisite Purchasers in accordance with Section 7 ; provided , however , that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to)

 

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take such action, or refrain from taking such action, with respect to such Termination Event or Servicer Default as it shall deem advisable or in the best interest of the Purchasers. In the event that any remedy is exercised pursuant to Sections 4.02 , 4.04 or 7.02 of this Agreement, each Purchaser and the Administrative Agent shall pursue remedies designated by the Requisite Purchasers to the same extent as though such demand was caused by the action of all Purchasers, and each Purchaser agrees to act as expeditiously as possible so as to maximize recovery. Each Purchaser agrees that no Purchaser shall have any right individually to take action with respect to the Purchased Interest, it being understood and agreed that such rights and remedies with respect to any portion of the Purchased Interest may be exercised by the Administrative Agent as directed by the Requisite Purchasers for the ratable benefit of the Purchasers.

 

8.06 Credit Decision; Disclosure of Information by Administrative Agent . Each Purchaser acknowledges that no Administrative Agent Related Person has made any representation or warranty to it and that no act by the Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of the Transferor, Servicer or the Guarantor or any Affiliate thereof shall be deemed to constitute any representation or warranty by any Administrative-Agent Related Person to any Purchaser as to any matter, including whether Administrative-Agent Related Persons have disclosed material information in their possession. Each Purchaser represents to the Administrative Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Transferor, Servicer or the Guarantor, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and extend credit to the Transferor hereunder. Each Purchaser also represents that it will, independently and without reliance upon the Administrative Agent or any other Purchaser, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Transferor, Servicer or the Guarantor. Except for notices, reports and other documents expressly required to be furnished to the Purchasers by the Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any Purchaser with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Transferor, Servicer or the Guarantor or any of its Affiliates which may come into the possession of any Administrative Agent-Related Person.

 

8.07 Indemnification . Whether or not the transactions contemplated hereby are consummated, the Purchasers shall indemnify upon demand each Administrative Agent-Related Person (to the extent not reimbursed by or on behalf of the Transferor or the Guarantor and without limiting the obligation of the Transferor or the Guarantor to do so), pro rata, and hold harmless each Administrative Agent-Related Person from and against any and all Indemnified Liabilities of any kind whatsoever wh