SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-05647
----------------------------------
MATTEL, INC.
------------
(Exact name of registrant as specified in its charter)
Delaware 95-1567322
- ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 Continental Boulevard, El Segundo, California 90245-5012
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (310) 252-2000
--------------
(Former name, former address and former fiscal year, None
if changed since last report) --------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [_]
Number of shares outstanding of registrant's common stock
as of October 27, 1995:
Common Stock - $1 par value -- 220,848,875 shares
<PAGE>
<TABLE>
PART I -- FINANCIAL INFORMATION
-------------------------------
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Sept. 30, Sept. 30, Dec. 31,
(In thousands) 1995 1994 1994
- -------------- ----------- ----------- -----------
ASSETS
<S> <C> <C> <C>
Current Assets
Cash $ 84,221 $ 86,225 $ 239,100
Marketable securities 16,596 20,417 20,581
Accounts receivable, net 1,313,760 1,251,738 762,024
Inventories 463,037 360,741 339,143
Prepaid expenses and other current assets 201,380 159,235 182,675
----------- ----------- -----------
Total current assets 2,078,994 1,878,356 1,543,523
----------- ----------- -----------
Property, Plant and Equipment
Land 25,997 20,843 22,577
Buildings 192,293 170,479 172,310
Machinery and equipment 348,943 281,675 289,796
Capitalized leases 24,271 38,209 38,468
Leasehold improvements 50,978 44,287 46,512
----------- ----------- -----------
642,482 555,493 569,663
Less: accumulated depreciation 269,936 246,037 248,666
----------- ----------- -----------
372,546 309,456 320,997
Tools, dies and molds, net 114,030 89,434 94,924
----------- ----------- -----------
Property, plant and equipment, net 486,576 398,890 415,921
----------- ----------- -----------
Other Noncurrent Assets
Intangible assets, net 424,654 437,411 432,232
Sundry assets 72,260 70,973 67,350
----------- ----------- -----------
$ 3,062,484 $ 2,785,630 $ 2,459,026
=========== =========== ===========
<FN>
See accompanying notes to consolidated financial information.
</TABLE>
2
<PAGE>
<TABLE>
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
<CAPTION>
Sept. 30, Sept. 30, Dec. 31,
(In thousands, except share data) 1995 1994 1994
- --------------------------------- ----------- ----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C> <C>
Current Liabilities
Notes payable $ 243,390 $ 477,567 $ -
Current portion of long-term liabilities 31,939 2,700 3,095
Accounts payable 233,863 220,250 295,246
Accrued liabilities 470,058 444,514 453,146
Income taxes payable 229,752 163,959 164,394
----------- ----------- -----------
Total current liabilities 1,209,002 1,308,990 915,881
----------- ----------- -----------
Long-Term Liabilities
6-7/8% Senior notes due 1997 99,713 99,569 99,604
6-3/4% Senior notes due 2000 100,000 100,000 100,000
Medium-Term notes 220,000 - 110,500
Mortgage note 44,693 45,000 45,000
Other 105,746 102,077 102,351
----------- ----------- -----------
Total long-term liabilities 570,152 346,646 457,455
----------- ----------- -----------
Shareholders' Equity
Preference stock 9 9 9
Common stock $1.00 par value, 300.0 million
shares authorized; 223.3 million shares,
223.3 million shares and 223.3 million
shares issued, respectively (a) 223,254 178,611 223,264
Additional paid-in capital 233,750 283,156 234,913
Treasury stock at cost; 2.1 million shares,
0.2 million shares and 2.4 million shares,
respectively (a) (53,489) (4,114) (53,812)
Retained earnings (b) 939,992 709,359 737,528
Deferred compensation - (12,079) -
Currency translation adjustments (b) (60,186) (24,948) (56,212)
----------- ----------- -----------
Total shareholders' equity 1,283,330 1,129,994 1,085,690
----------- ----------- -----------
$ 3,062,484 $ 2,785,630 $ 2,459,026
=========== =========== ===========
<FN>
(a) Share data for September 1994 have been restated for the effects of the five-for-four
stock split distributed in January 1995.
(b) Since December 26, 1987.
See accompanying notes to consolidated financial information.
</TABLE>
3
<PAGE>
<TABLE>
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
---------------------- ----------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(In thousands, except per share amounts) 1995 1994 1995 1994
- ---------------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales $1,176,484 $1,037,082 $2,483,528 $2,174,616
Cost of sales 593,535 508,122 1,274,865 1,093,047
---------- ---------- ---------- ----------
Gross Profit 582,949 528,960 1,208,663 1,081,569
Advertising and promotion expenses 182,355 161,298 367,673 326,938
Other selling and administrative expenses 159,359 140,601 432,775 376,006
Interest expense 22,734 18,274 51,804 37,887
Other (income) expense, net (9,025) 5,967 (13,169) 10,567
---------- ---------- ---------- ----------
Income Before Income Taxes 227,526 202,820 369,580 330,171
Provision for income taxes 76,200 71,000 123,800 117,200
---------- ---------- ---------- ----------
Net Income 151,326 131,820 245,780 212,971
Preference stock dividend requirements 1,099 1,152 3,297 3,598
---------- ---------- ---------- ----------
Net Income Applicable to Common Shares $ 150,227 $ 130,668 $ 242,483 $ 209,373
========== ========== ========== ==========
Primary Income Per Common And Common
Equivalent Share
- ------------------------------------
Net income $ 0.67 $ 0.58 $ 1.08 $ 0.94
========== ========== ========== ==========
Average number of common and common
equivalent shares 225,523 225,930 224,771 223,666
========== ========== ========== ==========
Dividends Declared per Common Share $ 0.06 $ 0.05 $ 0.18 $ 0.14
========== ========== ========== ==========
<FN>
See accompanying notes to consolidated financial information.
</TABLE>
4
<PAGE>
<TABLE>
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
For the
Nine Months Ended
-----------------------
Sept. 30, Sept. 30,
(In thousands) 1995 1994
- -------------- ---------- ----------
<S> <C> <C>
Cash Flows From Operating Activities:
- -------------------------------------
Net income $ 245,780 $ 212,971
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation and amortization 93,290 82,933
Gain on sale of business (9,142) -
Provision for deferred compensation 6,918 2,543
(Increase) in accounts receivable (557,433) (599,392)
(Increase) in inventories (123,383) (90,362)
(Increase) in prepaid expenses and other current assets (20,825) (9,866)
Increase in accounts payable, accrued liabilities and
income taxes payable 13,637 100,491
Other, net (8,491) (951)
---------- ----------
Net cash flows used for operating activities (359,649) (301,633)
---------- ----------
Cash Flows From Investing Activities:
- -------------------------------------
Purchases of tools, dies and molds (69,893) (51,718)
Purchases of other property, plant and equipment (83,478) (50,708)
Purchases of marketable securities (28,014) (20,591)
Proceeds from sales of marketable securities 31,588 18,270
Proceeds from sale of business 21,129 -
Proceeds from sales of other property, plant and equipment 3,179 7,897
Investments in acquired businesses - (367,321)
Contingent consideration - Kransco acquisition (8,625) -
Other, net 730 (1,053)
---------- ----------
Net cash flows used for investing activities (133,384) (465,224)
---------- ----------
Cash Flows From Financing Activities:
- -------------------------------------
Notes payable 245,258 470,855
Issuance of Medium-Term notes 139,500 -
Redemption of Fisher-Price term loan - (120,629)
Long-term foreign borrowing (923) (5,110)
Collection of ESOP note receivable - 3,500
Payment of ESOP notes payable - (3,500)
Tax benefit of employee stock options exercised 7,713 25,538
Exercise of stock options 24,521 36,542
Purchase of treasury stock (40,002) (26,249)
Dividends paid on common stock (37,336) (29,441)
Dividends paid on preference stock (3,297) (3,598)
Payment for tendered Fisher-Price warrants - (4,891)
Other, net (216) (574)
---------- ----------
Net cash flows from financing activities 335,218 342,443
Effect of Exchange Rate Changes on Cash 2,936 4,526
---------- ----------
(Decrease) in Cash (154,879) (419,888)
Cash at Beginning of Period 239,100 506,113
---------- ----------
Cash at End of Period $ 84,221 $ 86,225
========== ==========
<FN>
See accompanying notes to consolidated financial information.
</TABLE>
5
<PAGE>
MATTEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
-------------------------------------------
1. The accompanying unaudited consolidated financial statements and
related disclosures have been prepared in accordance with generally
accepted accounting principles applicable to interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. In the opinion of management, all adjustments
considered necessary for a fair presentation of the Company's financial
position and interim results as of and for the periods presented have
been included. Certain amounts in the financial statements for prior
periods have been reclassified to conform with the current period's
presentation. Because the Company's business is seasonal, results for
interim periods are not necessarily indicative of those which may be
expected for a full year.
The financial information included herein should be read in conjunction
with the Company's consolidated financial statements and related notes
in its 1994 Annual Report to Shareholders.
2. Accounts receivable are shown net of allowances for doubtful accounts
of $14.8 million (September 30, 1995), $22.7 million (September 30,
1994) and $16.1 million (December 31, 1994). In addition, the Company
has reduced its accounts receivable by $24.0 million (September 30,
1995), $13.8 million (September 30, 1994), and $17.2 million (December
31, 1994) to reflect the write-down of certain uncollectible receivables
to their net realizable value.
3. Inventories are comprised of the following:
<TABLE>
<CAPTION>
Sept. 30, Sept. 30, Dec. 31,
(In thousands) 1995 1994 1994
- -------------- --------- --------- ---------
<S> <C> <C> <C>
Raw materials and work in progress $ 72,748 $ 71,017 $ 50,334
Finished goods 390,289 289,724 288,809
--------- --------- ---------
$ 463,037 $ 360,741 $ 339,143
========= ========= =========
</TABLE>
4. Net cash flows from operating activities include cash payments for the
following:
<TABLE>
<CAPTION>
For the Nine Months Ended
--------------------------
Sept. 30, Sept. 30,
(In thousands) 1995 1994
- -------------- ----------- -----------
<S> <C> <C>
Interest $ 43,187 $ 32,427
Income taxes 54,807 36,995
</TABLE>
6
5. In April, May and June 1995, the Company issued an aggregate of $139.5
million principal amount of fixed rate notes under its Medium-Term Note
program. The notes mature on various dates from June 1998 to May 2007
and bear interest at rates ranging from 5.93% to 7.65%. The proceeds
of these issuances will be used for general corporate purposes.
6. In the current quarter, the Board of Directors declared cash dividends
of $0.06 per common share, compared to $0.05 per common share in the
third quarter of 1994. Additionally, cash dividends of $1.2717 per
Series F Convertible Preference Stock were declared, which includes
participating common dividends of $0.06 per share.
7. Share and per share data presented in these financial statements
reflect the retroactive effects of the five-for-four stock split
distributed in January 1995.
Income per common share is computed by dividing earnings available to
common shareholders by the average number of common and common
equivalent shares outstanding during each period. Weighted average
share computations assume the exercise of dilutive stock options and
warrants, reduced by the number of shares which could be repurchased at
average market prices with proceeds from exercise.
8. In connection with the IGI merger in February 1992, 864.3 thousand
shares of $0.01 par value preference stock were designated as 12.5%
Convertible Preference Stock, Series F, and issued to the IGI Employee
Stock Ownership Plan ("ESOP"). On October 20 1995, the Company
purchased all shares of its preference stock from the IGI ESOP for
$73.9 million.
7
MATTEL, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Mattel, Inc. (the "Company") designs, manufactures, markets and distributes
a broad variety of toy products on a worldwide basis. The Company's
business is dependent in great part on its ability each year to redesign,
restyle and extend existing core products and product lines and to design
and develop innovative new toys and product lines. New products have
limited lives, ranging from one to three years, and generally must be
updated and refreshed each year.
Core brands have historically provided the Company with relatively stable
growth. The Company's four principal core brands are BARBIE fashion dolls
and doll clothing and accessories; FISHER-PRICE toys and juvenile products,
including the Power Wheels line of battery-powered, ride-on vehicles; the
Company's Disney-licensed toys; and die-cast HOT WHEELS vehicles and
playsets, each of which has broad worldwide appeal. Additional core
product lines consist of large dolls; preschool toys, including SEE 'N SAY
talking toys; the UNO and SKIP-BO card games; and the SCRABBLE game, which
the Company owns in markets outside of the United States and Canada.
RESULTS OF OPERATIONS
---------------------
The Company's business is seasonal, and, therefore, results of operations
are comparable only with corresponding periods. Following is a percentage
analysis of operating results:
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
------------------------ ------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales 100% 100% 100% 100%
=========== =========== =========== ===========
Gross profit 50% 51% 49% 50%
Advertising and promotion expenses 16 16 15 15
Other selling and administrative expenses 13 14 17 18
----------- ----------- ----------- -----------
Operating profit 21 21 17 17
Interest expense 2 1 2 2
----------- ----------- ----------- -----------
Income before income taxes 19% 20% 15% 15%
=========== =========== =========== ===========
</TABLE>
8
THIRD QUARTER
- -------------
Net sales in the third quarter of 1995 increased $139.4 million or 13% over
the 1994 third quarter. The current quarter's performance reflects the
continuing strong demand for the Company's core products such as BARBIE
doll products; FISHER-PRICE toys and juvenile products, including the Power
Wheels line; the UNO and SKIP-BO card games; and the SCRABBLE game, as well
as Disney-licensed toys introduced in connection with the release of the
"Pocahontas" motion picture.
Worldwide sales of core products represented 85% of the Company's third
quarter gross revenues, compared to 84% in 1994. Sales to customers within
the United States increased 15% and accounted for 62% of consolidated sales
for the third quarter of 1995 compared to 60% in the third quarter of 1994.
Sales to customers outside the United States increased 10%, including a net
$2.1 million favorable effect of the generally weaker U.S. dollar relative
to the year-ago quarter. At comparable foreign currency exchange rates,
sales internationally also grew 10%.
Gross profit as a percentage of net sales decreased one percentage point to
50%, primarily due to increased raw material prices and other product
costs.
Advertising and promotion expenses remained virtually constant as a
percentage of net sales; however, spending increased $21.1 million in
support of increased sales volume. Other selling and administrative
expenses increased $18.8 million due to higher design and development
expenses in support of new product lines, as well as an increase in bad
debt expense, including direct write-offs of uncollectible accounts of
financially troubled customers. Other income, net, increased $15.0 million
principally due to the gain recognized on the sale of the non-toy business
and trademark rights related to Corgi, and foreign currency transaction
gains.
Interest expense increased 24% compared to the third quarter of 1994. The
increase reflects higher average levels of domestic borrowings and higher
interest rates.
NINE MONTHS
- -----------
Net sales increased $308.9 million or 14% over 1994, reflecting continued
worldwide demand for the Company's core products. Worldwide core product
sales accounted for 85% of total sales compared to 84% during 1994, largely
due to increased sales of BARBIE doll products; FISHER-PRICE toys and
juvenile products, including the Power Wheels line; and Disney-licensed
toys introduced in connection with the release of the "Pocahontas" motion
picture. Sales to customers within the United States increased 16% and
accounted for 61% of consolidated sales compared to 60% in 1994. Sales to
customers outside the United States increased 11%, including a net $38.0
million favorable effect from the generally weaker U.S. dollar relative to
the year-ago period. At comparable foreign currency exchange rates, sales
internationally grew 7%.
Gross profit, as a percentage of net sales, decreased one percentage point
to 49% compared to the same period for 1994, primarily due to increased raw
material prices and other product costs.
9
Advertising and promotion expenses, as a percentage of net sales, remained
virtually constant at 15%. However, spending increased $40.7 million in
support of the growth in sales volume. Other selling and administrative
expenses increased $56.8 million mainly due to expenditures for new product
development, and an increase in bad debt expense, including direct write-
offs of uncollectible accounts of financially troubled customers. Other
income, net, increased $23.7 million as a result of the gain recognized on
the sale of the non-toy business and trademark rights related to Corgi, a
gain associated with a Mexican insurance claim, and foreign currency
transaction gains, partially offset by an increase in goodwill amortization
arising from the Kransco and J.W. Spear acquisitions in 1994.
Interest expense increased $13.9 million or 37% from 1994, which reflects
higher average levels of domestic borrowings at higher interest rates.
FINANCIAL CONDITION
-------------------
The Company's financial position remained strong as of September 30, 1995
as a result of profitable operating results. Cash balances, including
marketable securities, as of September 30, 1995 were $158.9 million lower
than year end mainly due to funding of seasonal working capital needs.
Accounts receivable increased $551.7 million since year end, primarily due
to current year sales volume and the seasonal customer payment terms. The
$62.0 million increase in accounts receivable over the year-ago quarter,
reflects increased sales volume, partially offset by the sale of certain
trade receivables. Inventory balances increased $123.9 million since year
end and $102.3 million over the 1994 quarter end, primarily due to a
continuing trend toward just-in-time ordering by retailers, and level
loading of the Company's factories in order to maximize production
efficiency.
Short-term bank borrowing decreased $234.2 million compared to the 1994
quarter end primarily due to the issuance of Medium-Term notes. Short-term
borrowings increased $243.4 million since year end in order to fund the
Company's seasonal working capital requirements. Seasonal financing needs
are expected to be satisfied through internally generated cash, issuances
of commercial paper and the sale of receivables under the domestic
Revolving Credit Agreement, and use of the Company's various foreign short-
term bank lines of credit.
10
Details of the Company's capitalization are as follows:
<TABLE>
<CAPTION>
(In millions) Sept. 30, 1995 Sept. 30, 1994 Dec. 31, 1994
- ------------- ----------------------------------------------
<S> <C> <C> <C>
6-7/8% Senior notes $ 99.7 5% $ 99.5 7% $ 99.6 7%
6-3/4% Senior notes 100.0 6 100.0 7 100.0 7
Medium-Term notes 220.0 12 - - 110.5 7
Other long-term debt
obligations 63.6 3 59.0 4 64.9 4
-----------------------------------------------
Total long-term debt 483.3 26 258.5 18 375.0 25
Other long-term liabilities 86.9 5 88.1 6 82.5 5
Shareholders' equity 1,283.3 69 1,130.0 76 1,085.7 70
----------------------------------------------
$1,853.5 100% $1,476.6 100% $1,543.2 100%
==============================================
</TABLE>
Total long-term debt increased as a percentage of total capitalization
compared to the year-ago quarter, primarily due to the issuance of Medium-
Term notes. Future long-term capital needs are expected to be satisfied
through the retention of corporate earnings and the issuance of long-term
debt instruments. Shareholders' equity increased $197.6 million since
December 31, 1994 and $153.3 million over the 1994 third quarter
principally as a result of the Company's profitable operating results and
exercises of employee stock options, partially offset by treasury share
purchases and dividends declared to common and preference shareholders.
11
<PAGE>
PART II -- OTHER INFORMATION
----------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits
--------
10.1 First Amendment to Second Amended and Restated Transfer and
Administration Agreement dated as of March 10, 1995 among
the Company, Mattel Sales Corp., Fisher-Price, Inc., the
Banks named therein and NationsBank of Texas, N.A., as Agent
10.2 Receivables Purchase Agreement dated as of August 29, 1995
among the Company, Mattel Sales Corp., Fisher-Price, Inc.,
and Bank of America N.T.S.A.
10.3 Stock Purchase Agreement dated October 20, 1995 by and
between Mattel, Inc. and Marine Midland Bank, as sub-trustee
of the International Games, Inc. Employee Stock Ownership
Trust
10.4 Fourth Amendment to the Mattel, Inc. Personal Investment
Plan
11.0 Computation of Income Per Common and Common Equivalent Share
27.0 Financial Data Schedule (EDGAR filing only)
(b) Reports on Form 8-K
-------------------
Mattel, Inc. filed the following Current Report on Form 8-K during
the quarterly period ended September 30, 1995:
Financial
Date of Report Items Reported Statements Filed
--------------- -------------- ----------------
July 18, 1995 5,7 None
August 11, 1995 5,7 None
August 29, 1995 5,7 None
12
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934 as
amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
MATTEL, INC.
------------
Registrant
Date: As of November 1, 1995 By: /s/ Gary P. Rolfes
---------------------- ---------------------
Gary P. Rolfes
Senior Vice President
and Controller
13
<PAGE>
EXHIBIT 10.1
FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED TRANSFER AND
ADMINISTRATION AGREEMENT (this "Amendment"), dated as of July 31, 1995, by
and among MATTEL SALES CORP., a California corporation, and FISHER-PRICE,
INC., a Delaware corporation, as transferors (each, a "Transferor"),
MATTEL, INC., a Delaware corporation, as guarantor and servicer (the
"Guarantor" and the "Servicer"), THE BANKS LISTED ON THE SIGNATURE PAGES
HEREOF (collectively, the "Banks") and NATIONSBANK OF TEXAS, N.A., a
national banking association, as agent on behalf of the Banks (the "Agent")
amending that certain Second Amended and Restated Transfer and
Administration Agreement dated as of March 10, 1995, by and among the
Transferors, the Guarantor, the Servicer, the Banks and the Agent (the
"Original Agreement" and said agreement as amended by this Amendment, the
"Agreement").
PRELIMINARY STATEMENTS
WHEREAS, the Transferors have requested that the Banks agree to
certain amendments to the Original Agreement and subject to the terms and
conditions hereof the Banks have agreed to such amendments.
NOW, THEREFORE, the parties hereby agree as follows:
Section 1. Definitions. All capitalized terms used herein which
are not otherwise defined are used as defined in the Original Agreement.
Section 2. Amendment of Definition of "Eligible Receivable".
Clause (ix) of the definition of "Eligible Receivable" set forth in Section
1.1 of the Original Agreement is hereby deleted in its entirety and
replaced with the following:
"(ix) the remaining term of which at the time of transfer
hereunder does not extend beyond the next succeeding Remittance Date; and"
Section 3. Amendment of Section 2.2. Section 2.2 of the
Original Agreement is hereby amended by deleting the phrase "March 17"
appearing in the proviso in the first paragraph of said Section and
replacing such phrase with "December 27".
Section 4. Representations and Warranties. The Transferors
hereby make to each of the Banks, on and as of the date hereof, all of the
representations and warranties set forth in Section 3.1 of the Original
Agreement, except to the extent that any such representation or warranty
relates to an earlier date. In addition, Mattel, Inc. hereby makes to each
of the Banks, on and as of the date hereof, all the representations and
warranties set forth in Section 3.2 of the Original Agreement, except to
the extent that any such representation or warranty relates to an earlier
date.
SECTION 5. Conditions Precedent. This Amendment shall not
become effective until the Agent shall have received the following:
(a) An opinion of counsel to the Transferors with respect to
certain corporate matters and the enforceability against the Transferors of
the Original Agreement as amended hereby, in form and substance acceptable
to the Agent; and
(b) An opinion of counsel to Servicer and the Guarantor with
respect to certain corporate matters and the enforceability against each of
the Servicer and the Guarantor of the Original Agreement as amended hereby,
in form and substance acceptable to the Agent.
SECTION 6. Amendment and Waiver. No provision hereof may be
amended, waived, supplemented, restated, discharged or terminated without
the written consent of the parties hereto.
SECTION 7. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of California,
without regard to the conflicts of Governmental Rules provisions thereof.
This Amendment together with the Original Agreement contains the final and
complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire
Agreement among the parties hereto with respect to the subject matter
hereof superseding all prior oral or written understandings.
2
SECTION 8. Severability; Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and
the same Amendment. Any provisions of this Amendment which are prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 9. Captions. The captions in this Amendment are for
convenience of reference only and shall not define or limit any of the
terms or provisions hereof.
SECTION 10. Ratification. Except as expressly affected by the
provisions hereof, the Original Agreement as amended by this Amendment
shall remain in full force and effect in accordance with its terms and
ratified and confirmed by the parties hereto. On and after the date
hereof, each reference in the Original Agreement to "this Agreement",
"hereunder", "herein" or words of like import shall mean and be a reference
to the Original Agreement as amended by this Amendment.
3
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date first above written.
MATTEL SALES CORP.,
as Transferor
By: /s/ William Stavro
-------------------------
Name: WILLIAM STAVRO
Title: Vice President and
Treasurer
FISHER-PRICE, INC.,
as Transferor
By: /s/ William Stavro
-------------------------
Name: WILLIAM STAVRO
Title: Treasurer
MATTEL, INC., as Guarantor
and Servicer
By: /s/ William Stavro
-------------------------
Name: WILLIAM STAVRO
Title: Sr. Vice President
and Treasurer
NATIONSBANK OF TEXAS, N.A.,
as Agent and a Bank
By: /s/ Tom F. Schaffenberg
--------------------------
Name: TOM F. SCHAFFENBERG
Title: Vice President
4
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Robert W. Troutman
-------------------------
Name: ROBERT W. TROUTMAN
Title: Managing Director
5
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Ted A. Dunn
-------------------------------
Name: TED A. DUNN
Title: Assistant Vice President
6
CHEMICAL BANK
By: /s/ David J. Corcoran
------------------------
Name: DAVID J. CORCORAN
Title: Vice President
7
THE FIRST NATIONAL BANK
OF BOSTON
By: /s/ Debra Zurka
---------------------
Name: DEBRA ZURKA
Title: Vice President
8
TORONTO-DOMINION
(TEXAS), INC.
By: /s/ Diane Bailey
---------------------
Name: DIANE BAILEY
Title: Vice President
9
CITICORP USA, INC.
By: /s/ Majorie Futornick
------------------------
Name: MAJORIE FUTORNICK
Title: Vice President
10
ABN AMRO BANK N.V.
By: /s/ Matthew S. Thomson
---------------------------
Name: MATTHEW S. THOMSON
Title: Group Vice President
By: /s/ Patrick A. Russo
-------------------------------
Name: PATRICK A. RUSSO
Title: Assistant Vice President
11
DRESDNER BANK AG
Los Angeles Agency
By: /s/ Barbara J. Readick
----------------------
Name: BARBARA J. READICK
Title: Vice President
By: /s/ Dennis G. Blank
----------------------
Name: DENNIS G. BLANK
Title: Vice President
12
MANUFACTURERS &
TRADERS TRUST CO.
By: /s/ Geoffrey R. Fenn
-----------------------
Name: GEOFFREY R. FENN
Title: Vice President
13
ISTITUTO BANCARIO SAN
PAOLO DI TORINO SPA
By: /s/ Glen Binder
---------------------
Name: GLEN BINDER
Title: Vice President
By: /s/ Jean Chang
-------------------------------
Name: JEAN CHANG
Title: Assistant Vice President
14
THE BANK OF
CALIFORNIA, N.A.
By: /s/ Lynn E. Vine
---------------------
Name: LYNN E. VINE
Title: Vice President
15
BANQUE NATIONALE
DE PARIS
By: /s/ C. Bettles
----------------------------
Name: C. BETTLES
Title: Senior Vice President
& Manager
By: /s/ Mitchell M. Ozawa
------------------------
Name: MITCHELL M. OZAWA
Title: Vice President
16
MARINE MIDLAND BANK
By: /s/ William M. Holland
-------------------------
Name: WILLIAM M. HOLLAND
Title: Vice President
17
<PAGE>
EXHIBIT 10.2
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement is entered into as of August 29,
1995 among Mattel Sales Corp., a California corporation ("Mattel Sales"),
as seller, Fisher-Price, Inc., a Delaware corporation ("Fisher-Price"), as
seller (Fisher-Price and Mattel Sales, in their capacities as sellers,
being referred to herein collectively as the "Sellers" and individually as
a "Seller"), Mattel, Inc., a Delaware corporation ("Mattel"), as servicer
(the "Servicer") and as guarantor (the "Guarantor"), and Bank of America
National Trust and Savings Association, a national banking association
("Bank of America"), as purchaser (in such capacity, together with its
successors and assigns in such capacity, the "Purchaser"). Certain terms
that are capitalized and used herein are defined in Exhibit I.
For good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility. On the terms and conditions
hereinafter set forth, the Purchaser hereby agrees to purchase from each
Seller, without recourse (except as expressly provided herein), undivided
percentage ownership interests in such Seller's Listed Receivables and
other items included in the related Purchased Interest.
Section 1.2. Making Purchases. (a) Each purchase of undivided
percentage ownership interests hereunder shall be made upon the Servicer's
irrevocable written notice, substantially in the form of Exhibit VIII
hereto (a "Purchase Notice"), delivered to the Purchaser in accordance with
Section 4.2 (which Purchase Notice must be received by the Purchaser prior
to 9:00 a.m., Los Angeles time) (i) not later than September 18, 1995 in
the case of the First Purchase Date, and (ii) not later than December 18,
1995, in the case of the Second Purchase Date. Each Purchase Notice shall
specify, with respect to each Seller, (A) the aggregate outstanding
principal balances of such Seller's Eligible Receivables with respect to
which such Seller proposes to sell an undivided percentage ownership
interest to the Purchaser and (B) the proposed Purchase Date.
Not later than 9:00 a.m. (Los Angeles time) on the day following its
receipt of each such Purchase Notice, the Purchaser shall send to the
Servicer a notice setting forth a calculation of the Purchased Interest
relating to each Seller, including a description of (i) the amount to be
paid by the Purchaser with respect to such Purchased Interest to the
Servicer on the related Purchase Date for the account of the applicable
Seller (such amount with respect to such Purchased Interest being referred
to as the "Purchaser's Investment") and (ii) the aggregate Yield to accrue
with respect to such Purchased Interest for the actual number of days in
the Yield Period commencing on the applicable Purchase Date (such aggregate
Yield with respect to such Purchased Interest being referred to as the
"Yield Reserve"), it being understood and agreed that the calculation of
the Yield Reserve shall not limit the
-1-
effect of the proviso to the definition of Yield in Exhibit I or the effect
of Exhibit VII. The Purchaser shall calculate the Purchaser's Investment
with respect to a Purchased Interest as an amount which, when added to the
related Yield Reserve, is as close is as reasonably practicable to (but not in
excess of) the aggregate outstanding principal balance of the related Eligible
Receivables set forth in the related Purchase Notice; it being understood
and agreed that the aggregate outstanding Purchaser's Investments shall not
exceed the Purchaser's Investment Limit and that this sentence shall not
limit any other provision of this Agreement (including Exhibit VII).
Each Seller shall send to the Purchaser for receipt by the Purchaser
not later than the Business Day prior to the related Purchase Date, a list
of such Seller's Receivables the outstanding principal balances of which
were reflected in the related Purchase Notice (such Receivables being
referred to as the "Listed Receivables"), which list shall identify the
invoice number, outstanding principal balance and maturity date of each
such Receivable (in each case as of the date of the related Purchase
Notice).
(b) On each Purchase Date, the Purchaser shall, upon satisfaction
of the applicable conditions set forth in Exhibit II hereto, pay to the
Servicer, for the account of the related Seller, in same day funds, an
amount equal to the Purchaser's Investment relating to the undivided
percentage ownership interest then being purchased from such Seller, by
remitting such funds to Bank of America National Trust and Savings
Association, ABA No. 121000358, Account No. 1233112850, reference "Mattel
Sales Receivables", or to such other account as the Sellers may designate
in writing to the Purchaser.
(c) On each Purchase Date, effective upon the payment contemplated
by Section 1.2(b) (and without the necessity of any formal or other
instrument of assignment or other further action), each Seller hereby
severally sells and assigns to the Purchaser an undivided percentage
ownership interest in (i) each Listed Receivable of such Seller, (ii) all
Related Security with respect to such Receivables, (iii) all Collections
with respect to such Receivables (including Collections received on and
after the date on which the related Purchase Notice is sent to the
Purchaser and prior to the related Purchase Date), and (iv) all proceeds
of, and all amounts received or receivable under any or all of, the
foregoing.
(d) To secure all of the obligations (monetary or otherwise) of
each Seller Party under this Agreement and the other Transaction Documents
to which it is a party, whether now or hereafter existing or arising, due
or to become due, direct or indirect, absolute or contingent, each Seller
hereby severally grants to the Purchaser a security interest in all of such
Seller's right, title and interest (including any undivided interest of
such Seller) in, to and under all of the following, whether now or
hereafter owned, existing or arising: (A) all Listed Receivables of such
Seller, (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 Purchaser 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. The Purchaser shall have, with respect to the property
described in this Section 1.2(d), and in addition to all the other rights
and remedies available to the Purchaser, all the rights and remedies of a
secured party under any applicable UCC.
Section 1.3. Servicing and Settlement Procedures. The servicing,
administering and collection of the Listed Receivables shall be conducted
in accordance with Exhibit VI hereto. Each
-2-
Seller shall provide to the Servicer on a timely basis all information
needed for such servicing, administration and collection, including notice
of the occurrence of any Termination Event Day. Subject to paragraph (c)(iv)
of Exhibit VI, the Servicer shall hold in trust (and, during the continuance
of a Termination Event, at the request of the Purchaser, segregate) for the
Purchaser, from Collections received by each Seller or the Servicer with
respect to such Seller's Listed Receivables, the percentage of such Collections
represented by the related Purchased Interest. On each Due Date, the Servicer
shall (x) deposit into the Purchaser's Account the amount of Collections
required to be held for the Purchaser pursuant to the preceding sentence and
(y) pay to the applicable Seller the remaining portion, if any, of Collections
then held by the Servicer.
Section 1.4. Payments and Computations, Etc. All amounts to be paid
or deposited by a Seller Party hereunder shall be paid or deposited no
later than noon (Los Angeles time) on the day when due in same day funds to
the Purchaser's Account. All amounts received after noon (Los Angeles
time) will be deemed to have been received on the immediately succeeding
Business Day. Each Seller and Mattel, solely in its capacity as the
Servicer, as the case may be, shall, to the extent permitted by law, pay
interest on any amount not paid or deposited by such Person which is
required to be paid or deposited by such Person hereunder when due
hereunder, at the Termination Rate (without duplication), payable on
demand. All computations of interest, Yield and other amounts hereunder
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 Purchaser hereunder on account of a Purchased Interest
shall be applied by the Purchaser first to pay itself accrued Yield with
respect to the related Purchaser's Investment and second to repay such
Purchaser's Investment.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS;
INDEMNIFICATION
Section 2.1. Representations and Warranties; Covenants. The Seller
Parties hereby severally make the representations and warranties, and
hereby agree to perform and observe the covenants, set forth in Exhibits
III and IV, respectively, hereto.
Section 2.2. Indemnities by the Sellers. Each Seller shall pay and
indemnify the Indemnified Parties in accordance with Exhibit VII hereto.
ARTICLE III.
GUARANTY
Section 3.1. Guaranty of Obligations. For valuable consideration,
the Guarantor unconditionally, absolutely and irrevocably guarantees and
promises to pay to the Purchaser on
-3-
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 Sellers hereunder owing to the Purchaser (such guarantee and promise
being referred to as this "Guaranty"). The phrase "payment and performance
obligations of the Sellers" (hereinafter collectively referred to in this
Article III as the "Obligations") is used herein in its most comprehensive
sense and includes any and all advances, debts, obligations, and liabilities
of the Sellers, now or hereafter made, incurred, or created, whether
voluntarily or involuntarily, and however arising, including any and all
reasonable attorneys' fees, costs, charges, Yield or interest (including
interest at the Termination Rate as contemplated by Section 1.4, it being
understood and agreed that the reference in Section 1.4 to Mattel in its
capacity as the Servicer shall not limit the effect of this Article III) owed
by the Sellers to the Purchaser, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether
the Sellers may be liable individually or jointly with others, whether
recovery upon such advances, debts, obligations or liabilities may be or
hereafter becomes barred by any statute of limitations or whether such
advances, debts, obligations or liabilities may be or hereafter become
otherwise unenforceable.
Section 3.2. 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 Sellers 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 3.3. Guarantor Directly Liable. The Guarantor agrees that
it is directly and primarily liable to the Purchaser, that its obligations
hereunder are independent of the Obligations of the Sellers, 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 a
Seller or whether a Seller is joined in any such action or actions. The
Guarantor agrees that any releases which may be given by the Purchaser to a
Seller or any other guarantor shall not release it from this Guaranty.
Section 3.4. 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 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
Purchaser 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 Purchaser in good faith and in compliance with applicable law;
(f) the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshalling of
assets, receivership, insolvency, bankruptcy, readjustment, assignment for
the benefit of creditors, or other similar proceedings which affect the
Guarantor, any other guarantor of any of the Obligations of either Seller
or any of the assets of any of them, or any allegation of invalidity or
contest of the validity of this Guaranty in any such proceeding; or (g) to
the extent permitted by law, the release or discharge of any other
guarantors of the Obligations from the performance or observance of any
obligation, covenant or agreement contained in any guaranties of the
Obligations by operation of law. To the
-4-
extent any of the foregoing refers to any actions which the Purchaser may
take, the Guarantor hereby agrees that the Purchaser may take such actions
in such manner, upon such terms, and at such times as the Purchaser, in its
discretion, deems advisable, without, in any way or respect, impairing,
affecting, reducing or releasing the Guarantor from its undertakings hereunder
and the Guarantor hereby consents to each and all of the foregoing actions,
events and occurrences.
Section 3.5. Waiver. The Guarantor hereby waives: (a) any and all
rights to require the Purchaser to prosecute or seek to enforce any
remedies against either Seller or any other Person liable to the Purchaser
on account of the Obligations; (b) any right to assert against the
Purchaser any defense (legal or equitable), set-off, counterclaim, or claim
which the Guarantor may now or at any time hereafter have against the
Sellers or any other Person liable to the Purchaser in any way or manner
under this Agreement; (c) all defenses, counterclaims and offsets of any
kind or nature, arising directly or indirectly from the present or future
lack of perfection, sufficiency, validity or enforceability of this
Agreement and the security interest granted pursuant hereto; (d) any
defense arising by reason of any claim or defense based upon an election of
remedies by the Purchaser, including 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 Sellers for
reimbursement, or any other rights of the Guarantor to proceed against the
Sellers, against any other guarantor, or against any other security, with
the Guarantor understanding that the exercise by the Purchaser of certain
rights and remedies may offset or eliminate the Guarantor's right of
subrogation against the Sellers, and that the Guarantor may therefore incur
partially or totally nonreimbursable 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 advances, debts, obligations or
liabilities, 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) and 726.
Section 3.6. Subrogation. The Guarantor hereby agrees that, unless
and until all Obligations have been paid to the Purchaser in full, it shall
not have any rights of subrogation, reimbursement or contribution as
against the Sellers or any other guarantor, if any, and shall not seek to
assert or enforce the same. The Guarantor understands that the exercise by
the Purchaser of certain rights and remedies contained in this Agreement
may affect or eliminate the Guarantor's right of subrogation, if any,
against the Sellers and that the Guarantor may therefore incur a partially
or totally non-reimbursable liability hereunder; nevertheless, the
Guarantor hereby authorizes and empowers the Purchaser to exercise, in its
sole discretion, any right or remedy, or any combination thereof, which may
then be available, since it is the intent and purpose of the Guarantor that
the obligations hereunder shall be absolute, independent and unconditional
under any and all circumstances.
Section 3.7. Information. The Guarantor is presently informed of
the financial condition of the Sellers and of all other circumstances which
diligent inquiry would reveal and which bear upon the risk of nonpayment of
the Obligations. The Guarantor hereby covenants that it will continue to
keep itself informed of the financial condition of the Sellers and of all
other circumstances which bear upon such risk of nonpayment. The Guarantor
hereby waives its right, if any, to require the
-5-
Purchaser to disclose to it any information which the Purchaser may now or
hereafter acquire concerning such condition or circumstances including the
release of any other guarantor.
Section 3.8. Evidence of Obligations. The Purchaser's books and
records evidencing the Obligations shall be admissible in any action or
proceeding and shall be binding upon the Guarantor for the purpose of
establishing the terms set forth therein and shall constitute prima facie
proof thereof.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or consent to any departure by any Seller Party
herefrom shall be effective unless in a writing signed by the Purchaser
(including any successor or assign to the extent such amendment or waiver
directly affects the interest of such successor or assign in the Listed
Receivables), and, in the case of any amendment, by such Seller Party and
then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No failure
on the part of the Purchaser to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
Section 4.2. Notices, Etc. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and sent or delivered, to each party
hereto, at its address set forth under its name on Schedule I hereto
(except that Purchase Notices shall be sent to the address set forth in the
form of Purchase Notice attached as Exhibit VIII) or at such other address
as shall be designated by such party in a written notice to the other
parties hereto. Notices and communications by facsimile shall be effective
when sent (and shall be followed by hard copy sent by first class mail),
and notices and communications sent by other means shall be effective when
received.
Section 4.3. Assignability. This Agreement and the Purchaser's
rights and obligations herein (including ownership of each Purchased
Interest) shall be assignable, in whole or in part, by the Purchaser and
its successors and assigns to an Eligible Assignee in a minimum amount of
twenty-five million dollars ($25,000,000); provided that unless a
Termination Event has occurred and is continuing, no such assignment shall
be effective without the prior written consent of Mattel, which consent
shall not be unreasonably withheld; provided, however, that no consent of
Mattel shall be required in connection with any assignment by the Purchaser
or its successors and assigns to an Affiliate of the Purchaser which is
otherwise an Eligible Assignee (each such assignee, an "Assignee");
provided, further, however, that the Seller Parties may continue to deal
solely and directly with the Purchaser in connection with the interest so
assigned to an Assignee until written notice of such assignment, together
with payment instructions, addresses and related information with respect
to the Assignee, shall have been given to the Servicer by the Purchaser and
the Assignee. From and after the date that such notice and information
shall have been so given, the Assignee shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it,
shall have the rights and obligations of the Purchaser under the
Transaction Documents, and (ii) the
-6-
Purchaser shall, to the extent that rights and obligations hereunder and
under the other Transaction Documents have been assigned by it, relinquish
its rights and be released from its obligations under the Transaction
Documents. No Seller Party may assign its rights or delegate its obligations
hereunder or any interest herein without the prior written consent of the
Purchaser, except as expressly provided for in Exhibit VI with respect to
the Servicer.
Section 4.4. Survival of Termination. The provisions of Sections
4.4 and 4.5, and the provisions of Article III and Exhibit VII, shall
survive any termination of this Agreement.
Section 4.5. Mattel Credit Agreement. Sections 10.1(f), 10.4, 10.5,
10.7, 10.11, 10.12 and 10.14 of the Mattel Credit Agreement are hereby
incorporated by reference as if set forth in full herein, except that for
purposes of such incorporation by reference: (i) all references to "the
Company" shall be deemed to be references to each Seller Party,
individually; (ii) all references to "Notes" or "Loan Documents" shall be
deemed to be references to the Transaction Documents; (iii) all references
to "Agent" or "Bank" shall be deemed to be references to the Purchaser;
(iv) all references to "Event of Default" shall be deemed to be references
to a Termination Event; (v) the reference to "Section 2.13" shall be deemed
to be a reference to this Agreement; (vi) all references to "Obligations"
shall be deemed to be references to the obligations of any Seller Party
under any Transaction Document; (vii) all references to "Loans" shall be
deemed to be deleted; (viii) the reference to "any Bank Affiliate" shall be
deemed to be a reference to any Affiliate; and (ix) all references to "this
Agreement" shall be deemed to be references to this Agreement.
Section 4.6. Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties hereto, and supersedes all
prior or contemporaneous agreements and understandings of such Persons,
verbal or written, relating to the subject matter hereof, it being
understood and agreed that this sentence shall not limit the incorporation
by reference of terms of the Mattel Credit Agreement to the extent such
terms are specifically incorporated by reference herein. The Exhibits and
Schedules hereto are incorporated by reference herein.
-7-
IN WITNESS WHEREOF, the parties have caused this Receivables Purchase
Agreement to be executed by their respective officers thereunto duly
authorized as of the date first above written.
MATTEL SALES CORP., as a Seller
By: /s/ WILLIAM STAVRO
-------------------------
William Stavro
Vice President, Treasurer
FISHER-PRICE, INC., as a Seller
By: /s/ WILLIAM STAVRO
--------------------------
William Stavro
Treasurer
MATTEL, INC., as the Servicer and as the
Guarantor
By: /s/ WILLIAM STAVRO
--------------------------------
William Stavro
Senior Vice President, Treasurer
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as the Purchaser
By: /s/ ROBERT W. TROUTMAN
--------------------------
Robert W. Troutman
Managing Director
-8-
EXHIBIT I
DEFINITIONS
As used in the Receivables Purchase Agreement dated as of August 29,
1995 among Mattel Sales Corp., as Seller, Fisher-Price, Inc., as Seller,
Mattel, Inc., as Servicer, and Bank of America National Trust and Savings
Association, as Purchaser (as the same may be amended, amended and
restated, or otherwise modified from time to time, this "Agreement" or this
"Receivables Purchase Agreement"), including its Exhibits, the following
terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section, Exhibit and Schedule references in
this Agreement (including in this Exhibit) are to Sections of and Exhibits
and Schedules to this Agreement. Unless the context otherwise requires,
capitalized terms used without definition in this Agreement have the
meanings set forth in the Mattel Credit Agreement.
"Adverse Claim" means a lien, security interest or other charge
or encumbrance, or any other type of right or claim, it being understood
and agreed that a lien, security interest or other charge or encumbrance,
or any other type of right or claim, in favor of the Purchaser shall not
constitute an Adverse Claim.
"Bankruptcy Code" means the United States Bankruptcy Reform Act
of 1978 (11 U.S.C. Section 101, et seq.), as amended from time to time.
"Business Day" means any day other than Saturday, Sunday or other
day on which commercial banks in Los Angeles, California are authorized or
required by law to close and, if the applicable Business Day relates to the
Eurodollar Rate, means such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
"Collections" means, with respect to any Listed Receivable, (a)
all funds which are received by the related Seller or the 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 Obligor or any other Person directly or
indirectly liable for the payment of such Listed Receivable and available
to be applied thereon), and (b) all other proceeds of such Listed
Receivable.
"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 Obligor becomes
or is obligated to make payment in respect of such Listed Receivable.
"Credit and Collection Policy" means those receivables credit and
collection policies and practices of the Sellers in effect on the date of
this Agreement, as amended from time to time to the extent permitted
herein.
I-1
"Dilution" means any adjustment in the outstanding principal
balance of a Listed Receivable attributable to any credits, rebates,
billing errors, sales or similar taxes, discounts, setoffs, disputes,
chargebacks, returns, allowances or similar items.
"Due Date" means the First Due Date or the Second Due Date, as
the case may be. With respect to the First Purchase Date, the "related"
Due Date means the First Due Date, and, with respect to the Second Purchase
Date, the "related" Due Date means the Second Due Date.
"Eligible Receivables" means, on an applicable Purchase Date, any
Receivable: (i) which has a stated maturity and which stated maturity (x)
with respect to Receivables existing on the First Purchase Date, is after
the First Purchase Date but not later than the First Due Date, and (y) with
respect to Receivables existing on the Second Purchase Date, is after the
Second Purchase Date but not later than the Second Due Date; (ii) which is
an "account" as defined in the UCC of any applicable jurisdiction; (iii)
which is denominated and payable only in United States dollars in the
United States; (iv) which, together with the Contract related thereto, is
in full force and effect and constitutes the legal, valid and binding
obligation of the Obligor enforceable against the Obligor in accordance
with its terms and subject to no offset, counterclaim or other defense; (v)
which, together with the Contract related thereto, does not contravene in
any material respect any Governmental Rules applicable thereto and with
respect to which no part of the Contract related thereto is in violation of
any such Governmental Rule in any material respect; (vi) which satisfies
all applicable requirements of the Credit and Collection Policy; (vii)
which was generated in the ordinary course of the related Seller's
business; and (viii) which was generated by the applicable Seller at such
time as the Obligor had long-term, unsecured debt rated at least A+ by S&P
and A1 by Moody's.
"Eurodollar Rate" means, for any Yield Period, an interest rate
per annum (rounded upward to the nearest 1/16th of 1%) determined pursuant
to the following formula:
Eurodollar Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means, for any Yield Period, the
maximum reserve percentage (expressed as a decimal, rounded upward to
the nearest 1/100th of 1%) in effect on the date LIBOR for such Yield
Period is determined under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred
to as "Eurocurrency liabilities") having a term comparable to such
Yield Period; and
"LIBOR" means the rate of interest per annum determined by the
Purchaser to be the rate of interest at which dollar deposits in the
approximate amount of the Purchaser's Investment associated with such
Yield Period would be offered to major banks in the London interbank
market at their request at or about 11:00 a.m. (London time) on the
second Business Day prior to the commencement of such Yield Period.
"Event of Default" has the meaning set forth in the Mattel Credit
Agreement.
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"First Due Date" means December 21, 1995.
"First Purchase Date" means September 21, 1995.
"Guarantor" has the meaning set forth in the preamble.
"Indemnified Amounts" means any and all claims, damages, costs,
expenses, losses and liabilities (including all reasonable fees and other
charges of any law firm or other external counsel, the reasonable allocated
cost of internal legal services and all reasonable other charges of
internal counsel).
"Indemnified Parties" means the Purchaser and its Affiliates and
their respective employees, agents, successors, transferees and assigns.
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Person relating to bankruptcy,
reorganization, insolvency, liquidations, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; and in the case of clause (a) or (b),
undertaken under U.S. Federal, state or foreign law, including the
Bankruptcy Code.
"Listed Receivables" has the meaning set forth in Section 1.2(a).
"Listed Receivables Balance" means, with respect to a Purchased
Interest and the related Seller, the outstanding principal balance, as of
the date the related Purchase Notice is sent to the Purchaser, of the
related Listed Receivables.
"Material Adverse Effect" means a material adverse effect upon
(i) the business, operations, properties, assets, business prospects or
condition (financial or otherwise) of Mattel and its Subsidiaries, taken as
a whole, or (ii) a material impairment of the ability of Mattel to perform
its obligations under this Agreement.
"Mattel Credit Agreement" means the Credit Agreement dated as of
March 10, 1995, among Mattel, the Banks named therein, and Bank of America,
as Agent, without giving effect to any amendment, amendment and
restatement, or other modification thereto or waiver thereof, except to the
extent approved by the Purchaser in a writing that refers to this
Agreement.
"Obligor" means Wal-Mart Stores, Inc.
"Purchase Date" means the First Purchase Date or the Second
Purchase Date, as the case may be.
"Purchase Notice" has the meaning set forth in Section 1.2(a).
"Purchased Interest" means, at any time, with respect to a
Seller, the undivided percentage ownership interest of the Purchaser
acquired pursuant to this Agreement from such Seller in such Seller's
Listed Receivables, Related Security with respect to such Receivables,
Collections
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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
where:
PI = the Purchaser's Investment with respect to such Seller
at the related Purchase Date.
YR = the Yield Reserve of such Purchased Interest at the
related Purchase Date; and
LRB = the related Listed Receivables Balance as of the date
the related Purchase Notice is sent to the Purchaser.
Each Purchased Interest with respect to a Seller shall be computed in
accordance with Section 1.2(a) and shall remain constant until such time as
the related Purchaser's Investment and accrued Yield thereon shall have
been paid in full. Upon payment of the items described in the preceding
sentence the related Purchased Interest shall be zero.
"Purchaser" has the meaning set forth in the preamble to this
Agreement.
"Purchaser Rate" means a rate per annum equal to the Eurodollar
Rate plus one-quarter of one percent (0.25%). The Purchaser Rate for a
Yield Period shall be established on the applicable day contemplated by the
definition of LIBOR.
"Purchaser's Account" means Account No. 12331-83980, reference
"Mattel Receivables Payment", ABA No. 121000358, maintained at the
Purchaser, or any other account designated in writing by the Purchaser to
the Servicer and the Sellers from time to time.
"Purchaser's Investment" has the meaning set forth in Section
1.2(a). The amount of each Purchaser's Investment shall be reduced by
payments received by the Purchaser and applied on account of such
Purchaser's Investment pursuant to this Agreement.
"Purchaser's Investment Limit" means one hundred million dollars
($100,000,000).
"Receivable" means any indebtedness and other obligations owed to
a Seller or any right of a Seller to payment from or on behalf of the
Obligor 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 related Seller'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
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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 the 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.
"Second Due Date" means March 21, 1996.
"Second Purchase Date" means December 21, 1995.
"Seller Party" means each of the Sellers and Mattel (in its
capacity as the Servicer or the Guarantor).
"Sellers" has the meaning set forth in the preamble to this
Agreement. A reference to the "related" Seller means (i) with respect to a
Receivable, that such Receivable by its original terms was owed to such
Seller, and (ii) with respect to a Purchased Interest, that such Purchased
Interest pertains to an investment in such Receivables.
"Servicer" has the meaning set forth in the preamble to this
Agreement.
"Termination Event" has the meaning specified in Exhibit V.
"Termination Event Day" means a day on which a Termination Event
exists.
"Termination Rate" means a rate per annum equal to the Base Rate
plus two percent (2.0%).
"Transaction Documents" means this Agreement and all
certificates, instruments, UCC financing statements, reports, notices,
agreements and documents executed or delivered by any Seller Party under or
in connection with this Agreement, thereby excluding, for example, the
Mattel Credit Agreement.
"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 to paragraph (c) of Exhibit VI.
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"Yield", for any Purchased Interest for each day in a related
Yield Period, means an amount determined as follows:
PR x PI x 1/360
where:
PR = the Purchaser Rate for such Yield Period; and
PI = the Purchaser's Investment with respect to such
Purchased Interest during such Yield Period;
provided that if one or more Termination Event Days shall occur during any
Yield Period, the Yield for such Purchased Interest for each such
Termination Event Day in such Yield Period shall be deemed to accrue in
accordance with the following formula:
TR x PI x 1/360
where:
TR = the Termination Rate on such Termination Event Day;
and
PI = the Purchaser's Investment with respect to such
Purchased Interest on such Termination Event Day.
It is hereby agreed and understood no provision of this Agreement
shall require the payment or permit the collection of Yield in excess of
the maximum permitted by applicable law.
"Yield Period" means each period from and including a Purchase
Date to but excluding the related Due Date.
Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting
principles. 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, "or" means
"and/or", and "including" (and with correlative meaning "include" and
"includes") means including without limiting the generality of any
description preceding such term.
I-6
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The initial
purchase under this Agreement is subject to the conditions precedent that
the Purchaser shall have received on or before the First Purchase Date the
following, each in form and substance (including the date thereof)
satisfactory to the Purchaser: (a) a counterpart of this Agreement duly
executed by the Sellers Parties; (b) favorable opinions of (x) the General
Counsel or an Assistant General Counsel of Mattel, relating to the Seller
Parties and (y) Latham & Watkins, special counsel to the Seller Parties;
(c) authorization from Mattel to debit a bank account of Mattel maintained
at the Purchaser, in an amount equal to twenty-five thousand dollars
($25,000), which amount constitutes an arrangement fee payable to BA
Securities, Inc. (it being understood and agreed that such arrangement fee
shall be payable by Mattel if such debit is not made prior to the initial
purchase); (d) a certificate of the Assistant Secretary of each Seller
Party certifying in each case (i) the names and signatures of its
applicable officers that shall execute and deliver the Transaction
Documents (on which certificate the Purchaser may conclusively rely until
such time as the Purchaser shall receive a revised certificate meeting the
requirements of this clause), (ii) that attached thereto is a true and
correct copy of the certificate or articles of incorporation (certified by
the Secretary of State of Delaware or California, as the case may be) and
by-laws of such Seller Party, in each case as in effect on the date of such
certification, (iii) that attached thereto are true and complete copies of
excerpts of resolutions adopted by the Board of Directors of such Seller
Party, approving the execution, delivery and performance of this Agreement
and all other Transaction Documents to which such Seller Party is a party;
and (iv) that attached thereto are good standing certificates (x) issued by
the Secretary of State of California with respect to Mattel Sales and (y)
issued by the Secretary of State of Delaware with respect to Fisher-Price
and Mattel; and (e) UCC-1 financing statements (x) signed by Mattel Sales
in form for filing with the Secretary of State of California and (y) signed
by Fisher-Price in form for filing with the Department of State of New
York, it being understood and agreed that such financing statements are to
be filed only in the circumstances contemplated by paragraph (c) of Exhibit
VI.
2. Condition Precedent to Second Purchase. The second
purchase hereunder shall be subject to the further condition precedent that
the Purchaser shall have received such "bring-downs" of the items described
in clause (d) of paragraph 1 of this Exhibit as it may reasonably request.
3. Conditions Precedent to All Purchases. Each purchase
(including the initial purchase) hereunder shall be subject to the further
conditions precedent that: (a) on the date of such purchase the following
statements shall be true (and acceptance of the proceeds of such purchase
shall be deemed a representation and warranty by the Sellers that such
statements are then true): (i) the representations and warranties contained
in Exhibit III are true and correct on and as of the date of such purchase
as though made on and as of such date (except to the extent any
representation and warranty is expressly made as of an earlier date); and
(ii) no event has occurred and is continuing, or would result from such
purchase, that constitutes a Termination Event or that would constitute a
Termination Event but for the requirement that notice be given or time
elapse or both; (b) after giving effect to the payment contemplated by
Section 1.2 on the date of such purchase, the aggregate outstanding
Purchaser's Investments shall not exceed the Purchaser's Investment Limit;
(c) the Purchaser shall have received a fee of three thousand dollars
($3,000) with respect to such purchase
II-1
on or before the date of such purchase; and (d) the Purchaser shall have
received a list of Eligible Receivables from each Seller in accordance
with the last paragraph of Section 1.2(a).
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EXHIBIT III
REPRESENTATIONS AND WARRANTIES
Each Seller Party severally represents and warrants, as to
itself alone, as applicable, to the Purchaser as follows:
(a) Such Seller Party is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of its
incorporation, and is duly qualified to do business, and is in good
standing, as a foreign corporation in every jurisdiction where the nature
of its business requires it to be so qualified, except in jurisdictions in
which the failure to be qualified or in good standing has or will have no
Material Adverse Effect.
(b) The execution, delivery and performance by such Seller
Party of this Agreement and the other Transaction Documents to which it is
a party, including such Seller Party's use of the proceeds of purchases,
(i) are within such Seller Party's corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) do not contravene or
result in a default under or conflict with (1) such Seller Party's charter
or by-laws, (2) any law, rule or regulation applicable to such Seller
Party, the violation of which would result in a Material Adverse Effect,
(3) any Contractual Obligation of such Seller Party the violation of which
would have a Material Adverse Effect or (4) any order, writ, judgment,
award, injunction or decree binding on or affecting such Seller Party or
its property, the violation of which would result in a Material Adverse
Effect, and (iv) do not result in or require the creation of any material
Adverse Claim upon or with respect to any of its material properties. This
Agreement and the other Transaction Documents to which it is a party have
been duly executed and delivered by such Seller Party.
(c) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Person or other Person is
required for the due execution, delivery and performance by such Seller
Party of this Agreement or any other Transaction Document to which it is a
party, it being understood and agreed that the Purchaser has the right to
file UCC-1 financing statements pursuant to Exhibit VI.
(d) This Agreement and the other Transaction Documents to
which it is a party constitutes the legal, valid and binding obligation of
such Seller Party enforceable against such Seller Party in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating
to or limiting creditors' rights generally.
(e) There is no pending or, to the knowledge of such Seller
Party, threatened action or proceeding affecting such Seller Party or any
of its Subsidiaries before any Governmental Person or arbitrator which, in
the reasonable opinion of such Seller Party, would result in a Material
Adverse Effect, or which affects or purports to affect the legality,
validity or enforceability of this Agreement or the other Transaction
Documents.
(f) With respect to each Seller, such Seller is the legal and
beneficial owner of its Listed Receivables (and all Related Security) free
and clear of any Adverse Claim; upon each purchase, the Purchaser shall
have a valid and enforceable first priority (and, on and after the UCC
III-1
Filing Date, perfected) undivided percentage ownership interest or security
interest in each such Listed Receivable and in the Related Security and
Collections and other proceeds with respect thereto, in each case free and
clear of any Adverse Claim. No effective financing statement or other
instrument similar in effect covering any related Contract or any such
Receivable or the Related Security or Collections with respect thereto is
on file in any recording office other than any financing statement or
similar instrument in favor of the Purchaser.
(g) All exhibits, financial statements, documents, books,
records, other information or reports furnished or to be furnished at any
time by or on behalf of such Seller Party to the Purchaser in connection
with this Agreement are or will be accurate in all material respects as of
their respective dates or (except as otherwise disclosed to the Purchaser
at such time) as of the date so furnished, and no such item contains or
will contain any untrue statement of a material fact or omits or will omit
to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they were
made, not misleading, except to the extent that any such statement or
omission that was untrue or misleading at the time made or that
subsequently became untrue or misleading has been superseded or corrected
by information provided to the Purchaser prior to the date of this
Agreement.
(h) With respect to each Seller, the principal place of
business and chief executive office (as such terms are used in the UCC) of
such Seller and the office where such Seller keeps its records concerning
the Listed Receivables are located at the address referred to in paragraph
(b) of Exhibit IV.
(i) Such Seller Party is not in violation of any order of any
court, arbitrator or Governmental Person, which violation would have a
Material Adverse Effect.
(j) With respect to each Seller, no proceeds of any purchase
from such Seller will be used for any purpose that violates any applicable
law, rule or regulation, including Regulations G or U of the Federal
Reserve Board.
(k) No event has occurred and is continuing, or would result
from a purchase in respect of the related Purchased Interest or from the
application of the proceeds therefrom, which constitutes a Termination
Event.
(l) With respect to each Seller, such Seller has accounted for
each sale of undivided percentage ownership interests in its Listed
Receivables in its books and financial statements as sales, consistent with
generally accepted accounting principles.
(m) With respect to each Seller Party, such Seller Party has
complied with all of the material terms, covenants and agreements contained
in this Agreement and the other Transaction Documents and applicable to it,
except, in any such case, where the consequences, direct or indirect, of
any such noncompliance, if any, would not result in a Material Adverse
Effect.
(n) With respect to each Seller, such Seller's complete
corporate name is set forth in the preamble to this Agreement, and such
Seller does not use and has not during the last five years used any other
corporate name, trade name, doing business name or fictitious name, except
as set
III-2
forth on Schedule II and except for names first used after the date
of this Agreement and set forth in a notice delivered to the Purchaser
pursuant to paragraph (b) of Exhibit IV.
III-3
EXHIBIT IV
COVENANTS
Until the later of (i) the date on which no Purchaser's Investment of
or Yield in respect of any Purchased Interest shall be outstanding and (ii)
the date all other amounts owed by the Sellers or the Servicer under this
Agreement to the Purchaser and any other Indemnified Party shall be paid in
full:
(a) Compliance with Laws, Etc. Each Seller Party shall comply
in all material respects with all applicable laws, rules, regulations and
orders, and preserve and maintain its corporate existence, rights,
franchises, qualifications, and privileges except to the extent that the
failure so to comply with such laws, rules and regulations or the failure
so to preserve and maintain such existence, rights, franchises,
qualifications, and privileges would not result in a Material Adverse
Effect.
(b) Offices, Records and Books of Account; Etc. Each Seller
(i) shall keep its principal place of business and chief executive office
(as such terms are used in the UCC) and the office where it keeps its
records concerning the Listed Receivables at the address of such Seller set
forth under its name on Schedule I to this Agreement or, upon at least 15
days' prior written notice of a proposed change to the Purchaser, at any
other locations (provided that, if the UCC Filing Date has occurred, then,
prior to making such a change, such Seller shall have taken all actions in
any applicable jurisdiction that may be requested by the Purchaser in
accordance with paragraph (d) of this Exhibit); and (ii) shall provide the
Purchaser with at least 15 days' written notice prior to making any change
in such Seller's name or making any other change in such Seller's identity
or corporate structure (including a merger) which could render any UCC
financing statement theretofore filed with respect to such Person by any
other Person (including, if applicable, any UCC financing statements filed
in connection with this Agreement) "seriously misleading" as such term is
used in the UCC (provided that, if the UCC Filing Date has occurred, then,
prior to making such a change, such Seller shall have taken all actions in
any applicable jurisdiction that may be requested by the Purchaser in
accordance with paragraph (d) of this Exhibit); each notice to the
Purchaser pursuant to this sentence shall set forth the applicable change
and the effective date thereof. Each Seller also will maintain and
implement administrative and operating procedures (including an ability to
recreate records evidencing Listed Receivables and related Contracts in the
event of the destruction of the originals thereof), and keep and maintain
all documents, books, records, computer tapes and disks and other
information reasonably necessary or advisable for the collection of all
Listed Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to
each existing Listed Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. Each Seller Party shall, at its expense, timely and
fully perform and comply in all material respects with all material
provisions, covenants and other promises required to be observed by it
under the Contracts related to the Receivables, and timely and fully comply
in all material respects with the Credit and Collection Policy with regard
to each such Listed Receivable and the related Contract.
IV-1
(d) Ownership Interest, Etc. Each Seller shall, at its
expense, take all action necessary or desirable to establish and maintain a
valid, enforceable and first priority (and, after the UCC Filing Date,
perfected) security interest in the items described in Section 1.2(d), free
and clear of any Adverse Claim, in favor of the Purchaser, including taking
such action to protect (and, on and after the UCC Filing Date, to perfect)
or more fully evidence the interest of the Purchaser under this Agreement
as the Purchaser may request.
(e) Sales, Liens, Etc. Neither Seller shall sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Adverse Claim upon or with respect to, any or all of its
right, title or interest in, to or under, any item described in Section
1.2(d) (including such Seller's undivided interest in any Listed
Receivable, Related Security, or Collections), or upon or with respect to
any account to which any Collections of any Listed Receivables are sent
(except the rights of the depository institution that maintains such
account), or assign any right to receive income in respect of any items
contemplated by this paragraph (e).
(f) Extension or Amendment of Receivables. Except as
expressly provided in this Agreement, no Seller Party shall adjust the
outstanding principal balance of, or otherwise modify the terms of, any of
the Listed Receivables, or amend, modify or waive any term or condition of
any related Contract; provided that notwithstanding any other provision of
this Agreement, no Seller Party shall extend the maturity of any Listed
Receivable.
(g) Change in Business or Credit and Collection Policy. No
Seller Party shall make any material change in the character of its
business, or in the Credit and Collection Policy, that would result in a
Material Adverse Effect. Neither Seller shall make any other change in the
Credit and Collection Policy without the prior written consent of the
Purchaser.
(h) Audits. Each Seller Party shall, from time to time during
regular business hours (and with reasonable advance notice) as requested by
the Purchaser, permit the Purchaser, or its agents or representatives, (x)
to examine and make copies of and abstracts from all books, records and
documents (including computer tapes and disks) in the possession or under
the control of such Seller relating to Listed Receivables and the Related
Security, including the related Contracts, and (y) to visit the offices and
properties of such Seller Party for the purpose of examining such materials
described in clause (x) above, and to discuss matters relating to Listed
Receivables and the Related Security or such Seller Party's performance
hereunder or under the Contracts with any of the officers, employees,
agents or contractors of such Seller Party having knowledge of such
matters. Without limiting the foregoing, such examinations, copies,
abstracts, visits and discussions may cover, among other things, maturity
dates, agings, past dues, charge-offs, and offsets with respect to the
Listed Receivables.
(i) Status of Listed Receivables. In the event that any third
party and any Seller Party enter into negotiations or discussions regarding
the provision of financing (whether in the form of a loan, purchase or
otherwise) with respect to any Receivable that is a Listed Receivable, such
Seller Party shall inform such third party that the applicable Seller has
sold an undivided percentage ownership interest in such Listed Receivable
to the Purchaser.
(j) Reporting Requirements.
IV-2
(x) If a Purchaser's Investment with respect to an
undivided interest purchased by the Purchaser on a Purchase Date
remains outstanding on the related Due Date after giving effect
to Section 1.3, then the related Seller or the Servicer shall
provide to the Purchaser on a weekly basis a report, in form and
substance satisfactory to the Purchaser, with respect to the
related Listed Receivables (including with respect to collection
efforts pertaining thereto).
(y) Each Seller Party shall provide to the Purchaser
as soon as possible and in any event within five Business Days
after the occurrence of each Termination Event or event which,
with the giving of notice or lapse of time, or both, would
constitute a Termination Event, a statement of the chief
financial officer of such Seller Party setting forth details of
such Termination Event or event and the action that such Seller
Party has taken and proposes to take with respect thereto.
(z) Each Seller Party shall provide to the Purchaser
such other information respecting its Listed Receivables or the
condition or operations, financial or otherwise, of such Seller
or any of its Affiliates as the Purchaser may from time to time
reasonably request.
IV-3
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
(a) Any Seller Party shall fail (i) to make when due any
payment or deposit to be made by it under this Agreement with respect to
the related Purchased Interest (including, in the case of the Servicer,
failing to deliver to the Purchaser on any Due Date an amount equal to the
Purchaser's Investments plus accrued Yield thereon) or (ii) to perform or
observe in any material respect, within 15 days after written notice
thereof, any other material term, covenant or agreement contained in any
Transaction Document on its part to be performed or observed or
(b) Any representation or warranty made or deemed made by any
Seller Party (or any of its officers) under or in connection with any
Transaction Document or any material information or report delivered by any
Seller Party pursuant to any Transaction Document shall prove to have been
incorrect or untrue in any material respect when made or deemed made or
delivered; or
(c) Any Event of Default shall have occurred; or
(d) The Purchaser shall fail to have a valid and enforceable
first priority (and, on and after the UCC Filing Date, perfected) undivided
percentage ownership interest or security interest in each Receivable and
the Related Security and Collections and other proceeds with respect
thereto, free and clear of any Adverse Claim; or
(e) There shall have occurred any event not otherwise covered
by this Exhibit which has or will have a Material Adverse Effect.
V-1
EXHIBIT VI
ADMINISTRATION AND COLLECTION
(a) Appointment of Servicer. Mattel is hereby designated as,
and hereby agrees to perform the duties and obligations of, the Servicer
pursuant to the terms hereof; provided that, with respect to any group of
Listed Receivables, Mattel (solely in its capacity as Servicer) may, at any
time, upon prior written notice to the Purchaser, delegate any or all of
its duties and obligations as Servicer under this Agreement to an Affiliate
of Mattel; provided, however, that notwithstanding any such delegation,
Mattel shall remain liable for the performance of the duties and
obligations of the Servicer in accordance with the terms of this Agreement
without diminution of such liability by virtue of such delegation and to
the same extent and under the same terms and conditions as if Mattel alone
were performing such duties and obligations. Subject to the foregoing,
Mattel hereby delegates to Fisher-Price all of Mattel's duties and
obligations under paragraph (b) below with respect to the Listed
Receivables of Fisher-Price. Mattel acknowledges that the Purchaser has
relied on the agreement of Mattel to act as the Servicer hereunder in
making its decision to execute and deliver this Agreement. Accordingly,
Mattel agrees that it will not voluntarily resign as the Servicer.
(b) Duties of Servicer. The Servicer shall take or cause to
be taken all such action as may be necessary or advisable to collect each
Listed Receivable from time to time, all in accordance with this Agreement
and all applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy;
provided, however, that the Servicer shall not extend the maturity of any
Listed Receivable. Each Seller shall deliver to the Servicer and the
Servicer shall hold for the benefit of such Seller and the Purchaser in
accordance with their respective interests, all records and documents
(including computer tapes or disks) with respect to such Seller's Listed
Receivables. Notwithstanding anything to the contrary contained herein,
the Purchaser may direct the Servicer to commence or settle any legal
action to enforce collection of any Listed Receivable or to foreclose upon
or repossess any Related Security; provided, however, that no such
direction may be given unless (x) a Termination Event has occurred and is
continuing and (y) the Purchaser believes in good faith that failure to
commence, settle, or effect such legal action, foreclosure or repossession
could materially and adversely affect a material portion of the Listed
Receivables.
(c) Enforcement Rights. Notwithstanding any other provision
of this Agreement, during the continuation of a Termination Event:
(i) at any time and from time to time the Purchaser may direct
the Obligor that payment of all amounts payable under any Listed
Receivable be made directly to the Purchaser or its designee;
(ii) at any time and from time to time the Purchaser may
instruct each Seller to give notice of the Purchaser's Interest in
such Seller's Listed Receivables to the Obligor, which notice shall
direct that payments be made directly to the Purchaser or its
designee, and upon such instruction from the Purchaser such Seller
shall give such notice at the expense of such Seller;
VI-1
(iii) at any time and from time to time the Purchaser may
request each Seller Party to, and upon such request such Seller Party
shall, assemble all of the records necessary or desirable to collect
such the Listed Receivables and the Related Security, and transfer or
license the use of, to the Purchaser, all software necessary or
desirable to collect such Listed Receivables and the Related Security,
and make the same available to the Purchaser or its designee at a
place selected by the Purchaser;
(iv) at any time and from time to time the Purchaser may
request each Seller Party to, and upon such request such Seller Party
shall as soon as is practicable and in any event within five Business
Days of such request, segregate all cash, checks and other instruments
received by it from time to time constituting Collections with respect
to the Listed Receivables in a manner acceptable to the Purchaser and,
promptly upon receipt, remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to the
Purchaser or its designee;
(v) at any time and from time to time the Purchaser may
request the Sellers to, and upon such request the Sellers shall, sign
and deliver to the Purchaser UCC financing statements with respect to
the items described in Section 1.2(d), in form and substance
satisfactory to the Purchaser, and the Purchaser shall have the right
to file such financing statements (and the UCC financing statements
delivered pursuant to Exhibit II) in such jurisdictions as it deems to
be necessary or appropriate to protect its interest in such items; and
(vi) each Seller Party hereby authorizes the Purchaser, and
irrevocably appoints the Purchaser as its attorney-in-fact with full
power of substitution and with full authority in the place and stead
of such Seller Party, which appointment is coupled with an interest,
to take any and all steps in the name of such Seller Party and on
behalf of such Seller Party necessary or desirable, in the
determination of the Purchaser, to collect any and all amounts or
portions thereof due under any and all of the Listed Receivables or
Related Security, including endorsing the name of such Seller Party on
checks and other instruments representing Collections and enforcing
such Listed Receivables, Related Security and the related Contracts.
Notwithstanding anything to the contrary contained in this paragraph,
none of the powers conferred upon such attorney-in-fact pursuant to
the immediately preceding sentence shall subject such attorney-in-fact
to any liability if any action taken by it shall prove to be
inadequate or invalid, nor shall they confer any obligations upon such
attorney-in-fact in any manner whatsoever.
(d) Responsibilities of the Sellers. Anything herein to the
contrary notwithstanding, each Seller shall (x) perform all of its
obligations under the Contracts related to its Listed Receivables to the
same extent as if interests in such Listed Receivables had not been
transferred hereunder and the exercise by the Purchaser of its rights
hereunder shall not relieve such Seller from such obligations, and (y) pay
when due any taxes, including any sales taxes payable in connection with
the Listed Receivables and their creation and satisfaction. The Purchaser
shall not have any obligation or liability with respect to any Listed
Receivable, any Related Security or any related Contract, nor shall any of
them be obligated to perform any of the obligations of a Seller under any
of the foregoing.
VI-2
EXHIBIT VII
INDEMNIFICATION
(a) Indemnification. Without limiting any other rights that
the Indemnified Parties may have hereunder or under applicable law, each
Seller hereby severally agrees (x) to indemnify each Indemnified Party from
and against any and all Indemnified Amounts awarded against or incurred by
such Indemnified Party arising out of or resulting from this Agreement or
the use of proceeds of purchases or the ownership of the Purchased Interest
relating to such Seller, or any interest therein, or in respect of any
Receivable of such Seller or any related Contract, and (y) to pay within 15
days of demand to each Indemnified Party any and all amounts necessary to
indemnify such Indemnified Party from and against such Indemnified Amounts,
including Indemnified Amounts relating to or resulting from any of the
following: (i) the failure of any information provided to the Purchaser
with respect to Listed Receivables, Collections, Related Security or this
Agreement to be true and correct; (ii) the failure of any representation or
warranty or statement made or deemed made by such Seller or the Servicer
under or in connection with this Agreement to have been true and correct in
all respects when made (it being understood and agreed that for purposes of
this Exhibit VII, in determining whether any such representation or
warranty or statement was true and correct in all respects when made, any
qualification in Exhibit III as to materiality or to a Material Adverse
Effect or to limitations on enforcement shall be disregarded); (iii) the
failure by such Seller or the Servicer to comply with any applicable law,
rule or regulation with respect to any Listed Receivable of such Seller or
the related Contract, or the failure of any Listed Receivable of such
Seller or the related Contract to conform to any such applicable law, rule
or regulation; (iv) the failure to vest in the Purchaser a valid and
enforceable first priority perfected (A) undivided percentage ownership
interest, to the extent of the related Purchased Interest, in the Listed
Receivables of such Seller and the Related Security and Collections with
respect thereto and (B) security interest in the items described in Section
1.2(d), in each case free and clear of any Adverse Claim; (v) any dispute,
claim, counterclaim, offset or defense (other than discharge in an
Insolvency Proceeding of the Obligor) of the Obligor to the payment of any
Listed Receivable of such Seller (including a defense based on such Listed
Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its
terms), any Dilution or other adjustment with respect to a Listed
Receivable of such Seller (whether or not contemplated by Exhibit VI),
excluding, however, adjustments required as a matter of law because the
Obligor is a party to an Insolvency Proceeding, or any claim resulting from
the sale of the goods or services related to such Listed Receivable or the
furnishing or failure to furnish such goods or services or relating to
collection activities with respect to such Listed Receivable; (vi) any
failure of such Seller or the Servicer to perform its duties or obligations
in accordance with the provisions of this Agreement, or to perform its
duties or obligations under any Contract (it being understood and agreed
that for purposes of this Exhibit VII, in determining whether a Seller or
the Servicer has performed its duties or obligations in accordance with the
provisions of this Agreement or has performed its duties or obligations
under any Contract, any qualification in Exhibit IV or Exhibit VI as to
materiality or to a Material Adverse Effect or to the rights of any
depository institution that maintains any account to which any Collections
of Listed Receivables are sent shall be disregarded); (vii) any breach of
warranty, products liability or other claim, investigation, litigation or
proceeding arising out of or in connection with goods or services which are
the subject of any Contract relating to such Seller's Listed Receivables;
(viii) the commingling of Collections of such Seller's Listed Receivables
at any time with other funds; (ix) any investigation, litigation or
proceeding related to this Agreement or the use
VII-1
of proceeds of purchases or
the ownership of the related Purchased Interest or in respect of any Listed
Receivable of such Seller or any Related Security or Contract in respect
thereof; (x) the occurrence of any Termination Event and the resulting
increase in Yield with respect to the Purchased Interest relating to such
Seller; (xi) the failure of any Purchased Interest relating to that Seller
to be less than or equal to one hundred percent (100%); (xii) the failure
of any of such Seller's Listed Receivables to be Eligible Receivables;
(xiii) the failure of such Seller or the Servicer to comply with the terms
of the Credit and Collection Policy; (xiv) the failure of any Contract
relating to such Seller's Listed Receivables to have terms that are
consistent with customary terms for such Seller's industry and type of
Receivable; (xv) the failure of such Seller to complete the sale and
delivery of the goods (or the performance of the services, if any) which
are the subject of any of such Seller's Listed Receivables; (xvi) the
existence of any contingent performance requirements of such Seller in
respect of any of its Listed Receivables; or (xvii) any action or inaction
by such Seller or the Servicer which impairs the interest of the Purchaser
in such Seller's Listed Receivables. Without limiting the foregoing, the
parties hereto agree that if (A) the Purchaser is paid less than the
Purchaser's Investments plus accrued Yield thereon on a Due Date pursuant
to Section 1.3 (the difference between (x) the amount so paid on such Due
Date and (y) such Purchaser's Investments plus such Yield being referred to
as the "deficiency amount"), and (B) the deficiency amount did not result
from the Obligor being a party to an Insolvency Proceeding, then for each
day following such Due Date until the Purchaser shall have received an
amount equal to the deficiency amount, the Indemnified Amounts shall
include an amount equal to the amount of interest (determined by the
Purchaser) that the Purchaser would have earned on such day on the
deficiency amount had such amount been paid to the Purchaser on such Due
Date; provided, however, that this sentence shall not limit the applicable
Seller's obligation to pay the deficiency amount to the Purchaser to the
extent that the deficiency amount otherwise would be so payable pursuant to
this Exhibit. Notwithstanding the first sentence of this paragraph, no
Seller shall be obligated to indemnify any Indemnified Party for (x)
Receivables which are uncollectible because the Obligor is a party to an
Insolvency Proceeding, it being understood and agreed that this clause (x)
shall not limit any Seller's obligations under this Exhibit arising out of
or relating to any other event, occurrence or circumstance which would give
rise to an obligation of such Seller pursuant to this Exhibit (to the
extent that such event, occurrence or circumstance adversely affects
repayment of the Purchaser's Investments plus accrued Yield thereon during
or in connection with such Insolvency Proceeding), (y) any overall net
income taxes or franchise taxes imposed on such Indemnified Party by the
jurisdiction under the laws of which such Indemnified Party is organized or
any political subdivision thereof or (z) Indemnified Amounts resulting from
the gross negligence or willful misconduct on the part of the Indemnified
Party proposed to be indemnified. Notwithstanding any other provision of
this Agreement, in the event that the Obligor becomes a party to any
Insolvency Proceeding: (i) each Seller Party shall promptly (and in any
event not later than thirty days) after receipt provide to the Purchaser a
copy of any document, pleading, report, notice, information or other
writing provided to such Seller Party, during or in connection with such
Insolvency Proceeding, by or on behalf of the Obligor, any committee,
court, other Governmental Person, trustee, receiver, liquidator, custodian
or similar official in such Insolvency Proceeding, relating to the forms,
procedures, bar date or other timing issues with respect to the filing of a
Proof of Claim in such Insolvency Proceeding, provided, however, that this
clause (i) shall not become effective until the Purchaser shall have sent a
notice to the Servicer to the effect that the Purchaser desires that the
Seller Parties comply with this clause (i); (ii) the Servicer, as agent for
each Seller, shall file Proofs of Claim, at the request and direction of
the Purchaser, with respect to the Listed Receivables with such court,
other Governmental Person, trustee, receiver, liquidator, custodian or
similar official, which Proofs of Claim shall be in form and substance
reasonably satisfactory to the
VII-2
Purchaser, it being understood and agreed
that the Purchaser shall reimburse the Servicer for its reasonable expenses
in making such filing to the extent that such expenses relate to the Listed
Receivables; and (iii) the Purchaser, as agent for each Seller, shall have
the right but not the obligation to file Proofs of Claim with respect to
the Listed Receivables with such court, other Governmental Person, trustee,
receiver, liquidator or similar official, it being understood and agreed
that the Purchaser shall not file such a Proof of Claim until the earlier
to occur of (x) the sixtieth day following the date on which the Purchaser
has sent a written request to the Sellers requesting such Sellers to file
such a Proof of Claim and (y) the thirtieth day prior to the bar date or
equivalent last day on which such a Proof of Claim may be filed in such
Insolvency Proceeding. As used herein, "Proof of Claim" shall refer
individually, and "Proofs of Claim" shall refer collectively, to 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.
Without limiting the foregoing, if and to the extent the Purchaser
shall be required for any reason to pay over to any Seller, the Servicer or
an Obligor (or any trustee, receiver, custodian or similar official in any
Insolvency Proceeding) any amount received by the Purchaser hereunder, such
amount shall be deemed not to have been so received but rather to have been
retained by the Sellers and, accordingly, the Purchaser shall have a claim
against the applicable Seller for such amount, payable on demand.
(b) Capital Adequacy, Etc. Sections 3.1(a)-(e), 3.2, 3.3(a)
and (b), 3.4, 3.5 (excluding the first sentence thereof) and 3.6 of the
Mattel Credit Agreement are hereby incorporated by reference as if set
forth in full herein, except that for purposes of such incorporation by
reference: (i) all references to "the Company" shall be deemed to be
references to each Seller, individually; (ii) all references to "Bank",
"Agent" or "Reference Banks" shall be deemed to be references to the
Purchaser; (iii) all references to "Lending Office" shall be deemed to be a
reference to the office of the Purchaser identified on the signature page
to this Agreement; (iv) all references to "this Agreement" or "Loan
Documents" shall be deemed to be references to this Agreement or any other
Transaction Documents; (v) all references to "Loans" shall be deemed to be
references to the Purchaser's Investments; (vi) all references to
"Eurodollar Rate Loans" shall be deemed to be references to Purchaser's
Investments with respect to which Yield would then be calculated based on
the Eurodollar Rate; (vii) all references to "Base Rate Loans" shall be
deemed to be references to Purchaser's Investments with respect to which
Yield would then be calculated based on the Termination Rate; (viii) all
references to "CD Rate" or "CD Rate Loans" shall be deemed to have been
deleted; (ix) all references to "interest" shall be deemed to be references
to Yield; and (x) the following words in Section 3.3(b) of the Mattel
Credit Agreement, "pursuant to Section 2.4, either on the last day of the
Interest Period thereof if the Bank may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or promptly, if the Bank may not
lawfully continue to maintain such Eurodollar Rate Loans", shall be deemed
to be replaced by the word "promptly".
VII-3
EXHIBIT VIII
[FORM OF] PURCHASE NOTICE
, 199
------------ -
VIA FACSIMILE (510-675-7531 or 510-675-7532)
Bank of America National Trust
and Savings Association
1850 Gateway Boulevard
Global Payments Operations
#5693
Concord, California 94520
Attention: Cheryl Davidson
Ladies and Gentlemen:
This Purchase Notice is being delivered to you pursuant to Section
1.2 of the Receivables Purchase Agreement dated as of August 29, 1995 (as
amended, amended and restated or otherwise modified from time to time in
accordance with its terms, the "Receivables Purchase Agreement") among
Mattel Sales Corp., Fisher-Price, Inc., Mattel, Inc., and Bank of America
National Trust and Savings Association. Capitalized terms used herein
without definition shall have the meanings assigned thereto in the
Receivables Purchase Agreement.
The Servicer hereby notifies the Purchaser that each Seller proposes
to sell to the Purchaser on the [First] [Second] Purchase Date an undivided
percentage ownership interest in such Seller's Eligible Receivables and
other items contemplated by Section 1.2(c) of the Receivables Purchase
Agreement. As of the date of this Purchase Notice, the aggregate
outstanding principal balances of the Eligible Receivables of Mattel Sales
with respect to which Mattel Sales proposes to sell an undivided percentage
ownership interest to the Purchaser is $_____________, and the aggregate
outstanding principal balances of the Eligible Receivables of Fisher-Price
with respect to which Fisher-Price proposes to sell an undivided percentage
ownership interest to the Purchaser is $_____________.
Very truly yours,
MATTEL, INC., as the Servicer
By:
------------------------------
Name:
----------------------------
Title:
-----------------------------
VIII-1
SCHEDULE I
ADDRESSES FOR NOTICES
Bank of America National Trust
and Savings Association
Credit Products #5618
555 S. Flower Street
Los Angeles, California 90071
Attention: Robert W. Troutman
Telephone: (213) 228-3866
Facsimile: (213) 228-2756
Mattel, Inc.
333 Continental Blvd.
El Segundo, California 90245
Attention: William Stavro
Telephone: (310) 252-3202
Facsimile: (310) 252-3861 or
(310) 252-2179
Mattel Sales Corp.
333 Continental Blvd.
El Segundo, California 90245
Attention: William Stavro
Telephone: (310) 252-3202
Facsimile: (310) 252-3861 or
(310) 252-2179
Fisher-Price, Inc.
636 Girard Avenue
East Aurora, New York 14052
Attention: Mary Casey
Telephone: (716) 687-3000
Facsimile: (716) 687-3660
with a copy to:
William Stavro
Mattel, Inc.
333 Continental Blvd.
El Segundo, California 90245
Telephone: (310) 252-3202
Facsimile: (310) 252-3861 or
(310) 252-2179
SCHEDULE II
TRADE NAMES
Mattel Sales Corp.
- ------------------
Mattel Sales
Mattel
Fisher-Price, Inc.
- ------------------
Fisher-Price
FPI, Inc.
<PAGE>
EXHIBIT 10.3
STOCK PURCHASE AGREEMENT
------------------------
This Stock Purchase Agreement (the "Agreement"), dated as of October
20, 1995 is by and between Mattel, Inc., a Delaware corporation ("Buyer"),
and Marine Midland Bank solely in its capacity as the Sub-Trustee (the
"Sub-Trustee") of the International Games, Inc. Employee Stock Ownership
Trust (the "Trust") under an Agreement effective as of September 12, 1995
between the Sub-Trustee and International Games, Inc. (the "Sub-Trust
Agreement").
RECITALS
--------
A. The Trust owns (i) 864,293 shares of Buyer's Convertible
Preference Stock, Series F, $0.01 par value per share (the "Series F
Stock"), and (ii) 44,652 shares of Buyer's Common Stock, $1.00 par value
per share (the "Common Stock," and collectively with the Series F Stock,
the "Stock").
B. Buyer desires to purchase from the Trust, and the Trust desires
to sell to Buyer, all of the Stock subject to the terms and conditions of
this Agreement.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
-----------
1.1 Defined Terms. As used herein, the terms below shall have the
following meanings:
"Business Day" shall mean any day that commercial banks are open for
business in Los Angeles, California.
"Closing Date" shall mean the close of business on October 20, 1995,
or such other date as may be mutually agreed upon in writing by the Sub-
Trustee and Buyer.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"DPCM" shall mean Duff & Phelps Capital Markets Co.
"Encumbrances" shall mean any claim, lien, pledge, option, charge,
security interest, encumbrance or other rights of third parties.
1
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ESOP" shall mean the International Games, Inc. Restated Employee
Stock Ownership Plan.
"GAAP" shall mean generally accepted accounting principles.
"Representative" shall mean any officer, director, principal,
attorney, agent, employee or other representative.
"Trust Agreement" shall mean that certain Trust Agreement dated
January 1, 1987 by and between International Games, Inc. and the Trustee.
1.2 Other Defined Terms. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
Term Section
- ---- -------
1934 Act 5.4
Buyer's SEC Reports 5.4
Closing 3.1
Purchase Price 2.2
Trustee 2.1
ARTICLE II
PURCHASE AND SALE OF STOCK
--------------------------
2.1 Transfer of Stock. Upon the terms and subject to the conditions
contained herein, the Sub-Trustee shall direct The Standard Bank and Trust
Company, in its capacity as trustee of the Trust (the "Trustee"), to sell,
convey, transfer, assign and deliver the Stock to Buyer, and Buyer will
acquire the Stock from the Trust on the Closing Date.
2.2 Consideration for Stock. Upon the terms and subject to the
conditions contained herein, as consideration for the purchase of the
Stock, Buyer shall pay to the account of the Trust by wire transfer of
immediately available funds an aggregate purchase price of Seventy Five
Million, One Hundred and Five Thousand and Thirty Dollars ($75,105,030),
representing Seventy Three Million, Eight Hundred and Sixty Five Thousand,
Nine Hundred and Thirty Seven Dollars ($73,865,937) for the Series F Stock
and One Million, Two Hundred and Thirty Nine Thousand and Ninety Three
Dollars ($1,239,093) for the Common Stock (the "Purchase Price").
2
ARTICLE III
CLOSING
-------
3.1 Closing. The closing of the transactions contemplated herein
(the "Closing") shall be held at 9:00 A.M. local time on the Closing Date
at the offices of McDermott, Will & Emery, 227 West Monroe Street, Chicago,
Illinois unless the parties hereto otherwise agree.
3.2 Documents to be Delivered. To effect the transfer referred to in
Section 2.1 and the delivery of the consideration described in Section 2.2
hereof, the Sub-Trustee and Buyer shall, on the Closing Date, deliver the
following:
(a) The Sub-Trustee shall direct the Trustee to deliver to Buyer
certificate(s) evidencing the Stock, free and clear of any
Encumbrances of any nature whatsoever, duly endorsed in blank for
transfer or accompanied by stock powers duly executed in blank.
(b) The Sub-Trustee and Buyer shall each deliver all documents
required to be delivered pursuant to Articles VII and VIII hereof.
(c) Buyer shall deliver immediately available funds as provided in
Section 2.2.
(d) All instruments and documents executed and delivered to Buyer
pursuant hereto shall be in form and substance, and shall be executed
in a manner, reasonably satisfactory to Buyer. All instruments and
documents executed and delivered to Sub-Trustee pursuant hereto shall
be in form and substance, and shall be executed in a manner,
reasonably satisfactory to the Sub-Trustee.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SUB-TRUSTEE
-------------------------------------------------
The Sub-Trustee solely in its capacity as Sub-Trustee and on behalf of
the Trust hereby represents and warrants to Buyer as follows:
4.1 Authorization. To the best of its knowledge, the Sub-Trustee
has full power and authority to execute, deliver and perform this
Agreement, subject to the performance by the Trustee, and such execution,
delivery and performance has been duly authorized by all necessary action
on the part of the Sub-Trustee. This Agreement constitutes a valid and
binding obligation of the Sub-Trustee, solely in its capacity as Sub-
Trustee. The execution and delivery of this Agreement by the Sub-Trustee
and the
3
performance by the Sub-Trustee of its duties hereunder and under
the Sub-Trust Agreement do not violate applicable law, including ERISA or
the Code.
4.2 No Conflict or Violation. To the best knowledge of the Sub-
Trustee, neither the execution and delivery of this Agreement nor the
performance of the terms hereof violates, conflicts with or constitutes a
default under the terms of the ESOP, the Trust Agreement and Sub-Trust
Agreement or under any agreement or other document to which the Sub-Trustee
or Trustee is a party or by which the Sub-Trustee, the Trust or Trustee or
any of the assets of the Trust is or may be bound.
4.3 Fiduciary Authority. The Sub-Trustee has full power and
authority under the ESOP, the Trust Agreement and the Sub-Trust Agreement
to act as a Named Fiduciary of the Trust (within the meaning of Section
402(a)(2) of ERISA) for purposes of the sale of the Stock, and, in that
capacity, to direct the Trustee as to (i) the sale of the Stock to Buyer
and (ii) all other acts that the Sub-Trustee may deem necessary or proper
to carry out the foregoing.
4.4 Title to Stock. To the best of the knowledge of the Sub-Trustee
after having performed a reasonable investigation, the Trust owns the Stock
of record and beneficially, free and clear of all Encumbrances.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to the Sub-Trustee as follows:
5.1 Organization of Buyer. Buyer is duly organized, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority to conduct its business and to own and lease
its properties and assets.
5.2 Authorization. Buyer has all necessary corporate power and
authority to enter into this Agreement and has taken all corporate action
necessary to consummate the transactions contemplated hereby and to perform
its obligations hereunder. This Agreement has been duly executed and
delivered by Buyer and is a legal, valid and binding obligation of Buyer
enforceable against it in accordance with its terms.
5.3 No Conflict or Violation. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will result in (i) a violation of or a conflict with any provision of the
Certificate of Incorporation or Bylaws of Buyer or (ii) a breach of, or a
default under, any term or provision of any material contract, agreement,
indebtedness, lease,
4
Encumbrance or commitment to which Buyer is a party.
5.4 Financial Statements; Annual Reports on Form 10-K; Quarterly
Reports on Form 10-Q; Current Reports on Form 8-K. Buyer has furnished to
the Sub-Trustee its consolidated balance sheet as of December 31, 1994 and
December 31, 1993 and its statements of income and stockholders' equity for
each of the two years ended December 31, 1994 and December 31, 1993,
together with appropriate notes to such financial statements, accompanied
by the reports thereon containing opinions without comment or
qualification, by its independent certified public accountants.
All such financial statements, including the related notes, have been
prepared in conformity with GAAP consistently applied and are correct and
complete in all material respects and fairly present the consolidated
financial position of Buyer as of the dates of such balance sheets and the
consolidated reports of its operations for the respective periods
indicated.
Buyer has also furnished to the Sub-Trustee its Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and all quarterly reports
on Form 10-Q and current reports on Form 8-K which it has filed with the
Securities and Exchange Commission since December 31, 1994. The above
referenced documents of Buyer are collectively referred to herein as
"Buyer's SEC Reports." Buyer's SEC Reports contain all of the information
required by the Securities Exchange Act of 1934, as amended (the "1934
Act") and the rules and regulations thereunder. Buyer's SEC Reports do not
contain as of the date of the documents any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. Buyer has filed all reports
required to be filed under the 1934 Act during the twenty-four month period
preceding the date hereof.
ARTICLE VI
CERTAIN AGREEMENTS
------------------
6.1 Best Efforts. Subject to the terms and conditions herein
provided, each of the parties hereto covenants and agrees to use its best
efforts to take, or cause to be taken, all action or do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated
hereby and to cause the fulfillment of the parties' obligations hereunder.
6.2 Notification of Certain Matters. Prior to the Closing Date, the
Sub-Trustee shall give prompt notice to Buyer, and Buyer shall give prompt
notice to the Sub-Trustee, of (i) the occurrence, or the failure to occur,
of any event which occurrence or failure would be likely to cause any
representation or warranty contained
5
in this Agreement to be untrue or inaccurate in any material respect at any
time from the date hereof to the Closing Date and (ii) any material failure
of the Sub-Trustee or Buyer, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by
it hereunder, and each party shall use all reasonable efforts to remedy same.
6.3 Termination of the ESOP. The Buyer agrees that it shall cause
the ESOP to be terminated as promptly as practical after the Closing Date
and that it shall cause all necessary filings to be made with the Internal
Revenue Service to assure that the ESOP satisfies the requirements of
Section 401(a) of the Code upon termination.
ARTICLE VII
CONDITIONS TO SUB-TRUSTEE'S OBLIGATIONS
---------------------------------------
The obligations of the Sub-Trustee to direct the Trustee to transfer
the Stock to Buyer on the Closing Date are subject, in the discretion of
the Sub-Trustee, to the satisfaction, on or prior to the Closing Date, of
each of the following conditions:
7.1 Representations, Warranties and Covenants. All representations
and warranties of Buyer contained in this Agreement shall be true and
correct in all material respects at and as of the Closing Date as if such
representations and warranties were made at and as of the Closing Date, and
Buyer shall have performed in all material respects all agreements and
covenants required hereby to be performed by it prior to or at the Closing
Date.
7.2 No Governmental Proceeding or Litigation. No suit, action,
investigation, inquiry or other proceeding by any governmental authority or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which
could reasonably be expected materially to damage the Sub-Trustee or the
Trust if the transactions contemplated hereunder are consummated.
7.3 Sub-Trustee Fairness Opinion. On or prior to the Closing Date,
the Sub-Trustee shall have obtained a fairness opinion dated as of the
Closing Date from DPCM that (i) the sale of the Stock results in the Trust
receiving no less than adequate consideration (as defined in Section 3(18)
of ERISA) and (ii) the terms and conditions of the transactions
contemplated herein are fair and reasonable to the Trust from a financial
point of view.
7.4 Sub-Trustee Prudency Determination. The Sub-Trustee shall have
determined, as of the Closing Date, that the execution and delivery of this
Agreement, and the consummation of the transactions contemplated hereby,
are prudent under Part 4 of Subtitle B of Title I of ERISA and are in the
best interest of the ESOP participants and beneficiaries.
6
ARTICLE VIII
CONDITIONS TO BUYER'S OBLIGATIONS
---------------------------------
The obligations of Buyer to purchase the Stock on the Closing Date are
subject, in the discretion of Buyer, to the satisfaction, on or prior to
the Closing Date, of each of the following conditions:
8.1 Representations, Warranties and Covenants. All representations
and warranties of the Sub-Trustee contained in this Agreement shall be true
and correct in all material respects at and as of the Closing Date as if
such representations and warranties were made at and as of the Closing
Date, and the Sub-Trustee and the Trust shall have performed in all
material respects all agreements and covenants required hereby to be
performed by either of them prior to or at the Closing Date.
8.2 No Governmental Proceeding or Litigation. No suit, action,
investigation, inquiry or other proceeding by any governmental authority or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which
could reasonably be expected materially and adversely to affect the value
of the Stock.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Termination. If any condition precedent to the Sub-Trustee's
obligations hereunder is not satisfied and such condition is not waived by
the Sub-Trustee at or prior to the Closing Date, or if any condition
precedent to Buyer's obligations hereunder is not satisfied and such
condition is not waived by Buyer at or prior to the Closing Date, the party
who has the obligation to cause the condition to be fulfilled may, by
written notice to the other party on or prior to November 1, 1995, extend
the Closing. This Agreement shall terminate automatically if the Closing
Date has not occurred on or prior to November 1, 1995. In the event that a
condition precedent to its obligations is not satisfied, nothing contained
herein shall be deemed to require any party to terminate this Agreement,
rather than to waive such condition precedent and proceed with the
transactions contemplated hereby.
9.2 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party hereto without the prior
written consent of the other party hereto. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, and no other person
shall have any right, benefit or obligation hereunder.
7
9.3 Notices; Transfer of Funds. Unless otherwise provided herein,
any notice, request, instruction or other document to be given hereunder by
any party to the others shall be in writing and delivered in person or by
courier, telegraphed or by facsimile transmission or mailed by certified
mail, postage prepaid, return receipt requested (such mailed notice to be
effective on the date of such receipt is acknowledged), as follows:
If to Sub-Trustee: Marine Midland Bank, N.A.
Employee Benefit Trust Services
250 Park Avenue
New York, New York 10177
Attention: Stephen J. Hartman, Jr.
With a copy to: McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
Attention: Jared Kaplan, Esq.
If to Buyer: Mattel, Inc.
333 Continental Blvd.
El Segundo, CA 90245-5012
Attention: Leland P. Smith, Esq.
or to such other place and with such other copies as either party may
designate as to itself by written notice to the others.
Payments to be made to the Trust hereunder shall be made by wire
transferred funds to be delivered to the Trust's account number 90-11346 to
the account of the International Games, Inc. Employee Stock Ownership Trust
at Standard Bank and Trust Company, Hickory Hills, Illinois, ABA
#071909363.
9.4 Choice of Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of California except with respect to matters of law concerning the
internal corporate affairs of any corporate entity which is a party to or
the subject of this Agreement, and as to those matters the law of the
jurisdiction under which the respective entity derives its powers shall
govern.
9.5 Entire Agreement; Amendments and Waivers. This Agreement,
including all exhibits and schedules hereto, constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed
in writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
8
9.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.7 Invalidity. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred
to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or
of any other such instrument.
9.8 Headings. The headings of the Articles and Sections herein
are inserted for convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
9.9 Publicity. Neither party hereto shall issue any press release
nor make any public statement regarding the transactions contemplated
hereby, except as required by law or with the prior approval of the other
party.
9.10 Confidential Information. The parties acknowledge that the
transaction described herein is of a confidential nature and shall not be
disclosed except to Representatives and affiliates, or as required by law.
Neither party hereto shall make any public disclosure of the specific
terms of this Agreement, except as required by law.
9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
MATTEL, INC.
By:/s/ Ned Mansour
-------------------------------
Title: Executive Vice President
MARINE MIDLAND BANK
SOLELY AS SUB-TRUSTEE OF THE
INTERNATIONAL GAMES, INC. EMPLOYEE
STOCK OWNERSHIP TRUST PURSUANT TO THE
SUB-TRUST AGREEMENT
By:/s/ Stephen J. Hartman, Jr.
----------------------------
Title: Senior Vice President
<PAGE>
EXHIBIT 10.4
MATTEL, INC.
PERSONAL INVESTMENT PLAN
FOURTH AMENDMENT TO THE 1993 RESTATEMENT
The Mattel, Inc. Personnel Investment Plan (the "Plan") is hereby
amended as follows:
(1) Effective October 16, 1995, Section 5.8 of the Plan is hereby
amended by adding an addition paragraph at the end thereof to read in
its entirety as follows:
"An Eligible Employee who has transferred employment to the
Company (or other Participating Company) from Fisher-Price, Inc.,
and who has elected to transfer directly to this Plan his entire
account balance in the Fisher-Price, Inc. Matching Savings Plan
in accordance with the terms of such plan, shall be permitted to
transfer such account balance directly to this Plan. The
transfer must be made in cash, except that any promissory note
evidencing an outstanding loan to such Eligible Employee from the
Fisher-Price, Inc. Matching Savings Plan may be transferred to
this Plan in kind. Any transferred promissory note shall
thereafter be repayable by the Participant to the Plan in
accordance with its terms. Any amounts transferred from the
Fisher-Price, Inc. Matching Savings Plan shall not be subject to
distribution to the Participant except as expressly provided
under the terms of this Plan."
(2) Effective October 16, 1995, Article VIII of the Plan is hereby
amended by adding a new Section 8.18 at the end thereof to read in its
entirety as follows:
"8.18. Election for Fully Vested Employees Transferred to
Fisher-Price, Inc. A fully vested Participant who transfers
employment from the Company (or other Participating Company) to
Fisher-Price, Inc. and who is eligible to participate in the
Fisher-Price, Inc. Matching Savings Plan may elect to transfer
his entire vested account balance in the Plan to the Fisher-
Price, Inc. Matching Savings Plan by filing an election form at
the time and in the manner prescribed by the Committee. The
transfer must be made in cash except that any promissory note
evidencing an outstanding loan to the Participant from the Plan
may be transferred in kind. Any transferred promissory note
shall thereafter be repayable by the Participant to the Fisher-
Price, Inc. Matching Savings Plan in accordance with its terms."
IN WITNESS WHEREOF, Mattel, Inc. has caused this instrument to be
executed by its duly authorized officer this 16th day of October, 1995,
effective as of the dates set forth above.
MATTEL, INC.
BY:/s/ E. Joseph Mc Kay
-----------------------------------
E. JOSEPH MC KAY
Sr. Vice President, Human Resources
-2-
<PAGE>
<TABLE>
MATTEL, INC. AND SUBSIDIARIES EXHIBIT 11.0
(Page 1 of 2)
COMPUTATION OF INCOME PER COMMON AND COMMON EQUIVALENT SHARE
------------------------------------------------------------
(In thousands, except per share amounts)
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------- ----------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
PRIMARY 1995 1994 1995 1994
- ------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income $ 151,326 $ 131,820 $ 245,780 $ 212,971
Deduct: Dividends on convertible preference stock (1,099) (1,152) (3,297) (3,598)
--------- --------- --------- ---------
Net income applicable to common shares $ 150,227 $ 130,668 $ 242,483 $ 209,373
========= ========= ========= =========
Applicable Shares for Computation of Income per Share:
- ------------------------------------------------------
Weighted average common shares outstanding 221,429 223,129 221,172 220,009
Weighted average common equivalent shares arising from:
Dilutive stock options 2,918 1,905 2,502 2,677
Fisher-Price warrants 762 716 734 851
Restricted stock 414 180 363 129
--------- --------- --------- ---------
Weighted average number of common and common
equivalent shares 225,523 225,930 224,771 223,666
========= ========= ========= =========
Income Per Common Share:
- ------------------------
Net income per common share $ 0.67 $ 0.58 $ 1.08 $ 0.94
========= ========= ========= =========
</TABLE>
<PAGE>
<TABLE>
MATTEL, INC. AND SUBSIDIARIES EXHIBIT 11.0
(Page 2 of 2)
COMPUTATION OF INCOME PER COMMON AND COMMON EQUIVALENT SHARE
------------------------------------------------------------
(In thousands, except per share amounts)
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------- ----------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
FULLY DILUTED 1995 (a) 1994 (b) 1995 (a) 1994 (b)
- ------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income $ 151,326 $ 131,820 $ 245,780 $ 212,971
Add: Interest savings, net of tax, applicable to:
Assumed conversion of 8% convertible debentures - - - 628
Deduct: Impact of required ESOP dividends or
contributions upon conversion - (1,152) - (3,598)
--------- --------- --------- ---------
Net income applicable to common shares $ 151,326 $ 130,668 $ 245,780 $ 210,001
========= ========= ========= =========
Applicable Shares for Computation of Income per Share:
- ------------------------------------------------------
Weighted average common shares outstanding 221,429 223,129 221,172 220,009
Weighted average common equivalent shares arising from:
Dilutive stock options 3,031 1,905 3,259 2,988
Fisher-Price warrants 767 716 767 871
Assumed conversion of convertible preference stock 738 1,955 738 2,001
Restricted stock 433 185 433 185
Assumed conversion of 8% convertible debentures - - - 1,731
--------- --------- --------- ---------
Weighted average number of common and common
equivalent shares 226,398 227,890 226,369 227,785
========= ========= ========= =========
Income Per Common Share:
- ------------------------
Net income per common share $ 0.67 $ 0.57 $ 1.09 $ 0.92
========= ========= ========= =========
<FN>
(a) - This calculation is submitted in accordance with Regulation S-K, Item 601 (b)(11), although it is contrary
to paragraph 40 of APB Opinion No. 15 because it produces an anti-dilutive result.
(b) - This calculation is submitted in accordance with Regulation S-K, Item 601 (b)(11), although not required
by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%.
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
MATTEL INC.'S BALANCE SHEETS AND INCOME STATEMENTS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 84,221
<SECURITIES> 16,596
<RECEIVABLES> 1,328,548
<ALLOWANCES> 14,788
<INVENTORY> 463,037
<CURRENT-ASSETS> 2,078,994
<PP&E> 756,512
<DEPRECIATION> 269,936
<TOTAL-ASSETS> 3,062,484
<CURRENT-LIABILITIES> 1,209,002
<BONDS> 477,274
<COMMON> 223,254
0
9
<OTHER-SE> 1,060,067
<TOTAL-LIABILITY-AND-EQUITY> 3,062,484
<SALES> 2,483,528
<TOTAL-REVENUES> 2,483,528
<CGS> 1,274,865
<TOTAL-COSTS> 1,274,865
<OTHER-EXPENSES> 787,279
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51,804
<INCOME-PRETAX> 369,580
<INCOME-TAX> 123,800
<INCOME-CONTINUING> 245,780
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 245,780
<EPS-PRIMARY> 1.08
<EPS-DILUTED> 1.09
<FN>
Note - Fully diluted earnings per share for the nine months ended
September 30, 1995 has been submitted in accordance with Regulation
S-K, Item 601 (b)(11), although it is contrary to paragraph 40
of APB Opinion No. 15 because it produces an anti-dilutive result.
</TABLE>
