{"id":40067,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-agreement-mattel-inc-and-kevin-m-farr2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-agreement-mattel-inc-and-kevin-m-farr2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/loan-agreement-mattel-inc-and-kevin-m-farr2.html","title":{"rendered":"Loan Agreement &#8211; Mattel Inc. and Kevin M. Farr"},"content":{"rendered":"<pre>                                 LOAN AGREEMENT\n\n          THIS LOAN AGREEMENT (the \"Agreement\") is entered into as of February\n3, 2000, by and between Mattel, Inc., a Delaware corporation (\"Lender\") and\nKevin M. Farr (\"Borrower\").  Borrower and Lender are sometimes referred to in\nthis Agreement as a \"Party\" or, collectively, as the \"Parties.\"\n\n                                    RECITALS\n                                    --------\n                                        \n          WHEREAS, Borrower desires to obtain from Lender a loan in the\nprincipal amount of Five Hundred Thousand Dollars ($500,000.00) (the \"Loan\");\nand\n\n          WHEREAS, as an additional incentive to retain Borrower in the employ\nof Lender for a period of at least three years from the date hereof, Lender\ndesires to grant Borrower the Loan.\n\n          NOW, THEREFORE, in consideration of the terms and conditions herein\ncontained and for other good and valuable consideration, the receipt and\nsufficiency of which are hereby acknowledged, the parties hereto agree as\nfollows:\n\n                                   AGREEMENT\n                                   ---------\n                                        \n          1.  Loan Terms.\n              ---------- \n\n             (a) Principal Amount.  Lender shall pay to the order of Borrower,\n                 ----------------\non February 3, 2000, the principal sum of Five Hundred Thousand Dollars\n($500,000.00) (the \"Principal\").\n\n             (b) Interest.  Interest shall accrue on the outstanding Principal\n                 --------                                                     \namount at the rate of seven percent (7%) per annum, compounded annually.\n\n             (c) Promissory Note.  Borrower's obligation to repay the Loan shall\n                 ---------------\nbe evidenced by a promissory note substantially in the form attached as Exhibit\n                                                                        -------\nA hereto (the \"Note\"). Borrower shall execute and deliver to Lender the Note\n-\nconcurrently with execution and delivery of this Agreement.\n\n             (d) Repayment.  Borrower shall pay to the order of Lender the\n                 ---------                                                \nPrincipal and accrued interest under the Note on February 4, 2003, provided,\nhowever, that all Principal and accrued but unpaid interest shall become\nimmediately due and payable thirty (30) days after the date of Borrower's\ntermination of employment with Lender for any reason prior to February 4, 2003,\nunless Borrower commences arbitration with respect to the grounds for such\ntermination of employment within such thirty (30) day period, in which case all\nPrincipal and accrued but unpaid interest shall be due and payable five (5) days\nafter notice to Borrower of the entry of a final judgement in such arbitration.\nInterest shall continue to accrue during any such arbitration. The Loan shall be\nsubject to forgiveness as provided below.  The Loan shall be unsecured but with\nfull recourse against Borrower.\n\n \n          (e) Forgiveness.  The Loan, and Borrower's obligation to repay all\n              -----------                                                   \noutstanding Principal and accrued interest thereunder, shall be forgiven and\ncancelled by Lender and the Note shall be cancelled on February 3, 2003 if\nBorrower is employed by Lender on February 3, 2003, or earlier upon the date of\nthe termination of Borrower's employment with Lender prior to February 3, 2003\nif such termination is by Lender without Cause (as defined below), by Borrower\nfor Good Reason (as defined below) or by reason of Borrower's death or\nDisability (as defined below).  In addition, if the Loan is forgiven pursuant to\nthe preceding sentence and if Borrower is employed by Lender on February 3, 2003\nand continues to be employed by Lender, on April 1, 2004, or such earlier date\nas Borrower shall be required to pay federal, state or local income taxes with\nrespect to the forgiveness of the Loan, Lender shall pay Borrower an additional\npayment (the \"Gross-Up Payment\") in an amount required to fully reimburse\nBorrower with respect to all federal, state and local income taxes and\nemployment taxes with respect to the forgiveness of the Loan and with respect to\nsuch taxes, such that upon receipt of the Gross-Up Payment Borrower shall have\nno remaining obligations with respect to such taxes.   In addition, the Loan\nshall be forgiven by Lender on the date of a Change of Control (as defined\nbelow) of Lender if Borrower is employed by Lender on such date and Lender shall\npay Borrower the Gross-Up Payment with respect to the forgiveness of the Loan on\nApril 1, of the year following the year of the Change of Control, or such\nearlier date as Borrower shall be required to pay federal, state or local income\ntaxes with respect to the forgiveness of the Loan.\n\n          (f) Definitions.  For purposes of this Agreement, the following terms\n              -----------\nshall have the meanings indicated below:\n\n          \"Cause\" shall mean a reasonable determination of the Chief Executive\nOfficer of Lender that at least one of the following has occurred: (i) one or\nmore factually substantiated willful acts of dishonesty on Borrower's part which\nare intended to result in Borrower's substantial personal enrichment at the\nexpense of Lender; (ii) repeated violations by Borrower of Borrower's employment\nobligations to Lender which are demonstrably willful and deliberate on\nBorrower's part and which resulted in material injury to Lender; (iii) conduct\nof a factually substantiated criminal nature (commonly defined as a \"felony\" in\ncriminal statutes) which has or which is more likely than not to have a material\nadverse effect on Lender's reputation or standing in the community or on its\ncontinuing relationships with its customers or those who purchase or use its\nproducts; or (iv) factually substantiated fraudulent conduct in connection with\nthe business or affairs of Lender, regardless of whether said conduct is\ndesigned to defraud Lender or others; provided that, in each case, Borrower has\nreceived written notice of the described activity, has been afforded a\nreasonable opportunity to cure or correct the activity described in the notice,\nand has failed to substantially cure, correct or cease the activity, as\nappropriate.\n\n          \"Change of Control\" means:\n\n          (i)  the acquisition by any individual, entity or group (within the\nmeaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,\nas amended (the \"Exchange Act\")) (a \"Person\") of beneficial ownership (within\nthe meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of\neither (i) the then outstanding shares of common stock of Lender, including the\nshares of common stock of Lender issuable upon an exchange of Softkey\nExchangeable Shares that are not owned by Lender or any corporation \n\n                                       2\n\n \ncontrolled by Lender (the \"Outstanding Company Common Stock\") or (ii) the\ncombined voting power of the then outstanding voting securities of Lender\nentitled to vote generally in the election of directors (the \"Outstanding\nCompany Voting Securities\"); provided, however, that for purposes of this\nsubsection (i), the following shall not constitute a Change of Control: (a) any\nacquisition directly from Lender, (b) any acquisition by Lender or any\ncorporation controlled by Lender, (c) any acquisition by any employee benefit\nplan (or related trust) sponsored or maintained by Lender or any corporation\ncontrolled by Lender, (d) any acquisition by a Person of 20% of either the\nOutstanding Company Common Stock or the Outstanding Company Voting Securities as\na result of an acquisition of common stock of Lender by Lender or of Softkey\nExchangeable Shares by Softkey which, by reducing the number of shares of common\nstock of Lender or Softkey Exchangeable Shares outstanding, increases the\nproportionate number of shares beneficially owned by such Person to 20% or more\nof either the Outstanding Company Common Stock or the Outstanding Company Voting\nSecurities; provided, however, that if a Person shall become the beneficial\nowner of 20% or more of either the Outstanding Company Common Stock or the\nOutstanding Company Voting Securities by reason of a share acquisition by Lender\nor by Softkey as described above and shall, after such share acquisition by\nLender or Softkey, become the beneficial owner of any additional shares of\ncommon stock of Lender, then such acquisition shall constitute a Change of\nControl or (e) any acquisition pursuant to a transaction which complies with\nclauses (a), (b) and (c) of subsection (iii) of this Section 4(d); provided,\nfurther, however, that for purposes of this subsection (i), any Investing Person\n(as such term is defined in the Rights Agreement) shall be deemed not to be a\nbeneficial owner of any Investment Shares (as such term is defined in the Rights\nAgreement) and the holder of the Mattel Special Voting Preferred Share (as such\nterm is defined in the Rights Agreement) shall be deemed not to be a beneficial\nowner of such Mattel Special Voting Preferred Share; or\n\n          (ii)  individuals who, as of the date hereof, constitute the Board\n(the \"Incumbent Board\") cease for any reason to constitute at least a majority\nof the Board; provided, however, that any individual becoming a director\nsubsequent to the date hereof whose election, or nomination for election by\nLender's shareholders, was approved by a vote of at least a majority of the\ndirectors then comprising the Incumbent Board shall be considered as through\nsuch individual were a member of the Incumbent Board, but excluding, for this\npurpose, any such individual whose initial assumption of office occurs as a\nresult of an actual or threatened election contest with respect to the election\nor removal of directors or other actual or threatened solicitation of proxies or\nconsents by or on behalf of a Person other than the Board; or\n\n          (iii)  consummation by Lender of a reorganization, merger or\nconsolidation or sale or other disposition of all or substantially all of the\nassets of Lender or the acquisition of assets of another entity (a \"Business\nCombination\"), in each case, unless, following such Business Combination, (a)\nall or substantially all of the individuals and entities who were the beneficial\nowners, respectively, of the Outstanding Company Common Stock and Outstanding\nCompany Voting Securities immediately prior to such Business Combination\nbeneficially own, directly or indirectly, more than 50% of, respectively, the\nthen outstanding shares of common stock and the combined voting power of the\nthen outstanding voting securities entitled to vote generally in the election of\ndirectors, as the case may be, of the corporation resulting from such Business\nCombination (including, without limitation, a corporation which as a result of\nsuch transaction owns Lender or all or substantially all of Lender's assets\neither directly or through one or more subsidiaries) in substantially the same\nproportions as their \n\n                                       3\n\n \nownership immediately prior to such Business Combination of the Outstanding\nCompany Common Stock and Outstanding Company Voting Securities, as the case may\nbe, (b) no Person (excluding any employee benefit plan (or related trust) of\nLender or such corporation resulting from such Business Combination)\nbeneficially owns, directly or indirectly, 20% or more of, respectively, the\nthen outstanding share of common stock of the corporation resulting from such\nBusiness Combination or the combined voting power of the then outstanding voting\nsecurities of such corporation except to the extent that such ownership existed\nprior to the Business Combination and (c) at least a majority of the members of\nthe board of directors of the corporation resulting from such Business\nCombination were members of the Incumbent Board at the time of the execution of\nthe initial agreement, or of the action of the Board, providing for such\nBusiness Combination; or\n\n               (iv) approval by the shareholders of Lender of a complete\nliquidation or dissolution of Lender.\n\n               \"Disability\" shall mean that Borrower suffers a disability due to\nillness or injury which substantially and materially limits Borrower from\nperforming each of the essential functions of Borrower's job, even with\nreasonable accommodation and becomes entitled to receive disability benefits\nunder Lender's Long-Term Disability Plan for exempt employees.\n\n               \"Good Reason\" shall mean the good faith determination by Borrower\nthat any one or more of the following have occurred:\n\n               (i)    without the express written consent of Borrower, any\nchange(s) in any of the duties, authority, or responsibilities of Borrower which\nis (are) inconsistent in any substantial respect with Borrower's position,\nauthority, duties, or responsibilities as of the date of this Agreement;\n\n               (ii)   any failure by Lender to pay Borrower Borrower's salary or\nearned bonuses, other than an insubstantial and inadvertent failure remedied by\nLender promptly after receipt of notice thereof given by Borrower;\n\n               (iii)  any proposed termination by Lender of Borrower's\nemployment other than as permitted by the employment agreement entered into by\nthe Parties;\n\n               (iv)   any failure by Lender to obtain the assumption and\nagreement to perform the employment agreement entered into by the Parties by a\nsuccessor as contemplated by such employment agreement; or\n\n               (v)    transferring Borrower outside of the greater Los Angeles,\nCalifornia area without Borrower's express written consent.\n\n               \"Rights Agreement\" means the Rights Agreement, dated as of\nFebruary 7, 1992, as amended by an amendment dated as of May 13, 1999 and an\namendment dated as of November 4, 1999 by and between Lender and BankBoston\nN.A., a national banking association, \n\n                                       4\n\n \nformerly, The First National Bank of Boston, and not giving effect to any\namendments subsequent to November 4, 1999.\n\n              \"Softkey\" means Softkey Software Products Inc., an Ontario\ncorporation.\n\n              \"Softkey Exchangeable Shares\" means the Exchangeable Shares (as\ndefined in the Rights Agreement) in the capital stock of Softkey.\n\n          2.  Transfer of Notes.   Borrower shall not assign or transfer any of\n              -----------------                                                \nBorrower's benefits or obligations arising under the Notes.   Lender reserves\nthe right to assign or transfer all or any part of, or any interest in, Lender's\nrights and benefits under this Agreement or the Note to any successor to all or\npart of its business or assets so long as any assignee or transferee expressly\nagrees to assume and perform this Agreement in the same manner and to the same\nextent as Lender would be required to perform if no such assignment or transfer\nhad taken place.\n\n          3.  Amendment; Waiver.  This Agreement and the Note contain the entire\n              -----------------                                                 \nagreement between the Parties with respect to the subject matter hereof and may\nbe amended, modified or changed only by a written instrument executed by the\nParties.  No provision of this Agreement or the Note may be waived except by a\nwriting executed and delivered by the Party sought to be charged.  Any such\nwritten waiver will be effective only with respect to the event or circumstance\ndescribed therein and not with respect to any other event or circumstance,\nunless such waiver expressly provides to the contrary.\n\n          4.  Choice of Law.  This Agreement shall be construed in accordance\n              -------------                                                  \nwith and governed by the internal laws of the State of California, without\nreference to principles of conflict of laws.\n\n          5.  Headings.  The paragraph headings contained in this Agreement are\n              --------                                                         \nfor reference purposes only and shall not affect in any way the meaning or\ninterpretation of the provisions hereof.\n\n          6.  Notices.  All notices and other communications hereunder shall be\n              -------                                                          \nin writing; shall be delivered by hand delivery to the other party or mailed by\nregistered or certified mail, return receipt requested, postage prepaid; shall\nbe deemed delivered upon actual receipt; and shall be addressed as follows:\n\n          If to Lender:\n          ------------ \n                                MATTEL, INC.         \n                                333 Continental Blvd.\n                                El Segundo, CA 90245  \n \n\n          If to Borrower:\n          -------------- \n                                Mr. Kevin M. Farr    \n                                MATTEL, INC.         \n                                333 Continental Blvd. \n                                El Segundo, CA 90245\n\n                                       5\n\n \nor to such other address as either party shall have furnished to the other in\nwriting in accordance herewith.\n\n          7.  Counterparts.  This Agreement may be executed in one or more\n              ------------                                                \ncounterparts, each of which shall be deemed to be an original, but all of which\ntogether shall constitute one and the same instrument.\n\n          8.  Severability.  If any provision in or obligation under this\n              ------------                                               \nAgreement shall be invalid, illegal or unenforceable in any jurisdiction, the\nvalidity, legality and enforceability of the remaining provisions or\nobligations, or of such provision or obligation in any other jurisdiction, shall\nnot in any way be affected or impaired thereby.\n\n          9.  No Third-Party Beneficiary Rights.  The Parties do not intend to\n              ---------------------------------                               \nconfer and this Agreement shall not be construed to confer any rights or\nbenefits to  any person, firm, group, corporation or entity other than the\nParties.\n\n\n\n\n\n                            [Signature Page Follows]\n\n                                       6\n\n \n          IN WITNESS WHEREOF, this Agreement has been duly executed by the\nParties on the date first written above.\n\n\n                                 LENDER\n\n\n\n                                 By: \/s\/ Alan Kaye\n                                     -----------------------------------\n                                 Its:___________________________________\n\n\n\n                                 BORROWER\n\n\n                                 \/s\/ Kevin M. Farr\n                                 _______________________________________\n                                 Kevin M. Farr\n\n\n\n\n\n                                      S-1\n\n \n                                   EXHIBIT A\n                                   ---------\n\n                                Promissory Note\n\n\n$500,000.00                                        Date:  February 3, 2000\n\n          Mattel, Inc. (herein referred to as \"Holder\") has agreed to advance to\nKevin M. Farr (herein referred to as \"Maker\") on February 3, 2000,  $500,000.00,\nand for said value received Maker promises to repay to the order of Holder, the\nprincipal sum of $500,000.00 on or before February 4, 2003.  Maker shall owe to\nHolder interest on the principal sum in an amount equal to 7% per annum,\ncommencing on February 3, 2000, compounded annually, payable with principal on\nFebruary 4, 2003.\n\n          If Maker fails to make any payment set forth above when due, Holder\nmay elect to declare the entire unpaid principal amount, including all unpaid\ninterest, immediately due and payable with or without notice.\n\n          In the event of the termination of Maker's employment with Holder for\nany reason, all outstanding principal and accrued interest hereunder is\nimmediately due and payable, with or without notice, thirty (30) days after the\ndate of such termination  unless Maker commences arbitration as provided in that\ncertain Loan Agreement (the \"Loan Agreement\"), dated as of February 3, 2000,\nbetween Holder and Maker, unless this note and the loan it evidences shall have\nbeen cancelled and forgiven pursuant to the terms of the Loan Agreement.\n\n          In the event of commencement of legal action to enforce payment of\nthis note, the non-prevailing party agrees to pay the prevailing party's\nreasonable attorney's fees and court costs in connection therewith.\n\n\n\n                                    By: \/s\/ Kevin M. Farr      2\/10\/2000\n                                       ______________________________________\n                                       Kevin M. Farr             Date\n\nWitnessed by:\n\n\/s\/ Alan Kaye            2\/10\/2000\n_________________________________________\n                           Date\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8145],"corporate_contracts_industries":[9403],"corporate_contracts_types":[9539,9544],"class_list":["post-40067","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-mattel-inc","corporate_contracts_industries-consumer__toys","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40067","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40067"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40067"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40067"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40067"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}