Document/Exhibit Description Pages Size
1: 10-K Annual Report 63 353K
2: EX-10.26 Master Agreement 36 109K
3: EX-10.31 Second Amended Joint Plan of Reorganization 64 223K
4: EX-21.1 Subsidiaries of the Company 1 4K
5: EX-23 Consent of Ernst & Young LLP 1 5K
6: EX-27 Financial Data Schedule 2 8K
EXHIBIT 10.26
MASTER AGREEMENT
This Amended and Restated Master Agreement, dated as of November 19,
1997 (this "Agreement"), amends and restates the Master Agreement dated as of
October 7, 1997 (the "Original Agreement"), by and among (i) Toy Biz, Inc., a
Delaware corporation ("Toy Biz"), (ii) the secured creditors of Marvel
Entertainment Group, Inc., a Delaware corporation ("Entertainment"), and certain
of its direct and indirect subsidiaries who become parties to this Agreement by
executing and delivering a separate Consenting Lender Execution Page in the form
attached as Exhibit 1 to this Agreement (the "Consenting Lenders") and (iii) the
Panini Lenders (as defined in the Plan of Reorganization) who become parties to
this Agreement by executing and delivering a separate Consenting Panini Lender
Execution Page in the form attached as Exhibit 2 to this Agreement (the
"Consenting Panini Lenders").
PRELIMINARY STATEMENT
A. Entertainment, together with eight of its wholly owned
subsidiaries (collectively with Entertainment, the "Debtors"), are chapter 11
debtors and debtors in possession in cases pending under chapter 11 of title 11
of the United States Code (11 U.S.C. (S)(S) 101 et seq.) (the "Bankruptcy
Code"), having commenced voluntary cases (Nos. 96-2066 through 96-2077 (HSB))
(the "Reorganization Cases") in the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court").
B. Entertainment, certain affiliates of Entertainment, and The Chase
Manhattan Bank ("Chase") as administrative agent for the holders of Senior
Secured Claims (as defined in the Plan of Reorganization referred to below) are
parties to the Existing Credit Agreements (as such term is defined in the Plan
of Reorganization) pursuant to which the Debtors are indebted to the holders of
Senior Secured Claims.
C. Entertainment (i) owns approximately 26.7% of the Class A Common
Stock of Toy Biz, (ii) licenses certain intellectual property to Toy Biz, and
(iii) has entered into certain agreements with Toy Biz.
D. The Consenting Lenders and Toy Biz intend to jointly propose a
chapter 11 plan of reorganization (substantially in the form attached hereto as
Exhibit 3 (the "Plan of Reorganization"), as creditors and parties in interest
in the Reorganization Cases pending in the Bankruptcy Court. The Plan of
Reorganization will provide, among other things, that pursuant to an Agreement
and Plan of Merger (the "Merger Agreement"), Toy Biz and Entertainment will
combine (the "Merger") to form Newco ("Newco"), and each holder of Class A
Shares (as hereinafter defined) will receive a certain amount of shares of Newco
Common Stock (as hereinafter defined), other than Marvel, and (ii) Newco's
certificate of incorporation and by-laws will be amended and restated as
provided in the Plan of Reorganization.
E. At the same time as the execution and delivery of the Original
Agreement by Toy Biz, Isaac Perlmutter, Isaac Perlmutter T.A., and Zib Inc. (the
"Perlmutter Stockholders") and Avi Arad executed and delivered into escrow a
stockholders agreement (the "New Stockholders Agreement") having substantially
the same terms as the Stockholders' Agreement, dated as of March 2, 1995, by and
among Toy Biz, the Perlmutter Stockholders, Avi Arad and Entertainment, and each
of Isaac Perlmutter and Avi Arad executed and delivered into escrow voting trust
agreements having substantially the same terms as the Voting Trust Agreements,
dated as of March 2, 1995, by and among Entertainment and each of Isaac
Perlmutter and Avi Arad (the "New Voting Trust Agreements").
F. At the same time as the execution and delivery of this Agreement
by Toy Biz, the Perlmutter Stockholders and Avi Arad have executed and delivered
Amended and Restated Proxy and Stock Option Agreements (the "Proxy and Stock
Option Agreements") which amend and restate the Proxy and Stock Option
Agreements dated as of October 7, 1997, by and between the Perlmutter
Stockholders and Avi Arad, respectively, and the Consenting Lenders (as defined
in the Proxy and Stock Option Agreements), pursuant to which the Perlmutter
Stockholders and Avi Arad have, among other things, granted to the Designated
Consenting Lender a proxy to vote their Class A Shares in favor of the
transactions contemplated by this Agreement.
G. The parties hereto desire that the parties take the actions set
forth in this Agreement, subject to the terms and conditions contained herein,
so that (i) the Plan of Reorganization is confirmed by the Bankruptcy Court (or
such other court as may from time to time exercise jurisdiction over the
Debtors' Bankruptcy cases) in accordance with the Bankruptcy Code, (ii) the
Merger is consummated as provided in the Plan of Reorganization and the Merger
Agreement, and (iii) certain other related transactions are consummated as set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants set forth herein, and on the terms and subject to the
conditions set forth herein, the parties hereto agree as follows:
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ARTICLE 1
DEFINITIONS
For the purpose of this Agreement, capitalized terms which are used
herein and not otherwise defined shall have the meanings given such terms in the
Plan of Reorganization and the following terms shall have the meanings specified
in this Article 1.
"Adverse Order" shall mean an order of any court preventing Toy Biz
from complying with this Agreement or consummating the Plan of Reorganization
based wholly or in part on any contention that the board of directors of Toy Biz
which approved this Agreement was not the duly authorized board of directors of
Toy Biz at such time.
"Agreement" shall have the meaning set forth in the preamble.
"Antitrust Division" shall have the meaning set forth in Section 2.7.
"Bankruptcy Code" shall have the meaning set forth in the Preliminary
Statement.
"Bankruptcy Court" shall have the meaning set forth in the Preliminary
Statement.
"Change in Control" shall mean a determination of any court that the
board of directors of Toy Biz which approved the Master Agreement was not at
such time the duly authorized board of directors of Toy Biz.
"Chase" shall have the meaning set forth in the Preliminary Statement.
"Class A Shares" means shares of Class A common stock, par value $.01
per share, of Toy Biz.
"Class B Shares" means shares of Class B common stock, par value $.01
per share, of Toy Biz.
"Consenting Lenders" shall have the meaning set forth in the preamble.
"Consenting Lenders Threshold" means holders of Senior Secured Claims
holding at least two-thirds in principal amount and a majority in number of the
Senior Secured Claims, excluding Excluded Claims. For purposes hereof, if a
secured creditor is a Consenting Lender, all of the Senior Secured Claims in
which it has a beneficial interest, to the extent of its beneficial
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interest therein, shall be included for purposes of the computations in this
definition.
"Consenting Lenders Threshold Date" means the date this Agreement has
been executed and delivered by holders of Senior Secured Claims who constitute
the Consenting Lenders Threshold.
"Consenting Panini Lenders" shall have the meaning set forth in the
preamble.
"Contingent Senior Secured Claims" shall have the meaning set forth in
the Plan of Reorganization.
"Converted Class B Shares" means the Class A Shares issued upon
conversion of the Class B Shares as a result of a change in control of
Entertainment pursuant to the Toy Biz Stockholders Agreement, dated as of March
2, 1995.
"Debtors" shall have the meaning set forth in the Preliminary
Statement.
"Designated Consenting Lender" shall have the meaning set forth in the
Proxy and Stock Option Agreements.
"DIP Claim" shall have the meaning set forth in the Plan of
Reorganization.
"DIP Credit Agreement" shall have the meaning set forth in the Plan of
Reorganization.
"Disclosure Schedule" means the disclosure schedule separately
delivered by Toy Biz to the Consenting Lenders with the Original Agreement.
"Disclosure Statement" shall have the meaning set forth in Section
2.2.
"DGCL" means the General Corporation Law of the State of Delaware.
"Effective Time" shall have the meaning set forth in the Merger
Agreement.
"Employee Option" have the meaning set forth in Section 2.12.
"Entertainment" shall have the meaning set forth in the preamble.
"Excluded Claims" means Senior Secured Claims which are held or
controlled, directly or indirectly, by Carl Icahn, High River Limited
Partnership, Elliott Associates, L.P., Westgate
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International, L.P. or any affiliates of any of the foregoing or in which any of
the foregoing have any interest, including any participation interest, solely to
the extent of such interest.
"Form S-4" shall have the meaning set forth in Section 2.3.
"FTC" shall have the meaning set forth in Section 2.7.
"Governmental Entity" means any court, arbitral tribunal,
administrative agency or commission, or other governmental or regulatory
authority or agency.
"HSR Act" shall have the meaning set forth in Section 2.7.
"Information Statement/Prospectus" shall have the meaning set forth in
Section 2.3.
"Merger" shall have the meaning set forth in the Preliminary
Statement.
"Merger Agreement" shall have the meaning set forth in the Preliminary
Statement.
"Newco" shall have the meaning set forth in the Preliminary Statement.
"Newco Common Stock" shall mean Common Stock as defined in the Plan of
Reorganization.
"New Investment" shall mean the $90 million investment in Newco to be
made in exchange for the issuance by Newco of Convertible Preferred Stock or New
Convertible Notes (as defined in the Plan of Reorganization).
"New Stockholders Agreements" shall have the meaning set forth in the
Preliminary Statement.
"New Voting Trust Agreements" shall have the meaning set forth in the
Preliminary Statement.
"Perlmutter Stockholders" shall have the meaning set forth in the
Preliminary Statement.
"Plan of Reorganization" shall have the meaning set forth in the
Preliminary Statement.
"Preferred Shares" means Preferred Stock, par value $.01 per share of
Toy Biz.
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"Proxy and Stock Option Agreements" shall have the meaning set forth
in the Preliminary Statement.
"Qualifying Transaction" shall have the meaning set forth in the Plan
of Reorganization.
"Reorganization Cases" shall have the meaning set forth in the
Preliminary Statement.
"Requisite Amount of the Consenting Lenders" means Consenting Lenders
holding at least two-thirds in principal amount of the Fixed Senior Secured
Claims held by all of the Consenting Lenders, as shown on the Consenting Lender
Execution Pages signed by the Consenting Lenders.
"Requisite Amount of the Consenting Panini Lenders" means Panini
Lenders holding at least two-thirds in principal amount of the Contingent Senior
Secured Claims held by all of the Panini Lenders, as shown on the Panini Lenders
Execution Pages signed by the Consenting Panini Lenders.
"SEC" means the Securities and Exchange Commission.
"Senior Secured Claims" shall have the meaning set forth in the Plan
of Reorganization.
"Stock Option Plan" shall have the meaning set forth in Section 2.12.
"Subsidiary" means all of the corporations or other entities of which
Toy Biz owns a majority of the issued and outstanding capital stock or similar
interests.
"Toy Biz" shall have the meaning set forth in the preamble.
"Toy Biz Shares" shall mean the Class A Shares and Preferred Shares.
"Voting Debt" shall have the meaning set forth in Section 3.2.
ARTICLE 2
COVENANTS
2.1 Interim Operations of Toy Biz. Toy Biz covenants and agrees that,
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except (x) as expressly contemplated by this Agreement, the Plan of
Reorganization or the Merger Agreement or as disclosed on Schedule 2.1 in the
Disclosure Schedule or (y) as agreed in writing by a Requisite Amount of the
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Consenting Lenders after the date hereof and prior to the Effective Time, the
business of Toy Biz and its Subsidiary shall be conducted only in the ordinary
and usual course, in substantially the same manner as heretofore conducted, and,
in particular, Toy Biz will not, directly or indirectly, (i) issue, sell,
transfer, pledge or otherwise encumber, or agree (including pursuant to options
or warrants) to issue, sell, transfer, pledge or otherwise encumber, any of the
Toy Biz Shares (other than Class A Shares reserved for issuance on the date
hereof pursuant to the exercise of Employee Options outstanding on the date
hereof and upon the conversion of shares of Toy Biz' outstanding Series A
Preferred Stock) or capital stock of its Subsidiary beneficially owned by it;
(ii) amend its certificate of incorporation, by-laws or other comparable
organizational documents; (iii) split, combine or reclassify the outstanding Toy
Biz Shares; (iv) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to its capital stock; (v)
redeem, purchase or otherwise acquire directly or indirectly any shares of
capital stock of Toy Biz or its Subsidiary; (vi) acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial portion of the
assets of, any business or any corporation, partnership, joint venture or other
business organization; (vii) subject to any lien, mortgage, security interest,
pledge or other encumbrance or sell, lease or otherwise dispose of a material
portion of its assets other than in the ordinary course of business and any such
actions in connection with the refinancing of Toy Biz's current revolving credit
agreement; (viii) incur any indebtedness for borrowed money or guarantee any
such indebtedness, other than borrowings and guarantees incurred in the ordinary
course of business and except for refinancings of Toy Biz's current revolving
credit agreement; or (ix) enter into any transactions or agreements with any
directors or officers of Toy Biz or Isaac Perlmutter or Avi Arad or any
affiliates of any of the foregoing, other than consistent with past practice.
2.2 Consents and Approvals. Upon the terms and subject to the
----------------------
conditions of this Agreement, Toy Biz and the Consenting Lenders, acting
collectively, agree to use their reasonable best efforts to take, or cause to be
taken, all actions, and to 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 by this Agreement and the Plan of
Reorganization as promptly as practicable including, but not limited to: (i) the
preparation and filing of all forms, registrations, notices and pleadings
required to be filed to consummate the transactions contemplated by this
Agreement and the taking of such actions as are necessary to obtain any
requisite approvals, consents, order, exemptions or waivers by any third party
or Governmental Entity, including, but not limited to the Bankruptcy Court; (ii)
the defending of any lawsuits or other legal proceedings, whether judicial or
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administrative, challenging this Agreement or the consummation of the
transactions contemplated by this Agreement including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Entity
vacated or reversed; (iii) the filing of the Plan of Reorganization, together
with a disclosure statement (the "Disclosure Statement") with respect thereto,
as required by section 1125 of the Bankruptcy Code, no later than ten business
days after the Consenting Lender Threshold Date; and (iv) causing the
satisfaction of all conditions to the Merger as provided in the Merger
Agreement. In connection with and without limiting the foregoing, Toy Biz and
its board of directors shall (i) take all action it has the power to take
necessary so that no state takeover statute or similar statute or regulation is
or becomes applicable to the Merger, the Merger Agreement, this Agreement or any
other transaction contemplated by this Agreement and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to the Merger, the
Merger Agreement, this Agreement or any other transaction contemplated by this
Agreement, take all action it has the power to take necessary so that the Merger
and the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the Merger and
the other transactions contemplated by this Agreement.
2.3 Information Statement/Prospectus, Form S-4, etc.
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(a) To the extent required by applicable law, Toy Biz shall use
its best efforts to prepare and file with the SEC no later than thirty (30) days
after the Consenting Lender Threshold Date, a combined information statement and
prospectus on Form S-4 (the "Form S-4") with respect to the Toy Biz stockholder
action to approve the Merger and the registration of the shares of Newco Common
Stock to be issued in the Merger and shall use its best efforts to have the Form
S-4 declared effective by the SEC as promptly as practicable. Toy Biz shall also
take any action reasonably required to be taken under state blue sky or other
securities laws in connection with the issuance of shares of Newco Common Stock
in the Merger.
(b) Toy Biz shall promptly prepare and thereafter promptly
distribute to its stockholders, the combined information statement and
prospectus which is included in the Form S-4 to be filed pursuant to Section
2.3(a) hereof (the "Information Statement/Prospectus"), which Information
Statement/Prospectus shall comply in all material respects with the rules and
regulations of the SEC. The Information Statement/Prospectus shall be mailed to
stockholders of Toy Biz in accordance with Rule 14c-2 under the Securities
Exchange Act of 1934, as amended, at least 20 calendar days in advance of the
Effective Time.
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(c) Toy Biz shall notify the Consenting Lenders and the
Consenting Panini Lenders of the receipt of any comments from the SEC and of any
requests by the SEC for amendments or supplements to the Form S-4 or the
Information Statement/Prospectus or for additional information, and shall
promptly supply Chase with copies of all correspondence between Toy Biz (or
their representatives) and the SEC (or its staff) with respect thereto.
2.4 Stock Exchange Listing. Toy Biz shall use its best efforts to
----------------------
cause the shares of Newco Common Stock to be issued in the Merger and the Plan
of Reorganization and the Convertible Preferred Stock to be issued pursuant to
the Plan of Reorganization to be approved for listing on the New York Stock
Exchange, subject to official notice of issuance, prior to the Effective Time.
2.5 Publicity. After the initial press release with respect to the
---------
execution of this Agreement, so long as this Agreement is in effect, neither Toy
Biz, the Consenting Lenders, the Consenting Panini Lenders, nor any of their
respective affiliates shall issue or cause the publication of any press release
or other announcement with respect to the Merger, this Agreement, the Plan of
Reorganization or the other transactions contemplated hereby without the
exercise of reasonable efforts to consult with the Consenting Lenders, the
Consenting Panini Lenders and Toy Biz, except as may be required by law or by
any listing agreement with a national securities exchange or trading market.
2.6 Notification of Certain Matters.
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(a) Toy Biz shall give prompt notice to the Consenting Lenders
and the Consenting Panini Lenders of (i) the occurrence or non-occurrence of any
event the occurrence or nonoccurrence of which would cause any representation or
warranty of Toy Biz contained in this Agreement to be untrue or inaccurate in
any material respect at or prior to the Effective Time and (ii) any material
failure of Toy Biz to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by such party hereunder; provided,
however, that the failure to deliver any notice pursuant to this Section 2.6
shall not limit or otherwise affect the remedies available hereunder to the
nondefaulting or non-breaching party.
(b) Each of the Consenting Lenders and each of the Consenting
Panini Lenders shall give prompt notice to Toy Biz of (i) the occurrence or non-
occurrence of any event the occurrence or non-occurrence of which would cause
any representation or warranty of such Consenting Lender or such Consenting
Panini Lender contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the
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Effective Time and (ii) any material failure of such Consenting Lender or such
Consenting Panini Lender, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by such party hereunder; provided
however, that the failure to deliver any notice pursuant to this Section 2.6
shall not limit or otherwise affect the remedies available hereunder to the non-
defaulting or non-breaching party.
2.7 HSR Act. Toy Biz shall, as soon as practicable, file a
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Notification and Report Forms under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended ("HSR Act") with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the Department of Justice (the "Antitrust
Division") with respect to the Merger and shall use its best efforts to respond
as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division, including any request for additional information or
documentary material.
2.8 Required Actions. Each of the parties hereto hereby agrees to use
----------------
its reasonable best efforts to take, or cause to be done, all things necessary,
proper or advisable under applicable laws or regulations to:
(a) obtain approval of the Disclosure Statement in accordance
with section 1125 of the Bankruptcy Code as soon as
reasonably practicable, including, without limitation,
requesting that on or before January 5, 1998, the Bankruptcy
Court or such other court as may from time to time exercise
jurisdiction over the Debtors' Bankruptcy Cases schedule a
hearing on or before February 15, 1998 to consider the
adequacy of the Disclosure Statement;
(b) obtain entry of the Confirmation Order as soon as reasonably
practicable;
(c) cause the Consummation Date of the Plan of Reorganization to
occur as soon as reasonably practicable; and
(d) obtain from the Bankruptcy Court or such other court as may
from time to time exercise jurisdiction over the Debtors'
Bankruptcy Cases such other relief as may be necessary or
appropriate in connection with this Agreement, the Plan of
Reorganization and the consummation of the transactions
contemplated hereby and thereby.
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In addition, the parties to this Agreement shall consult with one another
concerning additional motions and/or pleadings that may be made in connection
with any of the foregoing or otherwise in connection with the Plan of
Reorganization.
2.9 Prohibited Actions. Each of the parties hereto hereby agrees not
------------------
to:
(a) object to the Disclosure Statement;
(b) object to entry of the Confirmation Order;
(c) take any action to hinder, delay, preclude or interfere with
the entry of an order approving the Disclosure Statement,
the entry of the Confirmation Order or the occurrence of the
Consummation Date;
(d) with respect to the Consenting Lenders, foreclose against
any collateral without the consent of Toy Biz which consent
will not be unreasonably withheld, unless a Requisite Amount
of the Consenting Lenders shall have first confirmed in
writing to Toy Biz that they will thereafter use reasonable
best efforts to effect transactions substantially similar to
those contemplated by this Agreement or, in the case of an
asset of immaterial value, provide an appropriate cash
credit, provided, however, that under no circumstance may
the Consenting Lenders foreclose against the Common Stock of
Fleer Corp.;
(e) with respect to the Consenting Panini Lenders, each
Consenting Panini Lender agrees that it shall not exercise
any of its remedies under the Existing Panini Credit
Agreements, to collect any of the Panini Obligations or to
realize on any of the collateral security or guarantee
obligations held with respect to any of the Panini
Obligations against any subsidiary of any of the Debtors
that is not the subject of a case under Title 11 of the
United States Code, except to the extent reasonably
necessary to protect their rights under the Existing Panini
Credit Agreements if (x) Panini becomes the subject of a
bankruptcy, insolvency, liquidation or similar proceeding
and/or (y) creditors of Panini, other than Panini Lenders,
holding claims against Panini
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aggregating greater than $1,000,000 exercise their rights
and remedies against Panini under their applicable credit
documents or under applicable law; provided, however,
notwithstanding the foregoing, the Consenting Panini Lenders
shall be entitled to seek adequate protection and object to
continued use of cash collateral.
(f) with respect to the Consenting Lenders and the Consenting
Panini Lenders, file a motion to dismiss or convert one or
more of the Reorganization Cases without the consent of Toy
Biz which consent will not be unreasonably withheld, unless
a Requisite Amount of the Consenting Lenders and a Requisite
Amount of the Consenting Panini Lenders shall have first
confirmed in writing to Toy Biz that they will thereafter
effect transactions substantially similar to those
contemplated by this Agreement;
(g) with respect to Toy Biz, file a motion to dismiss or convert
one or more of the Reorganization Cases without the consent
of the Requisite Amount of the Consenting Lenders which
consent will not be unreasonably withheld, unless Toy Biz
shall have first confirmed in writing to the Consenting
Lenders and the Panini Lenders that it will thereafter
effect transactions substantially similar to those
contemplated by this Agreement;
(h) with respect to the Consenting Lenders, transfer, sell or
assign, or agree to transfer, sell or assign their
respective Senior Secured Claims unless the transferee of
such Senior Secured Claims agrees in a writing reasonably
acceptable to Toy Biz to be bound by the terms and
conditions of this Agreement;
(i) with respect to the Consenting Panini Lenders, transfer,
sell or assign, or agree to transfer, sell or assign their
respective Senior Secured Claims unless the transferee of
such Senior Secured Claims agrees in writing reasonably
acceptable to Toy Biz to be bound by the terms and
conditions of this Agreement; or
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(j) support any other plan of reorganization, arrangement or
other settlement in any way inconsistent with the Plan of
Reorganization.
2.10 Merger. Upon satisfaction of the conditions set forth in Section
------
5.3, Toy Biz shall, in accordance with the Plan of Reorganization, (i) execute
and deliver the Merger Agreement and any other documents or instruments required
to be executed and delivered by it pursuant to the Merger Agreement, and (ii)
take any and all other action required under the Plan of Reorganization and the
Merger Agreement to effect the Merger.
2.11 Financing. On or before the Confirmation Date, Toy Biz shall
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provide the Consenting Lenders and the Consenting Panini Lenders with written
evidence of firm commitments, subject to customary exceptions, for the Term Loan
Facility, the Working Capital Facility and the New Investment. On or before the
Consummation Date, Toy Biz shall obtain the Term Loan Facility, the Working
Capital Facility and the New Investment; it being understood and agreed that
such financing obligation of Toy Biz is absolute and unconditional.
2.12 Company Stock Options.
---------------------
(a) Toy Biz's board of directors, or, if appropriate, any
committee administering Toy Biz's 1995 Stock Option Plan (the "Stock Option
Plan") shall, prior to the Effective Time, terminate, or adopt such resolutions
or take such actions as may be required to adjust, the terms of all then
outstanding employee stock options to purchase Toy Biz Shares granted under the
Stock Option Plan (each, an "Employee Option") and the terms of the Stock Option
Plan to provide that at the Effective Time, each Employee Option outstanding
immediately prior to the Effective Time will be deemed to constitute an option
to acquire, on the same terms and conditions as under such Employee Option, the
number of shares of Newco Common Stock as the holder of such Employee Option
would have been entitled to receive pursuant to the Merger Agreement had such
holder exercised such Employee Option in full immediately prior to the Effective
Time, at the price provided for in the Merger Agreement and any such shares
issuable under such Employee Options shall dilute only the shares to be issued
to holders of Toy Biz Shares in the Merger. Any such Employee Options which are
not terminated will dilute only the Newco Common Stock to be issued to holders
of Class A Shares in the Merger.
(b) Toy Biz shall not grant any stock options or stock
appreciation rights under the Stock Option Plan and will not accelerate the
exercisability of Employee Options and/or permit cash payments to holders of
Employee Options with respect to such options.
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2.13 Qualifying Transactions. Toy Biz shall use its reasonable best
-----------------------
efforts, without being required to incur any material expense, to cooperate with
efforts by the Secured Lenders or the Debtors to consummate a Qualifying
Transaction and, in connection therewith, shall cooperate with financial
advisors, accountants and other advisors to the Consenting Lenders and provide
financial information and projections and other information, subject to
customary confidentiality agreements, to such advisors and potential parties to
a Qualifying Transaction.
2.14 Restructuring of Panini Loan Documents. The Consenting Panini
--------------------------------------
Lenders shall restructure the Panini Obligations (as such term is defined in the
Plan of Reorganization) in accordance with the Plan of Reorganization.
ARTICLE 3
REPRESENTATIONS AND
WARRANTIES OF TOY BIZ
Toy Biz hereby represents and warrants to each Consenting Lender and
each Consenting Panini Lender as follows:
3.1 Organization. Each of Toy Biz and its Subsidiary is a corporation
------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
3.2 Capitalization.
--------------
(a) The authorized capital stock of Toy Biz consists of
100,000,000 Class A Shares, 20,000,000 Class B Shares and 25,000,000 shares of
Preferred Stock. As of the date of this Agreement, (i) 27,746,127 Class A Shares
are issued and outstanding and no Class A Shares are held in the treasury of Toy
Biz, (ii) no Class B Shares are issued and outstanding or held in the treasury
of Toy Biz, (iii) no shares of Preferred Stock are issued and outstanding, and
(iv) 704,386 Class A Shares are reserved for issuance upon exercise of
outstanding Employee Options. All the outstanding shares of Toy Biz's capital
stock are, and all Class A Shares which may be issued pursuant to the exercise
of outstanding Employee Options will be, when issued in accordance with the
respective terms thereof, duly authorized, validly issued, fully paid and non-
assessable. There are no bonds, debentures, notes or other indebtedness having
general voting rights (or convertible into securities having such rights)
("Voting Debt") of Toy Biz or its Subsidiary issued and outstanding. Except as
set forth above, as of the date hereof, (i) there are no shares of capital stock
of Toy Biz authorized, issued or outstanding, and (ii) there are no existing
options,
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warrants, calls, preemptive rights, subscriptions or other rights, agreements,
arrangements or commitments of any character, relating to the issued or unissued
capital stock of Toy Biz or its Subsidiary, obligating Toy Biz or its Subsidiary
to issue, transfer or sell or cause to be issued, transferred or sold any shares
of capital stock or Voting Debt of Toy Biz or its Subsidiary or securities
convertible into or exchangeable for such shares or equity interests, or
obligating Toy Biz or its Subsidiary to grant, extend or enter into any such
option, warrant, call, subscription or other right, agreement, arrangement or
commitment.
(b) Except as disclosed in Schedule 3.2(b) of the Disclosure
Schedule, all of the outstanding shares of capital stock of Toy Biz's Subsidiary
are owned of record and beneficially by Toy Biz, directly or indirectly. All
such shares have been validly issued and are fully paid and non-assessable and
are owned by Toy Biz free and clear of all liens, charges, claims or
encumbrances.
(c) Neither Toy Biz nor its Subsidiary is required to redeem,
repurchase or otherwise acquire shares of capital stock of Toy Biz, or its
Subsidiary, respectively, as a result of the transactions contemplated by this
Agreement.
3.3 Authorization; Validity of Agreement; Corporate Action. Toy Biz
------------------------------------------------------
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance by Toy Biz of this Agreement, and the consummation by
it of the transactions contemplated hereby, have been duly authorized by the
board of directors of Toy Biz and no other corporate action on the part of Toy
Biz is necessary to authorize the execution and delivery by Toy Biz of this
Agreement and, except for the approval of the stockholders of Toy Biz, the
consummation by it of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Toy Biz and constitutes a valid and binding
obligation of Toy Biz enforceable against Toy Biz in accordance with its terms
except that the enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity). Except as disclosed in Schedule 3.3 of the Disclosure
Schedule, the execution delivery and performance of this Agreement by Toy Biz do
not breach, violate, conflict with or constitute a default under any material
agreement to which Toy Biz is a party.
The Consenting Lenders and the Consenting Panini Lenders acknowledge
that Toy Biz is engaged in litigation with Entertainment concerning the status
of Toy Biz's class B common
15
stock and its stockholders' agreement (the "Stockholder Agreement Litigation").
The representations in this Article 3 are qualified by the Stockholder Agreement
Litigation.
3.4 Information. Toy Biz has adequate information concerning the
-----------
business and financial condition of the Debtors, the Reorganization Cases and
the transactions contemplated by this Agreement and the Plan of Reorganization
to make an informed decision with respect to this transactions contemplated by
this Agreement and the Plan of Reorganization. Toy Biz has independently and
without reliance upon any of the Consenting Lenders or any of the Consenting
Panini Lenders (except for the representations, warranties, and covenants and
agreements contained herein) and based on such information as Toy Biz has deemed
appropriate in its independent judgment, made its own analysis and decision to
enter into this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE
CONSENTING LENDERS AND THE CONSENTING PANINI LENDERS
Each of the Consenting Lenders and each of the Consenting Panini
Lenders hereby represents and warrants with respect to itself to Toy Biz as
follows:
4.1 Organization. It is an entity duly organized, validly existing
------------
and in good standing under the laws of the jurisdiction of its formation.
4.2 Authorization; Validity of Agreement; Corporate Action. It has
------------------------------------------------------
all requisite corporate or similar power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby; the
execution, delivery and performance by such party of this Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary action by such party and no further action on the
part of such part is necessary to authorize the execution and delivery by such
party of this Agreement and the consummation by it of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by such
party, and assuming due and valid authorization, execution and delivery hereof
of the other parties hereto, is a valid and binding obligation of such party
enforceable against such party in accordance with its terms except that the
enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditor's rights generally and (b) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in equity).
16
4.3 Ownership of Claims. Each Consenting Lender and each Consenting
-------------------
Panini Lender owns or beneficially owns, respectively, the outstanding principal
amount of Senior Secured Claims set forth on its Consenting Lender Execution
Page or Consenting Panini Lender Execution Page and, with respect to each such
claim, such party has the legal right to exercise all voting rights relating
thereto (collectively, "Controlled Claims"); and such party represents that to
the extent that it has previously pledged, hypothecated, transferred,
participated or otherwise encumbered any interests in such Senior Secured Claim,
the other party to any such conveyance has agreed to be bound hereby.
4.4 Information. Each Consenting Lender and each Consenting Panini
-----------
Lender has adequate information concerning the business and financial condition
of Toy Biz, the Debtors, the Reorganization Cases and the transactions
contemplated by this Agreement and the Plan of Reorganization to make an
informed decision with respect to the transactions contemplated by this
Agreement and the Plan of Reorganization. Each Consenting Lender and each
Consenting Panini Lender has independently and without reliance upon Toy Biz,
and its officers, directors and representatives whatsoever (except for the
representations, warranties, and covenants and agreements contained herein) and
based on such information as such party has deemed appropriate in its
independent judgment, made its own analysis and decision to enter into this
Agreement.
ARTICLE 5
CONDITIONS
5.1 Conditions to Each Party's Obligations to Continue to Perform Its
-----------------------------------------------------------------
Respective Obligations in Accordance with Article 2. The obligations of each
---------------------------------------------------
party to perform its respective obligations under Article 2 (other than Section
2.10) during the term of this Agreement shall be subject to there being no order
or injunction of a Governmental Entity of competent jurisdiction in effect
precluding, restraining, enjoining or prohibiting the transactions contemplated
in this Agreement and in the Plan of Reorganization during the term hereof,
which condition may be waived in whole or in part by Toy Biz or a Requisite
Amount of the Consenting Lenders as the case may be, to the extent permitted by
applicable law.
5.2 Conditions to Consenting Lenders' Obligations to Perform Their
--------------------------------------------------------------
Respective Obligations in Accordance with Article 2. The obligations of the
---------------------------------------------------
Consenting Lenders and the Consenting Panini Lenders to perform their respective
obligations under Article 2 during the term of this Agreement shall be subject
to the satisfaction of each of the following conditions
17
during the term hereof, any and all of which may be waived in whole or part by a
Requisite Amount of the Consenting Lenders to the extent permitted by applicable
law.
(a) Representations and Warranties of Toy Biz. The
-----------------------------------------
representations and warranties of Toy Biz shall be true and correct in all
material respects during the term hereof (except for those representations and
warranties that address matters only as of a particular date which need only be
true and correct in all material respects as of such date).
(b) Covenants of Toy Biz. Toy Biz shall have performed in all
--------------------
material respects its obligations required to be performed during the term of
this Agreement.
(c) No Stockholder Breach Event. No Stockholder Breach Event, as
---------------------------
defined in the Proxy and Stock Option Agreements, shall have occurred and be
continuing.
(d) Opinion of Counsel. No later than 5:00 p.m., New York Time,
------------------
on November 24, 1997, Battle Fowler LLP, counsel to Toy Biz shall have delivered
to Wachtell, Lipton, Rosen & Katz, its opinion in the form attached hereto as
Exhibit 5.2(d).
(e) Stockholders Agreement. Toy Biz, Avi Arad and the Perlmutter
----------------------
Stockholders shall have entered into a stockholders agreement pursuant to which
Avi Arad and the Perlmutter Stockholders agree to vote their shares of Newco
Common Stock in favor of the election to the Newco board of directors of five
nominees designated by the Consenting Lenders and certain of their transferees
for as long as the Consenting Lenders and those transferees hold more than a
specified percentage of the outstanding Newco Common Stock.
5.3 Conditions to Toy Biz's Obligation to Execute and Deliver the
-------------------------------------------------------------
Merger Agreement. The obligation of Toy Biz to execute and deliver the Merger
----------------
Agreement and to perform its obligation under Section 2.10 shall be subject to
the satisfaction on or prior to the date upon which Toy Biz executes the Merger
Agreement of each of the following conditions, any and all of which may be
waived in whole or in part by Toy Biz, to the extent permitted by applicable
law:
(a) Effectiveness of Form S-4. If required by applicable law,
-------------------------
the Form S-4 shall have become effective and no stop order suspending the
effectiveness of the Form S-4 shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the SEC.
(b) HSR Act. Any waiting period (including any extension
-------
thereof) under the HSR Act applicable to the Merger shall have expired or been
terminated.
18
(c) Injunctions. There shall be no order or injunction of a
-----------
Governmental Entity of competent jurisdiction in effect precluding, restraining,
enjoining or prohibiting consummation of the Merger.
(d) Confirmation Order. The Bankruptcy Court (or such other
------------------
court as may from time to time exercise jurisdiction over the Debtors'
Bankruptcy Cases) shall have entered the Confirmation Order and its
effectiveness and enforceability shall not be subject to any stay or injunction
and all conditions to the consummation of the Plan of Reorganization shall have
been satisfied or duly waived in accordance with the Plan of Reorganization.
ARTICLE 6
CONVERSION OF MARVEL-OWNED SHARES
6.1 Conversion of Marvel-Owned Shares. If this Agreement is
---------------------------------
terminated by the Consenting Lenders under Section 7.1(d) or the Merger
Agreement is terminated in accordance with Section 6.1(d) thereof, a Requisite
Amount of the Consenting Lenders shall have the right to direct Toy Biz to, and
Toy Biz shall thereupon be obligated to, convert the Converted Class B Shares
into an equal number of duly authorized, fully paid and nonassessable Class B
Shares. Following that conversion, the holders of the Converted Class B Shares
shall thereafter be deemed to be the holders of such new Class B Shares and the
certificates evidencing those Converted Class B Shares shall be deemed to
evidence those new Class B Shares. As a condition precedent to that conversion,
the New Stockholders Agreement and New Voting Trust Agreements will be released
from escrow and the holders of such new Class B Shares will be required to
complete, execute and deliver to each of the parties thereto the New
Stockholders Agreement and the New Voting Trust Agreements and Toy Biz will
deposit one of the Class B Shares into each of the voting trusts established
under the New Voting Trust Agreements as contemplated by the New Voting Trust
Agreements.
ARTICLE 7
TERMINATION AND WITHDRAWAL
7.1 Termination. This Agreement shall terminate upon the consummation
-----------
of the Merger at the Effective Time unless terminated sooner in accordance with
this Section 7.1. This Agreement may be terminated and the Merger contemplated
herein may be abandoned at any time prior to the Effective Time:
19
(a) by mutual written agreement of each of the Consenting
Lenders and Toy Biz;
(b) by Toy Biz if the Consummation Date has not occurred on or
before September 21, 1998, provided that the failure of the Consummation Date to
occur on or before such date is not the result of the breach of any
representation or warranty or the failure to perform any covenant or agreement
or satisfy any condition under this Agreement or the Merger Agreement by Toy
Biz, it being understood and agreed that the Consummation Date will be deemed to
have occurred if the parties effect a substantially similar transaction as
contemplated by Sections 2.9 (d) hereof on terms no less favorable to Toy Biz's
shareholders (other than the Debtors) than those contemplated by this Master
Agreement on or before September 21, 1998;
(c) by any Consenting Lenders or Toy Biz upon written notice
given to the other if there shall be any law or regulation of any competent
authority that makes consummation of the Merger illegal or otherwise prohibited,
or if any Governmental Entity of competent jurisdiction shall have issued a
final non-appealable order, judgment, injunction or order enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, other than an
Adverse Order or a Change in Control;
(d) by a Requisite Amount of the Consenting Lenders if Toy Biz
breaches or fails in any material respect to perform or comply with any of its
covenants and agreements contained herein or breaches its representations and
warranties in any material respect and such breach has not been cured to the
reasonable satisfaction of the Consenting Lenders within 10 days of the notice
by a Requisite Amount of the Consenting Lenders of such breach;
(e) by a Requisite Amount of the Consenting Lenders if there is
a Stockholder Breach Event (as defined in the Proxy and Stock Option
Agreements);
(f) by Toy Biz or any Consenting Lender if the Consenting Lender
Threshold Date has not occurred by 5:00 p.m., New York Time on November 21,
1997;
(g) by Toy Biz after the Consenting Lender Threshold Date if one
or more Consenting Lenders breach their respective representations, warranties
or covenants contained herein in any material respect, such breaches have not
been cured to Toy Biz's reasonable satisfaction within 10 days' receipt by such
Consenting Lender of notice by Toy Biz and, as a result of such breach, the
amount of Senior Secured Claims held by, or number of, non-breaching Consenting
Lenders falls below the Consenting Lender Threshold; and/or
20
(h) by Toy Biz or any Consenting Lender after the Consenting
Lender Threshold Date, if as a result of breaches by one or more Consenting
Lenders contemplated by Section 7.1(f) and/or withdrawals by Consenting Lenders
pursuant to Section 7.2 and 8.2, the amount of Senior Secured Claims held by, or
number of, non-breaching Consenting Lenders and non-withdrawing Consenting
Lenders falls below the Consenting Lenders Threshold.
7.2 Withdrawal. A Consenting Lender shall have the right to withdraw
----------
from this Agreement during the following periods. Upon withdrawal from this
Agreement by a Consenting Lender the withdrawing Consenting Lender shall
thereupon cease to have any rights or obligations under this Agreement, and
shall no longer be deemed to be a Consenting Lender. A Consenting Lender may
withdraw:
(a) at any time prior to 5:00 p.m., New York Time, January 15,
1998, if a court of competent jurisdiction has not by January 5, 1998
established a date on or prior to February 15, 1998 to consider the adequacy of
the Disclosure Statement provided that failure to establish such a date is not
the result of the breach of any representation or warranty or the failure to
perform any covenant or agreement or satisfy any condition under this Agreement
or the Merger Agreement by any of the Consenting Lenders or any of the
Consenting Panini Lenders;
(b) at any time prior to 5:00 p.m., New York Time, February 25,
1998, if the Disclosure Statement relating to the Plan of Reorganization has not
been approved by the Bankruptcy Court (or such other court as may from time to
time exercise jurisdiction over the Debtors' Bankruptcy Cases) by February 15,
1998 provided that failure to approve the Disclosure Statement by such date is
not the result of the breach of any representation or warranty or the failure to
perform any covenant or agreement or satisfy any condition under this Agreement
or the Merger Agreement by any of the Consenting Lenders or any of the
Consenting Panini Lenders;
(c) at any time prior to 5:00 p.m., New York Time, April 10,
1998, if the Confirmation Date has not occurred on or before April 1, 1998,
provided that failure of the Confirmation Date to occur on or before such date
is not the result of the breach of any representation or warranty or the failure
to perform any covenant or agreement or satisfy any condition under this
Agreement or the Merger Agreement by any of the Consenting Lenders or any of the
Consenting Panini Lenders;
(d) at any time prior to 5:00 p.m., New York Time, May 25, 1998,
if the Consummation Date has not occurred on or before May 15, 1998, provided
that the failure of the Consummation Date to occur on or before such date is not
the result of the breach of any representation or warranty or the
21
failure to perform any covenant or agreement or satisfy any condition under this
Agreement or the Merger Agreement by any of the Consenting Lenders or any of the
Consenting Panini Lenders;
(e) at any time during the sixty (60) day period following the
entry of an Adverse Order.
(f) at any time during the thirty (30) day period following a
Change in Control.
ARTICLE 8
MISCELLANEOUS
8.1 Fees and Expenses. Except as contemplated by this Agreement and
-----------------
the Plan of Reorganization, all costs and expenses incurred in connection with
this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such expenses.
8.2 Amendment, Modification, Waiver and Other Action. Subject to
------------------------------------------------
applicable law, this Agreement may be amended, modified and supplemented in any
and all respects, and any provision hereof may be waived, by written agreement
of Toy Biz and a Requisite Amount of the Consenting Lenders, provided that any
Consenting Lender who does not agree to any such amendment, modification,
supplement or waiver shall have the right to withdraw from this Agreement within
ten days after such amendment, modification, supplement or waiver becomes
effective, and in addition, provided that no such amendment, modification
supplement or waiver shall affect the amount of the Newco Guaranty, the
collateral securing the Newco Guaranty or any of the terms of the Restructured
Panini Obligations without the written agreement of a Requisite Amount of the
Consenting Panini Lenders.
8.3 Nonsurvival of Representations and Warranties. None of the
---------------------------------------------
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective Time.
8.4 Notices. All notices and other communications hereunder shall be
-------
in writing and shall be sufficient if in writing and delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, and shall be deemed given when so delivered personally,
telecopied or if mailed or sent by overnight courier service, on the scheduled
delivery date, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
22
if to the Consenting Lenders, to:
To the address of that
Consenting Lender set forth
adjacent to the signature of
that Consenting Lender on
the signature pages to this
Agreement
with a copy to:
Chaim J. Fortgang
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telephone No.: (212) 403-1000
Telecopy No.: (212) 403-2000
and
if to the Consenting Panini Lenders, to:
To the address of that
Consenting Panini Lender set forth
adjacent to the signature of
that Consenting Panini Lender on
the signature pages to this
Agreement
with a copy to:
Chaim J. Fortgang
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telephone No.: (212) 403-1000
Telecopy No.: (212) 403-2000
and
if to Toy Biz, to:
Toy Biz, Inc.
333 East 38th Street
New York, New York 10016
Attention: General Counsel
Telephone No.: (212) 682-4700
Telecopy No.: (212) 682-3516
23
with a copy to:
Lawrence Mittman
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Telephone No.: (212) 856-7177
Telecopy No.: (212) 856-7807
8.5 Interpretation. When a reference is made in this Agreement to
--------------
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include", "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation". As used in this Agreement, the term "affiliate(s)" shall have the
meaning set forth in Rule 12b-2 of the Exchange Act.
8.6 Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties. Delivery of an executed
signature page of this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
8.7 Entire Agreement, No Third Party Beneficiaries. This Agreement
----------------------------------------------
(including the documents and the instruments referred to herein) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
8.8 Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a Governmental Entity of competent jurisdiction to be
invalid, void, unenforceable or against its regulatory policy, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
8.9 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the general corporation law of the State of Delaware with
respect to matters covered therein and otherwise in accordance with the laws of
the State of New York, in each case without giving effect to the principles of
conflicts of law thereof.
24
8.10 Enforcement; Damages. The parties agree that irreparable damage
--------------------
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at law or in equity; provided, however, in no
-------- -------
event shall Toy Biz be liable for any damages as a result of a breach or
failure by Toy Biz to perform or comply with any of its covenants or agreements
contained in this Agreement which (i)(x) occurs after there has been a Change
in Control and (y) is caused by the action or inaction of the new board of
directors or new management of Toy Biz or (ii) occurs as a result of an Adverse
Order.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
TOY BIZ, INC.
By:
-----------------------------------
Name: Joseph M. Ahearn
Title: President
CONSENTING LENDER EXECUTION PAGE
By signing below, the undersigned is hereby executing and agreeing to be bound
by the (a) Amended and Restated Master Agreement (the "Master Agreement"), dated
as of November 19, 1997, by and among (i) Toy Biz, Inc., (ii) certain secured
creditors of Marvel Entertainment Group, Inc. and certain of its direct and
indirect subsidiaries (the "Marvel Debtors"), and (iii) the Panini Lenders (as
defined in the Plan of Reorganization referred to in the Master Agreement), (b)
Amended and Restated Proxy and Stock Option Agreement, dated as of November 19,
1997, by and among Isaac Perlmutter, Isaac Perlmutter, T.A. and Zib, Inc. and
certain secured creditors of the Marvel Debtors, and (c) Amended and Restated
Proxy and Stock Option Agreement, dated as of November 19, 1997, by and among
Avi Arad and certain secured creditors of the Marvel Debtors. This Consenting
Lender Execution Page shall be deemed to be a signature page to each of the
agreements listed above and the undersigned shall be deemed to have signed each
as a "Consenting Lender."
Name of Consenting Lender:
--------------------------------------------
By:
-----------------------------------------
Name:
Title:
Address for Notices:
--------------------------------------------
--------------------------------------------
--------------------------------------------
Telephone No.:
------------------------------
Telecopy No.:
-------------------------------
Principal amount of Fixed Senior Secured
Claims owned or beneficially owned and which
is consenting as set forth above: $ .
--------
CONSENTING PANINI LENDER EXECUTION PAGE
By signing below, the undersigned is hereby executing and agreeing to be bound
by the Amended and Restated Master Agreement (the "Master Agreement"), dated
as of November 19, 1997, by and among (i) Toy Biz, Inc., (ii) certain secured
creditors of Marvel Entertainment Group, Inc. and certain of its direct and
indirect subsidiaries, and (iii) the Panini Lenders (as defined in the Plan of
Reorganization referred to in the Master Agreement).
Name of Consenting Panini Lender:
--------------------------------
By:
-----------------------------
Name:
Title:
Address for Notices:
--------------------------------
--------------------------------
--------------------------------
Telephone No.:
------------------
Telecopy No.:
-------------------
Principal amount of claims under the
Existing Panini Junior Credit Agreements
owned or beneficially owned and which is
consenting as set forth above: It.
Lire .
------------------
Principal amount of claims under the
Existing Panini Senior Credit Agreements
owned or beneficially owned and which is
consenting as set forth above: It.
Lire .
------------------
AMENDMENT NO. 1 TO THE
AMENDED AND RESTATED MASTER AGREEMENT
This Amendment No. 1, dated as of February 3, 1998 (this "Amendment"),
to the Amended and Restated Master Agreement, dated as of November 19, 1997 (the
"Master Agreement"), by and among (i) Toy Biz, Inc., a Delaware corporation
("Toy Biz"), (ii) certain secured creditors (the "Consenting Lenders") of Marvel
Entertainment Group, Inc., a Delaware corporation ("Entertainment"), and certain
of its direct and indirect subsidiaries and (iii) certain creditors (the
"Consenting Panini Lenders") of Panini S.p.A. and its subsidiaries.
PRELIMINARY STATEMENT
Each of the parties to this Amendment is a party to the Master
Agreement. Sections 7.1(b) and 7.2 of the Master Agreement specify certain
dates by which events are contemplated to occur. The parties to this Amendment
wish to extend the dates specified in those sections of the Master Agreement by
30 days as provided in this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants set forth herein, and on the terms and subject to the
conditions set forth herein, the parties hereto agree as follows:
Section 1. The following dates referred to in the Master Agreement are
hereby amended as follows:
(a) The date "February 15, 1998" in Section 7.2(a) of the Master
Agreement is hereby extended to March 17, 1998.
(c) The dates "February 25, 1998" and "February 15, 1998" in Section
7.2(b) of the Master Agreement are hereby extended to March 27, 1998 and
March 17, 1998, respectively.
(d) The dates "April 10, 1998" and "April 1, 1998" in Section 7.2(c)
of the Master Agreement are hereby extended to May 10, 1998 and May 1,
1998, respectively.
(e) The dates "May 25, 1998" and "May 15, 1998" in Section 7.2(d) of
the Master Agreement are hereby extended to June 24, 1998 and June 14,
1998, respectively.
(f) The date September 21, 1998 in Section 7.1(b) of the Master
Agreement is hereby extended to October 21, 1998.
Section 2. This Amendment shall become effective when it has been
executed by Consenting Lenders who are parties to the Master Agreement and who
constitute the Consenting Lender Threshold (as that terms is defined in the
Master Agreement). This Amendment may be executed in two or more counterparts,
all of which shall be considered one and the same agreement. Delivery of an
executed signature page of this Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
Section 3. Except as specifically amended in this Amendment, the
Master Agreement is ratified and confirmed in all respects and remains in full
force and effect in accordance with its terms.
Section 4. The joint plan of reorganization of Entertainment and
certain of its direct and indirect subsidiaries, filed on November 19, 1997,
shall be amended to be substantially consistent with Exhibit A hereto.
THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK
iii
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
TOY BIZ, INC.
By:
------------------------------------
Name: Joseph M. Ahearn
Title: President
CONSENTS TO EXTENSION
I, Avi Arad, consent to this Amendment No. 1 to the Amended and
Restated Master Agreement, dated as of February 3, 1998 (the "Master Agreement
Amendment"), and confirm that the Amended and Restated Proxy and Stock Option
Agreement, dated as of November 19, 1997, between myself and secured creditors
of Marvel Entertainment Group, Inc., remains in full force and effect despite
the Master Agreement Amendment.
----------------------------------------
Avi Arad
I, Isaac Perlmutter, consent to this Amendment No. 1 to the Amended
and Restated Master Agreement, dated as of February 3, 1998 (the "Master
Agreement Amendment"), and confirm that the Amended and Restated Proxy and Stock
Option Agreement, dated as of November 19, 1997, between myself and secured
creditors of Marvel Entertainment Group, Inc., remains in full force and effect
despite the Master Agreement Amendment.
----------------------------------------
Isaac Perlmutter
CONSENTING LENDER EXECUTION PAGE
By signing below, the undersigned is hereby executing and agreeing to be bound
by (a) Amendment No. 1, dated as of February 3, 1998, to the Amended and
Restated Master Agreement, dated as of November 19, 1997, by and among (i) Toy
Biz, Inc., (ii) certain secured creditors (the "Consenting Lenders") of Marvel
Entertainment Group, Inc., a Delaware corporation ("Entertainment"), and certain
of its direct and indirect subsidiaries (the "Marvel Debtors") and (iii) certain
creditors of Panini S.p.A. and its subsidiaries.
Name of Consenting Lender:
----------------------------------------
By:
-------------------------------------
Name:
Title:
AMENDMENT NO. 2 TO THE
AMENDED AND RESTATED MASTER AGREEMENT
This Amendment No. 2, dated as of March 12, 1998 (this "Second
Amendment"), to the Amended and Restated Master Agreement, dated as of November
19, 1997 (the "Master Agreement"), by and among (i) Toy Biz, Inc., a Delaware
corporation ("Toy Biz"), (ii) certain secured creditors (the "Consenting
Lenders") of Marvel Entertainment Group, Inc., a Delaware corporation
("Entertainment"), and certain of its direct and indirect subsidiaries and
(iii) certain creditors (the "Consenting Panini Lenders") of Panini S.p.A. and
its subsidiaries.
PRELIMINARY STATEMENT
Each of the parties to this Second Amendment is a party to the Master
Agreement. Sections 7.1(b) and 7.2 of the Master Agreement originally specified
certain dates by which events were contemplated to occur. Those dates were
extended by 30 days by Amendment No. 1, dated as of February 3, 1998, to the
Master Agreement (the "First Amendment"). The parties to this Second Amendment
wish to further extend those dates by 30 days as provided in this Second
Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants set forth herein, and on the terms and subject to the
conditions set forth herein, the parties hereto agree as follows:
Section 1. The following dates referred to in the Master Agreement are
hereby amended as follows:
(a) The dates "April 10, 1998" and "April 1, 1998" in Section 7.2(c) of
the Master Agreement, extended by the First Amendment to May 10, 1998 and
May 1, 1998, respectively, are hereby extended to June 9, 1998 and June 1,
1998, respectively.
(b) The dates "May 25, 1998" and "May 15, 1998" in Section 7.2(d) of the
Master Agreement, extended by the First Amendment to June 24, 1998 and June
14, 1998, respectively, are hereby extended to July 24, 1998 and July 14,
1998, respectively.
(c) The date September 21, 1998 in Section 7.1(b) of the Master
Agreement, extended by the First Amendment to October 21, 1998, is
hereby extended to November 20, 1998.
Section 2. This Second Amendment shall become effective when it
has been executed by Consenting Lenders who are parties to the Master Agreement
and who constitute the Consenting Lender Threshold (as that terms is defined in
the Master Agreement). This Second Amendment may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.
Delivery of an executed signature page of this Second Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.
Section 3. Except as specifically amended in this Second
Amendment, the Master Agreement is ratified and confirmed in all respects and
remains in full force and effect in accordance with its terms.
Section 4. The joint plan of reorganization of Entertainment and
certain of its direct and indirect subsidiaries; filed on November 19, 1997,
and amended on February 12, 1998, shall be further amended to be substantially
in the form attached as Exhibit A hereto.
THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK
iv
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be signed by their respective officers thereunto duly authorized
as of the date first written above.
TOY BIZ, INC.
By:
------------------------------------
Name: Joseph M. Ahearn
Title: President
CONSENTS TO EXTENSION
I, Avi Arad, consent to this Amendment No. 2, dated as of March 12,
1998, to the Amended and Restated Master Agreement (the "Master Agreement
Second Amendment"), and confirm that the Amended and Restated Proxy and Stock
Option Agreement, dated as of November 19, 1997, between myself and secured
creditors of Marvel Entertainment Group, Inc., remains in full force and effect
despite the Master Agreement Second Amendment.
---------------------------------------
Avi Arad
I, Isaac Perlmutter, consent to this Amendment No. 2, dated as of
March 12, 1998, to the Amended and Restated Master Agreement (the "Master
Agreement Second Amendment"), and confirm that the Amended and Restated Proxy
and Stock Option Agreement, dated as of November 19, 1997, between myself and
secured creditors of Marvel Entertainment Group, Inc., remains in full force
and effect despite the Master Agreement Second Amendment.
---------------------------------------
Isaac Perlmutter
CONSENTING LENDER EXECUTION PAGE
By signing below, the undersigned is hereby executing and agreeing to be bound
by (a) Amendment No. 2, dated as of March 10, 1998, to the Amended and Restated
Master Agreement, dated as of November 19, 1997, by and among (i) Toy Biz, Inc.,
(ii) certain secured creditors (the "Consenting Lenders") of Marvel
Entertainment Group, Inc., a Delaware corporation ("Entertainment"), and certain
of its direct and indirect subsidiaries (the "Marvel Debtors") and (iii) certain
creditors of Panini S.p.A. and its subsidiaries.
Name of Consenting Lender:
------------------------------------------
By:
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Name:
Title:
Dates Referenced Herein and Documents Incorporated by Reference
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