Exhibit 10.4

 

AMENDMENT NO. 2 AND REAFFIRMATION AGREEMENT

AMENDMENT NO. 2 AND REAFFIRMATION AGREEMENT (this “Amendment”) dated as of June
28, 2006 to CREDIT AGREEMENT (the “Credit Agreement”) dated as of November 9,
2005, among MARVEL ENTERTAINMENT, INC., a Delaware corporation, and HSBC BANK
USA, NATIONAL ASSOCIATION, as Lender. All capitalized terms used but not defined
herein shall have the same meanings herein as in the Credit Agreement. The
parties hereto hereby agree as follows:

ARTICLE I:  AMENDMENTS

Section 1.1. Defined Terms. Section 1.1 is hereby amended such that the
definition set forth below which is also set forth in the Credit Agreement is
hereby amended and restated in its entirety as set forth below.

“Final Maturity Date ” means (a) March 31, 2008 or (b) such earlier date on
which the Loans shall become due and payable in accordance with the terms of
this Agreement, whether by acceleration or otherwise.

Section 1.2. Prepayment. Section 2.5(a)(i) of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:

(i)            Prepayment. The Borrower shall have the right to prepay the Loans
at any time in whole or from time to time in part. In the event of the
consummation of any sale, conveyance, transfer or other disposition of the
intellectual property of the Borrower (or its subsidiaries) in a single
transaction or a series of related transactions (an “IP Sale”) for an aggregate
amount in excess of $5,000,000, the Commitment shall be reduced by an amount
equal to 100% of the net cash proceeds of such IP Sale. As used herein, “net
cash proceeds” shall means proceeds of an IP Sale net of reasonable cash costs
of such IP Sale and taxes paid and payable on and as a result thereof. For the
avoidance of doubt, a license by Borrower of its intellectual property shall not
be deemed to be an IP Sale.

Section 1.3. Commitment Reduction. Section 2.5(a)(ii) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:

(ii)          Mandatory Commitment Reduction. The Commitment shall automatically
and permanently be reduced by (i) an amount equal to $25,000,000 on September
30, 2006 and (ii) by an amount equal to $25,000,000 on March 31, 2007.

Section 1.4. Reporting Requirements. Section 5.1 of the Credit Agreement is
hereby amended

(i) by deleting clause “(c)” of that section and replacing it with the
following: “(c) promptly and in any event within 30 days after the end of each
calendar month, an aging of accounts receivable as of the last day of such
calendar month;” and

(ii) by deleting, within clause “(e)” of that section, the phrase “on the 15th
and the 30th day of each calendar month” and replacing that phrase with the
phrase “on the 30th day of each calendar month”.

 

 

1

 

--------------------------------------------------------------------------------

 

ARTICLE II:  REAFFIRMATION; REPRESENTATIONS AND WARRANTIES

Section 2.1. General. Each Obligor hereby ratifies, confirms and reaffirms in
all respects all of its Obligations to the Lender as evidenced by the Credit
Documents and all of its Obligations to the Lender arising under any other
instrument or agreement creating, evidencing, or securing any of its obligations
to the Lender.

Section 2.2. Representations and Warranties. Each Obligor hereby represents and
warrants to the Lender that, after giving effect to this Amendment, (a) the
representations and warranties set forth in the Credit Documents are true and
correct in all material respects on and as of the date hereof, except to the
extent such representations and warranties expressly relate to an earlier date,
(b) no Default or Event of Default has occurred and is continuing , (c) this
Amendment has been duly authorized, executed and delivered by the Obligors and
constitute a legal, valid and binding obligation of the Obligors, enforceable
against the Obligors in accordance with its terms and (d) no litigation has been
commenced against any Obligor or any of its subsidiaries seeking to restrain or
enjoin (whether temporarily, preliminarily or permanently) the performance of
any action by any Obligor required or contemplated by this Amendment, the Credit
Agreement or the Credit Documents, in each case as amended hereby.

ARTICLE III: MISCELLANEOUS

Section 3.1. No Waiver. Except as otherwise provided herein, this Amendment
shall not (i) constitute a modification, acceptance or waiver with respect to
any other term, provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein or (ii) except as contemplated
hereunder, prejudice any right or remedy that the Lender may now have or may
have in the future under or in connection with the Credit Agreement or any other
instrument or agreement referred to therein and all obligations of the Obligors
and rights of the Lender thereunder shall remain in full force and effect.

Section 3.2. Amendment. This Amendment and Amendment No. 1 to the Credit
Agreement dated as of January 18, 2006 by and between the Borrower and the
Lender are Credit Documents.

Section 3.3. Successors and Assigns. The provisions of this Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that no Obligor may assign or otherwise transfer
any of its rights or Obligations hereunder without the prior written consent of
Lender (and any attempted assignment or transfer by any Obligor without such
consent shall be null and void).

Section 3.4. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.

Section 3.5. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Amendment and shall not affect the construction of, or be taken into
consideration in interpreting, this Amendment.

Section 3.6. Counterparts. This Amendment may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Amendment or of any other Credit Document by telecopy shall be effective as
delivery of a manually executed counterpart of this Amendment or of such other
Credit Document.

 

2

 

--------------------------------------------------------------------------------

 

Section 3.7. Severability. The fact that any term or provision of this Amendment
is held invalid, illegal or unenforceable as to any person in any situation in
any jurisdiction shall not affect the validity, enforceability or legality of
the remaining terms or provisions hereof or the validity, enforceability or
legality of such offending term or provision in any other situation, or
jurisdiction or as applied to any person.

[Signature page follows.]

 

3

 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the day and year first
above written.

BORROWER:

 

MARVEL ENTERTAINMENT, INC.

 

By  /s/ Kenneth P. West                                

 

Name: Kenneth P. West

 

 

Title: Executive Vice President and

 

Chief Financial Officer

 

 

Notice Address for The Borrower:

 

417 Fifth Avenue

New York, NY 10016

Attn: Kenneth P. West, Executive Vice President and Chief Financial Officer

Telephone: 212-576-8538

Facsimile: 212-576-4064

 

ADDITIONAL OBLIGOR(S):

 

MARVEL CHARACTERS, INC.

 

By  /s/ Kenneth P. West                                

 

Name: Kenneth P. West

 

Title: Treasurer

 

 

 

LENDER:

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

By  /s/ MARY A. PAN                                   

 

MARY A. PAN

 

 

SENIOR VICE PRESIDENT

 

Notice Address:

 

452 Fifth Avenue

New York, New York 10018

Attn: Mary A. Pan, Senior Vice President

Telephone: 212-525-5370

Facsimile: 212-525-6233

 

 

 

 

4