<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 4, 1994
REGISTRATION NO. 33-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
MATTEL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1567322
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
333 CONTINENTAL BOULEVARD
EL SEGUNDO, CALIFORNIA 90245-5012
(310) 252-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
N. NED MANSOUR, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
MATTEL, INC.
333 CONTINENTAL BOULEVARD
EL SEGUNDO, CALIFORNIA 90245-5012
(310) 252-3607
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
JOHN J. COST, ESQ. BRIAN G. CARTWRIGHT, ESQ.
IRELL & MANELLA LATHAM & WATKINS
333 SO. HOPE STREET, SUITE 3300 633 W. FIFTH STREET
LOS ANGELES, CA 90071 LOS ANGELES, CA 90071
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt Securities........ $250,000,000(1)(2) 100%(3)(4) $250,000,000 $86,207
</TABLE>
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(1) In U.S. dollars or the equivalent if Debt Securities are denominated in
foreign currency or currency units, on the basis of exchange rates on the
date an agreement to issue and sell the applicable Debt Securities is
entered into.
(2) Or, if any Debt Securities are issued at an original issue discount, such
greater amount as shall result in proceeds of $250,000,000 to the
Registrant.
(3) Estimated solely for the purpose of computing the registration fee.
(4) Excluding accrued interest and accrued amortization of discount, if any, to
the date of delivery.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1993 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED AUGUST 4, 1994
$250,000,000
LOGO OF MATTEL, INC.
DEBT SECURITIES
-----------
The Company may offer from time to time in one or more series its debt
securities (the "Debt Securities") in amounts, at prices and on terms to be
determined at the time of offering. The aggregate initial offering price of the
Debt Securities to be offered will be limited to $250,000,000 (or the
equivalent if Debt Securities are denominated in foreign currency or currency
units) or, if Debt Securities are issued at an original issue discount, such
greater amount as shall result in aggregate proceeds of $250,000,000 to the
Company.
The accompanying Prospectus Supplement sets forth the specific designation,
aggregate principal amount, designated currency (or currency unit), purchase
price, maturity, interest rate (or manner of calculation thereof), time of
payment of interest (if any), and any other specific terms of the Debt
Securities. The Prospectus Supplement also sets forth the name of and
compensation to each underwriter, dealer or agent (if any) involved in the
offer of the Debt Securities, the other terms and manner of the offer and
distribution of the Debt Securities and the net proceeds to the Company from
such offering.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
Debt Securities may be offered to or through underwriters, dealers or agents
designated from time to time, as set forth in the Prospectus Supplement, and
may be offered to other purchasers directly by the Company. See "Plan of
Distribution" for possible indemnification arrangements for underwriters,
dealers and agents.
------------
, 1994
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND THEREIN, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER, DEALER OR
AGENT. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY DEBT SECURITIES IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFERING
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT
THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR IN ANY
PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF
OR OF SUCH PROSPECTUS SUPPLEMENT.
AVAILABLE INFORMATION
Mattel, Inc. ("Mattel" or the "Company") has filed with the Securities and
Exchange Commission (the "Commission") in Washington, D.C. a Registration
Statement on Form S-3 (including all amendments thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Debt Securities offered hereby. This Prospectus and
any Prospectus Supplement do not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the Debt Securities, reference is hereby made to the
Registration Statement and the exhibits and schedules thereto.
Mattel is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by
Mattel can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and at the Commission's regional offices located
at Seven World Trade Center, 13th Floor, New York, New York 10048, and in
Chicago at 500 West Madison Street, Room 1400, Chicago, Illinois 60661. Copies
of such materials can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Reports, proxy statements and other information concerning Mattel can also be
inspected and copied at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005 and the Pacific Stock Exchange, 115 Sansome
Street, 2nd Floor, San Francisco, California 94104, on which exchanges certain
securities of Mattel are listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which Mattel has filed with the Commission pursuant
to the Exchange Act, are hereby incorporated by reference in, and shall be
deemed to be a part of, this Prospectus: Mattel's Annual Report on Form 10-K
for the year ended December 31, 1993, its Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1994 and June 30, 1994, its Current Reports on
Form 8-K dated February 1, 1994, February 8, 1994, February 9, 1994, March 23,
1994, March 28, 1994, April 14, 1994, April 20, 1994, July 21, 1994, July 22,
1994 and July 29, 1994, its Current Report on Form 8-K dated May 31, 1994 and
the First Amendment thereto on Form 8-K/A dated June 30, 1994 and its Notice of
Annual Meeting of Stockholders and Proxy Statement, dated March 28, 1994.
All documents filed by Mattel pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part thereof from the respective
dates of filing of such documents. Any statement contained in this Prospectus
or in any Prospectus Supplement or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed
2
<PAGE>
to be modified or superseded for purposes of this Prospectus and any Prospectus
Supplement to the extent that a statement contained herein or in any Prospectus
Supplement (or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference in this Prospectus)
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Prospectus or any
Prospectus Supplement except as so modified or superseded.
Mattel will provide without charge to any person to whom this Prospectus is
delivered, on the written or oral request of such person, a copy of any or all
of the foregoing documents incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference therein). Requests should be directed to the attention of the
Corporate Secretary, Mattel, Inc., 333 Continental Boulevard, El Segundo,
California 90245-5012, or by telephone at (310) 252-3616.
IN CONNECTION WITH THE OFFERING OF CERTAIN DEBT SECURITIES, THE UNDERWRITERS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF SUCH SECURITIES OR OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY
BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
Mattel is a leading worldwide designer, manufacturer and marketer of toys.
The Company's three strongest principal product lines are BARBIE fashion dolls
and doll clothing and accessories, FISHER-PRICE toys and juvenile products and
the Company's Disney-licensed toys, each of which has broad worldwide appeal.
Additional current principal product lines consist of die-cast vehicles and
accessories, including HOT WHEELS; POWER WHEELS battery-powered ride-on
vehicles; large dolls; preschool toys, including SEE 'N SAY toys; and the UNO
and SKIP-BO games.
Mattel management has implemented three complementary business strategies
designed to achieve consistent, profitable growth: first, a concentration on
leveraging the consumer franchises of Mattel's time-tested core product lines;
second, expansion of the Company's international marketing and distribution
network; and third, organization of the Company's manufacturing capabilities to
maximize overall efficiency and flexibility and minimize risk. Mattel
management has also pursued a financial strategy of reducing risk through the
implementation of strict financial controls. These include the control of
expenses and the aggressive management of working capital, foreign exchange
risk and the financial risk associated with new product introductions. In
addition, management's objective is to minimize the cost of capital to the
Company by blending the sources of funds through the control of long-term
leverage, and the maintenance of sufficient operating cash and short-term
credit lines to finance the Company's seasonal working capital requirements.
Mattel was incorporated in California in 1948 and reincorporated in Delaware
in 1968. Its executive offices are located at 333 Continental Boulevard, El
Segundo, California 90245-5012, telephone (310) 252-2000.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Debt Securities
for general corporate purposes, which may include additions to working capital,
reduction of other indebtedness, financing of capital expenditures, potential
acquisitions and the repurchase by the Company of its common shares. Funds not
required immediately for such purposes may be invested temporarily in short-
term marketable securities.
3
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's unaudited ratios of earnings to
fixed charges for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEARS ENDED(A)(B)
----------------- ------------------------
JUNE 30, JUNE 30,
1994 1993(A) 1993 1992 1991 1990 1989
-------- -------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(c)(d)...................... 5.78 3.67 4.20 4.51 4.00 3.33 2.83
</TABLE>
- --------
(a) The consolidated ratio of earnings to fixed charges for 1993, 1992 and 1991
has been restated for the effects of the November 1993 merger of Fisher-
Price, Inc. into a wholly-owned subsidiary of the Company, accounted for as
a pooling of interests. Fisher-Price, Inc. was excluded from periods prior
to July 1, 1991, while its business was operated as a division of The
Quaker Oats Company.
(b) The Company's financial reporting year ended on December 31 for years 1991
through 1993 and on the last Saturday of December for years 1989 and 1990.
(c) The ratio of earnings to fixed charges is computed by dividing income
before taxes, extraordinary items, cumulative effect of changes in
accounting principles, fixed charges, minority interest and undistributed
income of less-than-majority-owned affiliates by fixed charges. Fixed
charges are the sum of interest costs (whether expensed or capitalized) and
the portion of aggregate rental expense (one-third) which is estimated to
represent the interest factor in such rentals.
(d) Until July 1, 1991, the Company was a guarantor of certain foreign bank
lines of credit extended to less-than-majority-owned joint ventures.
Performance by the Company pursuant to these guarantees was deemed
unlikely; thus the associated fixed charges have been excluded from
computation of the ratio of earnings to fixed charges. The portion of fixed
charges paid by less-than-majority-owned joint ventures for which the
Company was guarantor was approximately $4.5 million, $4.8 million and $5.5
million in 1991, 1990 and 1989, respectively.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities offered hereby are to be issued under an indenture, dated
as of August 1, 1994 (the "Indenture"), between Mattel and Chemical Trust
Company of California, as Trustee (the "Trustee"). The following summary of
certain provisions of the Indenture, a copy of which was filed as an exhibit to
the Registration Statement, does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, all provisions of the
Indenture, including the definition therein of certain terms. Wherever
particular sections or defined terms of the Indenture are referred to, it is
intended that such sections or defined terms shall be incorporated herein by
reference.
GENERAL
The Debt Securities will rank equally with all other unsecured and
unsubordinated indebtedness of Mattel.
The Debt Securities that may be offered under the Indenture are not limited
in amount. The Debt Securities may be issued in one or more series with the
same or various maturities, at par, at a premium, or with an original issue
discount. The Prospectus Supplement will set forth the initial offering price,
the aggregate principal amount and the following terms of the Debt Securities
in respect of which this Prospectus is delivered: (1) the title of such Debt
Securities; (2) any limit on the aggregate principal amount of such Debt
Securities; (3) the date or dates on which principal on such Debt Securities
will be payable; (4) the rate
4
<PAGE>
or rates and, if applicable, the method used to determine the rate including
any commodity, commodity index, stock exchange index or financial index, at
which such Debt Securities will bear interest, if any, the date or dates from
which such interest will accrue, the dates on which such interest shall be
payable and the record date for the interest payable on any interest payment
date; (5) the place or places where principal of, premium, if any, and interest
on such Debt Securities will be payable; (6) the period or periods within
which, the price or prices at which and the terms and conditions upon which the
Debt Securities may be redeemed; (7) the obligation, if any, of the Company to
redeem or purchase the Debt Securities pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof; (8) the
denominations of such Debt Securities, if other than denominations of $1,000
and any integral multiple thereof; (9) the portion of principal amount of such
Debt Securities that shall be payable upon acceleration, if other than the
principal amount thereof; (10) the currency of denomination of such Debt
Securities; (11) the designation of the currency or currencies in which payment
of principal of and interest on such Debt Securities will be made; (12) if
payments of principal of, premium, if any, or interest on the Debt Securities
are to be made in currency other than the denominated currency, the manner in
which the exchange rate with respect to such payments will be determined; (13)
the manner in which the amounts of payment of principal of, premium, if any, or
interest on such Debt Securities will be determined, if such amounts may be
determined by reference to an index based on a currency or currencies other
than that in which the Debt Securities are denominated or designated to be
payable or by reference to a commodity, commodity index, stock exchange index
or financial index; (14) any other terms of such Debt Securities, which other
terms will not be inconsistent with the provisions of the Indenture; and (15)
any depositaries, interest rate calculation agents, exchange rate calculation
agents or other agents with respect to the Debt Securities other than those
originally appointed. (Indenture (S) 2.2) The Prospectus Supplement will set
forth any federal income tax, accounting or special considerations applicable
to the Debt Securities.
PAYMENT OF INTEREST AND EXCHANGE
Each Debt Security will be represented by either a global security (a "Global
Debt Security") registered in the name of The Depository Trust Company, as
Depository (the "Depository") or a nominee of the Depository (each such Debt
Security represented by a Global Debt Security being herein referred to as a
"Book-Entry Debt Security") or a certificate issued in definitive registered
form (a "Certificated Debt Security"), as set forth in the applicable
Prospectus Supplement. Except as set forth under "Global Debt Securities and
Book-Entry System" below, Book-Entry Debt Securities will not be issuable in
certificated form.
Certificated Debt Securities. Certificated Debt Securities may be transferred
or exchanged at the Trustee's office or paying agencies in accordance with the
terms of the Indenture. No service charge will be made for any transfer or
exchange of Certificated Debt Securities, but Mattel may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. Certificated Debt Securities will not be exchangeable for
Book-Entry Debt Securities, except under the circumstances described below
under "Global Debt Securities and Book-Entry System." (Indenture (S)(S) 2.4 and
2.7)
The transfer of Certificated Debt Securities and the right to the principal
of, premium, if any, and interest on such Certificated Debt Securities may be
effected only by surrender of the old certificate representing such
Certificated Debt Securities and either reissuance by Mattel or the Trustee of
the old certificate to the new Holder or the issuance by Mattel or the Trustee
of a new certificate to the new Holder.
Global Debt Securities and Book-Entry System. Each Global Debt Security
representing Book-Entry Debt Securities will be deposited with, or on behalf
of, the Depository, and registered in the name of the Depository or a nominee
of the Depository. Except as set forth below, Book-Entry Debt Securities will
not be exchangeable for Certificated Debt Securities and will not otherwise be
issuable as Certificated Debt Securities.
5
<PAGE>
The procedures that the Depository has indicated it intends to follow with
respect to Book-Entry Debt Securities are set forth below.
Ownership of beneficial interests in Book-Entry Debt Securities will be
limited to persons that have accounts with the Depository for the related
Global Debt Security ("participants") or persons that may hold interests
through participants. Upon the issuance of a Global Debt Security, the
Depository will credit, on its book-entry registration and transfer system, the
participants' accounts with the respective principal amounts of the Book-Entry
Debt Securities represented by such Global Debt Security beneficially owned by
such participants. The accounts to be credited shall be designated by any
dealers, underwriters or agents participating in the distribution of such Book-
Entry Debt Securities. Ownership of Book-Entry Debt Securities will be shown
on, and the transfer of such ownership interests will be effected only through,
records maintained by the Depository for the related Global Debt Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of some
states may require that certain purchasers of securities take physical delivery
of such securities in definitive form. Such limits and such laws may impair the
ability to own, transfer or pledge beneficial interests in Book-Entry Debt
Securities.
So long as the Depository for a Global Debt Security, or its nominee, is the
registered owner of such Global Debt Security, such Depository or such nominee,
as the case may be, will be considered the sole owner or holder of the Book-
Entry Debt Securities represented by such Global Debt Security for all purposes
under the Indenture. Except as set forth below, owners of Book-Entry Debt
Securities will not be entitled to have such securities registered in their
names, will not receive or be entitled to receive physical delivery of a
certificate in definitive form representing such securities and will not be
considered the owners or holders thereof under the Indenture. Accordingly, each
person owning Book-Entry Debt Securities must rely on the procedures of the
Depository for the related Global Debt Security and, if such person is not a
participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder under the Indenture.
The Company understands, however, that under existing industry practice, the
Depository will authorize the persons on whose behalf it holds a Global Debt
Security to exercise certain rights of holders of Debt Securities, and the
Indenture provides that the Company, the Trustee and their respective agents
will treat as the holder of a Debt Security the persons specified in a written
statement of the Depository with respect to such Global Debt Security for
purposes of obtaining any consents or directions required to be given by
holders of the Debt Securities pursuant to the Indenture. (Indenture
(S) 2.14.6)
Payments of principal, premium, if any, and interest on Book-Entry Debt
Securities will be made to the Depository or its nominee, as the case may be,
as the registered holder of the related Global Debt Security. (Indenture
(S) 2.14.5) None of Mattel, the Trustee or any other agent of Mattel or agent
of the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in such Global Debt Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Mattel expects that the Depository, upon receipt of any payment of principal,
premium, if any, or interest on a Global Debt Security, will immediately credit
participants' accounts with payments in amounts proportionate to the respective
amounts of Book-Entry Debt Securities held by each such participant as shown on
the records of such Depository. Mattel also expects that payments by
participants to owners of beneficial interests in Book-Entry Debt Securities
held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such participants.
If the Depository is at any time unwilling or unable to continue as
Depository or ceases to be a clearing agency registered under the Exchange Act,
and a successor Depository registered as a clearing agency under the Exchange
Act is not appointed by Mattel within 90 days, Mattel will issue Certificated
Debt Securities in
6
<PAGE>
exchange for such Global Debt Security. In addition, Mattel may at any time and
in its sole discretion determine not to have any of the Book-Entry Debt
Securities represented by one or more Global Debt Securities and, in such
event, will issue Certificated Debt Securities in exchange for such Global Debt
Security or Securities. Any Certificated Debt Securities issued in exchange for
a Global Debt Security will be registered in such name or names as the
Depository shall instruct the Trustee. It is expected that such instructions
will be based upon directions received by the Depository from participants with
respect to ownership of Book-Entry Debt Securities relating to such Global Debt
Security.
The foregoing information in this section concerning the Depository and the
Depository's Book-Entry System has been obtained from sources the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
NO PROTECTION IN THE EVENT OF A CHANGE OF CONTROL
Unless otherwise set forth in the Prospectus Supplement, the Debt Securities
will not contain any provisions which may afford holders of the Debt Securities
protection in the event of a change in control of the Company or in the event
of a highly leveraged transaction (whether or not such transaction results in a
change in control of the Company).
CERTAIN COVENANTS OF MATTEL
Limitation on Liens. The Company shall not and shall not permit any
Subsidiary to create, incur, assume or suffer to exist any Lien (as defined)
upon any of the their respective assets, except for: (i) Liens existing on the
date of the Indenture or arising under the Indenture; (ii) any extension,
renewal or replacement (or successive extensions, renewals or replacements) of
any Lien existing on the date of the Indenture; (iii) Liens on Current Assets
(as defined) (or on any promissory notes received in satisfaction of any of the
accounts receivable of the Company or any of its Subsidiaries) securing
Indebtedness (as defined) incurred to finance working capital requirements,
provided, however, that the Indebtedness secured by such Lien does not mature
later than 36 months from the date incurred; (iv) certain Liens incurred in the
ordinary course of business; (v) Liens on property that are in existence at the
time the Company or its Subsidiaries acquire such property, provided that such
Liens (A) are not incurred in connection with, or in contemplation of, the
acquisition of the property acquired and (B) do not extend to or cover any
property or assets of the Company or any Subsidiary other than the property so
acquired; (vi) purchase money Liens upon or in any real or personal property
(including fixtures and other equipment) acquired or held by the Company or any
Subsidiary in the ordinary course of business to secure the purchase price of
such property or to secure Indebtedness incurred solely for the purpose of
financing or refinancing the acquisition or improvement of or construction
costs related to such property, provided that no such Lien shall extend to or
cover any property other than the property being acquired or improved; (vii)
any interest or title of a lessor in the property subject to any Capitalized
Lease or Sale/Leaseback Transaction that is permitted under the restrictions
described below under "--Limitation on Sale/Leaseback Transactions;" or (viii)
other Liens securing Indebtedness in an aggregate principal amount which,
together with the aggregate outstanding principal amount of all other
Indebtedness of the Company and its Subsidiaries secured by Liens permitted
under the terms of this subsection (viii) and the aggregate amount of the
Sale/Leaseback Transactions which would otherwise be permitted under the
restrictions described below in clause (i) under the caption"--Limitation on
Sale/Leaseback Transactions," does not at the time any such Lien is incurred
exceed ten percent of the Consolidated Net Tangible Assets (as defined) as
shown in the latest audited consolidated balance sheet of the Company and its
Subsidiaries.
Limitation on Sale/Leaseback Transactions. The Company shall not, and shall
not permit any Subsidiary, to enter into any Sale/Leaseback Transaction, unless
either (i) the Company or such Subsidiary would be entitled, pursuant to
subsection (viii) under "--Limitation on Liens," to incur Indebtedness in a
principal amount equal to or exceeding the amount of such Sale/Leaseback
Transaction, secured by a Lien on the property to be leased; or (ii) the
Company or such Subsidiary, within 90 days after the effective date
7
<PAGE>
of such transaction, applies or unconditionally agrees to apply to the
retirement of Indebtedness an amount equal to the greater of the net proceeds
of the Sale/Leaseback Transaction or the fair value, in the opinion of the
Board of Directors, of such property at the time of such transaction (in either
case adjusted to reflect the remaining term of the lease).
Merger, Consolidation, or Sale of Assets. The Company may not consolidate or
merge with or into, or sell, lease, convey or otherwise dispose of all or
substantially all of its assets to, another corporation, person or entity
unless (i) the Company is the surviving person or the successor or transferee
is a corporation organized under the laws of the United States, any state
thereof or the District of Columbia, (ii) the successor assumes all the
obligations of the Company under the Debt Securities and the Indenture, and
(iii) immediately after such transaction no Event of Default (as defined)
exists.
CERTAIN DEFINITIONS
Set forth below are certain significant terms which are defined in Section
1.1 of the Indenture:
"Consolidated Net Tangible Assets" means the total amount of assets of the
Company and its Subsidiaries on a consolidated basis (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups occurring after January 1, 1988 of capital assets
(excluding in any case write-ups in connection with accounting for acquisitions
in conformity with generally accepted accounting principles), after deducting
therefrom (i) all current liabilities of the Company and its Subsidiaries, (ii)
all investments in unconsolidated Subsidiaries of the Company and in persons
which are not Subsidiaries of the Company (except, in each case, investments in
marketable securities) and (iii) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other intangible items, all
as set forth on the most recently available consolidated balance sheet of the
Company and its Subsidiaries, prepared in conformity with generally accepted
accounting principles.
"Current Assets" means any asset of the Company or any of its Subsidiaries
that would be classified as a current asset on an audited consolidated balance
sheet of the Company prepared, in accordance with generally accepted accounting
principles, on the date any Lien on such asset is incurred.
"Discount Security" means any Debt Security that provides for an amount less
than the stated principal amount thereof to be due and payable upon declaration
of acceleration of the maturity thereof pursuant to the terms of the Indenture.
"Indebtedness" means, with respect to any person, and without duplication:
(1) any liability of such person (A) for borrowed money, or (B) for any
letter of credit for the account of such person supporting obligations of
such person or other persons, or (C) evidenced by a bond, note, debenture
or similar instrument (including a purchase money obligation) given in
connection with the acquisition of any businesses, properties or assets of
any kind (other than a trade payable or a current liability arising in the
ordinary course of business), or (D) for the payment of money relating to a
Capitalized Lease;
(2) any liability of others described in the preceding clause (1) that
the person has guaranteed or that is otherwise its legal liability; and
(3) any amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to in clauses (1) and
(2) above.
"Lien" means any lien, security interest, charge, mortgage, pledge or other
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).
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<PAGE>
"Sale/Leaseback Transaction" means any arrangement with any person (other
than the Company or any of its Subsidiaries) providing for the leasing by the
Company or any of its Subsidiaries of any property which has been or is to be
sold or transferred by the Company or such Subsidiary to such person or to any
person (other than the Company or any of its Subsidiaries) to which funds have
been or are to be advanced by such person on the security of the leased
property.
"Subsidiary" of any specified person means (i) a corporation a majority of
whose capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by such person or by
such person and a subsidiary or subsidiaries of such person or by a subsidiary
or subsidiaries of such person or (ii) any other person (other than a
corporation) in which such person or such person and a subsidiary or
subsidiaries of such person or a subsidiary or subsidiaries of such person
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
Debt Securities of any series: (a) default in the payment of any interest upon
any Debt Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; (b) default in the payment
of principal of or premium, if any, on any Debt Security of that series when
due; (c) default in the deposit of any sinking fund payment, when and as due in
respect of any Debt Security of that series; (d) default in the performance or
breach of any other covenant or warranty of Mattel in the Indenture (other than
a covenant or warranty that has been included in the Indenture solely for the
benefit of a series of Debt Securities other than that series), which default
continues uncured for a period of 60 days after written notice to the Company
by the Trustee or to the Company and the Trustee by the holders of at least 25%
in principal amount of the outstanding Debt Securities of that series as
provided in the Indenture; (e) unless the terms of such series otherwise
provide, an event of default under any Indebtedness for money borrowed by the
Company (including a default with respect to Debt Securities of any series
other than that series) or any Subsidiary, whether such Indebtedness now exists
or shall hereafter be created, if (A) such default either (1) results from the
failure to pay any such Indebtedness at its stated final maturity or (2)
relates to an obligation other than the obligation to pay such Indebtedness at
its stated final maturity and results in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated
maturity and (B) the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to pay
principal at stated final maturity or the maturity of which has been so
accelerated, aggregates $10 million or more at any one time outstanding; (f)
certain events of bankruptcy, insolvency or reorganization; and (g) any other
Event of Default provided with respect to Debt Securities of that series that
is described in the Prospectus Supplement accompanying this Prospectus. No
Event of Default with respect to a particular series of Debt Securities (except
as to the certain events in bankruptcy, insolvency or reorganization)
necessarily constitutes an Event of Default with respect to any other series of
Debt Securities. (Indenture (S) 6.1) The occurrence of an Event of Default
would constitute an event of default under certain of Mattel's existing bank
lines. In addition, the occurrence of certain Events of Default or an
acceleration under the Indenture would constitute an event of default under
certain other indebtedness of Mattel.
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then in every such case the Trustee
or the holders of not less than 25% in principal amount of the outstanding Debt
Securities of that series may, by a notice in writing to Mattel (and to the
Trustee if given by the holders), declare to be due and payable immediately the
principal (or, if the Debt Securities of that series are Discount Securities,
such portion of the principal amount as may be specified in the terms of that
series) and premium, if any, of all Debt Securities of that series. In the case
of an Event of Default resulting from the certain events of bankruptcy,
insolvency or reorganization, the principal (or such specified amount) and
premium, if any, of all outstanding Debt Securities shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any holder of outstanding Debt Securities. At any time after
a declaration of acceleration with respect to Debt Securities of any series
9
<PAGE>
has been made, but before a judgment or decree for payment of the money due has
been obtained by the Trustee, the holders of a majority in principal amount of
the outstanding Debt Securities of that series may, subject to the Company
having paid or deposited with the Trustee a sum sufficient to pay overdue
interest and principal which has become due other than by acceleration and
certain other conditions, rescind and annul such acceleration if all Events of
Default, other than the non-payment of accelerated principal and premium, if
any, with respect to Debt Securities of that series, have been cured or waived
as provided in the Indenture. (Indenture (S) 6.2) For information as to waiver
of defaults see the discussion set forth below under "--Modification and
Waiver." Reference is made to the Prospectus Supplement relating to any series
of Debt Securities that are Discount Securities for the particular provisions
relating to acceleration of a portion of the principal amount of such Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Indenture provides that the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
holder of outstanding Debt Securities, unless the Trustee receives indemnity
satisfactory to it against any loss, liability or expense. (Indenture (S) 7.1
(e)) Subject to certain rights of the Trustee, the holders of a majority in
principal amount of the outstanding Debt Securities of any series shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee with respect to the Debt Securities of that series. (Indenture
(S) 6.12)
No holder of any Debt Security of any series will have any right to institute
any proceeding, judicial or otherwise, with respect to the Indenture or for the
appointment of a receiver or trustee, or for any remedy under the Indenture,
unless such holder shall have previously given to the Trustee written notice of
a continuing Event of Default with respect to Debt Securities of that series
and unless also the holders of at least 25% in principal amount of the
outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the holders of a majority
in principal amount of the outstanding Debt Securities of that series a
direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. (Indenture (S) 6.7) Notwithstanding the
foregoing, the holder of any Debt Security will have an absolute and
unconditional right to receive payment of the principal of, premium, if any,
and any interest on such Debt Security on or after the due dates expressed in
such Debt Security and to institute suit for the enforcement of any such
payment. (Indenture (S) 6.8)
The Indenture requires Mattel, within 90 days after the end of each of its
fiscal years, to furnish to the Trustee a statement as to compliance with the
Indenture. (Indenture (S) 4.3) The Indenture provides that the Trustee may
withhold notice to the holders of Debt Securities of any series of any Default
or Event of Default (except in payment on any Debt Securities of such series)
with respect to Debt Securities of such series if it in good faith determines
that withholding such notice is in the interest of the holders of Debt
Securities. (Indenture (S) 7.5)
MODIFICATION AND WAIVER
Modifications to, and amendments of, the Indenture may be made by Mattel and
the Trustee with the consent of the holders of 66 2/3% in principal amount of
the outstanding Debt Securities of each series affected by such modifications
or amendments provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding Debt Security affected
thereby: (a) change the amount of Debt Securities whose holders must consent to
an amendment or waiver; (b) reduce the rate of or extend the time for payment
of interest (including default interest) on any Debt Security; (c) reduce the
principal or premium, if any, or change the fixed maturity of any Debt Security
or reduce the amount of, or postpone the date fixed for, the payment of any
sinking fund or analogous obligation with respect to any series of Debt
Securities; (d) waive a default in the payment of the principal of, premium, if
any, or interest on any Debt Security (except a rescission of acceleration of
the Debt Securities of any series by the holders of at least a majority in
aggregate principal amount of the then outstanding Debt Securities of such
series and a waiver of
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<PAGE>
the payment default that resulted from such acceleration); (e) make the Debt
Security payable in currency other than that stated in the Debt Security; (f)
make any change to certain provisions of the Indenture relating to, among other
things, the right of holders of Debt Securities to receive payment of the
principal, premium, if any, and interest on such Debt Securities and to
institute suit for the enforcement of any such payment and to waivers or
amendments; or (g) waive a redemption payment with respect to any Debt Security
or change any of the provisions with respect to the redemption of any Debt
Securities. (Indenture (S) 9.3)
The holders of at least 66 2/3% in principal amount of the outstanding Debt
Securities of any series may on behalf of the holders of all Debt Securities of
that series waive, insofar as that series is concerned, compliance by Mattel
with provisions of the Indenture other than certain specified provisions.
(Indenture (S) 9.2) The holders of a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the holders of all
the Debt Securities of such series waive any past default under the Indenture
with respect to such series and its consequences, except a default in the
payment of the principal of, premium, if any, or any interest on any Debt
Security of that series or in respect of a provision which under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Debt Security of that series affected. (Indenture (S) 6.13)
DEFEASANCE OF DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
Defeasance and Discharge. The Indenture provides that Mattel may be
discharged from any and all obligations in respect of the Debt Securities of
any series (except for certain obligations to register the transfer or exchange
of Debt Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, to maintain paying agencies and the treatment of
funds held by paying agents) upon the deposit with the Trustee, in trust, of
money and/or government obligations in the same currency as such series that,
through the payment of interest and principal in respect thereof in accordance
with their terms, will provide money in an amount sufficient in the opinion of
a nationally recognized firm of independent public accountants to pay and
discharge each installment of principal (and premium, if any) and interest on
and any mandatory sinking fund payments in respect of the Debt Securities of
such series on the stated maturity of such payments in accordance with the
terms of the Indenture and such Debt Securities. Such discharge may occur only
if, among other things, (a) Mattel has received from, or there has been
published by, the United States Internal Revenue Service a ruling, or, since
the date of execution of the Indenture, there has been a change in the
applicable United States federal income tax law, in either case to the effect
that holders of the Debt Securities of such series will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to United States federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit, defeasance and discharge had not
occurred; and (b) such discharge will not be applicable to any Debt Securities
of such series then listed on the New York Stock Exchange or any other
securities exchange if such discharge would cause said Debt Securities to be
de-listed as a result thereof. (Indenture (S) 8.3)
Defeasance of Certain Covenants. The Indenture provides that unless otherwise
provided by the terms of the applicable series of Debt Securities, upon
compliance with certain conditions, (i) Mattel may omit to comply with the
restrictive covenants contained in Sections 4.2 (except as to corporate
existence), 4.3 through 4.8 and Section 5.1 of the Indenture, including the
restrictive covenants described above under the caption "Certain Covenants of
Mattel"; and (ii) cross accelerations constituting Events of Default under
Section 6.1(5) shall be inapplicable to such series. The conditions include:
the deposit with the Trustee of money and/or government obligations in the same
currency as such series that, through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an amount
sufficient in the opinion of a nationally recognized firm of independent public
accountants to pay principal, premium, if any, and interest on and any
mandatory sinking fund payments in respect of the Debt Securities of such
series on the stated maturity of such payments in accordance with the terms of
the Indenture and such Debt Securities; and the delivery to the Trustee of an
opinion of counsel to the effect that the holders of the Debt Securities of
such series will not recognize income, gain or loss for United States federal
income tax purposes as a result of
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such deposit and related covenant defeasance and will be subject to United
States federal income tax in the same amount and in the same manner and at the
same times as would have been the case if such deposit and related covenant
defeasance had not occurred. (Indenture (S) 8.4)
Defeasance and Events of Default. In the event Mattel exercises its option to
omit compliance with certain covenants of the Indenture with respect to any
series of Debt Securities and the Debt Securities of such series are declared
due and payable because of the occurrence of any Event of Default, the amount
of money and government obligations on deposit with the Trustee will be
sufficient to pay amounts due on the Debt Securities of such series at the time
of their stated maturity but may not be sufficient to pay amounts due on the
Debt Securities of such series at the time of the acceleration resulting from
such Event of Default. However, Mattel shall remain liable for such payments.
CONCERNING THE TRUSTEE
Mattel maintains banking relationships in the ordinary course of business
with one or more affiliates of the Trustee.
PLAN OF DISTRIBUTION
GENERAL
Mattel may sell the Debt Securities being offered hereby: (i) directly to
purchasers; (ii) through agents; (iii) through dealers; (iv) through
underwriters; or (v) through a combination of any such methods of sale.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions either: (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase Debt Securities may be solicited directly by Mattel.
Offers to purchase Debt Securities may also be solicited by agents designated
by Mattel from time to time. Any such agent, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act involved in the
offer or sale of the Debt Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by Mattel to such agent
will be set forth, in the Prospectus Supplement.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, Mattel will sell such Debt Securities to
the dealer, as principal. The dealer, who may be deemed to be an "underwriter"
as that term is defined in the Securities Act, may then resell such Debt
Securities to the public at varying prices to be determined by such dealer at
the time of resale.
If an underwriter is, or underwriters are, utilized in the sale, Mattel will
execute an underwriting agreement with such underwriters at the time of sale to
them and the names of the underwriters will be set forth in the Prospectus
Supplement, which will be used by the underwriters to make resales of the Debt
Securities in respect of which this Prospectus is delivered to the public. In
connection with the sale of Debt Securities, such underwriters may be deemed to
have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
Debt Securities for whom they may act as agents. Underwriters may also sell
Debt Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Any underwriting compensation paid by the Company to underwriters in
connection with the offering of Debt Securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers, will be set
forth in the Prospectus Supplement.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with Mattel, to indemnification by Mattel
against certain civil liabilities, including liabilities under the
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Securities Act. Underwriters and agents may engage in transactions with, or
perform services for, the Company in the ordinary course of business.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, Mattel will authorize
underwriters, dealers or other persons to solicit offers by certain
institutions to purchase Debt Securities pursuant to contracts providing for
payment and delivery on a future date or dates. Institutions with which such
contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (a) the purchase of
the Debt Securities shall not at the time of delivery be prohibited under the
laws of the jurisdiction to which such purchaser is subject and (b) if the Debt
Securities are also being sold to underwriters, Mattel shall have sold to such
underwriters the Debt Securities not sold for delayed delivery. The
underwriters, dealers and such other persons will not have any responsibility
in respect of the validity or performance of such contracts. The Prospectus
Supplement relating to such contracts will set forth the price to be paid for
Debt Securities pursuant to such contracts, the commissions payable for
solicitation of such contracts and the date or dates in the future for delivery
of Debt Securities pursuant to such contracts.
LEGAL MATTERS
The validity of the Debt Securities will be passed upon for the Company by
Irell & Manella, Los Angeles, California. Ronald M. Loeb, a partner of the law
firm of Irell & Manella, is a Director of the Company and is the record owner
of 53,631 shares of the Company's common stock. Certain legal matters will be
passed upon for any underwriters or agents by Latham & Watkins, Los Angeles,
California.
EXPERTS
The consolidated financial statements and financial statement schedules of
the Company, incorporated in this Prospectus by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993 (the "Form 10-
K"), have been so incorporated in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting and, with respect to the historical financial
statements of Fisher-Price, Inc. for the fiscal year ended January 3, 1993, in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of said firm as experts in auditing and accounting. The
consolidated statement of income, stockholders' equity and cash flows of
Fisher-Price, Inc. and its subsidiaries for the six months ended December 29,
1991, prior to the restatement thereof (and therefore not presented in the Form
10-K) for the merger of Fisher-Price, Inc. with and into a wholly-owned
subsidiary of Mattel, as described in Note 2 to the consolidated financial
statements included in the Form 10-K, incorporated in this Prospectus by
reference, has been audited by Arthur Andersen & Co., independent public
accountants, as indicated in their report with respect thereto, and is
incorporated herein in reliance upon the authority of said firm as experts in
giving said report. The consolidated financial statements of Kransco for the
year ended December 31, 1993, incorporated in this Prospectus by reference to
the First Amendment to Current Report on Form 8-K/A dated June 30, 1994, have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration fee................................................ $ 86,207
Rating agency fees.............................................. 150,000
Printing and engraving expenses................................. 25,000
Accounting fees and expenses.................................... 60,000
Legal fees and expenses......................................... 70,000
Blue sky fees and expenses...................................... 15,000
Fees and expenses of Trustee.................................... 10,000
Miscellaneous................................................... 8,793
--------
Total.......................................................... $425,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Mattel, Inc. (the "Company" or the "Registrant") has adopted provisions in
its Restated Certificate of Incorporation (the "Certificate") which require
the Company to indemnify any and all persons whom it has the power to
indemnify pursuant to the Delaware General Corporation Law (the "DGCL")
against any and all expenses, judgments, fines, amounts paid in settlement,
and any other liabilities to the fullest extend permitted by the DGCL.
The Certificate also empowers the Registrant by action of its Board of
Directors to purchase and maintain insurance, at its expense, to protect
itself and such persons against any such expense, judgment, fine, amount paid
in settlement or other liability, whether or not the Registrant would have the
power to indemnify any such individual under the DGCL.
In addition, the Registrant's By-laws require that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a director, officer, employee or
agent of the Registrant or is or was serving at the request of the Registrant,
a director, officer, employee or agent of the Registrant as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent, or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Registrant to the fullest extent
authorized by the DGCL, as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment
permits the Registrant to provide broader indemnification rights than said law
permitted the Registrant to provide prior to such amendment) against all
expense, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and
such indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that except for
claims by such persons for non-payment of entitled indemnification claims
against the Registrant, the Registrant shall indemnify such person seeking
indemnification in connection with a proceeding initiated by such person only
if such proceeding was authorized by the Registrant's Board of Directors. The
By-laws specify that the right to indemnification so provided is a contract
right, set forth certain procedural and evidentiary standards applicable to
the enforcement of a claim under the By-laws, entitle the persons to be
indemnified to be reimbursed for the expenses of prosecuting any such claim
against the Registrant and entitle them to have all expenses incurred in
advance of the final disposition of a proceeding paid by the Registrant. Such
provisions, however, are intended to be in furtherance and not in limitation
of the general right to indemnification provided in the By-laws.
II-1
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The Company has entered into indemnity agreements (the "Indemnity
Agreements") with each director of the Company, including directors who are
also officers and employees of the Company, and certain senior officers of the
Company. The Indemnity Agreements provide that the Company will pay any costs
which an indemnitee actually and reasonably incurs because of claims made
against him or her by reason of the fact that he or she is or was a director or
officer of the Company. The payments to be made under the Indemnity Agreements
include, but are not limited to, expenses of investigation, judicial or
administrative proceedings or appeals, damages, judgments, fines, amounts paid
in settlement, and attorneys' fees and disbursements, except the Company is not
obligated to make any payment under the Indemnity Agreements which the Company
is prohibited by law from paying as indemnity, or where (a) indemnification is
provided to an indemnitee under an insurance policy, except for amounts in
excess of insurance coverage, (b) the claim is one for which an indemnitee is
otherwise indemnified by the Company, (c) final determination is rendered in a
claim based upon the indemnitee obtaining a personal profit or advantage to
which he or she is not legally entitled, (d) final determination is rendered on
a claim for an accounting of profits made in connection with a violation of
Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), or
similar state or common law provisions, (e) the indemnitee was adjudged to be
deliberately dishonest, or (f) (with respect to a director) liability arises
out of a breach of certain of his or her fiduciary duties.
The directors and officers of the Company and its subsidiaries are insured
under certain insurance policies against claims made during the period of the
policies against liabilities arising out of claims for certain acts in their
capacities as directors and officers of the Company and its subsidiaries.
ITEM 16.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- --------------------------------------------------------------------
<C> <S>
1 Form of Underwriting Agreement
2.1 Agreement and Plan of Merger, dated as of August 19, 1993, by and
among the Company, MAT Acquisition, Inc. and Fisher-Price, Inc.
(incorporated by reference to Exhibit 2.1 to the Company's
Registration Statement on Form S-4, Registration Statement No. 33-
50749)
2.2 Amended and Restated Asset Purchase Agreement, dated as of March 26,
1994 and amended and restated as of May 15, 1994, by and between
Kransco and Mattel, Inc. (incorporated by reference to Exhibit 2.1
to the Company's Current Report on Form 8-K dated May 31, 1994)
4 Form of Indenture between the Registrant and Chemical Trust
Corporation of California, as Trustee, relating to the Debt
Securities
5 Opinion of Irell & Manella as to the validity of the Debt Securities
12 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Price Waterhouse LLP relating to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993 (the "Form
10-K")
23.2 Consent of Coopers & Lybrand L.L.P. relating to the Form 10-K
23.3 Consent of Arthur Andersen & Co. relating to the Form 10-K
23.4 Consent of Price Waterhouse LLP relating to the Company's First
Amendment to Current Report on Form 8-K/A dated June 30, 1994
23.5 Consent of Irell & Manella (included in their opinion)
24 Power of Attorney (set forth on page II-4 and II-5)
25 Form T-1 Statement of Eligibility and Qualification of the Trustee
Under the Trust Indenture Act of 1939
</TABLE>
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) of this section do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to section 13 or section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of El Segundo, State of California, on August 4,
1994.
MATTEL, INC.
By: /s/ Michael G. McCafferty
___________________________________
Name: Michael G. McCafferty
Title: Executive Vice President
and Chief Financial Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Mattel, Inc., do hereby
severally constitute and appoint John W. Amerman, N. Ned Mansour, Michael G.
McCafferty, Robert Normile and John L. Vogelstein, and each of them, our true
and lawful attorneys and agents, to do any and all acts and things in our name
and behalf in our capacities as directors and officers and to execute any and
all instruments for us and in our names in the capacities indicated below,
which said attorneys and agents, or any of them, may deem necessary or
advisable to enable said Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with this Registration Statement on Form S-
3, including specifically, but without limitation, power and authority to sign
for us or any of us, in our names in the capacities indicated below, any and
all amendments (including post-effective amendments) hereto; and we do each
hereby ratify and confirm all that said attorneys and agents, or any one of
them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John W. Amerman Chairman of the Board and August 4, 1994
____________________________________ Chief Executive Officer
John W. Amerman
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Michael G. McCafferty Executive Vice-President and August 4, 1994
____________________________________ Chief Financial Officer
Michael G. McCafferty
/s/ Gary P. Rolfes Senior Vice-President and August 4, 1994
____________________________________ Controller
Gary P. Rolfes
/s/ Jill E. Barad Director, President and August 4, 1994
____________________________________ Chief Operating Officer
Jill E. Barad
/s/ Harold Brown Director August 4, 1994
____________________________________
Harold Brown
/s/ James A. Eskridge Director and President, August 4, 1994
____________________________________ Fisher-Price, Inc.
James A. Eskridge
/s/ Tully M. Friedman Director August 4, 1994
____________________________________
Tully M. Friedman
/s/ Ronald M. Loeb Director August 4, 1994
____________________________________
Ronald M. Loeb
/s/ Edward H. Malone Director August 4, 1994
____________________________________
Edward H. Malone
/s/ Edward N. Ney Director August 4, 1994
____________________________________
Edward N. Ney
/s/ William D. Rollnick Director August 4, 1994
____________________________________
William D. Rollnick
/s/ John L. Vogelstein Director August 4, 1994
____________________________________
John L. Vogelstein
/s/ Lindsey F. Williams Director and President, August 4, 1994
____________________________________ Mattel International
Lindsey F. Williams
</TABLE>
II-5
<PAGE>
SHELF
UNDERWRITING AGREEMENT
_____________, 1994
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Dear Sirs:
We (the "Manager") are acting on behalf of the underwriter or underwriters
(including ourselves) named below (such underwriter or underwriters being herein
called the "Underwriters"), and we understand that Mattel, Inc., a Delaware
corporation (the "Company"), proposes to issue and sell [Currency and Principal
Amount] aggregate initial offering price of [Full title of Debt Securities] (the
"Debt Securities"). The Debt Securities will be issued pursuant to the
provisions of an Indenture dated as of ________________, 1994 (the "Indenture")
between the Company and Chemical Trust Company of California, as Trustee (the
"Trustee").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective principal amounts of Debt
Securities set forth below opposite their names at a purchase price of ____% of
the principal amount of Debt Securities [, plus accrued interest, if any, from
[Date of Debt Securities] to the date of payment and delivery]/1/:
<TABLE>
<CAPTION>
Principal Amount of
Name Debt Securities
- ---- -------------------
<S> <C>
[Insert syndicate list]
Total....................
===================
</TABLE>
- ---------------------
/1/ To be added only if the transaction does not close flat.
<PAGE>
[The principal amount of Debt Securities to be purchased by the
several Underwriters shall be reduced by the aggregate principal amount of Debt
Securities sold pursuant to delayed delivery contracts.]/2/
The Underwriters will pay for the Debt Securities [(less any Debt
Securities sold pursuant to delayed delivery contracts)] on _______________,
1994, or at such other time, not later than 5:00 p.m. (New York time) on
_______________, 1994, as shall be designated by the Manager. The time and date
of such payment and delivery are hereinafter referred to as the Closing Date./3/
The Debt Securities shall have the terms set forth in the Prospectus
dated _____________, 1994, and the Prospectus Supplement dated _______________,
199__, including the following:
Terms of Debt Securities
- ------------------------
Maturity Date:
Interest Rate:
Redemption Provisions:
Interest Payment Dates: _______________ __ and
_______________ __ commencing
_______________ __, ____
[(Interest accrues from
_______________ __, ____)]/4/
Form and Denomination:
[Other Terms:]
[The commission to be paid to the Underwriters in respect of the Debt
Securities purchased pursuant to delayed delivery contracts arranged by the
Underwriters shall be ___% of the principal amount of the Debt Securities so
purchased.]/5/
- -----------------------
/2/ To be added only if delayed delivery contracts are contemplated.
/3/ This paragraph would have to be modified for any Debt Securities that are
to be issued in bearer form.
/4/ To be added only if the transaction does not close flat.
/5/ To be added only if delayed delivery contracts are contemplated.
2
<PAGE>
All provisions contained in the document entitled "Mattel, Inc.
Underwriting Agreement Standard Provisions (Debt Securities)" dated
_______________, 1994, a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that (i) if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control and (ii) all
references in such document to a type of agreement that has not been entered
into in connection with the transactions contemplated hereby shall not be deemed
to be a part of this Agreement.
3
<PAGE>
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
MANAGER
Acting severally on behalf of themselves and
the several Underwriters named herein
By: MANAGER
By:
------------------------------------------
Name:
Title:
Accepted:
MATTEL, INC.
By:
-------------------------------------
Name:
Title:
4
<PAGE>
EXHIBIT 1
MATTEL, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
_______________, 1994
From time to time, Mattel, Inc., a Delaware corporation (the
"Company"), may enter into one or more underwriting agreements that provide for
the sale of designated securities to the several underwriters named therein.
The standard provisions set forth herein may be incorporated by reference in any
such underwriting agreement (an "Underwriting Agreement"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
sometimes referred to as this Agreement. Terms defined in the Underwriting
Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Debt Securities and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating to the
Debt Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"). The term "Registration Statement" means the
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "Basic Prospectus" means the prospectus included in
the Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus"
means a preliminary prospectus supplement specifically relating to the Debt
Securities, together with the Basic Prospectus. As used herein, the terms
"Basic Prospectus," "Prospectus" and "preliminary prospectus" shall include in
each case the documents, if any, incorporated by reference therein. The terms
"supplement", "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
The term Contract Securities means the Debt Securities to be purchased
pursuant to the delayed delivery contracts substantially in the form of Schedule
I hereto, with such changes therein as the Company may approve (the "Delayed
Delivery Contracts"). The term "Underwriters' Securities" means the Debt
Securities other than Contract Securities.
<PAGE>
1. Representations and Warranties. The Company represents and warrants
-------------------------------
to each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened to the
Company by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder, (ii)
each part of the Registration Statement, when such part became effective,
did not contain and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
(b) do not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
the Manager expressly for use therein or (B) to that part of the
Registration Statement that constitutes the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), of the Trustee.
(c) The financial statements of the Company and its subsidiaries set
forth in the Registration Statement and Prospectus fairly present the
financial condition of the Company and its subsidiaries as of the dates
indicated and the results of operations and changes in financial position
for the periods therein specified in conformity with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise stated therein).
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
2
<PAGE>
(e) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
except to the extent that the failure of any such subsidiary, singly or in
the aggregate, to be so duly incorporated or validly existing or to have
such corporate power and authority, would not have a material adverse
effect on the Company and its subsidiaries taken as a whole or on the
business of the Company and its subsidiaries taken as a whole. Each
subsidiary of the Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to
the extent that the failure of any such subsidiary, singly or in the
aggregate, to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole or on the business of the Company and its subsidiaries taken as a
whole.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in accordance
with its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.
(h) The Delayed Delivery Contracts have been duly authorized, executed
and delivered by the Company and are valid and binding agreements of the
Company, enforceable in accordance with their respective terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles
of general applicability.
(i) The Debt Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of the Underwriting Agreement, in the case of the Underwriters' Securities,
or by institutional investors in accordance with the terms of the Delayed
Delivery Contracts, in the case of the Contract Securities, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, in each case enforceable in accordance with
their respective terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration, if any, and the
availability of equitable remedies may be limited by equitable principles
of general applicability.
(j) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture, the
Debt Securities
3
<PAGE>
and the Delayed Delivery Contracts will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture, the Debt Securities or the Delayed Delivery Contracts, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Debt Securities.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus.
(l) There are no legal or governmental proceedings pending or
threatened to the Company to which the Company or any of its subsidiaries
is a party or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement, the Prospectus or any documents incorporated by
reference in the Registration Statement or the Prospectus that are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement, the Prospectus
or any documents incorporated by reference in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement
that are not so described or filed as required.
(m) The Company and its subsidiaries own or possess the patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks
and trade names presently employed by them in connection with the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice of infringement of or conflict with asserted rights
of others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in any material adverse change, or any notice of any other
development with respect to the foregoing involving a prospective material
adverse change, in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries taken as a whole, except as may be described in writing to,
and accepted for exclusion by, the Manager.
(n) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(o) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection
4
<PAGE>
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"),
(ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have
a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(p) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(q) Neither the Company nor any of its subsidiaries has, directly or
indirectly, paid or delivered any fee, commission or other sum of money or
item or property, however characterized, to any finder, agent, government
official or other party, in the United States or any other country, which
is in any manner related to the business, assets or operations of Company
or any of its subsidiaries, which is, or may be with the passage of time or
discovery, illegal under any federal, state or local laws of the United
States (including without limitation the U.S. Foreign Corrupt Practices'
Act) or any other country having jurisdiction; and neither the Company nor
any of its subsidiaries has participated, directly or indirectly, in any
boycotts or other similar practices affecting any of its actual or
potential customers.
(q) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or any affiliate located in Cuba.
2. Delayed Delivery Contracts. If the Prospectus provides for sales
--------------------------
of Debt Securities pursuant to Delayed Delivery Contracts, the Company hereby
authorizes the Underwriters to solicit offers to purchase Contract Securities on
the terms and subject to the conditions set forth in the Prospectus pursuant to
Delayed Delivery Contracts. Delayed Delivery Contracts may be entered into only
with institutional investors approved by the Company of the types set forth in
the Prospectus. On the Closing Date, the Company will pay to the Manager as
compensation for the accounts of the Underwriters the commission set forth in
the Underwriting Agreement in respect of the Contract Securities. The
Underwriters will not have any responsibility in respect of the validity or the
performance of any Delayed Delivery Contracts.
5
<PAGE>
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the aggregate amount of Debt Securities to be purchased
by the several Underwriters shall be reduced by the aggregate amount of Contract
Securities; such reduction shall be applied to the commitment of each
Underwriter pro rata in proportion to the amount of Debt Securities set forth
opposite such Underwriter's name in the Underwriting Agreement, except to the
extent that the Manager determines that such reduction shall be applied in other
proportions and so advises the Company; provided, however, that the total amount
-------- -------
of Debt Securities to be purchased by all Underwriters shall be the aggregate
amount set forth above, less the aggregate amount of Contract Securities.
3. Public Offering. The Company is advised by the Manager that the
---------------
Underwriters propose to make a public offering of their respective portions of
the Underwriters' Securities as soon after this Agreement has been entered into
as in the Manager's judgment is advisable. The terms of the public offering of
the Underwriters' Securities are set forth in the Prospectus.
4. Purchase and Delivery. Except as otherwise provided in this
---------------------
Section 4, payment for the Underwriters' Securities shall be made by certified
or official bank check or checks payable to the order of the Company in New York
Clearing House funds at the time and place set forth in the Underwriting
Agreement, upon delivery to the Manager for the respective accounts of the
several Underwriters of the Underwriters' Securities, registered in such names
and in such denominations as the Manager shall request in writing not less than
two full business days prior to the date of delivery, with any transfer taxes
payable in connection with the transfer of the Underwriters' Securities to the
Underwriters duly paid.
Delivery on the Closing Date of any Underwriters' Securities that are
Debt Securities in bearer form shall be effected by delivery of a single
temporary global Debt Security without coupons (the "Global Debt Security")
evidencing the Debt Securities that are Debt Securities in bearer form to a
common depositary for Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euro-clear System ("Euro-clear"), and for Centrale de
Livraison de Valeurs Mobilieres S.A. ("CEDEL") for credit to the respective
accounts at Euro-clear or CEDEL of each Underwriter or to such other accounts as
such Underwriter may direct. Any Global Debt Security shall be delivered to the
Manager not later than the Closing Date, against payment of funds to the Company
in the net amount due to the Company for such Global Debt Security by the method
and in the form set forth in the Underwriting Agreement. The Company shall
cause definitive Debt Securities in bearer form to be prepared and delivered in
exchange for such Global Debt Security in such manner and at such time as may be
provided in or pursuant to the Indenture; provided, however, that the Global
-------- -------
Debt Security shall be exchangeable for definitive Debt Securities in bearer
form only on or after the date specified for such purpose in the Prospectus.
5. Conditions to Closing. The several obligations of the
---------------------
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
6
<PAGE>
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus, that, in the judgment of the Manager, is material and
adverse and that makes it, in the judgment of the Manager,
impracticable to market the Debt Securities on the terms and in the
manner contemplated in the Prospectus.
(b) The Manager shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company,
to the effect set forth in clause (a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(c) The Manager shall have received on the Closing Date an opinion of
Irell & Manella, counsel for the Company, dated the Closing Date, to the
effect that
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in the State of California;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
7
<PAGE>
(iv) the Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and are valid and binding
agreements of the Company, enforceable in accordance with their
respective terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (b) the availability of equitable remedies may be
limited by equitable principles of general applicability;
(v) the Debt Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, in the case
of Underwriters' Securities, or by institutional investors in
accordance with the terms of the Delayed Delivery Contracts, in the
case of the Contract Securities, will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the
Company, in each case enforceable in accordance with their respective
terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration, if any, and the availability
of equitable remedies may be limited by equitable principles of
general applicability;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Debt Securities and the Delayed Delivery Contracts
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to the Company
and its subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this
Agreement, the Indenture, the Debt Securities or the Delayed Delivery
Contract except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of
the Debt Securities;
(vii) to the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with
respect to any of the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names presently
employed by them in connection with the business now operated by the
Company or its subsidiaries which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
any material adverse change, or notice of any other development with
respect to the foregoing involving a prospective
8
<PAGE>
material adverse change, in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company
and its subsidiaries, taken as a whole, except as may be disclosed in
writing by the Company to, and accepted for exclusion by, the Manager;
(viii) the statements (1) in the Prospectus under the
captions "Description of Debt Securities," "Plan of Distribution" and
"Certain Federal Tax Consequences," and (2) in the Registration
Statement under Item 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(ix) to the best of such counsel's knowledge after due
inquiry, there are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject or any development in such proceedings that
are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference in the
Registration Statement or the Prospectus that are not so described and
there are no statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement, the
Prospectus or any documents incorporated by reference in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not so described or filed as
required;
(x) the Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended;
(xi) such counsel (1) is of the opinion that each document
filed pursuant to the Exchange Act and incorporated by reference in
the Registration Statement and the Prospectus (except for financial
statements and schedules as to which such counsel need not express any
opinion) complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder and (2) is of the opinion that the Registration
Statement and the Prospectus (except for financial statements and
schedules included therein as to which such counsel need not express
any opinion) comply as to form in all material respects with the
Securities Act, the rules and regulations of the Commission thereunder
and the Trust Indenture Act; and
(xii) no facts have come to the attention of such counsel
that would lead such counsel to believe that (1) (except for financial
statements and schedules as to which such counsel need not express any
belief and except for that part of the Registration Statement that
constitutes the Form T-1 heretofore referred to) the Registration
Statement and the prospectus included therein at the time the
Registration Statement (and the documents incorporated by reference in
the
9
<PAGE>
Registration Statement and such prospectus) became effective contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (2) (except for financial statements and
schedules as to which such counsel need not express any belief) the
Prospectus and the documents incorporated by reference therein as of
the Closing Date contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The Manager shall have received on the Closing Date an opinion of
the general counsel or the assistant general counsel of the Company, dated
the Closing Date, to the effect that
(i) the Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole;
(ii) based upon opinions, oral or written, of foreign counsel,
each of the subsidiaries of the Company meeting the definition of
"Significant Subsidiary" under Regulation S-X of the Commission has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on such subsidiary;
(iii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Debt Securities and the Delayed Delivery Contracts
will not contravene any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and
its subsidiaries, taken as a whole, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or
order of or qualification with any governmental body or agency is
required for the performance by the Company of its obligations under
this Agreement, the Indenture, the Debt Securities or the Delayed
Delivery Contracts except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and
sale of the Debt Securities;
(iv) the Company and its subsidiaries own or possess the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information,
10
<PAGE>
systems or procedures), trademarks, service marks and trade names
presently employed by them in connection with the business now
operated by them, and neither the Company nor any of its subsidiaries
has received any notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in any material adverse change, or notice of any
other development with respect to the foregoing involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries, taken as a whole, except as may
be disclosed in writing by the Company to, and accepted for exclusion
by, the Manager;
(v) there are no legal or governmental proceedings pending or
threatened to the Company to which the Company or any of its
subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject or any development in
such proceedings that are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
in the Registration Statement or the Prospectus that are not so
described and there are no statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement, the Prospectus or any documents incorporated by reference
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or
filed as required;
(vi) such counsel (1) is of the opinion that each document
filed pursuant to the Exchange Act and incorporated by reference in
the Registration Statement and the Prospectus (except for financial
statements and schedules as to which such counsel need not express any
opinion) complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder and (2) is of the opinion that the Registration
Statement and the Prospectus (except for financial statements and
schedules included therein as to which such counsel need not express
any opinion) comply as to form in all material respects with the
Securities Act, the rules and regulations of the Commission thereunder
and the Trust Indenture Act; and
(vii) no facts have come to the attention of such counsel
that would lead such counsel to believe that (1) (except for financial
statements and schedules as to which such counsel need not express any
belief and except for that part of the Registration Statement that
constitutes the Form T-1 heretofore referred to) the Registration
Statement and the prospectus included therein at the time the
Registration Statement (and the documents incorporated by reference in
the Registration Statement and such prospectus) became effective
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (2) (except for financial
statements and schedules as to which such counsel need not express any
belief) the Prospectus and the documents incorporated by reference
therein
11
<PAGE>
as of the Closing Date contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(e) The Manager shall have received on the Closing Date an opinion of
Latham & Watkins, special counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in subparagraphs (ii), (iii), (iv),
(v), (viii) (but only as to the statements in the Prospectus under
"Description of Debt Securities" and "Plan of Distribution") and (xii) of
paragraph (c) above.
With respect to the subparagraph (xii) of paragraph (c) above, Irell &
Manella may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are without
independent check or verification, except as specified. With respect to
subparagraph (xii) of paragraph (c) above, Latham & Watkins may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
(but not including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated therein by
reference), but are without independent check or verification, except as
specified.
The opinion of Irell & Manella described in paragraph (c) above shall
be rendered to the Manager at the request of the Company and shall so state
therein.
(f) The Manager shall have received on the Closing Date a letter,
dated the Closing Date, in form and substance satisfactory to the Manager,
from the Company's independent public accountants, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
into the Prospectus.
6. Covenants of the Company. In further consideration of the
------------------------
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To furnish the Manager, without charge, a signed copy of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to the
Registration Statement as the Manager may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus with respect to the Debt Securities, to furnish to the Manager a
copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which the Manager reasonably objects;
provided, however, that the
-------- -------
12
<PAGE>
foregoing requirement shall not apply to any of the Company's periodic
filings with the Commission required to be filed pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act or pursuant to Item 5 (including
related exhibits filed pursuant to Item 7) of Form 8-K, copies of which
filings the Company will cause to delivered to the Manager promptly after
being transmitted for filing with the Commission.
(c) If, during such period after the first date of the public offering
of the Debt Securities as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare, file
with the Commission and furnish, at its own expense, to the Underwriters,
and to the dealers (whose names and addresses the Manager will furnish to
the Company) to which Debt Securities may have been sold by the Manager on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Debt Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualification for as long as
the Manager shall reasonably request.
(e) To make generally available to its security holders and to the
Manager as soon as practicable an earning statement covering a twelve-month
period beginning on the first day of the first full fiscal quarter after
the date of this Agreement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder. If such fiscal quarter is the
last fiscal quarter of the Company's fiscal year, such earning statement
shall be made available not later than 90 days after the close of the
period covered thereby and in all other cases shall be made available not
later than 45 days after the close of the period covered thereby.
(f) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase debt securities of the Company
substantially similar to the Debt Securities (other than (i) the Debt
Securities and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of the Manager.
(g) Whether or not any sale of Debt Securities is consummated, to pay
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the preparation and filing of the Registration
Statement and the Prospectus and all
13
<PAGE>
amendments and supplements thereto, (ii) the preparation, issuance and
delivery of the Debt Securities, (iii) the fees and disbursements of the
Company's counsel and accountants and of the Trustee and its counsel, (iv)
the qualification of the Debt Securities under securities or Blue Sky laws
in accordance with the provisions of Section 6(d), including filing fees
and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
or Legal Investment Memoranda, (v) the printing and delivery to the
Underwriters in quantities as hereinabove stated of copies of the
Registration Statement and all amendments thereto and of the Prospectus and
any amendments or supplements thereto, (vi) any fees charged by rating
agencies for the rating of the Debt Securities, (vii) the fees and
expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc. and (viii) all document production
charges and expenses of counsel to the Underwriters (but not including
their fees for professional services) in connection with the preparation of
this Agreement.
7. Covenants of the Underwriters.
-----------------------------
Each of the several Underwriters represents and agrees with the
Company that:
(i) except to the extent permitted under U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D) (the "D Rules"), (A) it has not offered or sold, and
during the restricted period will not offer or sell, Debt Securities in
bearer form (including any Debt Security in global form that is
exchangeable for Debt Securities in bearer form) to a person who is within
the United States or its possessions or to a United States person and (B)
it has not delivered and will not deliver within the United States or its
possessions definitive Debt Securities in bearer form that are sold during
the restricted period;
(ii) it has, and throughout the restricted period will have, in
effect procedures reasonably designed to ensure that its employees or
agents who are directly engaged in selling Debt Securities in bearer form
are aware that such Debt Securities may not be offered or sold during the
restricted period to a person who is within the United States or its
possessions or to a United States person, except as permitted by the D
Rules;
(iii) if it is a United States person, it is acquiring the Debt
Securities in bearer form for purposes of resale in connection with their
original issuance and if it retains Debt Securities in bearer form for its
own account, it will only do so in accordance with the requirements of U.S.
Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6);
(iv) if it transfers to any affiliate Debt Securities in bearer
form for the purpose of offering or selling such Debt Securities during the
restricted period, it will either (A) obtain from such affiliate for the
benefit of the Company the representations and agreements contained in
clauses (i), (ii) and (iii) or (B) repeat and confirm the representations
and agreements contained in clauses (i), (ii) and (iii) on such affiliate's
behalf and obtain from such affiliate the authority to so obligate it;
14
<PAGE>
(v) it will obtain for the benefit of the Company the
representations and agreements contained in clauses (i), (ii), (iii) and
(iv) from any person other than its affiliate with whom it enters into a
written contract, as defined in U.S. Treas. Reg. Section 1.163-5(c) (2) (i)
(D) (4) for the offer or sale during the restricted period of Debt
Securities in bearer form; and
(vi) it will comply with or observe any other restrictions or
limitations set forth in the Prospectus on persons to whom, or the
jurisdictions in which, or the manner in which, the Debt Securities may be
offered, sold, resold or delivered.
All other terms used in the preceding paragraph have the meaning given to them
by the U.S. Internal Revenue Code (the "Code") and regulations thereunder,
including the D Rules. The restricted period is defined at U.S. Treas. Reg.
Section 1.163-5(c)(2)(i)(D)(7).
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with investigating or defending any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Manager expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and
15
<PAGE>
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
(b) of this Section 8 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Debt Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Debt Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering of such
16
<PAGE>
Debt Securities (before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus Supplement,
bear to the aggregate public offering price of the Debt Securities. The
relative fault of the Company on the one hand and of the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
8 are several in proportion to the respective principal amounts of Debt
Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Debt
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. Termination. This Agreement shall be subject to termination, by
-----------
notice given by the Manager to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on the New York Stock
Exchange, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Manager, is
material and adverse and (b) in the case of any of the events specified in
clauses (a) (i) through (iv), such event, singly or together with any other such
event, makes it, in the judgment of the Manager, impracticable to market the
Debt Securities on the terms and in the manner contemplated in the Prospectus.
10. Defaulting Underwriters. If, on the Closing Date, any one or
-----------------------
more of the Underwriters shall fail or refuse to purchase Underwriters'
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate amount of Underwriters' Securities
17
<PAGE>
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate amount of the
Underwriters' Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the amount of Underwriters'
Securities set forth opposite their respective names in the Underwriting
Agreement bears to the aggregate amount of Underwriters' Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as the Manager may specify, to purchase the Underwriters' Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided that in no event shall the amount of
--------
Underwriters' Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 10 by an amount in excess
of one-ninth of such amount of Underwriters' Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Underwriters' Securities and the
aggregate amount of Underwriters' Securities with respect to which such default
occurs is more than one-tenth of the aggregate amount of Underwriters'
Securities to be purchased on such date, and arrangements satisfactory to the
Manager and the Company for the purchase of such Underwriters' Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the Company.
In any such case either the Manager or the Company shall have the right to
postpone the Closing Date but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering of the Debt Securities.
11. Representations and Indemnities to Survive. The respective
------------------------------------------
indemnity and contribution agreements and the representations, warranties and
other statements of the Company, its officers and the Underwriters set forth in
this Agreement will remain in full force and effect, regardless of any
termination of this Agreement, any investigation made by or on behalf of any
Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Section 8 and delivery of and payment for the Debt
Securities.
12. Successors. This Agreement will enure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 8, and no
other person will have any right or obligation hereunder.
18
<PAGE>
13. Counterparts. The Underwriting Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have
--------
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
19
<PAGE>
Schedule I
DELAYED DELIVERY CONTRACT
______________, 199__
Dear Sirs:
The undersigned hereby agrees to purchase from Mattel, Inc., a
Delaware corporation (the "Company"), and the Company agrees to sell to the
undersigned the Company's securities described in Schedule A annexed hereto (the
"Securities"), offered by the Company's Prospectus dated _______________, 19__
and Prospectus Supplement dated _______________, 19__, receipt of copies of
which are hereby acknowledged, at a purchase price stated in Schedule A and on
the further terms and conditions set forth in this Agreement. The undersigned
does not contemplate selling Securities prior to making payment therefor.
The undersigned will purchase from the Company Securities in the
principal amount and numbers on the delivery dates set forth in Schedule A. Each
such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Company or its order by
certified or official bank check in New York Clearing House funds at the office
of _______________________________, New York, N.Y., at 10:00 A.M. (New York
time) on the Delivery Date, upon delivery to the undersigned of the Securities
to be purchased by the undersigned on the Delivery Date, in such denominations
and registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to the Delivery Date.
The undersigned represents and warrants to the Company that as of the
date hereof the purchase of Securities to be made by the undersigned is not
prohibited under the laws of the jurisdiction to which the undersigned is
subject.
The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above of, such part of the Securities as is to
be sold to them.
<PAGE>
Promptly after completion of sale and delivery to the Underwriters, the Company
will mail or deliver to the undersigned as its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.
This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
If this Agreement is acceptable to the Company, it is requested that
the Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This
will become a binding agreement, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
I-2
<PAGE>
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
Yours very truly,
---------------------------------------------
(Purchaser)
By
-------------------------------------------
Name:
Title:
--------------------------------------------
--------------------------------------------
--------------------------------------------
(Address)
Accepted:
MATTEL, INC.
By
---------------------------------
PURCHASER --- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)
<TABLE>
<CAPTION>
Telephone No.
Name (Including Area Code) Department
---- --------------------- ----------
<S> <C> <C>
--------------------- --------------------- ---------------------
</TABLE>
I-3
<PAGE>
SCHEDULE A
----------
Securities:
- ----------
Principal Amounts or Numbers to be Purchased:
- --------------------------------------------
Purchase Price:
- --------------
Delivery Dates:
- --------------
I-4
<PAGE>
EXHIBIT 4
===============================================================================
MATTEL, INC.
-----------------------
INDENTURE
Dated as of August 1, 1994
-----------------------
CHEMICAL TRUST COMPANY OF CALIFORNIA
Trustee
===============================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 - DEFINITIONS AND INCORPORATION BY REFERENCE ................. 1
SECTION 1.1 Definitions ............................................ 1
SECTION 1.2 Other Definitions ...................................... 6
SECTION 1.3 Incorporation by Reference of Trust Indenture Act ...... 7
SECTION 1.4 Rules of Construction .................................. 7
ARTICLE 2 - THE SECURITIES ............................................. 8
SECTION 2.1 Issuable in Series ..................................... 8
SECTION 2.2 Establishment of Terms of Series of Securities ......... 8
SECTION 2.3 Execution and Authentication ........................... 10
SECTION 2.4 Registrar and Paying Agent ............................. 11
SECTION 2.5 Paying Agent to Hold Money in Trust .................... 12
SECTION 2.6 Securityholder Lists ................................... 12
SECTION 2.7 Transfer and Exchange .................................. 12
SECTION 2.8 Mutilated, Destroyed, Lost and Stolen Securities ....... 13
SECTION 2.9 Oustanding Securities .................................. 14
SECTION 2.10 Treasury Securities .................................... 14
SECTION 2.11 Temporary Securities ................................... 14
SECTION 2.12 Cancellation ........................................... 15
SECTION 2.13 Defaulted Interest ..................................... 15
SECTION 2.14 Global Securities ...................................... 15
SECTION 2.15 CUSIP Numbers .......................................... 16
ARTICLE 3 - REDEMPTION ................................................. 17
SECTION 3.1 Notice to Trustees ..................................... 17
SECTION 3.2 Selection of Securities to be Redeemed ................. 17
SECTION 3.3 Notice of Redemption ................................... 17
SECTION 3.4 Effect of Notice of Redemption ......................... 18
SECTION 3.5 Deposit of Redemption Price ............................ 18
SECTION 3.6 Securities Redeemed in Part ............................ 18
ARTICLE 4 - COVENANTS .................................................. 18
SECTION 4.1 Payment of Principal and Interest ...................... 18
SECTION 4.2 SEC Reports ............................................ 19
SECTION 4.3 Compliance Certificate ................................. 19
SECTION 4.4 Stay, Extension and Usury Laws ......................... 19
SECTION 4.5 Corporate Existence .................................... 19
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 4.6 Taxes .................................................. 20
SECTION 4.7 Limitation on Liens .................................... 20
SECTION 4.8 Limitation on Sale/Leaseback Transactions .............. 21
ARTICLE 5 - SUCCESSORS ................................................. 22
SECTION 5.1 When Company May Merge, Etc. ........................... 22
SECTION 5.2 Successor Corporation Substituted ...................... 22
ARTICLE 6 - DEFAULTS AND REMEDIES ...................................... 23
SECTION 6.1 Events of Default ...................................... 23
SECTION 6.2 Acceleration of Maturity; Rescission and Annulment ..... 24
SECTION 6.3 Collection of Indebtedness and Suits for Enforcement
by Trustee ........................................... 25
SECTION 6.4 Trustee May File Proofs of Claim ....................... 26
SECTION 6.5 Trustee May Enforce Claims Without Possession
of Securities ........................................ 27
SECTION 6.6 Application of Money Collected ......................... 27
SECTION 6.7 Limitation on Suits .................................... 28
SECTION 6.8 Unconditional Right of Holders to Receive Principal
and Interest ......................................... 28
SECTION 6.9 Restoration of Rights and Remedies ..................... 28
SECTION 6.10 Rights and Remedies Cumulative ......................... 29
SECTION 6.11 Delay or Omission Not Waiver ........................... 29
SECTION 6.12 Control by Holders ..................................... 29
SECTION 6.13 Waiver of Past Defaults ................................ 30
SECTION 6.14 Undertaking for Costs .................................. 30
SECTION 6.15 Waiver of Stay or Extension Laws ....................... 30
ARTICLE 7 - TRUSTEE .................................................... 31
SECTION 7.1 Duties of Trustee ...................................... 31
SECTION 7.2 Rights of Trustee ...................................... 32
SECTION 7.3 Individual Rights of Trustee ........................... 33
SECTION 7.4 Trustee's Disclaimer ................................... 33
SECTION 7.5 Notice of Defaults ..................................... 33
SECTION 7.6 Reports by Trustee to Holders .......................... 33
SECTION 7.7 Compensation and Indemnity ............................. 33
SECTION 7.8 Replacement of Trustee ................................. 34
SECTION 7.9 Successor Trustee by Merger, etc. ...................... 35
SECTION 7.10 Eligibility; Disqualification .......................... 35
SECTION 7.11 Preferential Collection of Claims Against Company ...... 36
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION> Page
----
<S> <C>
ARTICLE 8-SATISFACTION AND DISCHARGE ................................... 36
SECTION 8.1 Satisfaction and Discharge of Indenture ............... 36
SECTION 8.2 Application of Trust Funds; Indemnification ........... 37
SECTION 8.3 Satisfaction, Discharge and Defeasance of Securities
of any Series ........................................ 38
SECTION 8.4 Defeasance of Certain Obligations ..................... 39
SECTION 8.5 Repayment to Company .................................. 41
ARTICLE 9-AMENDMENTS AND WAIVERS ....................................... 41
SECTION 9.1 Without Consent of Holders ............................ 41
SECTION 9.2 With Consent of Holders ............................... 41
SECTION 9.3 Limitations ........................................... 42
SECTION 9.4 Compliance with Trust Indenture Act ................... 43
SECTION 9.5 Revocation and Effect of Consents ..................... 43
SECTION 9.6 Notation on or Exchange of Securities ................. 43
SECTION 9.7 Trustee Protected ..................................... 43
ARTICLE 10-MISCELLANEOUS ............................................... 44
SECTION 10.1 Trust Indenture Act Controls .......................... 44
SECTION 10.2 Notices ............................................... 44
SECTION 10.3 Communication by Holders with Other Holders ........... 45
SECTION 10.4 Certificate and Opinion as to Conditions Precedent .... 45
SECTION 10.5 Statements Required in Certificate or Opinion ......... 45
SECTION 10.6 Rules by Trustee and Agents ........................... 45
SECTION 10.7 Legal Holidays ........................................ 46
SECTION 10.8 No Recourse Against Others ............................ 46
SECTION 10.9 Counterparts .......................................... 46
SECTION 10.10 Governing Laws ........................................ 46
SECTION 10.11 No Adverse Interpretation of Other Agreements ......... 46
SECTION 10.12 Successors ............................................ 46
SECTION 10.13 Severability .......................................... 46
SECTION 10.14 Table of Contents, Headings, Etc. ..................... 47
SECTION 10.15 Securities in a Foreign Currency or in ECU ............ 47
SECTION 10.16 Judgment Currency ..................................... 47
ARTICLE 11-SINKING FUNDS ............................................... 48
SECTION 11.1 Applicability of Article .............................. 48
SECTION 11.2 Satisfaction of Sinking Fund Payments
with Securities ...................................... 48
SECTION 11.3 Redemption of Securities for Sinking Fund ............. 49
</TABLE>
iii
<PAGE>
MATTEL, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of August 1, 1994
<TABLE>
<CAPTION>
<S> <C>
(S) 310(a)(1) ............................. 7.10
(a)(2) ............................. 7.10
(a)(3) ............................. Not Applicable
(a)(4) ............................. Not Applicable
(a)(5) ............................. 7.10
(b) ............................. 7.10
(S) 311(a) ............................. 7.11
(b) ............................. 7.11
(c) ............................. Not Applicable
(S) 312(a) ............................. 2.6
(b) ............................. 10.3
(c) ............................. 10.3
(S) 313(a) ............................. 7.6
(b)(1) ............................. 7.6
(b)(2) ............................. 7.6
(c)(1) ............................. 7.6
(d) ............................. 7.6
(S) 314(a) ............................. 4.2, 10.5
(b) ............................. Not Applicable
(c)(1) ............................. 10.4
(c)(2) ............................. 10.4
(c)(3) ............................. Not Applicable
(d) ............................. Not Applicable
(e) ............................. 10.5
(f) ............................. Not Applicable
(S) 315(a) ............................. 7.1
(b) ............................. 7.5
(c) ............................. 7.1
(d) ............................. 7.1
(e) ............................. 6.14
(S) 316(a) ............................. 2.10
(a)(1)(A) ............................. 6.2
............................. 6.12
(a)(1)(B) ............................. 6.13
(b) ............................. 6.8
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(S) 317(a)(1) ....................................... 6.3
(a)(2) ....................................... 6.4
(b) ....................................... 2.5
(S) 318(a) ....................................... 10.1
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE>
Indenture dated as of August 1, 1994, between Mattel, Inc., a Delaware
corporation ("Company"), and Chemical Trust Company of California, a California
corporation ("Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Securities issued under
this Indenture.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
-----------
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Service Agent.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the place in
connection with which the term is used. If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is
made or given by the Trustee shall constitute a sufficient publication of such
notice.
"Bearer" means anyone in possession from time to time of a Bearer
Security.
"Bearer Security" means any Security that does not provide for the
identification of the Holder thereof.
"Board of Directors" means the Board of Directors of the Company or
any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant to authorization by the Board of Directors and to
be in full force and effect on the date of the certificate and delivered to the
Trustee.
"Capitalized Lease" means any lease of property where the obligations
of the lessee thereunder are required to be classified and accounted for as a
capitalized lease on a balance sheet of such lessee under generally accepted
accounting principles.
<PAGE>
"Company" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name of the
Company by its Chairman of the Board, a President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the total amount of assets of
the Company and its Subsidiaries on a consolidated basis (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups occurring after January 1, 1988 of capital assets
(excluding in any case write-ups in connection with accounting for acquisitions
in conformity with generally accepted accounting principles), after deducting
therefrom (i) all current liabilities of the Company and its Subsidiaries, (ii)
all investments in unconsolidated Subsidiaries of the Company and in persons
which are not Subsidiaries of the Company (except, in each case, investments in
marketable securities) and (iii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other intangible items, all as set
forth on the most recently available consolidated balance sheet of the Company
and its Subsidiaries, prepared in conformity with generally accepted accounting
principles.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered.
"Current Assets" means any asset of the Company or any of its
Subsidiaries that would be classified as a current asset on an audited
consolidated balance sheet of the Company prepared, in accordance with generally
accepted accounting principles, on the date any Lien (as hereinafter defined) on
such asset is incurred.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Depository" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used with
respect to the Securities of any Series shall mean the Depository with respect
to the Securities of such Series.
"Discount Security" means any Security that provides for an amount
less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.
"Dollars" means the currency of the United States of America.
2
<PAGE>
"ECU" means the European Currency Unit as determined by the Commission
of the European Union.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Foreign Currency" means any currency issued by a government other
than the government of the United States of America.
"Foreign Government Securities" means with respect to Securities of
any Series that are denominated in a Foreign Currency, noncallable (i) direct
obligations of the government that issued such Foreign Currency for the payment
of which obligations its full faith and credit is pledged or (ii) obligations of
a person controlled or supervised by and acting as an agency or instrumentality
of such government, the payment of which obligations is unconditionally
guaranteed as a full faith and credit obligation of such government.
"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.1
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.
"Holder" or "Securityholder" means a person in whose name a Security
is registered or the holder of a Bearer Security.
"Indebtedness" means, with respect to any person, and without
duplication:
(1) any liability of such person (A) for borrowed money, or (B)
for any letter of credit for the account of such person supporting
obligations of such person or other persons, or (C) evidenced by a bond,
note, debenture or similar instrument (including a purchase money
obligation) given in connection with the acquisition of any businesses,
properties or assets of any kind (other than a trade payable or a current
liability arising in the ordinary course of business), or (D) for the
payment of money relating to a Capitalized Lease;
(2) any liability of others described in the preceding clause (1)
that the person has guaranteed or that is otherwise its legal liability;
and
(3) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses
(1) and (2) above.
"Indenture" means this Indenture as amended from time to time and
shall include the form and terms of particular Series of Securities established
or contemplated hereunder.
"Lien" means any lien, security interest, charge, mortgage, pledge or
other encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).
3
<PAGE>
"Maturity," when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Officer" means the Chairman of the Board, any President, any Vice-
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the Company's principal executive officer, principal
financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.
"Ordinary Course Lien" means
(1) Liens of taxes, assessments or governmental charges or levies
on the property of the Company or any of its Subsidiaries if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or
are being contested in good faith and by appropriate proceedings and for
which adequate reserves in accordance with generally accepted accounting
principles shall have been set aside on the books of the Company;
(2) Liens imposed by law, such as carriers', warehousemen's,
landlords', materialmen's and mechanics' liens and other similar liens,
arising in the ordinary course of business which secure obligations not
more than 60 days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
generally accepted accounting principles shall have been set aside on the
books of the Company;
(3) Liens (other than any Lien imposed by the Employee Retirement
Income Security Act of 1974, as amended) arising out of pledges or deposits
under worker's compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar legislation;
(4) Liens incurred or deposits made to secure the performance of
tenders, bids, surety bonds or performance and return-of-money bonds
incurred in the ordinary course of business;
(5) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the marketability of the same or interfere with
the use thereof in the business of the Company or any of its Subsidiaries,
as the case may be;
4
<PAGE>
(6) Liens relating to a judgment or other court-ordered award or
settlement as to which the Company has not exhausted its appellate rights.
(7) Leases or subleases granted to or by the Company or any
Subsidiary not pursuant to a Sale/Leaseback Transaction undertaken in the
ordinary course of the business of the Company or any such Subsidiary and
not for the purpose of providing a lien, security interest, charge,
mortgage, pledge or other such encumbrance to secure another obligation.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on the Security.
"Responsible Officer" when used with respect to the Trustee, means the
chairman or the vice-chairman of the board of directors or trustees, the
chairman or vice-chairman of the executive committee of the board of directors
or trustees, the president, any vice-president, the treasurer, the secretary,
any trust officer, any second or assistant vice-president or any officer or
assistant officer of the Trustee other than those specifically above mentioned
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with a particular
subject.
"Sale/Leaseback Transaction" means any arrangement with any person
(other than the Company or any of its Subsidiaries) providing for the leasing by
the Company or any of its Subsidiaries of any property which has been or is to
be sold or transferred by the Company or such Subsidiary to such person or to
any person (other than the Company or any of its Subsidiaries) to which funds
have been or are to be advanced by such person on the security of the leased
property.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debentures, notes or other debt instruments of
the Company of any Series authenticated and delivered under this Indenture.
"Series" or "Series of Securities" means each series of debentures,
notes or other debt instruments of the Company created pursuant to Sections 2.1
and 2.2 hereof.
"Significant Subsidiary" of any person means any Subsidiary of such
person which either (i) had current assets plus intercompany receivables
aggregating in excess of $500,000 as shown on the most recent quarterly
consolidated balance sheet of such Subsidiary prepared in accordance with
generally accepted accounting principles, or (ii) had gross revenues, including
intercompany revenues, plus gross income aggregating for the 12-month period
ending
5
<PAGE>
on the date of such Subsidiary's most recent quarterly statement of income
prepared in accordance with generally accepted accounting principles in excess
of $1,000,000.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any specified person means (i) a corporation a
majority of whose capital stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such person
or by such person and a subsidiary or subsidiaries of such person or by a
subsidiary or subsidiaries of such person or (ii) any other person (other than a
corporation) in which such person or such person and a subsidiary or
subsidiaries of such person or a subsidiary or subsidiaries of such person
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act as so amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each person who is then a Trustee hereunder, and
if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America which are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation evidenced by such
depository receipt.
SECTION 1.2 Other Definitions.
-----------------
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
---- ----------
<S> <C>
"Bankruptcy Law"................... 6.1
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
---- ----------
<S> <C>
"Custodian"........................ 6.1
"Event of Default"................. 6.1
"Journal".......................... 10.15
"Judgment Currency"................ 10.16
"Legal Holiday".................... 10.7
"mandatory sinking fund payment"... 11.1
"Market Exchange Rate"............. 10.15
"New York Banking Day"............. 10.16
"optional sinking fund payment".... 11.1
"Paying Agent"..................... 2.4
"Registrar"........................ 2.4
"Required Currency"................ 10.16
"Service Agent".................... 2.4
</TABLE>
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein are used herein as so defined.
SECTION 1.4 Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles;
(3) references to "generally accepted accounting principles"
shall mean generally accepted accounting principles in effect as of the
time when and for the period as to which such accounting principles are to
be applied;
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in the plural
include the singular; and
(6) provisions apply to successive events and transactions.
ARTICLE 2
THE SECURITIES
SECTION 2.1 Issuable in Series.
------------------
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The
Securities may be issued in one or more Series. All Securities of a Series
shall be identical except as may be provided in a Board Resolution and/or
an Officers' Certificate detailing the adoption of the terms thereof
pursuant to the Board Resolution or a supplemental indenture hereto. In
the case of Securities of a Series to be issued from time to time, the
Officers' Certificate may provide for the method by which specified terms
(such as interest rate, maturity date, record date or date from which
interest should accrue) are to be determined. Securities may differ
between Series, in respect of any matters; provided that all Series of
Securities shall be equally and ratably entitled to the benefits of the
Indenture.
SECTION 2.2 Establishment of Terms of Series of Securities.
----------------------------------------------
At or prior to the issuance of any Securities within a Series,
the following shall be established (as to the Series generally, in the case
of Subsections 2.2.1 and 2.2.2 and either as to such Securities within the
Series or as to the Series generally in the case of Subsections 2.2.3
through 2.2.16) by either a Board Resolution or a supplemental indenture
hereto (and, to the extent not set forth in such Board Resolution or
supplemental indenture, in an Officers' Certificate detailing the adoption
of terms pursuant to the Board Resolution):
2.2.1 the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other
Series);
2.2.2 any limit upon the aggregate principal amount of the
Securities of the Series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the Series pursuant to Section 2.7, 2.8 or 2.11);
8
<PAGE>
2.2.3 the date or dates on which the principal of the Securities
of the Series is payable;
2.2.4 the rate or rates and, if applicable, the method used to
determine the rate including, but not limited to, any commodity, commodity
index, stock exchange index or financial index, at which the Securities of
the Series shall bear interest, if any, the date or dates from which such
interest shall accrue, the dates on which such interest shall be payable
and the record date for the interest payable on any interest payment date;
2.2.5 the place or places where the principal of and interest on
the Securities of the Series shall be payable, or the method of such
payment, if by wire transfer, mail or other means;
2.2.6 the period or periods within which, the price or prices at
which and the terms and conditions upon which the Securities of the Series
may be redeemed, in whole or in part, at the option of the Company;
2.2.7 the obligation, if any, of the Company to redeem or
purchase the Securities of the Series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which Securities of the Series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
2.2.8 if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Securities of the Series
shall be issuable;
2.2.9 if other than the principal amount thereof, the portion of
the principal amount of the Securities of the Series that shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 6.2;
2.2.10 the currency of denomination of the Securities of the
Series, which may be Dollars, any Foreign Currency or composite currency,
including, but not limited to, the ECU, and if such currency of
denomination is a composite currency other than the ECU, the agency or
organization, if any, responsible for overseeing such composite currency;
2.2.11 the designation of the currency or currencies in which
payment of the principal of and interest on the Securities of the Series
will be made, and the designation, if any, of the currency or currencies in
which payment of the principal of or interest on the Securities of the
Series, at the election of a Holder thereof, may also be payable;
2.2.12 if the payments of principal of or interest on the
Securities of the Series are to be made in a Foreign Currency other than
the currency in which such Securities are denominated, the manner in which
the exchange rate with respect to such payments shall be determined;
9
<PAGE>
2.2.13 if the amount of payments of principal of or interest on
the Securities of the Series may be determined with reference to an index
based on a currency or currencies other than that in which the Securities
are denominated or designated to be payable or determined by reference to a
commodity, commodity index, stock exchange index or financial index, the
manner in which such amounts shall be determined;
2.2.14 any other terms of the Securities of the Series (which
terms shall not be inconsistent with the provisions of this Indenture);
2.2.15 the forms of the Securities of the Series in bearer or
fully registered form (and, if in fully registered form, whether the
Securities will be issuable as Global Securities); and
2.2.16 any depositories, interest rate calculation agents,
exchange rate calculation agents or other agents with respect to Securities
of such Series if other than those appointed herein.
All Securities of any one Series need not be issued at the same time
and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution or Officers'
Certificate referred to above or as set forth in a supplemental indenture
hereto, and, unless otherwise provided, the authorized principal amount of any
Series may be increased to provide for issuances of additional Securities of
such Series.
SECTION 2.3 Execution and Authentication.
----------------------------
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal, which may be in facsimile form, shall
be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution or Officers' Certificate detailing the adoption of terms pursuant to
the Board Resolution, upon receipt by the Trustee of a Company Order. If
provided for in such procedures, such Company Order may authorize authentication
and delivery pursuant to oral or electronic instructions from the Company or its
duly authorized agent or agents, which oral instructions shall be promptly
confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by Board Resolution or supplemental
indenture hereto.
10
<PAGE>
The aggregate principal amount of Securities of any Series outstanding
at any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution or Officers' Certificate or
supplemental indenture hereto delivered pursuant to Section 2.2, except as
provided in Section 2.8.
Prior to the issuance of Securities of any Series, the Trustee shall
have received and (subject to Section 7.2) shall be fully protected in relying
on: (a) the Board Resolution or Officers' Certificate detailing the adoption of
terms pursuant to the Board Resolution or a supplemental indenture hereto
establishing the form of the Securities of that Series or of Securities within
that Series and the terms of the Securities of that Series or of Securities
within that Series, (b) an Officers' Certificate complying with Section 10.4,
and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
SECTION 2.4 Registrar and Paying Agent.
--------------------------
The Company shall maintain, with respect to each Series of Notes, at
the place or places specified with respect to such Series pursuant to Section
2.2, an office or agency where Securities of such Series may be presented or
surrendered for payment ("Paying Agent"), where Securities of such Series may be
surrendered for registration of transfer or exchange ("Registrar") and where
notices and demands to or upon the Company in respect of the Securities of such
Series and this Indenture may be served ("Service Agent"). The Registrar shall
keep a register with respect to each Series of Securities and to their transfer
and exchange. The Company will give prompt written notice to the Trustee of the
name and address, and any change in the name or address, of each Registrar,
Paying Agent or Service Agent. If at any time the Company shall fail to
maintain any such required Registrar, Paying Agent or Service Agent or shall
fail to furnish the Trustee with the name and address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more co-
registrars, additional paying agents or additional service agents and may from
time to time rescind such designations; provided, however, that no such
-------- -------
designation or rescission shall in any manner
11
<PAGE>
relieve the Company of its obligations to maintain a Registrar, Paying Agent and
Service Agent in each place so specified pursuant to Section 2.2 for Securities
of any Series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the name
or address of any such co-registrar, additional paying agent or additional
service agent. The term "Registrar" includes any co-registrar; the term "Paying
Agent" includes any additional paying agent; and the term "Service Agent"
includes any additional service agent.
The Company hereby appoints the Trustee the initial Registrar, Paying
Agent and Service Agent for each Series unless another Registrar, Paying Agent
or Service Agent, as the case may be, is appointed prior to the time Securities
of that Series are first issued.
SECTION 2.5 Paying Agent to Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by
the Paying Agent for the payment of principal or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for the money. If the Company or
a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of Securityholders of any Series of Securities all
money held by it as Paying Agent.
SECTION 2.6 Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA
(S) 312(a). If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten days before each interest payment date and at such
other times as the Trustee may request in writing a list, in such form and as of
such date as the Trustee may reasonably require, of the names and addresses of
Securityholders of each Series of Securities.
SECTION 2.7 Transfer and Exchange.
---------------------
Where Securities of a Series are presented to the Registrar or a co-
registrar with a request to register a transfer or to exchange them for an equal
principal amount of Securities of the same Series and date of maturity of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection
12
<PAGE>
therewith (other than any such transfer tax or similar governmental charge
payable upon exchanges pursuant to Sections 2.11 or 9.6).
Neither the Company nor the Registrar shall be required (a) to issue,
register the transfer of, or exchange Securities of any Series for the period
beginning at the opening of business fifteen days immediately preceding the
mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.
SECTION 2.8 Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
13
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SECTION 2.9 Outstanding Securities.
----------------------
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on the Maturity date of Securities of a Series
money sufficient to pay such Securities payable on that date, then on and after
that date such Securities of the Series cease to be outstanding and interest on
them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
In determining whether the Holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.2.
SECTION 2.10 Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver or consent,
Securities of a Series owned by the Company or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.
SECTION 2.11 Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon a Company
Order. Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee upon request shall authenticate definitive Securities of the same
Series and date of maturity in exchange for temporary Securities. Until so
exchanged, temporary securities shall have the same rights under this Indenture
as the definitive Securities.
14
<PAGE>
SECTION 2.12 Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for transfer,
exchange, payment, replacement or cancellation and shall destroy such cancelled
Securities (subject to the record retention requirement of the Exchange Act) and
deliver a certificate of such destruction to the Company, unless the Company
otherwise directs. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation.
SECTION 2.13 Defaulted Interest.
------------------
If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date. The Company
shall fix the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of
interest to be paid. The Company may pay defaulted interest in any other lawful
manner.
SECTION 2.14 Global Securities.
-----------------
2.14.1 Terms of Securities. A supplemental indenture to the
-------------------
Indenture or a Board Resolution (and, to the extent not set forth in the Board
Resolution, an Officers' Certificate detailing the adoption of terms pursuant to
the Board Resolution) shall establish whether the Securities of a Series shall
be issued in whole or in part in the form of one or more Global Securities and
the Depository for such Global Security or Securities.
2.14.2 Transfer and Exchange. Notwithstanding any provisions to
---------------------
the contrary contained in Section 2.7 of the Indenture and in addition thereto,
any Global Security shall be exchangeable pursuant to Section 2.7 of the
Indenture for securities registered in the names of Holders other than the
Depository for such Security or its nominee only if (i) such Depository notifies
the Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depository within 90 days of such event, (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable or (iii) an event shall have
happened and be continuing which is or after notice or lapse of time or both,
would be, an Event of Default with respect to the Securities represented by such
Global Security. Any Global Security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for Securities registered in such names
as the Depository shall direct in writing in an aggregate principal amount equal
to the principal amount of the Global Security with like tenor and terms.
Except as provided in this Section 2.14.2, a Global Security may not
be transferred except as a whole by the Depository with respect to such Global
Security to a
15
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nominee of such Depository, by a nominee of such Depository to such Depository
or another nominee of such Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such a successor Depository.
2.14.3 Legend. Any Global Security issued hereunder shall bear
------
a legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable
for Securities registered in the name of a person other than the Depository
or its nominee only in the limited circumstances described in the
Indenture, and may not be transferred except as a whole by the Depository
to a nominee of the Depository, by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such a successor
Depository."
2.14.4 Acts of Holders. The Depository, as a Holder, may
---------------
appoint agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture.
2.14.5 Payments. Notwithstanding the other provisions of this
--------
Indenture, unless otherwise specified as contemplated by Section 2.2, payment of
the principal of and interest on any Global Security shall be made to the person
specified therein.
2.14.6 Consents, Declaration and Directions. Except as provided
------------------------------------
in Section 2.14.5, the Company, the Trustee and any Agent shall treat a person
as the Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depositary with respect to such Global Security, for purposes of obtaining
any consents, declarations or directions required to be given by the Holders
pursuant to this Indenture.
SECTION 2.15 CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
--------
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
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ARTICLE 3
REDEMPTION
SECTION 3.1 Notice to Trustees.
------------------
The Company may, with respect to any Series of Securities, reserve the
right to redeem and pay the Series of Securities or may covenant to redeem and
pay the Series of Securities or any part thereof before maturity at such time
and on such terms as provided for in such Securities. If a Series of Securities
is redeemable and the Company wants or is obligated to redeem prior to the
Stated Maturity thereof all or part of the Series of Securities pursuant to the
terms of such Securities, it shall notify the Trustee of the redemption date and
the principal amount of Series of Securities to be redeemed. The Company shall
give the notice at least 60 days before the redemption date (or such shorter
notice as may be acceptable to the Trustee).
SECTION 3.2 Selection of Securities to be Redeemed.
--------------------------------------
Unless otherwise indicated for a particular Series by Board Resolution
or by a supplemental indenture hereto (or to the extent not set forth in such
Board Resolution or supplemental indenture, in an Officers' Certificate so
indicating pursuant to the Board Resolution), if less than all the Securities of
a Series are to be redeemed, the Trustee shall select the Securities of the
Series to be redeemed in any manner that the Trustee deems fair and appropriate.
The Trustee shall make the selection from Securities of the Series outstanding
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities of the Series that have denominations
larger than $1,000. Securities of the Series and portions of them it selects
shall be in amounts of $1,000 or whole multiples of $1,000 or, with respect to
Securities of any Series issuable in other denominations pursuant to Section
2.2.8, the minimum principal denomination for each Series and integral multiples
thereof. Provisions of this Indenture that apply to Securities of a Series
called for redemption also apply to portions of Securities of that Series called
for redemption.
SECTION 3.3 Notice of Redemption.
--------------------
Unless otherwise indicated for a particular Series by Board Resolution
or by a supplemental indenture hereto, at least 30 days but not more than 60
days before a redemption date, the Company shall mail a notice of redemption by
first-class mail to each Holder whose Securities are to be redeemed and if any
Bearer Securities are outstanding, publish on one occasion a notice in an
Authorized Newspaper.
The notice shall identify the Securities of the Series to be redeemed
and shall state:
(1) the redemption date;
(2) the redemption price;
17
<PAGE>
(3) the name and address of the Paying Agent;
(4) that Securities of the Series called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) that interest on Securities of the Series called for
redemption ceases to accrue on and after the redemption date; and
(6) any other information as may be required by the terms of the
particular Series or the Securities of a Series being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.4 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed or published as provided in
Section 3.3, Securities of a Series called for redemption become due and payable
on the redemption date and at the redemption price. A notice of redemption may
not be conditional. Upon surrender to the Paying Agent, such Securities shall
be paid at the redemption price plus accrued interest to the redemption date.
SECTION 3.5 Deposit of Redemption Price.
---------------------------
On or before the redemption date, the Company shall deposit with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date.
SECTION 3.6 Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security of the same Series and the same
maturity equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
COVENANTS
SECTION 4.1 Payment of Principal and Interest.
---------------------------------
The Company covenants and agrees for the benefit of each Series of
Securities that it will duly and punctually pay the principal of and interest on
the Securities of that Series in accordance with the terms of such Securities
and this Indenture.
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SECTION 4.2 SEC Reports.
-----------
The Company shall deliver to the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA (S) 314(a).
SECTION 4.3 Compliance Certificate.
----------------------
The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon becoming aware of (i) any Default, Event
of Default or default in the performance of any covenant, agreement or condition
contained in this Indenture or (ii) any event of default referred to in Section
6.1(5), an Officers' Certificate specifying such Default, Event of Default or
default.
SECTION 4.4 Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
SECTION 4.5 Corporate Existence.
-------------------
Subject to Article 5, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Significant
Subsidiary in accordance with the respective organizational documents of each
Significant Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and its Significant Subsidiaries; provided, however,
-------- -------
that
19
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the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Significant
Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Holders.
SECTION 4.6 Taxes.
-----
The Company shall, and shall cause each of its Significant
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.
SECTION 4.7 Limitation on Liens.
-------------------
The Company shall not and shall not permit any of its Subsidiaries to,
directly or indirectly, create, assume or otherwise cause or suffer to exist,
except in favor of the Company, any Lien of or upon any of the properties or
assets, real, personal or mixed (including stock and other securities of its
Subsidiaries), of the Company or any of its Subsidiaries whether owned at the
date of this Indenture or thereafter acquired, or of or upon any income or
profits therefrom, except for:
(1) Liens existing on the date hereof or arising under this
Indenture;
(2) any extension, renewal, or replacement (or successive
extensions, renewals or replacements) of any Lien existing on the date
hereof, if limited to the same property subject to, and securing not more
than the amount secured by, the Lien extended, renewed or replaced;
(3) Liens on Current Assets (or on any promissory note received
in satisfaction of any accounts receivable of the Company or any of its
Subsidiaries which, immediately prior to such satisfaction, was subject to
such a Lien) securing Indebtedness incurred to finance working capital
requirements, provided, however, that the Indebtedness secured by such Lien
-------- -------
does not mature later than 36 months from the date incurred;
(4) any Ordinary Course Lien arising, and only so long as
continuing, in the ordinary course of the business of the Company or any of
its Subsidiaries;
(5) Liens upon any property hereafter acquired (including by
reason of a merger or consolidation of another entity into the Company or a
Subsidiary) existing thereon at the time of acquisition, provided that such
--------
Liens (A) are not incurred in connection with, or in contemplation of, the
acquisition of the property acquired, except as permitted under subsection
(6) of this Section 4.7, and (B) do not extend to or cover any property or
assets of the Company or any Subsidiary other than the property so
acquired;
20
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(6) purchase money Liens upon or in any real or personal property
(including fixtures and other equipment) acquired or held by the Company or
any of its Subsidiaries in the ordinary course of business to secure the
purchase price of such property or to secure Indebtedness incurred solely
for the purpose of financing or refinancing the acquisition or improvement
of or construction costs related to such property, provided that no such
--------
Lien shall extend to or cover any property or assets of the Company or any
Subsidiary other than the property being acquired or improved;
(7) any interest or title of a lessor in the property subject to
any Capitalized Lease or Sale/Leaseback Transaction that is permitted under
Section 4.8; or
(8) other Liens securing Indebtedness in an aggregate principal
amount which, together with the aggregate outstanding principal amount of
all other Indebtedness of the Company and its Subsidiaries secured by Liens
permitted under the terms of this subsection (8), and the aggregate amount
(before deducting expenses) of Sale/Leaseback Transactions which would
otherwise be permitted under the provisions of Section 4.8(1), does not at
the time such Liens are incurred exceed 10% of the Company's Consolidated
Net Tangible Assets as shown on the most recent audited consolidated
balance sheet of the Company and its Subsidiaries.
SECTION 4.8 Limitation on Sale/Leaseback Transactions.
-----------------------------------------
The Company shall not and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into any Sale/Leaseback Transaction unless either:
(1) the Company or such Subsidiary would be permitted, pursuant
to the terms of Section 4.7(8), to incur Indebtedness in an aggregate
principal amount equal to or exceeding the aggregate amount (before
deducting expenses) of the Sale/Leaseback Transaction secured by a Lien on
the property subject to such Sale/Leaseback Transaction; or
(2) the Company or such Subsidiary within 90 days of the
effectiveness of such Sale/Leaseback Transaction applies or unconditionally
agrees to apply to the retirement of Indebtedness an amount equal to the
greater of (A) the net proceeds of the Sale/Leaseback Transaction or (B)
the fair value, in the opinion of the Board of Directors of the Company, of
the subject property of the Sale/Leaseback Transaction at the time of such
transaction (in either case adjusted to reflect the remaining term of the
lease subject to such Sale/Leaseback Transaction).
21
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ARTICLE 5
SUCCESSORS
SECTION 5.1 When Company May Merge, Etc.
---------------------------
The Company shall not consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets to,
any person unless:
(1) the Company is the surviving person or the person formed by
or surviving any such consolidation or merger (if other than the Company),
or to which such sale, lease, conveyance or other disposition shall have
been made, is a corporation organized and existing under the laws of the
United States, any state thereof or the District of Columbia;
(2) the corporation formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale, lease,
conveyance or other disposition shall have been made, assumes by
supplemental indenture all the obligations of the Company under the
Securities and this Indenture; and
(3) immediately after the transaction no Default or Event of
Default exists.
The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
SECTION 5.2 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor person has been named
as the Company herein; provided, however, that the predecessor Company in the
-------- -------
case of a sale, lease, conveyance or other disposition shall not be released
from the obligation to pay the principal of and interest on the Securities.
22
<PAGE>
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
-----------------
"Event of Default," wherever used herein with respect to Securities of
any Series, means any one of the following events, except the events set forth
in clause (5) below, which shall not apply for the benefit of Securities of a
Series as to which, pursuant to Section 2.2.14 in the establishing Board
Resolution and Officers' Certificate or supplemental indenture hereto, it is
provided that such Series shall not have the benefit of said Event of Default
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest on any Security of that
Series when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of any Security of that
Series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that Series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a default
whose performance or whose breach is elsewhere in this Section specifically
dealt with or which has expressly been included in this Indenture solely for the
benefit of Series of Securities other than that Series), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
outstanding Securities of that Series a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(5) a default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company (including a default with respect
to Securities of any Series other than that Series) or any Subsidiary (or the
payment of which is guaranteed by the Company or a Subsidiary), whether such
Indebtedness or guarantee now exists or shall be created hereafter, if (a)
either (i) such default results from the failure to pay any such Indebtedness at
its stated final maturity or (ii) relates to an obligation other than the
obligation to pay such Indebtedness at its stated final maturity and results in
the holder or holders of such Indebtedness causing such Indebtedness to become
due prior to its stated maturity and (b) the principal amount of such
Indebtedness, together with the principal amount of any other such Indebtedness
in default for failure to pay principal at stated final maturity or the maturity
of which has been so accelerated, aggregates $10,000,000 or more at any one time
outstanding; or
23
<PAGE>
(6) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) generally is unable to pay its debts as the same become due;
or
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case,
(B) appoints a Custodian of the Company or any of its Significant
Subsidiaries or for all or substantially all of its property, or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
(8) any other Event of Default provided with respect to Securities of
that Series.
SECTION 6.2 Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to Securities of any Series at the
time outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the outstanding
Securities of that Series may declare the principal amount (or, if any
Securities of that Series are Discount Securities, such portion of the principal
amount as may be specified in the terms of such Securities) of all of the
Securities of that Series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or
24
<PAGE>
specified amount) shall become immediately due and payable. If an Event of
Default specified in Section 6.1(6) or (7) shall occur, the principal amount (or
specified amount) of all outstanding Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after such a declaration of acceleration with respect to
any Series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the outstanding
Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that Series,
(B) the principal of any Securities of that Series which have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon any overdue principal and overdue interest at the rate or
rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that Series,
other than the non-payment of the principal of Securities of that Series which
have become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 6.13.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
SECTION 6.3 Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 60 days, or
(2) default is made in the payment of principal of any Security at
the Maturity thereof, or
25
<PAGE>
(3) default is made in the deposit of any sinking fund payment when
and as due by the terms of a Security,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal or any
overdue interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or deemed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to any Securities of any Series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
Series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4 Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding,
and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
26
<PAGE>
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.5 Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 6.6 Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under
Section 7.7; and
Second: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
Third: To the Company.
27
<PAGE>
SECTION 6.7 Limitation on Suits.
-------------------
No Holder of any Security of any Series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of
that Series;
(2) the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the outstanding Securities of that Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 6.8 Unconditional Right of Holders to Receive Principal and Interest.
----------------------------------------------------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Security on the Stated
Maturity or Stated Maturities expressed in such Security (or, in the case of
redemption, on the redemption date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 6.9 Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every
28
<PAGE>
such case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been instituted.
SECTION 6.10 Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.11 Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 6.12 Control by Holders.
------------------
The Holders of a majority in principal amount of the outstanding
Securities of any Series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such Series, provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall
have the right to decline to follow any such direction if the Trustee in
good faith shall, by a Responsible Officer of the Trustee, determine that
the proceeding so directed would involve the Trustee in personal liability.
29
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SECTION 6.13 Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive any past Default hereunder with respect to such
Series and its consequences, except a Default (1) in the payment of the
principal of or interest on any Security of such Series or (2) in respect of a
covenant or provision hereof which under Article 9 cannot be modified or amended
without the consent of the Holder of each outstanding Security of such Series
affected. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.14 Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest on
any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on or after the redemption date).
SECTION 6.15 Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
30
<PAGE>
ARTICLE 7
TRUSTEE
SECTION 7.1 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon Officers' Certificates or Opinions of
Counsel furnished to the Trustee and conforming to the requirements of this
Indenture; however, in the case of any such Officers' Certificates or
-------
Opinions of Counsel which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine such
Officers' Certificates and Opinions of Counsel to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it with respect to Securities of
any Series in good faith in accordance with the direction of the Holders of
a majority in principal amount of the outstanding Securities of such Series
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Securities of
such Series.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraph (a), (b) and (c) of this Section.
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(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) No provision of this Indenture shall require the Trustee to risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent shall
be entitled to the protections, immunities and standard of care as are set forth
in paragraphs (a), (b) and (c) of this Section with respect to the Trustee.
SECTION 7.2 Rights of Trustee.
-----------------
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care. No
Depository shall be deemed an agent of the Trustee and the Trustee shall not be
responsible for any act or omission by any Depository.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Securities unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction.
32
<PAGE>
SECTION 7.3 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its authentication.
SECTION 7.5 Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing with respect
to the Securities of any Series and if it is known to a Responsible Officer of
the Trustee, the Trustee shall mail to each Securityholder of the Securities of
that Series and, if any Bearer Securities are outstanding, publish on one
occasion in an Authorized Newspaper, notice of a Default or Event of Default
within 90 days after it occurs or, if later, after a Responsible Officer of the
Trustee has knowledge of such Default or Event of Default. Except in the case of
a Default or Event of Default in payment on any Security of any Series, the
Trustee may withhold the notice if and so long as its corporate trust committee
or a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Securityholders of that Series.
SECTION 7.6 Reports by Trustee to Holders.
-----------------------------
Within 60 days after May 15 in each year, the Trustee shall transmit
by mail to all Securityholders, as their names and addresses appear on the
Security Register, and, if any Bearer Securities are outstanding, publish in an
Authorized Newspaper, a brief report dated as of such May 15, in accordance
with, and to the extent required under, TIA (S) 313.
A copy of each report at the time of its mailing to Securityholders of
any Series shall be filed with the SEC and each stock exchange on which the
Securities of that Series are listed. The Company shall promptly notify the
Trustee when Securities of any Series are listed on any stock exchange.
SECTION 7.7 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
33
<PAGE>
The Company shall indemnify the Trustee (including the cost of
defending itself) against any loss, liability or expense incurred by it except
as set forth in the next paragraph in the performance of its duties under this
Indenture as Trustee or Agent. The Trustee shall notify the Company promptly
of any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld. This indemnification shall
apply to officers, directors, employees, shareholders and agents of the Trustee.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee or by any officer, director, employee,
shareholder or agent of the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities of any Series on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8 Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign with respect to the Securities of one or more
Series by so notifying the Company. The Holders of a majority in principal
amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company. The Company may remove
the Trustee with respect to Securities of one or more Series if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
34
<PAGE>
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any one or
more Series does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least 10% in principal amount of the Securities of the applicable Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee with respect to the Securities of any one or more
Series fails to comply with Section 7.10, any Securityholder of the applicable
Series may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series and if any Bearer Securities are
outstanding, publish such notice on one occasion in an Authorized Newspaper.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 hereof shall continue for the benefit of
the retiring trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
SECTION 7.9 Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee shall always have a
combined capital and surplus of at least $10,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b).
35
<PAGE>
SECTION 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
ARTICLE 8
SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Order cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(a) all Securities theretofore authenticated and delivered (other
than Securities that have been destroyed, lost or stolen and that have been
replaced or paid) have been delivered to the Trustee for cancellation; or
(b) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company, or
(iv) are deemed paid and discharged pursuant to Section 8.3,
as applicable;
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
in trust in an amount sufficient for the purpose of paying and
discharging the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal
and interest to the date of such deposit (in the case of Securities
which become due and payable) or to the Stated Maturity or redemption
date, as the case may be;
36
<PAGE>
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.7, and, if money shall
have been deposited with the Trustee pursuant to clause (1) of this Section or
if money or obligations shall have been deposited with or received by the
Trustee pursuant to Section 8.3, the obligations of the Trustee under Section
8.2 and Section 8.5 shall survive.
SECTION 8.2 Application of Trust Funds; Indemnification.
-------------------------------------------
(a) Subject to the provisions of Section 8.5, all money deposited
with the Trustee pursuant to Section 8.1, all money and U.S. Government
Obligations or Foreign Government Securities deposited with the Trustee
pursuant to Section 8.3 or 8.4 and all money received by the Trustee in
respect of U.S. Government Obligations or Foreign Government Securities
deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in
trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with
or received by the Trustee or to make mandatory sinking fund payments or
analogous payments as contemplated by Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against U.S. Government
Obligations or Foreign Government Securities deposited pursuant to Sections
8.3 or 8.4 or the interest and principal received in respect of such
obligations other than any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time to
time upon Company Request any U.S. Government Obligations or Foreign
Government Securities or money held by it as provided in Sections 8.3 or
8.4 which, in the opinion of a nationally recognized firm of independent
certified public accountants expressed in a written certification thereof
delivered to the Trustee, are then in excess of the amount thereof which
then would have been required to be deposited for the purpose for which
such Obligations or Foreign Government Securities or money were deposited
or received. This provision shall not authorize the sale by the Trustee of
any U.S. Government Obligations or Foreign Government Securities held under
this Indenture.
37
<PAGE>
SECTION 8.3 Satisfaction, Discharge and Defeasance of Securities of any Series.
------------------------------------------------------------------
Unless this Section 8.3 is otherwise specified, pursuant to Section
2.2.14, to be inapplicable to Securities of any Series, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of any such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of any such Series,
shall no longer be in effect (and the Trustee, at the expense of the Company,
shall, at Company Request, execute proper instruments acknowledging the same),
except as to:
(a) the rights of Holders of Securities of such Series to
receive, from the trust funds described in subparagraph (d) hereof, (i)
payment of the principal of and each installment of principal of or
interest on the outstanding Securities of such Series on the Stated
Maturity of such principal or installment of principal or interest and (ii)
the benefit of any mandatory sinking fund payments applicable to the
Securities of such Series on the day on which such payments are due and
payable in accordance with the terms of this Indenture and the Securities
of such Series;
(b) the Company's obligations with respect to such Securities of
such Series under Sections 2.4, 2.7 and 2.8; and
(c) the rights, powers, trust and immunities of the Trustee
hereunder and the duties of the Trustee under Section 8.2 and the duty of
the Trustee to authenticate Securities of such Series issued on
registration of transfer or exchange;
provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of such Securities (i) in
the case of Securities of such Series denominated in Dollars, cash in
Dollars (or such other money or currencies as shall then be legal tender in
the United States) and/or U.S. Government Obligations, or (ii) in the case
of Securities of such Series denominated in a Foreign Currency (other than
a composite currency), money and/or Foreign Government Securities in the
same Foreign Currency, which through the payment of interest and principal
in respect thereof, in accordance with their terms, will provide (and
without reinvestment and assuming no tax liability will be imposed on such
Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge each
installment of principal, (including mandatory sinking fund or analogous
payments) of and any interest on all the Securities of such Series on the
dates such installments of interest or principal are due;
38
<PAGE>
(e) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(f) such provision would not cause any outstanding Securities of
such Series then listed on the New York Stock Exchange or other securities
exchange to be delisted as a result thereof;
(g) no Default or Event of Default with respect to the Securities
of such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture,
there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such opinion shall confirm that,
the Holders of the Securities of such Series will not recognize income,
gain or loss for Federal income tax purposes as a result of such deposits,
defeasance and discharge and will be subject to Federal income tax on the
same amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred;
(i) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities of such Series over any
other creditors of the company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company; and
(j) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this
Section have been complied with.
SECTION 8.4 Defeasance of Certain Obligations.
---------------------------------
Unless this Section 8.4 is otherwise specified pursuant to
Section 2.2.14 to be inapplicable to Securities of any Series, on and after
the 91st day after the date of the deposit referred to in subparagraph (1)
hereof, the Company may omit to comply with any term, provision or
condition set forth under Sections 4.2 (except as to corporate existence),
4.3, 4.4, 4.5, 4.6, 4.7, 4.8, and 5.1 (and the failure to comply with any
such provisions shall not constitute a Default or Event of Default under
Section 6.1) and the occurrence of any event described in clause (5) of
Section 6.1 shall not constitute a Default or Event of Default hereunder,
with respect to the Securities of such Series, provided that the following
conditions shall have been satisfied:
39
<PAGE>
(1) With reference to this Section 8.4, the Company has deposited
or caused to be irrevocably deposited (except as provided in Section 8.3)
with the Trustee as trust funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities
(i) in the case of Securities of such Series denominated in Dollars, cash
in Dollars (or such other money or currencies as shall then be legal tender
in the United States) and/or U.S. Government Obligations, or (ii) in the
case of Securities of such Series denominated in a Foreign Currency (other
than a composite currency), money and/or Foreign Government Securities in
the same Foreign Currency, which through the payment of interest and
principal in respect thereof, in accordance with their terms, will provide
(and without reinvestment and assuming no tax liability will be imposed on
such Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge each installment of principal (including mandatory sinking fund
or analogous payments) of and any interest on all the Securities of such
Series on the dates such installments of interest or principal are due;
(2) Such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(3) No Default or Event of Default with respect to the Securities
of such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel confirming that Holders of the Securities of such Series will not
recognize income, gain or loss for federal income tax purposes as a result
of such deposit and defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred;
(5) the Company shall have delivered to the Trustee an Officers'
Certificate stating the deposit was not made by the Company with the intent
of preferring the Holders of the Securities of such Series over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company; and
(6) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated by
this Section have been complied with.
40
<PAGE>
SECTION 8.5 Repayment to Company.
--------------------
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders.
--------------------------
The Company and the Trustee may amend or supplement this Indenture or
the Securities of one or more Series without the consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided that such amendment or
--------
supplement does not adversely affect the rights of any Securityholders;
(4) to make any change that does not adversely affect the rights
of any Securityholder;
(5) to provide for the issuance of and establish the form and
terms and conditions of Securities of any Series as permitted by this
Indenture;
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee; or
(7) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
SECTION 9.2 With Consent of Holders.
-----------------------
The Company and the Trustee may enter into a supplemental
indenture with the written consent of the Holders of at least 66 2/3% in
principal amount of the outstanding Securities of each Series affected by
such supplemental indenture, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Securityholders
41
<PAGE>
of each such Series. Except as provided in Section 6.13, the Holders of 66
2/3% in principal amount of the outstanding Securities of each Series
affected by such waiver by notice to the Trustee may waive compliance by
the Company with any provision of this Indenture or the Securities with
respect to such Series.
It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any
proposed supplemental indenture or waiver, but it shall be sufficient if
such consent approves the substance thereof. After a supplemental
indenture or waiver under this section becomes effective, the Company shall
mail to the Holders of Securities affected thereby and, if any Bearer
Securities affected thereby are outstanding, publish on one occasion in an
Authorized Newspaper, a notice briefly describing the supplemental
indenture or waiver. Any failure by the Company to mail or publish such
notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture or waiver.
SECTION 9.3 Limitations.
-----------
Without the consent of each Securityholder affected, an amendment
or waiver may not:
(1) change the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of
interest (including default interest) on any Security;
(3) reduce the principal or change the Stated Maturity of any
Security or reduce the amount of, or postpone the date fixed for,
the payment of any sinking fund or analogous obligation;
(4) waive a Default or Event of Default in the payment of the
principal of or interest on any Security (except a rescission of
acceleration of the Securities of any Series by the Holders of at
least a majority in aggregate principal amount of the then
outstanding Securities of such Series and a waiver of the payment
default that resulted from such acceleration);
(5) make the Security payable in currency other than that
stated in the Security;
(6) make any change in Sections 6.8, 6.13, 9.3 (this
sentence), 10.15 or 10.16; or
(7) waive a redemption payment with respect to any Security
or change any of the provisions with respect to the redemption of
any Securities.
42
<PAGE>
SECTION 9.4 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the Securities of one or more
Series shall be set forth in a supplemental indenture hereto that complies with
the TIA as then in effect.
SECTION 9.5 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
Any amendment or waiver once effective shall bind every Securityholder
of each Series affected by such amendment or waiver unless it is of the type
described in any of clauses (1) through (7) of Section 9.3. In that case, the
amendment or waiver shall bind each Holder of a Security who has consented to it
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 9.6 Notation on or Exchange of Securities.
-------------------------------------
The Trustee may place an appropriate notation about an amendment or
waiver on any Security of any Series thereafter authenticated. The Company in
exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the
amendment or waiver.
SECTION 9.7 Trustee Protected.
-----------------
In enacting, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights.
43
<PAGE>
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control.
SECTION 10.2 Notices.
-------
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail:
if to the Company:
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Attention: N. Ned Mansour, Senior Vice President,
General Counsel and Secretary
if to the Trustee:
Chemical Trust Company of California
300 South Grand Avenue
Los Angeles, California 90071
Attention: Paula Oswald, Assistant Vice President
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar and,
if any Bearer Securities are outstanding, published in an Authorized Newspaper.
Failure to mail a notice or communication to a Securityholder of any Series or
any defect in it shall not affect its sufficiency with respect to other
Securityholders of that or any other Series.
If a notice or communication is mailed or published in the manner
provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
44
<PAGE>
SECTION 10.3 Communication by Holders with Other Holders.
-------------------------------------------
Securityholders of any Series may communicate pursuant to TIA (S)
312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this Indenture or the Securities of that Series or
all Series. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 10.4 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.5 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA (S) 314(a)(4)) shall comply with the
provisions of TIA (S) 314(e) and shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 10.6 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or a meeting
of Securityholders of one or more Series. Any Agent may make reasonable
rules and set reasonable requirements for its functions.
45
<PAGE>
SECTION 10.7 Legal Holidays.
--------------
Unless otherwise provided by Board Resolution or supplemental
indenture hereto for a particular Series, a "Legal Holiday" is a Saturday,
a Sunday, or a day on which banking institutions are not required to be
open. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 10.8 No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Securityholder
by accepting a Security waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
SECTION 10.9 Counterparts.
------------
This Indenture may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
SECTION 10.10 Governing Laws.
--------------
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA SHALL GOVERN THIS
INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISION THEREOF.
SECTION 10.11 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.12 Successors.
----------
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 10.13 Severability.
------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
46
<PAGE>
SECTION 10.14 Table of Contents, Headings, Etc.
--------------------------------
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no
way modify or restrict any of the terms or provisions hereof.
SECTION 10.15 Securities in a Foreign Currency or in ECU.
------------------------------------------
Unless otherwise specified in an Officers' Certificate delivered
pursuant to Section 2.2 of this Indenture with respect to a particular
Series of Securities, whenever for purposes of this Indenture any action
may be taken by the Holders of a specified percentage in aggregate
principal amount of Securities of all Series or all Series affected by a
particular action at the time outstanding and, at such time, there are
outstanding Securities of any Series which are denominated in a coin or
currency other than Dollars (including ECUs), then the principal amount of
Securities of such Series which shall be deemed to be outstanding for the
purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate at such time. For
purposes of this Section 10.15, "Market Exchange Rate" shall mean the noon
Dollar buying rate in New York City for cable transfers of that currency as
published by the Federal Reserve Bank of New York; provided, however, in
-------- -------
the case of ECUs, Market Exchange Rate shall mean the rate of exchange
determined by the Commission of the European Union (or any successor
thereto) as published in the Official Journal of the European Union (such
publication or any successor publication, the "Journal"). If such Market
Exchange Rate is not available for any reason with respect to such
currency, the Trustee shall use, in its sole discretion and without
liability on its part, such quotation of the Federal Reserve Bank of New
York or, in the case of ECUs, the rate of exchange as published in the
Journal, as of the most recent available date, or quotations or, in the
case of ECUs, rates of exchange from one or more major banks in The City of
New York or in the country of issue of the currency in question or, in the
case of ECUs, in Brussels, Belgium, or such other quotations or, in the
case of ECUs, rates of exchange as the Trustee, upon consultation with the
Company, shall deem appropriate. The provisions of this paragraph shall
apply in determining the equivalent principal amount in respect of
Securities of a Series denominated in currency other than Dollars in
connection with any action taken by Holders of Securities pursuant to the
terms of this Indenture.
All decisions and determinations of the Trustee regarding the
Market Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the
absence of manifest error, be conclusive to the extent permitted by law for
all purposes and irrevocably binding upon the Company and all Holders.
SECTION 10.16 Judgment Currency.
-----------------
The Company agrees, to the fullest extent that it may effectively
do so under applicable law, that (a) if for the purpose of obtaining
judgment in any court it is necessary to convert the sum due in respect of
the principal of or interest or other amount on the Securities of any
Series (the "Required Currency") into a currency in which a judgment will
be rendered (the "Judgment Currency"), the rate of exchange used shall be
the rate at which in accordance
47
<PAGE>
with normal banking procedures the Trustee could purchase in The City of
New York the Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a New
York Banking Day, then, to the extent permitted by applicable law, the rate
of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which final unappealable judgment is entered and (b)
its obligations under this Indenture to take payments in the Required
Currency (i) shall not be discharged or satisfied by any tender, any
recovery pursuant to any judgment (whether or not entered in accordance
with subsection (a)), in any currency other than the Required Currency,
except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose
of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable, and (iii) shall not be affected by judgment
being obtained for any other sum due under this Indenture. For purposes of
the foregoing, "New York Banking Day" means any day except a Saturday,
Sunday or a legal holiday in The City of New York on which banking
institutions are authorized or required by law, regulation or executive
order to close.
ARTICLE 11
SINKING FUNDS
SECTION 11.1 Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking
fund for the retirement of the Securities of a Series, except as otherwise
permitted or required by any form of Security of such Series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by
the terms of the Securities of any Series is herein referred to as a
"mandatory sinking fund payment" and any other amount provided for by the
terms of Securities of such Series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any
Series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 11.2. Each sinking fund payment shall be
applied to the redemption of Securities of any Series as provided for by
the terms of the Securities of such Series.
SECTION 11.2 Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company may, in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such Series to be
made pursuant to the terms of such Securities (1) deliver outstanding
Securities of such Series to which such sinking fund payment is applicable
(other than any of such Securities previously called for mandatory sinking
fund redemption) and (2) apply as credit Securities of such Series to which
such sinking fund payment is applicable and which have been redeemed either
at the election of the Company pursuant to
48
<PAGE>
the terms of such Series of Securities (except pursuant to any mandatory
sinking fund) or through the application of permitted optional sinking fund
payments or other optional redemptions pursuant to the terms of such
Securities, provided that such Securities have not been previously so
credited. Such Securities shall be received by the Trustee, together with
an Officers' Certificate with respect thereto, not later than 15 days prior
to the date on which the Trustee begins the process of selecting Securities
for redemption, and shall be credited for such purpose by the Trustee at
the price specified in such Securities for redemption through operation of
the sinking fund and the amount of such sinking fund payment shall be
reduced accordingly. If as a result of the delivery or credit of
Securities in lieu of cash payments pursuant to this Section 11.2, the
principal amount of Securities of such Series to be redeemed in order to
exhaust the aforesaid cash payment shall be less than $100,000, the Trustee
need not call Securities of such Series for redemption, except upon receipt
of a Company Order that such action be taken, and such cash payment shall
be held by the Trustee or a Paying Agent and applied to the next succeeding
sinking fund payment, provided, however, that the Trustee or such Paying
--------- --------
Agent shall from time to time upon receipt of a Company Order pay over and
deliver to the Company any cash payment so being held by the Trustee or
such Paying Agent upon delivery by the Company to the Trustee of Securities
of that Series purchased by the Company having an unpaid principal amount
equal to the cash payment required to be released to the Company.
SECTION 11.3 Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 60 days (unless otherwise indicated in the Board
Resolution or Officers' Certificate or supplemental indenture in respect of
a particular Series of Securities) prior to each sinking fund payment date
for any Series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing mandatory
sinking fund payment for that Series pursuant to the terms of that Series,
the portion thereof, if any, which is to be satisfied by payment of cash
and the portion thereof, if any, which is to be satisfied by delivering and
crediting of Securities of that Series pursuant to Section 11.2, and the
optional amount, if any, to be added in cash to the next ensuing mandatory
sinking fund payment, and the Company shall thereupon be obligated to pay
the amount therein specified. Not less than 45 days (unless otherwise
indicated in the Board Resolution or Officers' Certificate or supplemental
indenture in respect of a particular Series of Securities) before each such
sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in
Section 3.2 and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided in Section
3.3. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 3.4, 3.5
and 3.6.
49
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
MATTEL, INC.
(SEAL) By: __________________________________
Name:
Attest: Title:
CHEMICAL TRUST COMPANY OF CALIFORNIA
By: __________________________________
Name:
Title:
50
<PAGE>
EXHIBIT 5
[LETTERHEAD OF IRELL & MANELLA]
August 4, 1994
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Re: Debt Securities of Mattel, Inc.
-------------------------------
Ladies and Gentlemen:
We have acted as counsel to Mattel, Inc., a Delaware corporation (the
"Company"), in connection with the Company's Registration Statement on Form
S-3, File No. 33-_____________ (the "Registration Statement"), filed with the
Securities and Exchange Commission with respect to the registration under the
Securities Act of 1933, as amended (the "Act"), of $250,000,000 aggregate
initial offering price of one or more series of the Company's debt securities
(the "Debt Securities"), which may be issued from time to time pursuant to Rule
415 under the Act. The Debt Securities will be issued pursuant to an Indenture
(the "Indenture") between the Company and Chemical Trust Company of California,
as trustee ("the Trustee"), and will be subject to specific terms pertaining to
each respective series of Debt Securities as determined at the time of sale and
as set forth either in a supplemental indenture or resolutions of the Company's
Board of Directors in accordance with the terms of the Indenture (the "Amendment
Procedures").
As such counsel, we have examined the Registration Statement and a form
of the Indenture and have made such other factual and legal investigations as we
deemed necessary or appropriate in order to render this opinion. Further, we are
familiar with additional corporate procedures that the Company contemplates
taking prior to the issuance of any series of Debt Securities, including the
Amendment Procedures.
Based upon such examinations and investigations and subject to such
additional corporate procedures (including the Amendment Procedures) being taken
as now contemplated by the
<PAGE>
[LETTERHEAD OF IRELL & MANELLA]
Mattel, Inc.
August 4, 1994
Page 2
Company prior to the issuance of any series of Debt Securities, it is our
opinion that, upon the issuance and sale of the Debt Securities against payment
therefor, and assuming the due authorization and execution of the Debt
Securities by the Company and the authentication thereof by the Trustee in
accordance with the terms of the Indenture, the Debt Securities will be legally
issued and will constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to the
binding and enforceable nature of such obligations, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
This opinion is rendered solely for your benefit in connection with the
transactions decribed above. This opinion may not be used or relied upon by any
other person and may not be disclosed, quoted, filed with a governmental agency
or otherwise referred to without our prior written consent. However, we hereby
consent to the use of this opinion as an exhibit to the Registration Statement
and to the use of our name under the heading "Legal Matters" in the Prospectus
constituting part of the Registration Statement.
Sincerely,
/s/ IRELL & MANELLA
Irell & Manella
<PAGE>
EXHIBIT 12.0
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in thousands, except ratios)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED(a)
------------------------ -------------------------------------------------------------------
June 30, June 30, Dec. 31, Dec. 31, Dec. 31, Dec. 29, Dec. 30,
1994 1993(a) 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR FIXED
CHARGES:
Income before income taxes,
cumulative effect of
changes in accounting
principles and extraordinary
item $127,351 $90,238 $236,646 $282,945 $214,326 $143,482 $109,165
Less (plus) minority interest
and undistributed income (loss)
of less-than-majority-owned
affiliates, net (43) 18 124 (23) 2,432 3,319 708
Add:
Interest expense 19,613 28,138 62,614 68,716 64,334 49,929 53,251
Appropriate portion of rents(b) 7,036 5,655 11,276 11,898 7,871 7,115 6,696
-------- -------- -------- -------- -------- -------- --------
Earnings available for fixed
charges $153,957 $124,049 $310,660 $363,536 $288,963 $203,845 $169,820
======== ======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense $19,613 $28,138 $62,614 $68,716 $64,334 $49,929 $53,251
Capitalized interest - - - - - 4,240 -
Appropriate portion of rents(b) 7,036 5,655 11,276 11,898 7,871 7,115 6,696
-------- -------- -------- -------- -------- -------- --------
Fixed charges(c) $26,649 $33,793 $73,890 $80,614 $72,205 $61,284 $59,947
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed
charges 5.78 X 3.67 X 4.20 X 4.51 X 4.00 X 3.33 X 2.83 X
======== ======== ======== ======== ======== ======== ========
</TABLE>
(a) Consolidated financial information for 1993, 1992 and 1991 has been
restated for the effects of the November 1993 merger of Fisher-Price, Inc.
into a wholly-owned subsidiary of the Company, accounted for as a pooling
of interests. Fisher-Price, Inc. was excluded from periods prior to July 1,
1991, while its business was operated as a division of The Quaker Oats
Company.
(b) Portion of rental expenses which is deemed representative of an interest
factor, not to exceed one-third of total rental expense.
(c) Until July 1, 1991, the Company was a guarantor of certain foreign bank
lines of credit extended to less-than-majority-owned joint ventures.
Performance by the Company pursuant to these guarantees was deemed
unlikely, thus the associated fixed charges have been excluded from
computation of the ratio of earnings to fixed charges. The portion of fixed
charges paid by less-than-majority-owned joint ventures for which the
Company was guarantor was approximately $4.5 million, $4.8 million, and
$5.5 million in 1991, 1990 and 1989, respectively.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 8, 1994, which appears on page 51 of the 1993 Annual Report to
Shareholders of Mattel, Inc., which is incorporated by reference in Mattel,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1993. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedules, which appears on page 30 of such Annual Report on
Form 10-K. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
PRICE WATERHOUSE LLP
Los Angeles, California
August 3, 1994
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Mattel, Inc. on Form S-3 of our report dated February 4, 1993, on our audit of
the consolidated financial statements and financial statement schedules of
Fisher-Price, Inc. as of January 3, 1993, and for the fiscal year then ended,
which report is included in the Mattel, Inc. Annual Report on Form 10-K for the
year ended December 31, 1993. We also consent to the reference to our firm
under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Rochester, New York
August 1, 1994
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated February 11, 1992
included in Mattel, Inc.'s Form 10-K for the year ended December 31, 1993 and to
all references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN & CO.
Rochester, New York
August 1, 1994
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Mattel, Inc. of
our report dated January 31, 1994 relating to the consolidated financial
statements of Kransco, which appears in the Current Report on Form 8-K/A-1 of
Mattel, Inc. dated June 30, 1994. We also consent to the reference to us under
the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
San Francisco, California
August 3, 1994
<PAGE>
EXHIBIT 25
CONFORMED
_____________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM T-l
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(B)(2)_________
___________________________
CHEMICAL TRUST COMPANY OF CALIFORNIA
(formerly Manufacturers Hanover Trust Company of California)
(Exact name of trustee as specified in its charter)
CALIFORNIA 94-2926573
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
50 California Street
San Francisco, California 94111
(Address of principal executive offices) (Zip Code)
___________________________
MATTEL, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 95-1567322
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
333 Continental Boulevard
El Segundo, California 90245-5012
(Address of principal executive offices) (Zip Code)
___________________________
Debt Securities
(Title of the indenture securities)
__________________________________
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the State of California,
235 Montgomery Street, San Francisco, California 94104-2980.
Board of Governors of the Federal Reserve System,
Washington, D.C. 20551
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
ITEM 16. LIST OF EXHIBITS
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Incorporation of the Trustee as now in
effect, including the Restated Articles of Incorporation dated December 23, 1986
and the Certificate of Amendment dated March 26, 1992 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 33-55136, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (See Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-55136, which is incorporated by reference).
3. Authorization to exercise corporate trust powers (Contained in
Exhibit 2).
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-55136, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 21(b) of the Act
(See Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-55136, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical Trust Company of California, a corporation organized and
existing under the laws of the State of California, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Los Angeles and State of
California, on the 4th day of August, 1994.
CHEMICAL TRUST COMPANY OF CALIFORNIA
By /s/ Paula Oswald
------------------------
PAULA OSWALD
Assistant Vice President
3
<PAGE>
EXHIBIT 7. Report of Condition of the Trustee.
- --------------------------------------------------------------------------------
4
<PAGE>
TRUST COMPANY
CONSOLIDATED REPORT OF CONDITION OF Chemical Trust Company of California
--------------------------------------------
(Legal Title)
LOCATED AT San Francisco San Francisco CA 94111
---------------------------------------------------------------------
(City) (County) (State) (Zip)
AS OF CLOSE OF BUSINESS ON June 30, 1994 BANK NO. 1476
------------------------------- ----
================================================================================
================================================================================
ASSETS DOLLAR AMOUNT IN THOUSANDS
<TABLE>
<S> <C>
1. Cash and due from banks 3,334
2. U.S. Treasury securities 5,940
3. Obligations of other U.S. Government agencies and corporations 1,495
4. Obligations of States and political subdivisions
5. Other securities (including $ corporate stock)
--------------
(a) Loans
(b) Less: Reserve for possible loan losses
(c) Loans (Net)
7. Bank Premises, furniture and fixtures and other assets
representing bank premises (including $ -0- capital leases) 253
----------
8. Real estate owned other than bank premises
9. Investments in subsidiaries not consolidated
10. Other assets (complete schedule on reverse)
(including $2,513 intangibles) 7,550
------
11. TOTAL ASSETS 18,572
======
LIABILITIES
12. Liabilities For borrowed money
13. Mortgage indebtedness (including $ capital leases)
-------------
14. Other liabilities (complete on schedule on reverse) 3,173
15. TOTAL LIABILITIES 3,173
======
16. Capital notes and debentures
SHAREHOLDERS EQUITY
17. Preferred stock--
(Number shares outstanding ) Amount $
-------------
18. Common stock--
(Number shares authorized 100 ) Amount $
-------------
(Number shares outstanding 100 ) Amount $ 10
-------------
19. Surplus Amount $ 9,990
20. TOTAL CONTRIBUTED CAPITAL 10,000
21. Retained earnings and other capital reserves 5,399
22. TOTAL SHAREHOLDERS EQUITY 15,399
23. TOTAL LIABILITIES AND CAPITAL ACCOUNTS 18,572
======
</TABLE>
5
<PAGE>
MEMORANDA
1. Assets deposited with State Treasurer to qualify for
exercise of fiduciary powers (market value) 605
- -------------------------------------------------------------------------------
The undersigned, Andrew Wilcox, Managing Director and
-------------------------------------
(Name and Title)
Patrick D. Fleck, Vice President & CFO
--------------------------------------
(Name and Title)
of the above named trust company, each declares, for himself alone and not for
the other: I have a personal knowledge of the matters contained in this report
(including the reverse side hereof), and I believe that each statement in said
report is true. Each of the undersigned, for himself alone and not for the
other, certifies under penalty of perjury that the foregoing is true and
correct.
Executed on 7/28/94, at San Francisco, California
-------- --------------
(Date) (City)
s/Andrew Wilcox s/Patrick D. Fleck
--------------- ------------------
(Signature) (Signature)
<TABLE>
<CAPTION>
SCHEDULE OF OTHER ASSETS
<S> <C>
Cost of Business Acquisitions 2,513
Accounts Receivable 4,491
Accrued Interest 107
Deferred Taxes 318
Other 121
Total (same as Item 10) 7,550
SCHEDULE OF OTHER LIABILITIES
Accrued Income Taxes 1,269
Accrued Expenses & A/P 218
Accrued Inter company Exp/Pay 805
Accrued Pension & Benefits 857
Other 24
Total (same as Item 14) 3,173
</TABLE>
6
