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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: September 19, 1994
MATTEL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 001-05647 95-1567322
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File No.) Identification No.)
333 Continental Boulevard, El Segundo, California 90245-5012
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 252-2000
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N/A
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(Former name or former address, if changed since last report)
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Item 7. Financial Statements and Exhibits
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(a) Financial statements of businesses acquired: None
(b) Pro forma financial information: None
(c) Exhibits:
4.1 Indenture between the Registrant and Chemical Trust
Company of California, as Trustee, dated as of August 1,
1994
4.2 Form of Fixed Rate Note
4.3 Form of Floating Rate Note
99.0 Distribution Agreement dated September 19, 1994
2
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
MATTEL, INC.
Registrant
By: /s/ Robert Normile
-----------------------------
Robert Normile
Vice President, Assistant
General Counsel and Assistant
Date: September 19, 1994 Secretary
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3
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MATTEL, INC.
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INDENTURE
Dated as of August 1, 1994
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CHEMICAL TRUST COMPANY OF CALIFORNIA
Trustee
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE............................ 1
SECTION 1.1 Definitions........................................ 1
SECTION 1.2 Other Definitions.................................. 7
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.. 7
SECTION 1.4 Rules of Construction.............................. 8
ARTICLE II
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............................. 13
SECTION 2.8 Mutilated, Destroyed, Lost and Stolen Securities.. 13
SECTION 2.9 Outstanding Securities............................ 14
SECTION 2.10 Treasury Securities............................... 14
SECTION 2.11 Temporary Securities.............................. 15
SECTION 2.12 Cancellation...................................... 15
SECTION 2.13 Defaulted Interest................................ 15
SECTION 2.14 Global Securities................................. 15
SECTION 2.15 CUSIP Numbers..................................... 17
ARTICLE III
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
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ARTICLE IV
COVENANTS.............................................................. 19
SECTION 4.1 Payment of Principal and Interest................... 19
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................................. 20
SECTION 4.6 Taxes............................................... 20
SECTION 4.7 Limitation on Liens................................. 20
SECTION 4.8 Limitation on Sale/Leaseback Transactions........... 21
ARTICLE V
SUCCESSORS............................................................. 22
SECTION 5.1 When Company May Merge, Etc......................... 22
SECTION 5.2 Successor Corporation Substituted................... 22
ARTICLE VI
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............................ 29
SECTION 6.14 Undertaking for Costs.............................. 30
ARTICLE VII
TRUSTEE................................................................ 30
SECTION 7.1 Duties of Trustee.................................. 30
SECTION 7.2 Rights of Trustee.................................. 31
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SECTION 7.3 Individual Rights of Trustee........................... 32
SECTION 7.4 Trustee's Disclaimer................................... 32
SECTION 7.5 Notice of Defaults..................................... 32
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...... 35
ARTICLE VIII
SATISFACTION AND DISCHARGE................................................ 35
SECTION 8.1 Satisfaction and Discharge of Indenture..................35
SECTION 8.2 Application of Trust Funds; Indemnification..............36
SECTION 8.3 Satisfaction, Discharge and Defeasance of
Securities of any Series............................... 37
SECTION 8.4 Defeasance of Certain Obligations...................... 39
SECTION 8.5 Repayment to Company................................... 40
ARTICLE IX
AMENDMENTS AND WAIVERS.................................................... 40
SECTION 9.1 Without Consent of Holders............................. 40
SECTION 9.2 With Consent of Holders................................ 41
SECTION 9.3 Limitations............................................ 41
SECTION 9.4 Compliance with Trust Indenture Act.................... 42
SECTION 9.5 Revocation and Effect of Consents...................... 42
SECTION 9.6 Notation on or Exchange of Securities.................. 42
SECTION 9.7 Trustee Protected...................................... 42
ARTICLE X
MISCELLANEOUS............................................................. 43
SECTION 10.1 Trust Indenture Act Controls.......................... 43
SECTION 10.2 Notices............................................... 43
SECTION 10.3 Communication by Holders with Other Holders........... 44
SECTION 10.4 Certificate and Opinion as to Conditions Precedent.... 44
SECTION 10.5 Statements Required in Certificate or Opinion......... 44
SECTION 10.6 Rules by Trustee and Agents........................... 44
SECTION 10.7 Legal Holidays........................................ 45
SECTION 10.8 No Recourse Against Others............................ 45
SECTION 10.9 Counterparts.......................................... 45
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SECTION 10.10 Governing Laws.......................................... 45
SECTION 10.11 No Adverse Interpretation of Other Agreements........... 45
SECTION 10.12 Successors.............................................. 45
SECTION 10.13 Severability............................................ 45
SECTION 10.14 Table of Contents, Headings, Etc........................ 46
SECTION 10.15 Securities in a Foreign Currency or in ECU.............. 46
SECTION 10.16 Judgment Currency....................................... 46
ARTICLE XI
SINKING FUNDS........................................................ 47
SECTION 11.1 Applicability of Article................................ 47
SECTION 11.2 Satisfaction of Sinking Fund Payments with Securities... 47
SECTION 11.3 Redemption of Securities for Sinking Fund............... 48
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MATTEL, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of August 1, 1994
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(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
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(S) 317(a)(1)............................. 6.3
(a)(2)............................. 6.4
(b)................................ 2.5
(S) 318(a)................................ 10.1
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Note: This reconciliation and tie shall not, for any purpose, be
deemed to be part of the Indenture.
vi
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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 I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
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"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.
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"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.
"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.
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"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.
"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:
(a) 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;
(b) any liability of others described in the preceding clause (a) that
the person has guaranteed or that is otherwise its legal liability; and
(c) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses
(a) and (b) above.
3
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"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).
"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
(a) 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;
(b) 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;
(c) 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;
(d) 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;
4
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(e) 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;
(f) Liens relating to a judgment or other court-ordered award or
settlement as to which the Company has not exhausted its appellate rights.
(g) 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.
5
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"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 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,
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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.
6
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SECTION 1.2 Other Definitions.
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DEFINED IN
TERM SECTION
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"Bankruptcy Law"................... 6.1
"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
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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.
7
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SECTION 1.4 Rules of Construction.
---------------------
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles;
(c) 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;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the plural
include the singular; and
(f) provisions apply to successive events and transactions.
ARTICLE II
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, a supplemental indenture hereto or an Officers'
Certificate pursuant to authority granted under a Board Resolution:
8
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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);
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
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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;
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 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.
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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.
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
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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 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.
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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 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.
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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.
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.
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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.
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
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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 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.
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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.
ARTICLE III
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
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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:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(e) that interest on Securities of the Series called for redemption
ceases to accrue on and after the redemption date; and
(f) 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.
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ARTICLE IV
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.
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(e), 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
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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 V, 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 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:
(a) Liens existing on the date hereof or arising under this
Indenture;
(b) 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;
(c) 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;
20
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(d) 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;
(e) 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
(f) 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;
(f) 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;
(g) 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
(h) 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 (h), and the aggregate amount
(before deducting expenses) of Sale/Leaseback Transactions which would
otherwise be permitted under the provisions of Section 4.8(a), 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:
(a) the Company or such Subsidiary would be permitted, pursuant to
the terms of Section 4.7(h), 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
(b) 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
21
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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).
ARTICLE V
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:
(a) 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;
(b) 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
(c) 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 VI
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 (e) 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):
(a) 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
(b) default in the payment of the principal of any Security of that
Series at its Maturity; or
(c) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that Series; or
(d) 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
(e) 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
23
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stated final maturity or the maturity of which has been so accelerated,
aggregates $10,000,000 or more at any one time outstanding; or
(f) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is unable to pay its debts as the same become due;
or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case,
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of its
property, or
(iii) 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.
(h) 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
24
<PAGE>
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 specified amount) shall become immediately due and
payable. If an Event of Default specified in Section 6.1(f) or (g) 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:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest on all Securities of that Series,
(ii) 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,
(iii) 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
(iv) 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
(b) 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
(a) 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
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<PAGE>
(b) default is made in the payment of principal of any Security at
the Maturity thereof, or
(c) 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,
(a) 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
26
<PAGE>
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
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.
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<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
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
Series;
(b) 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;
(c) 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;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) 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 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
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<PAGE>
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
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(c) 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.
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
29
<PAGE>
(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
IX 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).
ARTICLE VII
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:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(ii) 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
30
<PAGE>
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:
(i) This paragraph does not limit the effect of paragraph (b) of
this Section.
(ii) 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.
(iii) 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.
(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
31
<PAGE>
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.
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
32
<PAGE>
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.
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.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) 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:
(a) the Trustee fails to comply with Section 7.10;
(b) 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;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
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
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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).
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 VIII
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
(a) either
(i) 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
35
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(ii) all such Securities not theretofore delivered to the Trustee
for cancellation
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity
within one year, or
(3) 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
(4) are deemed paid and discharged pursuant to Section 8.3,
as applicable;
and the Company, in the case of (1), (2) or (3) 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;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) 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 (a) 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
36
<PAGE>
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.
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;
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<PAGE>
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;
(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
38
<PAGE>
(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 (a) 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 (e) 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:
(a) 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;
(b) 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;
(c) 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;
(d) 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
39
<PAGE>
the same times as would have been the case if such deposit and defeasance
had not occurred;
(e) 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
(f) 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.
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 IX
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:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) 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;
(d) to make any change that does not adversely affect the rights of
any Securityholder;
(e) to provide for the issuance of and establish the form and terms
and conditions of Securities of any Series as permitted by this Indenture;
(f) 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
40
<PAGE>
(g) 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 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:
(a) change the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of interest
(including default interest) on any Security;
(c) 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;
(d) 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);
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(e) make the Security payable in currency other than that stated in
the Security;
(f) make any change in Sections 6.8, 6.13, 9.3 (this sentence), 10.15
or 10.16; or
(g) waive a redemption payment with respect to any Security or change
any of the provisions with respect to the redemption of any Securities.
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 (a) through (g) 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 executing, 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.
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ARTICLE X
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.
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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:
(a) 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
(b) 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:
(a) a statement that the person making such certificate or opinion
has read such covenant or condition;
(b) 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;
(c) 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
(d) 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.
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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.
45
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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 Luxemburg 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
with normal banking procedures the Trustee could purchase in The City of New
York the
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<PAGE>
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 XI
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 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
47
<PAGE>
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.
48
<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: /s/ WILLIAM STAVRO
------------------------------------
William Stavro
Attest: /s/ Robert Normile Vice President and Treasurer
------------------------
Robert Normile
Assistant Secretary
CHEMICAL TRUST COMPANY OF CALIFORNIA
By: /s/ HANS H. HELLEY
------------------------------------
Hans H. Helley
Assistant Vice President
49
<PAGE>
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
----------------------
County of Los Angeles
---------------------
On 9/15/94 before me, Deborah Abele, Notary Public
------- -------------------------------------------------------,
DATE NAME, TITLE OF OFFICER - E.G., "JANE DOE, NOTARY PUBLIC"
personally appeared William Stavro
-----------------------------------------------------------,
NAME(S) OF SIGNER(S)
[X] personally known to me - OR - [_] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument
and acknowledged to me that he/she/they
executed the same in his/her/their
DEBORAH ABELE authorized capacity(ies), and that by
COMM. #974911 his/her/their signature(s) on the
[SEAL] Notary Public - California instrument the person(s), or the entity
LOS ANGELES COUNTY upon behalf of which the person(s) acted,
My Comm. Expires OCT 4, 1996 executed the instrument.
WITNESS my hand and official seal.
/s/ DEBORAH ABELE
------------------------------------------
SIGNATURE OF NOTARY
- - --------------------------------- OPTIONAL -------------------------------------
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
[_] INDIVIDUAL
[X] CORPORATE OFFICER
Vice Pres. & Treasurer Indenture
________________________________ _______________________________________
TITLE(S) TITLE OR TYPE OF DOCUMENT
[_] PARTNER(S) [_] LIMITED
[_] GENERAL _______________________________________
[_] ATTORNEY-IN-FACT NUMBER OF PAGES
[_] TRUSTEE(S)
[_] GUARDIAN/CONSERVATOR
[_] OTHER: _________________________ _______________________________________
________________________________ DATE OF DOCUMENT
________________________________
SIGNER IF REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
Mattel, Inc. _______________________________________
____________________________________ SIGNER(S) OTHER THAN NAMED ABOVE
____________________________________
50
<PAGE>
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
----------------------
County of Los Angeles
---------------------
On 9/19/94 before me, Nancy G. Johnson
------- -------------------------------------------------------,
DATE NAME, TITLE OF OFFICER - E.G., "JANE DOE, NOTARY PUBLIC"
personally appeared Hans H. Helley
-----------------------------------------------------------,
NAME(S) OF SIGNER(S)
[X] personally known to me - OR - [_] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument
and acknowledged to me that he/she/they
executed the same in his/her/their
NANCY G. JOHNSON authorized capacity(ies), and that by
COMM. #1003109 his/her/their signature(s) on the
[SEAL] Notary Public - California instrument the person(s), or the entity
LOS ANGELES COUNTY upon behalf of which the person(s) acted,
My Comm. Expires AUG 26, 1997 executed the instrument.
WITNESS my hand and official seal.
/s/ NANCY G. JOHNSON
------------------------------------------
SIGNATURE OF NOTARY
- - --------------------------------- OPTIONAL -------------------------------------
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
[_] INDIVIDUAL
[X] CORPORATE OFFICER
Asst. VP
________________________________ _______________________________________
TITLE(S) TITLE OR TYPE OF DOCUMENT
[_] PARTNER(S) [_] LIMITED
[_] GENERAL _______________________________________
[_] ATTORNEY-IN-FACT NUMBER OF PAGES
[_] TRUSTEE(S)
[_] GUARDIAN/CONSERVATOR
[_] OTHER: _________________________ _______________________________________
________________________________ DATE OF DOCUMENT
________________________________
SIGNER IF REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
Chemical Trust Company of California _______________________________________
____________________________________ SIGNER(S) OTHER THAN NAMED ABOVE
____________________________________
51
<PAGE>
(FORM OF FACE OF SECURITY)
MATTEL, INC.
SERIES A MEDIUM-TERM NOTE
Fixed Rate Note
REGISTERED REGISTERED
No. FXR- [PRINCIPAL AMOUNT]
CUSIP:
If the registered owner of this Security (as indicated below) is The
Depository Trust Company (the "Depository") or a nominee of the Depository, this
Security is a Global Security and the following two legends apply:
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 of the
Depository or a nominee of such successor.
Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Issuer (as defined below) or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY" AND
"INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET FORTH
BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME
TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
<PAGE>
<TABLE>
<S> <C> <C> <C>
ORIGINAL INITIAL INTEREST RATE: ORIGINAL
ISSUE DATE: REDEMPTION MATURITY DATE:
PERCENTAGE:
INTEREST ANNUAL APPLICABILITY FINAL MATURITY
ACCRUAL DATE: REDEMPTION OF MODIFIED DATE:
PERCENTAGE PAYMENT UPON
REDUCTION: ACCELERATION:
TOTAL AMOUNT If yes, state OPTIONAL
OF OID: ISSUE PRICE: REPAYMENT
DATES:
ORIGINAL YIELD SPECIFIED APPLICABILITY
TO MATURITY: CURRENCY: OF ANNUAL
INTEREST
INITIAL PAYMENTS:
ACCRUAL
REDEMPTION
DATE:
INITIAL RECORD DATES
REDEMPTION (IF OTHER THAN
DATE: MAY 1 AND
NOVEMBER 1):
OTHER TERMS:
</TABLE>
Mattel, Inc., a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to
,
or registered assignees, the principal sum of
_______________________________________, on the Original Maturity Date specified
above (except to the extent redeemed or repaid prior to the Original Maturity
Date) or, if the maturity hereof is extended in accordance with the procedures
set forth below to an Extended Maturity Date, as defined below, on such Extended
Maturity Date (except to the extent previously redeemed or repaid) and to pay
interest thereon at the Interest Rate per annum specified above or, if the
interest rate herein is reset or re-established in connection with an extension
of maturity in accordance with the procedures specified on the reverse hereof,
at the interest rate per annum determined pursuant to such procedures, from the
Interest Accrual Date specified above until the principal hereof is paid or duly
made available for payment (except as provided below), semiannually (unless
otherwise specified on the face hereof) in arrears on the fifteenth day of May
and November in each year (unless otherwise specified on the face hereof) (each
such date an "Interest Payment Date") commencing on the Interest Payment Date
next succeeding the Interest Accrual Date specified above, and at maturity (or
on any redemption or repayment date); provided, however, that if the Interest
Accrual Date occurs between a Record Date, as defined below, and the next
succeeding Interest Payment
2
<PAGE>
Date, interest payments will commence on the second Interest Payment Date
succeeding the Interest Accrual Date to the registered holder of this Note on
the Record Date with respect to such second Interest Payment Date; and provided,
further, that if this Note is subject to "Annual Interest Payments," interest
payments shall be made annually in arrears and the term "Interest Payment Date"
shall be deemed to mean the fifteenth day of November in each year.
Interest on this Note will accrue from the most recent Interest
Payment Date to which interest has been paid or duly provided for, or, if no
interest has been paid or duly provided for, from the Interest Accrual Date,
until the principal hereof has been paid or duly made available for payment
(except as provided below). The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, subject to certain
exceptions described herein, be paid to the person in whose name this Note (or
one or more predecessor Notes) is registered at the close of business on the
date 15 calendar days prior to such Interest Payment Date, whether or not a
Business Day, unless otherwise provided on the face hereof (each such date a
"Record Date"); provided, however, that interest payable at maturity (or on any
-------- -------
redemption or repayment date) will be payable to the person to whom the
principal hereof shall be payable. As used herein, "Business Day" means (1) any
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which banking institutions are authorized or required by law or regulation to
close in The City of New York, New York, or Los Angeles, California, and (2)(i)
with respect to Notes denominated in a Specified Currency other than U.S.
dollars, Australian dollars, or ECUs, in the principal financial center of the
country of the Specified Currency, (ii) with respect to Notes denominated in
Australian dollars, in Sydney, and (iii) with respect to Notes denominated in
ECUs, in Luxemburg and that is not a non-ECU clearing day, as determined by the
ECU Banking Association in Paris.
Payment of the principal of this Note, any premium and the interest
due at maturity (or on any redemption or repayment date) will be made in
immediately available funds upon surrender of this Note at the principal
corporate trust office of the Trustee or at the office or agency of the Trustee
maintained for that purpose in The City of New York, New York, or at such other
paying agency as the Issuer may determine. Payment of the principal of and
premium, if any, and interest on this Note will be made in the Specified
Currency indicated above; provided, however, that U.S. dollar payments of
-------- -------
interest, other than interest due at maturity or on any date of redemption or
repayment, will be made by U.S. dollar check mailed to the address of the person
entitled thereto as such address shall appear in the Note register. A holder of
U.S. $10,000,000 or more in aggregate principal amount of Notes having the same
Interest Payment Date will be entitled to receive payments of interest, other
than interest due at maturity or on any date of redemption or repayment, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date. If this Note is
denominated in a Specified Currency other than U.S. dollars, payments of
interest hereon will be made by wire transfer of immediately available funds to
an account maintained by the holder hereof with a bank located outside the
United States if appropriate wire transfer instructions have been received by
the Paying Agent in writing not less than 15 calendar days prior to the
applicable Interest Payment Date. If such wire transfer instructions are not so
received, such interest payments will be made by check payable in such Specified
Currency mailed to the address of the person entitled thereto as such address
shall appear in the Note register.
3
<PAGE>
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed under its corporate seal.
DATED: MATTEL, INC.
By
-----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred to
in the within-mentioned Indenture.
CHEMICAL TRUST COMPANY OF CALIFORNIA,
as Trustee
By
------------------------------------
Authorized Officer
4
<PAGE>
(FORM OF REVERSE OF SECURITY)
This Note is one of a duly authorized issue of Series A Medium-Term
Notes having maturities of more than nine months from the date of issue (the
"Notes") of the Issuer. The Notes are issuable under an indenture dated as of
August 1, 1994, duly executed and delivered by the Issuer to Chemical Trust
Company of California, Trustee (herein called the "Trustee"), to which indenture
and all indentures supplemental thereto (herein called the "Indenture")
reference is hereby made for a statement of the respective rights, limitations
of rights and immunities of the Issuer, the Trustee and holders of the Notes and
the terms upon which the Notes are, and are to be, authenticated and delivered.
The Issuer has appointed Chemical Trust Company of California as the paying
agent (the "Paying Agent," which term includes any additional or successor
Paying Agent appointed by the Issuer) with respect to the Notes. The terms of
individual Notes may vary with respect to interest rates, interest rate
formulas, issue dates, maturity dates, or otherwise, all as provided in the
Indenture. To the extent not inconsistent herewith, the terms of the Indenture
are hereby incorporated by reference herein.
This Note will not be subject to any sinking fund and, unless
otherwise provided on the face hereof in accordance with the provisions of the
following two paragraphs, will not be redeemable or subject to repayment at the
option of the holder prior to maturity.
If so indicated on the face of this Note, this Note may be redeemed in
whole or in part at the option of the Issuer on or after the Initial Redemption
Date specified on the face hereof on the terms set forth on the face hereof and
at a redemption price (expressed as a percentage of the principal amount hereof)
equal to the Initial Redemption Percentage, together with interest accrued and
unpaid hereon to the date of redemption. If this Note is subject to "Annual
Redemption Percentage Reduction," the Initial Redemption Percentage indicated on
the face hereof will be reduced on each anniversary of the Initial Redemption
Date by the Annual Redemption Percentage Reduction specified on the face hereof
until the redemption price of this Note is 100% of the principal amount hereof,
together with interest accrued and unpaid hereon to the date of redemption.
Notice of redemption shall be mailed by first class mail, postage prepaid, to
the registered holders of the Notes designated for redemption at their addresses
as the same shall appear on the Note register not less than 30 nor more than 60
days prior to the date fixed for redemption, subject to all the conditions and
provisions of the Indenture. In the event of redemption of this Note in part
only, a new Note or Notes for the amount of the unredeemed portion hereof shall
be issued in the name of the holder hereof upon the cancellation hereof, but, in
any event, the principal amount of the Note remaining outstanding after
redemption must be an Authorized Denomination.
If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments of
$1,000 or, if this Note is denominated in a Specified Currency other than U.S.
dollars, in increments of 1,000 units of such Specified Currency (provided that
any remaining principal amount hereof shall not be less than the minimum
Authorized Denomination hereof) at the option of the holder hereof at a price
equal to 100% of the principal
5
<PAGE>
amount to be repaid, together with interest accrued and unpaid hereon to the
date of repayment. For this Note to be repaid at the option of the holder
hereof, the Paying Agent must receive at its principal corporate trust office in
Los Angeles, California, or at its office in The City of New York, New York, at
least 30 days but not more than 60 days prior to the date of repayment, (i) this
Note with the form entitled "Option to Elect Repayment" below duly completed or
(ii) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or a trust company in the United States setting forth
the name of the holder of this Note, the principal amount hereof, the principal
amount hereof to be repaid, the certificate number of this Note or a description
of this Note's tenor and terms, a statement that the option to elect repayment
is being exercised thereby and a guarantee that this Note, together with the
form entitled "Option to Elect Repayment" duly completed, will be received by
the Paying Agent not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; provided, however, that such
-------- -------
telegram, telex, facsimile transmission or letter shall only be effective if
this Note and such form duly completed are received by the Paying Agent by such
fifth Business Day. Effective exercise of such repayment option by the holder
hereof shall be irrevocable. In the event of repayment of this Note in part
only, a new Note or Notes for the amount of the unpaid portion hereof shall be
issued in the name of the holder hereof upon the cancellation hereof, but, in
any event, the principal amount of the Note remaining outstanding after
repayment must be an Authorized Denomination.
If so indicated on the face of this Note, the Issuer has the option to
extend the Original Maturity Date hereof for one or more periods of one or more
whole years (each an "Extension Period") up to but not beyond the Final Maturity
Date specified on the face hereof and in connection therewith to establish a new
interest rate and new redemption provisions for the Extension Period.
The Issuer may exercise such option by notifying the Paying Agent of
such exercise at least 45 but not more than 60 days prior to the Original
Maturity Date or, if the maturity hereof has already been extended, prior to the
maturity date then in effect (an "Extended Maturity Date"), such notice to be
accompanied by the form of the Extension Notice referred to below. No later
than 38 days prior to the Original Maturity Date or an Extended Maturity Date,
as the case may be (each, a "Maturity Date"), the Paying Agent will mail to the
holder hereof a notice (the "Extension Notice") relating to such Extension
Period, by first class mail, postage prepaid, setting forth (a) the election of
the Issuer to extend the maturity of this Note; (b) the new Extended Maturity
Date; (c) the interest rate applicable to the Extension Period; and (d) the
provisions, if any, for redemption during the extension period, including the
date or dates on which, the period or periods during which and the price or
prices at which such redemption may occur during the Extension Period. Upon the
mailing by the Paying Agent of an Extension Notice to the holder of this Note,
the maturity hereof shall be extended automatically, and, except as modified by
the Extension Notice and as described in the next paragraph, this Note will have
the same terms it had prior to the mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 10:00 A.M., New York
City time, on the twentieth calendar day prior to the Maturity Date in effect
immediately preceding the
6
<PAGE>
mailing of the applicable Extension Notice (or if such day is not a Business
Day, not later than 10:00 A.M., New York City time, on the immediately
succeeding Business Day), the Issuer may, at its option, revoke the interest
rate provided for in such Extension Notice and establish a higher interest rate
for the Extension Period by causing the Paying Agent to send notice of such
higher interest rate within seven days of receipt of such notice to the holder
of this Note by first class mail, postage prepaid, or by such other means as
shall be agreed between the Issuer and the Paying Agent. Such notice shall be
irrevocable. All Notes with respect to which the Maturity Date is extended in
accordance with an Extension Notice will bear such higher interest rate for the
Extension Period, whether or not tendered for repayment.
If the Issuer elects to extend the maturity hereof, the holder of this
Note will have the option to require the Issuer to repay this Note on the
Maturity Date in effect immediately preceding the mailing of the applicable
Extension Notice at a price equal to the principal amount hereof plus any
accrued and unpaid interest to such date. In order for this Note to be so
repaid on such Maturity Date, the holder hereof must follow the procedures set
forth above for optional repayment, except that the period for delivery of this
Note or notification to the Paying Agent shall be at least 25 but not more than
35 days prior to the Maturity Date in effect immediately preceding the mailing
of the applicable Extension Notice and except that if the holder hereof has
tendered this Note for repayment pursuant to this paragraph he may, by written
notice to the Paying Agent, revoke any such tender for repayment until 3:00
P.M., New York City time, on the twentieth calendar day prior to the Maturity
Date then in effect (or, if such day is not a Business Day, until 3:00 P.M., New
York City time, on the immediately succeeding Business Day).
Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Unless otherwise specified
on the face hereof, interest payments for this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months.
In the case where the Interest Payment Date or the Maturity Date (or
any redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but will be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.
This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured and
---- -----
unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or exchange
hereof, is issuable only in fully registered form, without coupons, and, if
denominated in U.S. dollars, is issuable only in denominations of U.S. $1,000
and any integral multiple of U.S. $1,000 in
7
<PAGE>
excess thereof. If this Note is denominated in a Specified Currency other than
U.S. dollars, then, unless a higher minimum denomination is required by
applicable law, it is issuable only in denominations of the equivalent of U.S.
$1,000 (rounded to an integral multiple of 1,000 units of such Specified
Currency), or any amount in excess thereof which is an integral multiple of
1,000 units of such Specified Currency, as determined by reference to the noon
dollar buying rate in New York City for cable transfers of such Specified
Currency published by the Federal Reserve Bank of New York (the "Market Exchange
Rate") on the Business Day immediately preceding the date of issuance; provided,
--------
however, that in the case of ECUs, the Market Exchange Rate shall be 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, or any
successor publication, on the Business Day immediately preceding the date of
issuance.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in Los Angeles, California, a register for
the registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee or at the office of the Trustee in The City of
New York, New York, by surrendering this Note for cancellation, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and duly
executed by the registered holder hereof in person or by the holder's attorney
duly authorized in writing, and thereupon the Trustee shall issue in the name of
the transferee or transferees, in exchange herefor, a new Note or Notes having
identical terms and provisions and having a like aggregate principal amount in
authorized denominations, subject to the terms and conditions set forth herein;
provided, however, that the Trustee will not be required (i) to register the
- - -------- -------
transfer of or exchange any Note that has been called for redemption in whole or
in part, except the unredeemed portion of Notes being redeemed in part, (ii) to
register the transfer of or exchange any Note if the holder thereof has
exercised his right, if any, to require the Issuer to repurchase such Note in
whole or in part, except the portion of such Note not required to be
repurchased, or (iii) to register the transfer of or exchange Notes to the
extent and during the period so provided in the Indenture with respect to the
redemption of Notes. Notes are exchangeable at said offices for other Notes of
other authorized denominations of equal aggregate principal amount having
identical terms and provisions. All such exchanges and transfers of Notes will
be free of charge, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge in connection therewith. All Notes
surrendered for exchange shall be accompanied by a written instrument of
transfer in form satisfactory to the Trustee and executed by the registered
holder in person or by the holder's attorney duly authorized in writing. The
date of registration of any Note delivered upon any exchange or transfer of
Notes shall be determined by the Issuer and shall be such that no gain or loss
of interest results from such exchange or transfer.
In case any Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and such Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, a new Note of like tenor will be issued by the Issuer
in exchange for the Note so mutilated or defaced, or in lieu of the Note so
destroyed or lost or stolen, but, in the case of any destroyed or lost or stolen
Note, only upon receipt of evidence satisfactory to the Trustee and the Issuer
that such Note was destroyed, lost or stolen and, if required, upon receipt also
of indemnity satisfactory to each of them. All expenses and
8
<PAGE>
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
holder of the Note mutilated, defaced, destroyed, lost or stolen.
The Indenture provides that if an Event of Default, as defined in the
Indenture, shall occur and be continuing with respect to any series of debt
securities issued under the Indenture including the series of Series A Medium-
Term Notes of which this Note forms a part, the Trustee or the holders of not
less than 25% in aggregate principal amount of the debt securities then
outstanding of the series may, by a notice in writing to the Issuer (and to the
Trustee if given by such holders), declare the principal of, and the premium, if
any, on such series to be due and payable, together with interest accrued
thereon. Any Event of Default with respect to a particular series of debt
securities may be waived by the holders of a majority in aggregate principal
amount of the outstanding debt securities of the series affected, except in each
case a failure to pay the principal of, or premium, if any, or interest on, such
debt securities.
If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is declared to be
due and payable as described in the preceding paragraph, the amount of principal
due and payable with respect to this Note shall be limited to the aggregate
principal amount hereof multiplied by the sum of the Issue Price specified on
the face hereof (expressed as a percentage of the aggregate principal amount)
plus the original issue discount amortized from the Interest Accrual Date to the
date of declaration, which amortization shall be calculated using the "interest
method" (computed in accordance with generally accepted accounting principles in
effect on the date of declaration), (ii) for the purpose of any vote of
securityholders taken pursuant to the Indenture prior to the acceleration of
payment of this Note, the principal amount hereof shall equal the amount that
would be due and payable hereon, calculated as set forth in clause (i) above, if
this Note were declared to be due and payable on the date of any such vote and
(iii) for the purpose of any vote of securityholders taken pursuant to the
Indenture following the acceleration of payment of this Note, the principal
amount hereof shall equal the amount of principal due and payable with respect
to this Note, calculated as set forth in clause (i) above.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the debt securities at the time outstanding of all series to
be affected (or not less than 66 2/3% in aggregate principal amount of any
series affected in case one or more but not all of the series are affected)
evidenced as provided in the Indenture, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in any
manner the rights of the holders of the securities of each such series;
provided, however, that no such supplemental indenture shall, among other
- - -------- -------
matters, (i) change the fixed maturity of any debt security, or reduce the rate
of or extend the time of payment of any interest thereon, or reduce the
principal amount thereof or any premium thereon, or make the principal thereof
or any interest or premium thereon payable in any currency other than that
hereinbefore provided, without the consent of the holder of each debt security
so affected, or (ii) reduce the aforesaid percentage of debt securities, the
9
<PAGE>
holders of which are required to consent to any such supplemental indenture,
without the consent of the holder of each debt security affected.
Except as set forth below, if the principal of, premium, if any, or
interest on, this Note is payable in a Specified Currency other than U.S.
dollars and such Specified Currency is not available to the Issuer for making
payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
then the Issuer will be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis of the Market
Exchange Rate on the date of such payment or, if the Market Exchange Rate is not
available on such date, as of the most recent practicable date. Any payment
made under such circumstances in U.S. dollars where the required payment is in a
Specified Currency other than U.S. dollars will not constitute an Event of
Default.
If payment in respect of this Note is required to be made in ECUs and
ECUs are unavailable due to the imposition of exchange controls or other
circumstances beyond the Issuer's control or are no longer used in the European
Monetary System, then all payments in respect of this Note shall be made in U.S.
dollars until ECUs are again available or so used. The amount of each payment
in U.S. dollars shall be computed on the basis of the equivalent of the ECU in
U.S. dollars, determined as described below, as of the second Business Day prior
to the date on which such payment is due.
The equivalent of the ECU in U.S. dollars as of any date shall be
determined by the Issuer or Chemical Trust Company of California as Exchange
Rate Agent on the following basis. The component currencies of the ECU for this
purpose (the "Components") shall be the currency amounts that were components of
the ECU as of the last date on which the ECU was used in the European Monetary
System. The equivalent of the ECU in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Components. The U.S. dollar
equivalent of each of the Components shall be determined by the Issuer or such
agent on the basis of the most recently available Market Exchange Rates for such
Components.
If the official unit of any Component is altered by way of combination
or subdivision, the number of units of that currency as a Component shall be
combined or subdivided in the same proportion. If two or more Components are
consolidated into a single currency, the amounts of those currencies as
Components shall be replaced by an amount in such single currency equal to the
sum of the appropriate amounts of the consolidated component currencies
expressed in such single currency. If any Component is divided into two or more
currencies, the amount of the original component currency shall be replaced by
the appropriate amounts of such two or more currencies, the sum of which shall
be equal to the amount of the original component currency.
All determinations referred to above made by the Issuer or its agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive to the extent permitted by law for all purposes and binding on the
holder of this Note.
10
<PAGE>
So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and the
premium, if any, and interest on this Note as herein provided in The City of New
York, and an office or agency in said City for the registration, transfer and
exchange as aforesaid of the Notes and where notices and demands to or upon the
Issuer in respect of the Notes may be served. The Issuer may designate other
agencies for the payment of said principal, premium and interest at such place
or places (subject to applicable laws and regulations) as the Issuer may decide.
So long as there shall be such an agency, the Issuer shall keep the Trustee
advised of the names and locations of such agencies, if any are so designated.
With respect to moneys paid by the Issuer and held by the Trustee or
any Paying Agent for payment of the principal of or interest or premium, if any,
on any Notes that remain unclaimed at the end of the two years after such
principal, interest or premium shall have become due and payable (whether at
maturity or upon call for redemption or otherwise), (i) the Trustee or such
Paying Agent shall notify the holders of such Notes that such moneys shall be
repaid to the Issuer and any person claiming such moneys shall thereafter look
only to the Issuer for payment thereof and (ii) such moneys shall be so repaid
to the Issuer. Upon such repayment all liability of the Trustee or such Paying
Agent with respect to such moneys shall thereupon cease, without, however,
limiting in any way any obligation that the Issuer may have to pay the principal
of or interest or premium, if any, on this Note as the same shall become due.
No provision of this Note or of the Indenture shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place, and
rate, and in the coin or currency, herein prescribed unless otherwise agreed
between the Issuer and the registered holder of this Note; provided, however, if
-------- -------
the principal of, premium, if any, or interest on, this Note is payable in a
Specified Currency other than U.S. dollars and such Specified Currency is not
available to the Issuer for making payments hereon due to circumstances beyond
the control of the Issuer, as described above, then the Issuer will be entitled
to satisfy its obligations to the holder of this Note by making such payments in
U.S. dollars as set forth above.
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.
Upon any consolidation by the Issuer with or merger by the Issuer into
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Issuer substantially as an entirety in accordance with the
Indenture, the successor corporation formed by such consolidation or into which
the Issuer is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and power
of the Issuer under the Indenture with the same effect as if such successor
corporation had been named as the Issuer therein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under the Indenture and the Notes.
11
<PAGE>
No recourse shall be had for the payment of the principal of, premium,
if any, or the interest on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture or any
supplemental indenture thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
12
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -____________________ Custodian ______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act ______________________________________
State
Additional abbreviations may also be used though not in the above list.
----------------------
13
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
_______________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE, OF ASSIGNEE)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.
Dated: _____________________ ______________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Note in every particular, without
alteration or change whatsoever; signature(s)
must be guaranteed by an eligible guarantor
institution (banks, stock brokers, savings and
loan associations and credit unions with
membership in an approved membership signature
guarantee medallion program) pursuant to
Securities and Exchange Commission Rule
17Ad-15.
14
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Issuer
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the Optional Repayment Date, to the undersigned at
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name,
address and telephone number of the undersigned,
and name of contact person, if any)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
______________________________; and specify the denomination or denominations
(which shall not be less than the minimum authorized denomination) of the Notes
to be issued to the holder for the portions of the within Note not being repaid
(in the absence of any such specification, one such Note will be issued for the
portion not being repaid):_____________________________________________
Dated: _________________________ ________________________________________
NOTICE: The signature to the foregoing Election must correspond to the name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever; signature(s) must be guaranteed by an eligible guarantor
institution (banks, stock brokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program)
pursuant to Securities and Exchange Commission Rule 17Ad-15.
15
<PAGE>
(FORM OF FACE OF SECURITY)
MATTEL, INC.
SERIES A MEDIUM-TERM NOTE
Floating Rate Note
REGISTERED REGISTERED
No. FLR- [PRINCIPAL AMOUNT]
CUSIP:
If the registered owner of this Security (as indicated below) is The
Depository Trust Company (the "Depository") or a nominee of the Depository, this
Security is a Global Security and the following two legends apply:
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 of the
Depository or a nominee of such successor.
Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Issuer (as defined below) or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY" AND
"INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET FORTH
BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME
TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
BASE RATE: ORIGINAL ISSUE DATE: ORIGINAL MATURITY
DATE:
INDEX MATURITY: INTEREST ACCRUAL FINAL MATURITY
DATE: DATE:
SPREAD (PLUS OR INITIAL INTEREST INTEREST PAYMENT
MINUS): RATE: DATE(S):
ALTERNATE RATE INITIAL INTEREST INTEREST PAYMENT
EVENT SPREAD: RESET DATE: PERIOD:
SPREAD MULTIPLIER: MAXIMUM INTEREST INTEREST RESET
RATE: PERIOD:
APPLICABILITY OF MINIMUM INTEREST INTEREST RESET
MODIFIED PAYMENT RATE: DATES:
UPON ACCELERATION:
If yes, state INITIAL REDEMPTION CALCULATION AGENT:
ISSUE PRICE: DATE:
INITIAL REDEMPTION SPECIFIED CURRENCY:
PERCENTAGE:
ANNUAL REDEMPTION INDEX CURRENCY:
PERCENTAGE
REDUCTION:
OPTIONAL REPAYMENT TOTAL AMOUNT OF
DATE(S): OID:
ORIGINAL YIELD TO
MATURITY:
OTHER TERMS: INITIAL ACCRUAL
PERIOD OID:
</TABLE>
Mattel, Inc., a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to
or registered assignees, the principal sum of
________________________________
_____________________________, on the Original Maturity Date specified above
(except to the extent redeemed or repaid prior to the Original Maturity Date)
or, if the maturity hereof is extended in accordance with the procedures set
forth below to an Extended Maturity Date, as defined below, on such Extended
Maturity Date (except to the extent previously redeemed or repaid) and to pay
interest thereon, from the Interest Accrual Date specified above at a rate per
annum equal to the Initial Interest Rate specified above until the Initial
Interest Reset Date specified above, and thereafter at a rate
2
<PAGE>
per annum determined in accordance with the provisions specified on the reverse
hereof (including the provisions relating to extension of maturity) until the
principal hereof is paid or duly made available for payment. The Issuer will
pay interest in arrears monthly, quarterly, semiannually or annually as
specified above as the Interest Payment Period on each Interest Payment Date (as
specified above), commencing with the first Interest Payment Date next
succeeding the Interest Accrual Date specified above, and at maturity (or on any
redemption or repayment date); provided, however, that if the Interest Accrual
Date occurs between a Record Date, as defined below, and the next succeeding
Interest Payment Date, interest payments will commence on the second Interest
Payment Date succeeding the Interest Accrual Date to the registered holder of
this Note on the Record Date with respect to such second Interest Payment Date;
and provided, further, that if an Interest Payment Date or the Maturity Date or
redemption or repayment date would fall on a day that is not a Business Day, as
defined on the reverse hereof, such Interest Payment Date, Maturity Date or
redemption or repayment date shall be the following day that is a Business Day,
except that if the Base Rate specified above is LIBOR and such next Business Day
falls in the next calendar month, the Interest Payment Date, Maturity Date or
redemption or repayment date shall be the immediately preceding day that is a
Business Day.
Except as provided above, unless otherwise specified on the face
hereof, interest on Notes will be payable: (i) in the case of Notes with a
daily, weekly or monthly Interest Reset Date, on the third Wednesday of each
month or on the third Wednesday of March, June, September and December, as
specified on the face hereof; (ii) in the case of Notes with a quarterly
Interest Reset Date, on the third Wednesday of March, June, September and
December specified on the face hereof; (iii) in the case of Notes with a
semiannual Interest Reset Date, on the third Wednesday of the two months
specified on the face hereof; and (iv) in the case of Notes with an annual
Interest Reset Date, on the third Wednesday of the month specified on the face
hereof.
Interest on this Note will accrue from the most recent date on which
interest has been paid or duly provided for, or, if no interest has been paid or
duly provided for, from the Interest Accrual Date, until the principal hereof
has been paid or duly made available for payment (except as provided below).
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, subject to certain exceptions described herein, be
paid to the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the date 15 calendar days prior to such
Interest Payment Date (whether or not a Business Day) (each such date a "Record
Date"); provided, however, that interest payable at maturity (or on any
-------- -------
redemption or repayment date) will be payable to the person to whom the
principal hereof shall be payable.
Payment of the principal of this Note, any premium and the interest
due at maturity (or on any redemption or repayment date) will be made in
immediately available funds upon surrender of this Note at the principal
corporate trust office of the Trustee or at the office or agency of the Trustee
maintained for that purpose in The City of New York, New York, or at such other
paying agency as the Issuer may determine. Payment of the principal of and
premium, if any, and interest on this Note will be made in the Specified
Currency indicated above; provided, however, that U.S. dollar payments of
-------- -------
interest, other than interest due at
3
<PAGE>
maturity or any date of redemption or repayment, will be made by U.S. dollar
check mailed to the address of the person entitled thereto as such address shall
appear in the Note register. A holder of U.S. $10,000,000 or more in aggregate
principal amount of Notes having the same Interest Payment Date will be entitled
to receive payments of interest, other than interest due at maturity or any date
of redemption or repayment, by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received by the Paying Agent in
writing not less than 15 calendar days prior to the applicable Interest Payment
Date. If this Note is denominated in a Specified Currency other than U.S.
dollars, payments of interest hereon will be made by wire transfer of
immediately available funds to an account maintained by the holder hereof with a
bank located outside the United States if appropriate wire transfer instructions
have been received by the Paying Agent in writing not less than 15 calendar days
prior to the applicable Interest Payment Date. If such wire transfer
instructions are not so received, such interest payments (other than interest
payable at maturity or on any redemption or repayment date) will be made by
check payable in such Specified Currency mailed to the address of the person
entitled thereto as such address shall appear in the Note register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
4
<PAGE>
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed under its corporate seal.
DATED: MATTEL, INC.
By
-------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes
referred to in the within-
mentioned Indenture.
CHEMICAL TRUST COMPANY OF CALIFORNIA,
as Trustee
By
-------------------------------------
Authorized Officer
5
<PAGE>
(FORM OF REVERSE OF SECURITY)
This Note is one of a duly authorized issue of Series A Medium-Term
Notes having maturities of more than nine months from the date of issue (the
"Notes") of the Issuer. The Notes are issuable under an indenture dated as of
August 1, 1994, duly executed and delivered by the Issuer to Chemical Trust
Company of California, Trustee (herein called the "Trustee"), to which indenture
and all indentures supplemental thereto (herein called the "Indenture")
reference is hereby made for a statement of the respective rights, limitations
of rights and immunities of the Issuer, the Trustee and holders of the Notes and
terms upon which the Notes are, and are to be, authenticated and delivered. The
Issuer has appointed Chemical Trust Company of California as the paying agent
(the "Paying Agent," which term includes any additional or successor Paying
Agent appointed by the Issuer) with respect to the Notes. The terms of
individual Notes may vary with respect to interest rates, interest rate
formulas, issue dates, maturity dates, or otherwise, all as provided in the
Indenture. To the extent not inconsistent herewith, the terms of the Indenture
are hereby incorporated by reference herein.
This Note will not be subject to any sinking fund and, unless
otherwise provided on the face hereof in accordance with the provisions of the
following two paragraphs, will not be redeemable or subject to repayment at the
option of the holder prior to maturity.
If so indicated on the face of this Note, this Note may be redeemed in
whole or in part at the option of the Issuer on or after the Initial Redemption
Date specified on the face hereof on the terms set forth on the face hereof and
at a redemption price (expressed as a percentage of the principal amount hereof)
equal to the Initial Redemption Percentage, together with interest accrued and
unpaid hereon to the date of redemption. If this Note is subject to "Annual
Redemption Percentage Reduction," the Initial Redemption Percentage indicated on
the face hereof will be reduced on each anniversary of the Initial Redemption
Date by the Annual Redemption Percentage Reduction specified on the face hereof
until the redemption price of this Note is 100% of the principal amount hereof,
together with interest accrued and unpaid hereon to the date of redemption.
Notice of redemption shall be mailed by first class mail, postage prepaid, to
the registered holders of the Notes designated for redemption at their addresses
as the same shall appear on the Note register not less than 30 nor more than 60
days prior to the date fixed for redemption, subject to all the conditions and
provisions of the Indenture. In the event of redemption of this Note in part
only, a new Note or Notes for the amount of the unredeemed portion hereof shall
be issued in the name of the holder hereof upon the cancellation hereof, but, in
any event, the principal amount of the Note remaining outstanding after
redemption must be an Authorized Denomination.
If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments of
$1,000 or, if this Note is denominated in a Specified Currency other than U.S.
dollars, in increments of 1,000 units of such Specified Currency (provided that
any remaining principal amount hereof shall not be less than the minimum
Authorized
6
<PAGE>
Denomination hereof) at the option of the holder hereof at a price equal to 100%
of the principal amount to be repaid, together with interest accrued and unpaid
hereon to the date of repayment. For this Note to be repaid at the option of
the holder hereof, the Paying Agent must receive at its principal corporate
trust office in Los Angeles, California, or at its office in The City of New
York, New York, at least 30 but not more than 60 days prior to the date of
repayment, (i) this Note with the form entitled "Option to Elect Repayment"
below duly completed or (ii) a telegram, telex, facsimile transmission or a
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or a trust company
in the United States setting forth the name of the holder of this Note, the
principal amount hereof, the principal amount hereof to be repaid, the
certificate number of this Note or a description of this Note's tenor and terms,
a statement that the option to elect repayment is being exercised thereby and a
guarantee that this Note, together with the form entitled "Option to Elect
Repayment" duly completed, will be received by the Paying Agent not later than
the fifth Business Day after the date of such telegram, telex, facsimile
transmission or letter; provided, however, that such telegram, telex, facsimile
-------- -------
transmission or letter shall only be effective if this Note and such form duly
completed are received by the Paying Agent by such fifth Business Day.
Effective exercise of such repayment option by the holder hereof shall be
irrevocable. In the event of repayment of this Note in part only, a new Note or
Notes for the amount of the unpaid portion hereof shall be issued in the name of
the holder hereof upon the cancellation hereof, but, in any event, the principal
amount of the Note remaining outstanding after repayment must be an Authorized
Denomination.
If so indicated on the face of this Note, the Issuer has the option to
extend the Original Maturity Date hereof for one or more periods of one or more
whole years (each an "Extension Period") up to but not beyond the Final Maturity
Date specified on the face hereof and in connection therewith to establish a new
interest rate (calculated with reference to a Base Rate and the Spread and/or
Spread Multiplier, if any) and new redemption provisions for the Extension
Period.
The Issuer may exercise such option by notifying the Paying Agent of
such exercise at least 45 but not more than 60 days prior to the Original
Maturity Date or, if the maturity hereof has already been extended, prior to the
maturity date then in effect (an "Extended Maturity Date"), such notice to be
accompanied by the form of the Extension Notice referred to below. No later
than 38 days prior to the Original Maturity Date or an Extended Maturity Date,
as the case may be (each, a "Maturity Date"), the Paying Agent will mail to the
holder hereof a notice (the "Extension Notice") relating to such Extension
Period, by first class mail, postage prepaid, setting forth (a) the election of
the Issuer to extend the maturity of this Note; (b) the new Extended Maturity
Date; (c) the interest rate applicable to the Extension Period (calculated with
reference to a Base Rate and the Spread and/or Spread Multiplier, if any); and
(d) the provisions, if any, for redemption during the extension period,
including the date or dates on which, the period or periods during which and the
price or prices at which such redemption may occur during the Extension Period.
Upon the mailing by the Paying Agent of an Extension Notice to the holder of
this Note, the maturity hereof shall be extended automatically, and, except as
modified by the Extension Notice and as described in the next paragraph, this
Note will have the same terms it had prior to the mailing of such Extension
Notice.
7
<PAGE>
Notwithstanding the foregoing, not later than 10:00 A.M., New York
City time, on the twentieth calendar day prior to the Maturity Date in effect
immediately preceding the mailing of the applicable Extension Notice (or if such
day is not a Business Day, not later than 10:00 A.M., New York City time, on the
immediately succeeding Business Day), the Issuer may, at its option, revoke the
interest rate provided for in such Extension Notice and establish a higher
Spread and/or Spread Multiplier, if any, for the Extension Period by causing the
Paying Agent to send notice of such higher Spread and/or Spread Multiplier, if
any, within seven days of receipt of such notice to the holder of this Note by
first class mail, postage prepaid, or by such other means as shall be agreed
between the Issuer and the Paying Agent. Such notice shall be irrevocable. All
Notes with respect to which the Maturity Date is extended in accordance with an
Extension Notice will bear such higher Spread and/or Spread Multiplier, if any,
for the Extension Period, whether or not tendered for repayment.
If the Issuer elects to extend the maturity hereof, the holder of this
Note will have the option to require the Issuer to repay this Note on the
Maturity Date in effect immediately preceding the mailing of the applicable
Extension Notice at a price equal to the principal amount hereof plus any
accrued and unpaid interest to such date. In order for this Note to be so
repaid on such Maturity Date, the holder hereof must follow the procedures set
forth above for optional repayment, except that the period for delivery of this
Note or notification to the Paying Agent shall be at least 25 but not more that
35 days prior to the Maturity Date in effect immediately preceding the mailing
of the applicable Extension Notice and except that if the holder hereof has
tendered this Note for repayment pursuant to this paragraph he may, by written
notice to the Paying Agent, revoke any such tender for repayment until 3:00
P.M., New York City time, on the twentieth calendar day prior to the Maturity
Date then in effect (or, if such day is not a Business Day, until 3:00 P.M., New
York City time, on the immediately succeeding Business Day).
This Note will bear interest at the rate determined in accordance with
the applicable provisions below by reference to the Base Rate shown on the face
hereof based on the Index Maturity, if any, shown on the face hereof (i) plus or
minus the Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if
any, specified on the face hereof. Commencing with the Initial Interest Reset
Date specified on the face hereof, the rate at which interest on this Note is
payable shall be reset as of each Interest Reset Date (as used herein, the term
"Interest Reset Date" shall include the Initial Interest Reset Date). The
Interest Reset Dates will be the Interest Reset Dates specified on the face
hereof; provided, however, that (i) the interest rate in effect for the period
-------- -------
from the Interest Accrual Date to the Initial Interest Reset Date will be the
Initial Interest Rate and (ii) the interest rate in effect hereon for the ten
calendar days immediately prior to maturity hereof (or, with respect to any
principal amount to be redeemed or repaid, any redemption or repayment date)
shall be that in effect on the tenth calendar day preceding maturity hereof or
such date of redemption or repayment, as the case may be. If any Interest Reset
Date would otherwise be a day that is not a Business Day, such Interest Reset
Date shall be postponed to the next succeeding day that is a Business Day,
except that if the Base Rate specified on the face hereof is LIBOR and such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day. As used herein, "Business Day"
means (1) any day, other than a Saturday or Sunday, and that is neither a legal
holiday nor a day on which banking institutions are authorized or required by
law or
8
<PAGE>
regulation to close in The City of New York, New York, or Los Angeles,
California, and (2)(i) with respect to LIBOR Notes (as defined below), is also a
London Banking Day, (ii) with respect to Notes denominated in a Specified
Currency other than U.S. dollars, Australian dollars, or ECUs, in the principal
financial center of the country of the Specified Currency, (iii) with respect to
Notes denominated in Australian dollars, in Sydney, and (iv) with respect to
Notes denominated in ECUs, in Luxemburg and that is not a non-ECU clearing day,
as determined by the ECU Banking Association in Paris.
The Interest Reset Date will be, in the case of Notes which reset
daily, each Business Day; in the case of Notes (other than Notes whose Base Rate
is the Treasury Rate) which reset weekly, the Wednesday of each week; in the
case of Notes whose Base Rate is the Treasury Rate which reset weekly, the
Tuesday of each week, except as provided below; in the case of Notes which reset
monthly, the third Wednesday of each month; in the case of Notes which reset
quarterly, the third Wednesday of March, June, September and December; in the
case of Notes which reset semiannually, the third Wednesday of two months of
each year, as specified on the face hereof; and in the case of Notes which reset
annually, the third Wednesday of one month of each year, as specified on the
face hereof.
In the case where the Interest Payment Date or the Maturity Date (or
any redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but will be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.
The Interest Determination Date pertaining to an Interest Reset Date
for Notes bearing interest calculated by reference to the CD Rate, Commercial
Paper Rate, Federal Funds Rate, CMT Rate and Prime Rate will be the second
Business Day next preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date for Notes bearing
interest calculated by reference to LIBOR shall be the second London Banking Day
preceding such Interest Reset Date. As used herein, "London Banking Day" means
any day on which dealings in deposits in the Index Currency are transacted in
the London interbank market. The Interest Determination Date pertaining to an
Interest Reset Date for Notes bearing interest calculated by reference to the
Treasury Rate shall be the day of the week in which such Interest Reset Date
falls on which Treasury bills normally would be auctioned; provided, however,
-------- -------
that if, as a result of a legal holiday, an auction is held on the Friday of the
week preceding such Interest Reset Date, the related Interest Determination Date
shall be such preceding Friday; and provided, further, that if an auction shall
-------- -------
fall on any Interest Reset Date, then the Interest Reset Date shall instead be
the first Business Day following the date of such auction.
The "Calculation Date" pertaining to any Interest Determination Date
will be the earlier of (i) the tenth calendar day after such Interest
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day, or (ii) the Business Day preceding the
9
<PAGE>
applicable Interest Payment Date or Maturity Date or date of redemption or
payment, as the case may be.
Determination of CD Rate. If the Base Rate specified on the face
------------------------
hereof is the CD Rate, the CD Rate with respect to this Note shall be determined
on each Interest Determination Date and shall be the rate on such date for
negotiable certificates of deposit having the Index Maturity specified on the
face hereof as published by the Board of Governors of the Federal Reserve System
in "Statistical Release H.15(519), Selected Interest Rates," or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)"), under the heading "CDs (Secondary Market)," or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the CD Rate will be the rate on such
Interest Determination Date for negotiable certificates of deposit of the Index
Maturity specified on the face hereof as published by the Federal Reserve Bank
of New York City in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Certificates of Deposit." If neither of such rates is published by
3:00 P.M., New York City time, on such Calculation Date, then the CD Rate on
such Interest Determination Date will be calculated by the Calculation Agent
referred to on the face hereof and will be the arithmetic mean of the secondary
market offered rates as of 10:00 A.M., New York City time, on such Interest
Determination Date for certificates of deposit in the denomination of U.S.
$5,000,000 with a remaining maturity closest to the Index Maturity specified on
the face hereof of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money center
banks; provided, however, that if the dealers selected as aforesaid by the
-------- -------
Calculation Agent are not quoting as mentioned in this sentence, the rate of
interest in effect for the applicable period will be the same as the CD Rate for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate).
Determination of Commercial Paper Rate. If the Base Rate specified on
--------------------------------------
the face hereof is the Commercial Paper Rate, the Commercial Paper Rate with
respect to this Note shall be determined on each Interest Determination Date and
shall be the Money Market Yield (as defined herein) of the rate on such date for
commercial paper having the Index Maturity specified on the face hereof, as such
rate shall be published in H.15(519) under the heading "Commercial Paper," or if
not so published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Commercial Paper Rate shall
be the Money Market Yield of the rate on such Interest Determination Date for
commercial paper of the Index Maturity specified on the face hereof as published
in Composite Quotations under the heading "Commercial Paper." If neither of
such rates is published by 3:00 P.M., New York City time, on such Calculation
Date, then the Commercial Paper Rate shall be the Money Market Yield of the
arithmetic mean of the offered rates as of 11:00 A.M., New York City time, on
such Interest Determination Date of three leading dealers in commercial paper in
The City of New York selected by the Calculation Agent for commercial paper of
the Index Maturity specified on the face hereof, placed for an industrial issuer
whose bond rating is "AA," or the equivalent, from a nationally recognized
rating agency; provided, however, that if the dealers selected as aforesaid by
--------- -------
the Calculation Agent are not quoting as mentioned in this sentence, the rate of
interest in effect for the applicable period will be the same as the
10
<PAGE>
Commercial Paper Rate for the immediately preceding Interest Reset Period, (or,
if there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
"Money Market Yield" shall be the yield calculated in accordance with
the following formula:
Money Market Yield = D x 360
------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the Index Maturity specified on the face hereof.
Determination of Federal Funds Rate. If the Base Rate specified on
-----------------------------------
the face hereof is the Federal Funds Rate, the Federal Funds Rate with respect
to this Note shall be determined on each Interest Determination Date and shall
be the rate on such date for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)," or, if not so published by 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate will be the rate on such Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If neither of such rates is published by 3:00
P.M., New York City time, on such Calculation Date, the Federal Funds Rate for
such Interest Determination Date will be calculated by the Calculation Agent and
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds as of 9:00 A.M., New York City time, on such Interest
Determination Date arranged by three leading brokers in Federal funds
transactions in The City of New York selected by the Calculation Agent;
provided, however, that if the brokers selected as aforesaid by the Calculation
- - -------- -------
Agent are not quoting as mentioned in this sentence, the rate of interest in
effect for the applicable period will be the same as the Federal Funds Rate for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate).
Determination of LIBOR. If the Base Rate specified on the face hereof
----------------------
is LIBOR, LIBOR with respect to this Note shall be determined on each Interest
Determination Date as follows:
(i) As of the Interest Determination Date, LIBOR shall be either (a)
if "LIBOR Reuters" is specified on the face hereof, the arithmetic
mean of the offered rates (unless the specified Designated LIBOR Page
(as defined below) by its terms provides only for a single rate, in
which case such single rate shall be used) for deposits in the Index
Currency having the Index Maturity designated on the face hereof,
commencing on such Interest Determination Date, that appear on the
Designated LIBOR Page as of 11:00 A.M., London time, on that Interest
Determination Date, if at least two such offered rates appear (unless,
as aforesaid, only a single rate is required) on such Designated LIBOR
Page, or (b) if "LIBOR Telerate" is specified on the face hereof, the
rate for deposits in the Index
11
<PAGE>
Currency having the Index Maturity designated on the face hereof,
commencing on such Interest Determination Date, that appears on the
Designated LIBOR Page as of 11:00 A.M., London time, on that Interest
Determination Date. If fewer than two offered rates appear, or no rate
appears, as applicable, LIBOR in respect of the related Interest
Determination Date shall be determined as if the parties had specified
the rate described in clause (ii) below.
(ii) With respect to an Interest Determination Date on which fewer
than two offered rates appear (unless, as aforesaid, only a single
rate is required), or no rate appears, as the case may be, on the
applicable Designated LIBOR Page as specified in clause (i) above, the
Calculation Agent will request the principal London offices of each of
four major reference banks in the London interbank market, as selected
by the Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the period of
the Index Maturity designated on the face hereof, commencing on the
second London Banking Day immediately following such Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such Interest Determination
Date and in a principal amount of not less than $1,000,000 (or the
equivalent in the Index Currency, if the Index Currency is not the
U.S. dollar) that is representative for a single transaction in such
Index Currency in such market at such time. If at least two such
quotations are provided, LIBOR determined on such Interest
Determination Date will be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR determined on such
Interest Determination Date will be the arithmetic mean of the rates
quoted at approximately 11:00 A.M. (or such other time specified on
the face hereof), in the applicable principal financial center for the
country of the Index Currency on such Interest Determination Date, by
three major banks in such principal financial center selected by the
Calculation Agent for loans in the Index Currency to leading European
banks, having the Index Maturity designated on the face hereof and in
a principal amount of not less than $1,000,000 commencing on the
second London Banking Day immediately following such Interest
Determination Date (or the equivalent in the Index Currency, if the
Index Currency is not the U.S. dollar) that is representative for a
single transaction in such Index Currency in such market at such time;
provided however, that if the banks so selected by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR for such
Interest Reset Period will be the same as LIBOR for the immediately
preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate).
"Index Currency" means the currency (including composite currencies)
specified on the face hereof as the currency for which LIBOR shall be
calculated. If no such currency is specified on the face hereof, the Index
Currency shall be U.S. dollars.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is
designated on the face hereof, the display on the Reuters Monitor Money Rates
Service for the purpose of
12
<PAGE>
displaying the London interbank rates of major banks for the applicable Index
Currency, or (b) if "LIBOR Telerate" is designated on the face hereof, the
display on the Dow Jones Telerate Service for the purpose of displaying the
London interbank rates of major banks for the applicable Index Currency. If
neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof, LIBOR
for the applicable Index Currency will be determined as if LIBOR Telerate (and,
if the U.S. dollar is the Index Currency, Page 3750) had been specified.
Determination of Prime Rate. If the Base Rate specified on the face
---------------------------
hereof is the Prime Rate, the Prime Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate set forth
in H.15(519) for such date opposite the caption "Bank Prime Loan." If such rate
is not yet published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Prime Rate for such Interest
Determination Date will be the arithmetic mean of the rates of interest publicly
announced by each bank named on the Reuters Screen NYMF Page (as defined below)
as such bank's prime rate or base lending rate as in effect for such Interest
Determination Date as quoted on the Reuters Screen NYMF Page on such Interest
Determination Date, or, if fewer than four such rates appear on the Reuters
Screen NYMF Page for such Interest Determination Date, the rate shall be the
arithmetic mean of the prime rates quoted on the basis of the actual number of
days in the year divided by 360 as of the close of business on such Interest
Determination Date by at least two of the three major money center banks in The
City of New York selected by the Calculation Agent from which quotations are
requested. If fewer than two quotations are provided, the Prime Rate shall be
calculated by the Calculation Agent and shall be determined as the arithmetic
mean on the basis of the prime rates in The City of New York by the appropriate
number of substitute banks or trust companies organized and doing business under
the laws of the United States, or any State thereof, in each case having total
equity capital of at least U.S. $500 million and being subject to supervision or
examination by federal or state authority, selected by the Calculation Agent to
quote such rate or rates; provided, however, that if the banks or trust
-------- -------
companies selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Prime Rate in effect for such Interest Reset
Date will be the same as the Prime Rate for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the rate of
interest payable hereon shall be the Initial Interest Rate). "Reuters Screen
NYMF Page" means the display designated as Page "NYMF" on the Reuters Monitor
Money Rates Service (or such other page as may replace the NYMF Page on that
Service for the purpose of displaying prime rates or base lending rates of major
United States banks).
Determination of Treasury Rate. If the Base Rate specified on the
------------------------------
face hereof is the Treasury Rate, the Treasury Rate with respect to this Note
shall be determined on each Interest Determination Date and shall be the rate
for the auction held on such date of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified on the face hereof, as
published in H.15(519) under the heading "Treasury Bills -- auction average
(investment)," or if not so published by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the auction
average rate on such Interest Determination Date (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of Treasury Bills
having
13
<PAGE>
the Index Maturity specified on the face hereof are not published or reported as
provided above by 3:00 P.M., New York City time, on such Calculation Date or if
no such auction is held on such Interest Determination Date, then the Treasury
Rate shall be calculated by the Calculation Agent and shall be a yield to
maturity (expressed as a bond equivalent, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) calculated using the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Interest Determination Date, of three leading
primary United States government securities dealers selected by the Calculation
Agent for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified on the face hereof; provided, however, that if the
-------- -------
dealers selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, the Treasury Rate for such Interest Reset Date
will be the same as the Treasury Rate for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the rate of
interest payable hereon shall be the Initial Interest Rate).
Determination of CMT Rate. If the Base Rate specified on the face
-------------------------
hereof is the CMT Rate, the CMT Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate on such
date displayed for the Index Maturity specified on the face hereof on Telerate
Page 7055 for "Daily Treasury Constant Maturities and Money Markets/Federal
Reserve Board Release H.15 Monday's Approx. 3:45 P.M. EDT," for the applicable
Interest Determination Date (or such other page as may replace that page on such
service for the purpose of displaying rates or prices comparable to the CMT
Rate, as determined by the Calculation Agent). If such rate is not available by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the CMT Rate for such Interest Determination
Date shall be the bond equivalent yield to Maturity of the arithmetic mean (as
calculated by the Calculation Agent) of the secondary market bid rates, as of
3:00 P.M., New York City time, on such Interest Determination Date, reported,
according to their written records, by three leading primary United States
government securities dealers in The City of New York (each, a "Reference
Dealer") selected by the Calculation Agent, for the most recently issued direct
noncallable fixed rate Treasury Bills with an original Maturity approximately
equal to the applicable Index Maturity; provided, however, that if the dealers
-------- -------
selected as aforesaid by the Calculation Agent are not quoting bid rates as
mentioned in this sentence, the CMT Rate for such Interest Reset Date will be
the same as the CMT Rate for the immediately preceding Interest Reset Period
(or, if there was no such Interest Reset Period, the rate of interest payable on
the CMT Rate Notes for which the CMT Rate is being determined shall be the
Initial Interest Rate).
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by California law, as the same may be
modified by United States Federal law of general application.
14
<PAGE>
At the request of the holder hereof, the Calculation Agent will
provide to the holder hereof the interest rate hereon then in effect and, if
determined, the interest rate that will become effective as of the next Interest
Reset Date.
Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or at maturity (or on any earlier
redemption or repayment date), as the case may be; provided, however, that if
-------- -------
the Interest Reset Period with respect to this Note is daily or weekly, interest
payable on any Interest Payment Date, other than interest payable on any date on
which principal hereof is payable, will include interest accrued from and
including the Original Issue Date or from but excluding the last Record Date to
which interest has been paid, as the case may be, to and including the Record
Date immediately preceding the applicable Interest Payment Date. Accrued
interest hereon shall be an amount calculated by multiplying the face amount
hereof by an accrued interest factor. Such accrued interest factor shall be
computed by adding the interest factor calculated for each day in the period for
which interest is being paid. The interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the Base
Rate is the CD Rate, Commercial Paper Rate, Federal Funds Rate, Prime Rate or
LIBOR, as specified on the face hereof, or by the actual number of days in the
year if the Base Rate is the Treasury Rate or the CMT Rate, as specified on the
face hereof. All percentages used in or resulting from any calculation of the
rate of interest on this Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward, and all dollar amounts used in or resulting
from such calculation on this Note will be rounded to the nearest cent (with
one-half cent rounded upward). The interest rate in effect on any Interest
Reset Date will be the applicable rate as reset on such date. The interest rate
applicable to any other day is the interest rate from the immediately preceding
Interest Reset Date (or, if none, the Initial Interest Rate).
This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured and
---- -----
unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or exchange
hereof, is issuable only in fully registered form, without coupons, and, if
denominated in U.S. dollars, is issuable only in denominations of U.S. $1,000
and any integral multiple of U.S. $1,000 in excess thereof. If this Note is
denominated in a Specified Currency other than U.S. dollars, then, unless a
higher minimum denomination is required by applicable law, it is issuable only
in denominations of the equivalent of U.S. $1,000 (rounded to an integral
multiple of 1,000 units of such Specified Currency), or any amount in excess
thereof which is an integral multiple of 1,000 units of such Specified Currency,
as determined by reference to the noon dollar buying rate in New York City for
cable transfers of such Specified Currency as published by the Federal Reserve
Bank of New York (the "Market Exchange Rate") on the Business Day immediately
preceding the date of issuance; provided, however, that in the case of ECUs, the
-------- -------
Market Exchange Rate shall be 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
15
<PAGE>
Union, or any successor publication, on the Business Day immediately preceding
the date of issuance.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in Los Angeles, California, a register for
the registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee or at the office of the Trustee in the City of
New York, New York, by surrendering this Note for cancellation, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and duly
executed by the registered holder hereof in person or by the holder's attorney
duly authorized in writing, and thereupon the Trustee shall issue in the name of
the transferee or transferees, in exchange herefor, a new Note or Notes having
identical terms and provisions and having a like aggregate principal amount in
authorized denominations, subject to the terms and conditions set forth herein;
provided, however, that the Trustee will not be required (i) to register the
- - -------- -------
transfer of or exchange any Note that has been called for redemption in whole or
in part, except the unredeemed portion of Notes being redeemed in part, (ii) to
register the transfer of or exchange any Note if the holder thereof has
exercised his right, if any, to require the Issuer to repurchase such Note in
whole or in part, except the portion of such Note not required to be
repurchased, or (iii) to register the transfer of or exchange Notes to the
extent and during the period so provided in the Indenture with respect to the
redemption of Notes. Notes are exchangeable at said office for other Notes of
other authorized denominations of equal aggregate principal amount having
identical terms and provisions. All such exchanges and transfers of Notes will
be free of charge, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge in connection therewith. All Notes
surrendered for exchange shall be accompanied by a written instrument of
transfer in form satisfactory to the Trustee and executed by the registered
holder in person or by the holder's attorney duly authorized in writing. The
date of registration of any Note delivered upon any exchange or transfer of
Notes shall be determined by the Issuer and shall be such that no gain or loss
of interest results from such exchange or transfer.
In case any Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and such Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, a new Note of like tenor will be issued by the Issuer
in exchange for the Note so mutilated or defaced, or in lieu of the Note so
destroyed or lost or stolen, but, in the case of any destroyed or lost or stolen
Note, only upon receipt of evidence satisfactory to the Trustee and the Issuer
that such Note was destroyed or lost or stolen and, if required, upon receipt
also of indemnity satisfactory to each of them. All expenses and reasonable
charges associated with procuring such indemnity and with the preparation,
authentication and delivery of a new Note shall be borne by the holder of the
Note mutilated, defaced, destroyed, lost or stolen.
The Indenture provides that if an Event of Default, as defined in the
Indenture, shall occur and be continuing with respect to any series of debt
securities issued under the Indenture, including the series of Series A Medium-
Term Notes of which this Note forms a part, the Trustee or the holders of not
less than 25% in aggregate principal amount of the debt securities then
outstanding of the series may, by a notice in writing to the Issuer (and to the
16
<PAGE>
Trustee if given by such holders), declare the principal of, and the premium, if
any, on such series to be due and payable, together with interest accrued
thereon. Any Event of Default with respect to a particular series of debt
securities may be waived by the holders of a majority in aggregate principal
amount of the outstanding debt securities of the series affected, except in each
case a failure to pay the principal of, or premium, if any, or interest on, such
debt securities.
If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is declared to be
due and payable as described in the preceding paragraph, the amount of principal
due and payable with respect to this Note shall be limited to the aggregate
principal amount hereof multiplied by the sum of the Issue Price specified on
the face hereof (expressed as a percentage of the aggregate principal amount)
plus the original issue discount amortized from the Interest Accrual Date to the
date of declaration, which amortization shall be calculated using the "interest
method" (computed in accordance with generally accepted accounting principles in
effect on the date of declaration), (ii) for the purpose of any vote of
securityholders taken pursuant to the Indenture prior to the acceleration of
payment of this Note, the principal amount hereof shall equal the amount that
would be due and payable hereon, calculated as set forth in clause (i) above, if
this Note were declared to be due and payable on the date of any such vote and
(iii) for the purpose of any vote of securityholders taken pursuant to the
Indenture following the acceleration of payment of this Note, the principal
amount hereof shall equal the amount of principal due and payable with respect
to this Note, calculated as set forth in clause (i) above.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the debt securities at the time outstanding of all series
affected (or not less than 66 2/3% in aggregate principal amount of any series
affected in case one or more but not all of the series are affected) evidenced
as provided in the Indenture, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the securities of each such series; provided, however,
-------- -------
that no such supplemental indenture shall, among other matters, (i) change the
fixed maturity of any debt security, or reduce the rate of or extend the time of
payment of any interest thereon, or reduce the principal amount thereof or any
premium thereon, or make the principal thereof or any interest or premium
thereon payable in any currency other than that hereinbefore provided, without
the consent of the holder of each debt security so affected, or (ii) reduce the
aforesaid percentage of debt securities, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holder of
each debt security affected.
Except as set forth below, if the principal of, premium, if any, or
interest on, this Note is payable in a Specified Currency other than U.S.
dollars and such Specified Currency is not available to the Issuer for making
payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
then the Issuer will be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis
17
<PAGE>
of the Market Exchange Rate on the date of such payment or, if the Market
Exchange Rate is not available on such date, as of the most recent practicable
date. Any payment made under such circumstances in U.S. dollars where the
required payment is in a Specified Currency other than U.S. dollars will not
constitute an Event of Default.
If payment in respect of this Note is required to be made in ECUs and
ECUs are unavailable due to the imposition of exchange controls or other
circumstances beyond the Issuer's control or are no longer used in the European
Monetary System, then all payments in respect of this Note shall be made in U.S.
dollars until ECUs are again available or so used. The amount of each payment
in U.S. dollars shall be computed on the basis of the equivalent of the ECU in
U.S. dollars, determined as described below, as of the second Business Day prior
to the date on which such payment is due.
The equivalent of the ECU in U.S. dollars as of any date shall be
determined by the Issuer or Chemical Trust Company of California as Exchange
Rate Agent on the following basis. The component currencies of the ECU for this
purpose (the "Components") shall be the currency amounts that were components of
the ECU as of the last date on which the ECU was used in the European Monetary
System. The equivalent of the ECU in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Components. The U.S. dollar
equivalent of each of the Components shall be determined by the Issuer or such
agent on the basis of the most recently available Market Exchange Rates for such
Components.
If the official unit of any Component is altered by way of combination
or subdivision, the number of units of that currency as a Component shall be
combined or subdivided in the same proportion. If two or more Components are
consolidated into a single currency, the amounts of those currencies as
Components shall be replaced by an amount in such single currency equal to the
sum of the appropriate amounts of the consolidated component currencies
expressed in such single currency. If any Component is divided into two or more
currencies, the amount of the original component currency shall be replaced by
the appropriate amounts of such two or more currencies, the sum of which shall
be equal to the amount of the original component currency.
All determinations referred to above made by the Issuer or its agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive to the extent permitted by law for all purposes and binding on the
holder of this Note.
So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in The City of New York,
and an office or agency in said City for the registration, transfer and exchange
as aforesaid of the Notes and where notices and demands to or upon the Issuer in
respect of the Notes may be served. The Issuer may designate other agencies for
the payment of said principal, premium and interest at such place or places
(subject to applicable laws and regulations) as the Issuer may decide. So long
as there shall be such an agency, the Issuer shall keep the Trustee advised of
the names and locations of such agencies, if any are so designated.
18
<PAGE>
With respect to moneys paid by the Issuer and held by the Trustee or
any Paying Agent for payment of the principal of or interest or premium, if any,
on any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting in
any way any obligation that the Issuer may have to pay the principal of or
interest or premium if any, on this Note as the same shall become due.
No provision of this Note or of the Indenture shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place, and
rate, and in the coin or currency, herein prescribed unless otherwise agreed
between the Issuer and the registered holder of this Note; provided, however, if
-------- -------
the principal of, premium, if any, or interest on, this Note is payable in a
Specified Currency other than U.S. dollars and such Specified Currency is not
available to the Issuer for making payments hereon due to circumstances beyond
the control of the Issuer, as described above, then the Issuer will be entitled
to satisfy its obligations to the holder of this Note by making such payments in
U.S. dollars as set forth above.
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.
Upon any consolidation by the Issuer with or merger by the Issuer into
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Issuer substantially as an entirety in accordance with the
Indenture, the successor corporation formed by such consolidation or into which
the Issuer is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Issuer under the Indenture with the same effect as if such successor
corporation had been named as the Issuer therein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under the Indenture and the Notes.
No recourse shall be had for the payment of the principal of, premium,
if any, or the interest on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture or any
supplemental indenture thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
19
<PAGE>
THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
20
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -____________________ Custodian ______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act ______________________________________
State
Additional abbreviations may also be used though not in the above list.
----------------------
21
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
_______________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE, OF ASSIGNEE)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.
Dated: _____________________ ____________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Note in every
particular, without alteration or change
whatsoever; signature(s) must be guaranteed
by an eligible guarantor institution (banks,
stock brokers, savings and loan associations
and credit unions with membership in an
approved membership signature guarantee
medallion program) pursuant to Securities
and Exchange Commission Rule 17Ad-15.
22
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Issuer
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the Optional Repayment Date, to the undersigned at
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name,
address and telephone number of the undersigned,
and name of contact person, if any)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
______________________________; and specify the denomination or denominations
(which shall not be less than the minimum authorized denomination) of the Notes
to be issued to the holder for the portions of the within Note not being repaid
(in the absence of any such specification, one such Note will be issued for the
portion not being repaid):_____________________________________________
Dated: _________________________ _______________________________________
NOTICE: The signature to the foregoing Election must correspond to the
name as written upon the face of this Note in every particular, without
alteration or any change whatsoever; signature(s) must be guaranteed by an
eligible guarantor institution (banks, stock brokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Securities and Exchange Commission Rule
17Ad-15.
23
<PAGE>
MATTEL, INC.
$250,000,000
Series A Medium-Term Notes
Due More Than Nine Months From Date of Issue
DISTRIBUTION AGREEMENT
September 19, 1994
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Dear Sirs:
Mattel, Inc., a Delaware corporation (the "Company"), confirms its
agreement with each of you with respect to the issue and sale from time to time
by the Company of up to $250,000,000 (or the equivalent thereof in one or more
foreign currencies or composite currencies) aggregate initial public offering
price of its Series A Medium-Term Notes due more than nine months from date of
issue (the "Notes"). The Notes will be issued under an Indenture dated as of
August 1, 1994 (the "Indenture") between the Company and Chemical Trust Company
of California, as Trustee (the "Trustee"), and will have the maturities,
interest rates, redemption provisions, if any, and other terms as set forth in
supplements to the Basic Prospectus referred to below.
The Company hereby appoints Morgan Stanley & Co. Incorporated ("Morgan
Stanley") and CS First Boston Corporation ("CS First Boston") (individually, an
"Agent" and collectively, the "Agents") as its exclusive agents, subject to
Section 12, for the purpose of soliciting and receiving offers to purchase Notes
from the Company by others and, on the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, each Agent agrees to use reasonable efforts to solicit and receive offers
to purchase Notes upon terms acceptable to the Company at such times and in such
amounts as the Company shall from time to time specify. In addition, any Agent
may also purchase Notes as principal pursuant to the terms of a terms agreement
relating to such sale (a "Terms Agreement") in accordance with the provisions of
Section 2(b) hereof.
<PAGE>
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Notes. Such registration statement, including the exhibits thereto, as amended
at the Commencement Date (as hereinafter defined), is hereinafter referred to as
the "Registration Statement." The Company proposes to file with the Commission
from time to time, pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"), supplements to the prospectus included in the
Registration Statement that will describe certain terms of the Notes. The
prospectus in the form in which it appears in the Registration Statement is
hereinafter referred to as the "Basic Prospectus." The term "Prospectus" means
the Basic Prospectus together with the prospectus supplement or supplements
(each a "Prospectus Supplement") specifically relating to Notes, as filed with,
or transmitted for filing to, the Commission pursuant to Rule 424. As used
herein, the terms "Basic Prospectus" and "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").
1. Representations and Warranties. The Company represents and
------------------------------
warrants to and agrees with each Agent as of the Commencement Date, as of each
time the Company accepts an offer to purchase Notes (including any purchase by
an Agent pursuant to a Terms Agreement), as of each time the Company issues and
delivers Notes and as of each time the Registration Statement or the Basic
Prospectus is amended or supplemented, as follows (it being understood that such
representations, warranties and agreements shall be deemed to relate to the
Registration Statement, the Basic Prospectus and the Prospectus, each as amended
or supplemented to each such time):
(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
2
<PAGE>
which they were made, not misleading, except that (1) the representations
and warranties set forth in this Section 1(b) do not apply (A) to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to an Agent furnished to the Company in
writing by such Agent 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 and (2) the representations and
warranties set forth in clauses (iii) and (iv) above, when made as of the
Commencement Date or as of any time on which the Company accepts an offer
to purchase Notes, shall be deemed not to cover information concerning an
offering of particular Notes to the extent such information will be set
forth in a supplement to the Basic Prospectus.
(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.
(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.
3
<PAGE>
(f) Each of this Agreement and any applicable Written Terms
Agreement (as hereinafter defined) 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 Notes have been duly authorized and established as a
series of securities under the Indenture and, when the terms of a
particular Note and its issuance and sale have been duly authorized and
established by all necessary corporate action in conformity with the
Indenture, and such Note has been duly completed, executed, authenticated
and issued in accordance with the provisions of the Indenture and delivered
to and duly paid for by the purchasers thereof as contemplated by this
Agreement, such Note will be entitled to the benefits of the Indenture and
will be a valid and binding obligation 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.
(i) The execution and delivery by the Company of this Agreement,
the Notes, the Indenture and any applicable Written Terms Agreement, and
the performance by the Company of its obligations under this Agreement, the
Notes, the Indenture and any applicable Terms Agreement 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
Notes, the Indenture and any applicable Terms Agreement, 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 Notes.
(j) 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.
(k) 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 or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are
4
<PAGE>
required to be described in the Registration Statement or the Prospectus or
to be filed or incorporated by reference as exhibits to the Registration
Statement that are not described or filed or incorporated as required.
(l) 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 (collectively, the "Intellectual Property") employed by
them in connection with the business operated by them, except to the extent
that the failure to own or possess the Intellectual Property would not have
a material adverse effect on the Company and its subsidiaries taken as a
whole, 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 Agents.
(m) 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.
(n) 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 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.
(o) 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
5
<PAGE>
liabilities would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(p) 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.
Notwithstanding the foregoing, the representations and warranties set
forth in Section 1(b)(iii) and (iv), (h) (except as to due authorization of the
Notes) and (i), when made as of the Commencement Date, with respect to any Notes
the payments of principal or interest on which will be determined by reference
to one or more currency exchange rates, commodity prices, equity indices or
other factors, shall be deemed not to address the application of the Commodity
Exchange Act, as amended, or the rules, regulations or interpretations of the
Commodity Futures Trading Commission.
2. Solicitations as Agent; Purchases as Principal
----------------------------------------------
(a) Solicitations as Agent. In connection with an Agent's
----------------------
actions as agent hereunder, such Agent agrees to use reasonable efforts to
solicit offers to purchase Notes upon the terms and conditions set forth in
the Prospectus as then amended or supplemented.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase Notes. As soon as
practicable, but in any event not later than one business day in New York,
after receipt of notice from the Company, the Agents will suspend
solicitations of offers to purchase Notes from the Company until such time
as the Company has advised the Agents that such solicitation may be
resumed. While such solicitation is suspended, the Company shall not be
required to deliver any certificates, opinions or letters in accordance
with Sections 5(a), 5(b) and 5(c); provided, however, that if the
-------- -------
Registration Statement or Prospectus is amended or supplemented during the
period of suspension (other than by an amendment or supplement providing
solely for a change in the interest rates, redemption provisions,
amortization schedules or maturities offered on the Notes or for a change
the Agents deem to be immaterial), no Agent shall be required to resume
soliciting offers to
6
<PAGE>
purchase Notes until the Company has delivered such certificates, opinions
and letters as such Agent may request.
The Company agrees to pay to each Agent, as consideration for the
sale of each Note resulting from a solicitation made or an offer to
purchase received by such Agent, a commission in the form of a discount
from the purchase price of such Note equal to the percentage set forth
below of the purchase price of such Note:
<TABLE>
<CAPTION>
Term Commission Rate
---- ---------------
<S> <C>
From 9 months to less than 1 year 0.125%
From 1 year to less than 18 months 0.150%
From 18 months to less than 2 years 0.200%
From 2 years to less than 3 years 0.250%
From 3 years to less than 4 years 0.350%
From 4 years to less than 5 years 0.450%
From 5 years to less than 6 years 0.500%
From 6 years to less than 9 years 0.550%
From 9 years to less than 15 years 0.600%
From 15 years to less than 20 years 0.700%
From 20 years to less than 30 years 0.750%
30 years and beyond To be negotiated
</TABLE>
Each Agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by such Agent as agent that
in its judgment should be considered by the Company. The Company shall
have the sole right to accept offers to purchase Notes and may reject any
offer in whole or in part. Each Agent shall have the right to reject any
offer to purchase Notes that it considers to be unacceptable, and any such
rejection shall not be deemed a breach of its agreements contained herein.
The procedural details relating to the issue and delivery of Notes sold by
the Agents as agents and the payment therefor shall be as set forth in the
Administrative Procedures (as hereinafter defined).
(b) Purchases as Principal. Each sale of Notes to an Agent as
----------------------
principal shall be made in accordance with the terms of this Agreement. In
connection with each such sale, the Company will enter into a Terms
Agreement that will provide for the sale of such Notes to and the purchase
thereof by such Agent. Each Terms Agreement will take the form of either
(i) a written agreement between such Agent and the Company, which may be
substantially in the form of Exhibit A hereto (a "Written Terms
Agreement"), or (ii) an oral agreement between such Agent and the Company
confirmed in writing by such Agent to the Company.
An Agent's commitment to purchase Notes pursuant to a Terms
Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Notes to be purchased by such Agent
pursuant thereto, the maturity date of such Notes, the price to be paid to
the Company for such Notes, the interest rate and
7
<PAGE>
interest rate formula, if any, applicable to such Notes and any other terms
of such Notes. Each such Terms Agreement may also specify any requirements
for officers' certificates, opinions of counsel and letters from the
independent public accountants of the Company pursuant to Section 4 hereof.
A Terms Agreement may also specify certain provisions relating to the
reoffering of such Notes by such Agent.
Each Terms Agreement shall specify the time and place of delivery
of and payment for such Notes. Unless otherwise specified in a Terms
Agreement, the procedural details relating to the issue and delivery of
Notes purchased by an Agent as principal and the payment therefor shall be
as set forth in the Administrative Procedures. Each date of delivery of
and payment for Notes to be purchased by an Agent pursuant to a Terms
Agreement is referred to herein as a "Settlement Date."
Unless otherwise specified in a Terms Agreement, if you are
purchasing Notes as principal you may resell such Notes to other dealers.
Any such sales may be at a discount, which shall not exceed the amount set
forth in the Prospectus Supplement relating to such Notes.
(c) Administrative Procedures. The Agents and the Company agree
-------------------------
to perform the respective duties and obligations specifically provided to
be performed in the Medium-Term Notes Administrative Procedures (attached
hereto as Exhibit B) (the "Administrative Procedures"), as amended from
time to time. The Administrative Procedures may be amended only by written
agreement of the Company and the Agents.
(d) Delivery. The documents required to be delivered by Section
--------
4 of this Agreement as a condition precedent to each Agent's obligation to
begin soliciting offers to purchase Notes as an agent of the Company shall
be delivered at the Los Angeles office of Latham & Watkins, counsel for the
Agents, not later than 1 p.m., Los Angeles time, on the date hereof, or at
such other time and/or place as the Agents and the Company may agree upon
in writing, but in no event later than the day prior to the earlier of (i)
the date on which the Agents begin soliciting offers to purchase Notes and
(ii) the first date on which the Company accepts any offer by an Agent to
purchase Notes pursuant to a Terms Agreement. The date of delivery of such
documents is referred to herein as the "Commencement Date."
(e) Obligations Several. The Company acknowledges that the
-------------------
obligations of the Agents under this Agreement are several and not joint.
3. Agreements. The Company agrees with each Agent that:
----------
(a) Prior to the termination of the offering of the Notes
pursuant to this Agreement or any Terms Agreement, the Company will not
file any Prospectus Supplement relating to the Notes or any amendment to
the Registration Statement unless the Company has previously furnished to
the Agents copies thereof for their review and will not file any such
proposed supplement or amendment to which the
8
<PAGE>
Agents reasonably object; provided, however, that (i) the 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 be delivered to the Agents promptly after being transmitted
for filing with the Commission and (ii) any Prospectus Supplement that
merely sets forth the terms or a description of particular Notes shall only
be reviewed and approved by the Agent or Agents offering such Notes.
Subject to the foregoing sentence, the Company will promptly cause each
Prospectus Supplement to be filed with or transmitted for filing to the
Commission in accordance with Rule 424(b) under the Securities Act. The
Company will promptly advise the Agents (i) of the filing of any amendment
or supplement to the Basic Prospectus (except that notice of the filing of
an amendment or supplement to the Basic Prospectus that merely sets forth
the terms or a description of particular Notes shall only be given to the
Agent or Agents offering such Notes), (ii) of the filing and effectiveness
of any amendment to the Registration Statement, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment
or supplement to the Basic Prospectus or for any additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose, and (v) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order or notice
of suspension of qualification and, if issued, to obtain as soon as
possible the withdrawal thereof. If the Basic Prospectus is amended or
supplemented as a result of the filing under the Exchange Act of any
document incorporated by reference in the Prospectus, no Agent shall be
obligated to solicit offers to purchase Notes so long as it is not
reasonably satisfied with such document.
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act, any event occurs or
condition exists as a result of which the Prospectus, as then amended or
supplemented, would include an untrue statement of a material fact, or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances when the Prospectus, as then amended or
supplemented, is delivered to a purchaser, not misleading, or if, in the
opinion of the Agents or in the opinion of the Company, it is necessary at
any time to amend or supplement the Prospectus, as then amended or
supplemented, to comply with applicable law, the Company will immediately
notify the Agents by telephone (with confirmation in writing) to suspend
solicitation of offers to purchase Notes and, if so notified by the
Company, the Agents shall forthwith suspend such solicitation and cease
using the Prospectus, as then amended or supplemented. If the Company
shall decide to amend or supplement the Registration Statement or
Prospectus, as then amended or supplemented, it shall so advise the Agents
promptly by telephone (with confirmation in writing) and, at its expense,
shall prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or Prospectus, as
then amended or supplemented, satisfactory
9
<PAGE>
in all respects to the Agents, that will correct such statement or omission
or effect such compliance and will supply such amended or supplemented
Prospectus to the Agents in such quantities as they may reasonably request.
If any documents, certificates, opinions and letters furnished to the
Agents pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c) in
connection with the preparation and filing of such amendment or supplement
are satisfactory in all respects to the Agents, upon the filing with the
Commission of such amendment or supplement to the Prospectus or upon the
effectiveness of an amendment to the Registration Statement the Agents will
resume the solicitation of offers to purchase Notes hereunder.
Notwithstanding any other provision of this Section 3(b), until the
distribution of any Notes an Agent may own as principal has been completed
if any event described above in this paragraph (b) occurs, the Company
will, at its own expense, forthwith prepare and cause to be filed promptly
with the Commission an amendment or supplement to the Registration
Statement or Prospectus, as then amended or supplemented, satisfactory in
all respects to such Agent, will supply such amended or supplemented
Prospectus to such Agent in such quantities as it may reasonably request
and shall furnish to such Agent pursuant to paragraph (f) below and
Sections 5(a), 5(b) and 5(c) such documents, certificates, opinions and
letters as it may request in connection with the preparation and filing of
such amendment or supplement.
(c) The Company will make generally available to its security
holders and to the Agents as soon as practicable earning statements that
satisfy the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder covering twelve-month periods
beginning, in each case, not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in Rule 158
under the Securities Act) of the Registration Statement with respect to
each sale of Notes. 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.
(d) The Company will furnish to each Agent, without charge, a
signed copy of the Registration Statement, including exhibits and all
amendments thereto, and as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments
thereto as such Agent may reasonably request.
(e) The Company will endeavor to qualify the Notes for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Agents shall reasonably request and to maintain such qualifications for as
long as the Agents shall reasonably request.
(f) The Company shall furnish to the Agents such relevant
documents and certificates of officers of the Company relating to the
business, operations and affairs of the Company, the Registration
Statement, the Basic Prospectus, any amendments or supplements thereto, the
Indenture, the Notes, this
10
<PAGE>
Agreement, the Administrative Procedures, any Terms Agreement and the
performance by the Company of its obligations hereunder or thereunder as
the Agents may from time to time reasonably request.
(g) The Company shall notify the Agents promptly in writing of
any downgrading, or of its receipt of any notice of any intended or
potential downgrading or of any review for 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.
(h) The Company will, whether or not any sale of Notes is
consummated, pay all expenses incident to the performance of its
obligations under this Agreement and any Terms Agreement, including: (i)
the preparation and filing of the Registration Statement and the Prospectus
and all amendments and supplements thereto, (ii) the preparation, issuance
and delivery of the Notes, (iii) the fees and disbursements of the
Company's counsel and accountants and of the Trustee and its counsel, (iv)
the qualification of the Notes under securities or Blue Sky laws in
accordance with the provisions of Section 3(e), including filing fees and
the fees and disbursements of counsel for the Agents in connection
therewith and in connection with the preparation of any Blue Sky or Legal
Investment Memoranda, (v) the printing and delivery to the Agents 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) the printing and delivery to the Agents of copies
of any Blue Sky or Legal Investment Memoranda, (vii) any fees charged by
rating agencies for the rating of the Notes, (viii) the fees and expenses,
if any, incurred with respect to any filing with the National Association
of Securities Dealers, Inc., (ix) the fees and disbursements of counsel for
the Agents incurred in connection with the offering and sale of the Notes,
including any opinions to be rendered by such counsel hereunder, and (x)
any reasonable out-of-pocket expenses incurred by the Agents; provided that
any advertising expenses (including tombstones) incurred by the Agents
shall have been approved by the Company.
(i) Between the date of any Terms Agreement and the Settlement
Date with respect to such Terms Agreement, the Company will not, without
such Agent's prior consent, offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company substantially similar to such
Notes (other than (i) the Notes that are to be sold pursuant to such Terms
Agreement, (ii) Notes previously agreed to be sold by the Company, and
(iii) commercial paper and short-term bank loans issued in the ordinary
course of business), except as may otherwise be provided in such Terms
Agreement.
4. Conditions of the Obligations of the Agents. Each Agent's
-------------------------------------------
obligation to solicit offers to purchase Notes as agent of the Company, each
Agent's obligation to purchase Notes pursuant to any Terms Agreement and the
obligation of any other purchaser to purchase Notes will be subject to the
accuracy of the representations and warranties on the
11
<PAGE>
part of the Company herein, to the accuracy of the statements of the Company's
officers made in each certificate furnished pursuant to the provisions hereof
and to the performance and observance by the Company of all covenants and
agreements herein contained on its part to be performed and observed (in the
case of an Agent's obligation to solicit offers to purchase Notes, at the time
of such solicitation, and, in the case of an Agent's or any other purchaser's
obligation to purchase Notes, at the time the Company accepts the offer to
purchase such Notes and at the time of issuance and delivery) and (in each case)
to the following additional conditions precedent when and as specified:
(a) Prior to such solicitation or purchase, as the case may be:
(i) 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, as amended or supplemented at the time of
such solicitation or at the time such offer to purchase was made,
that, in the judgment of the relevant Agent, is material and adverse
and that makes it, in the judgment of such Agent, impracticable to
market the Notes on the terms and in the manner contemplated by the
Prospectus, as so amended or supplemented;
(ii) there shall not have occurred any (A) suspension or
material limitation of trading generally on or by, as the case may be,
the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade, (B) suspension of trading of any securities of the Company on
any exchange or in any over-the-counter market, (C) declaration of a
general moratorium on commercial banking activities in New York by
either Federal or New York State authorities, or (D) any outbreak or
escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the relevant Agent, is
material and adverse and, in the case of any of the events described
in clauses (ii)(A) through (D), such event, singly or together with
any other such event, makes it, in the judgment of such Agent,
impracticable to market the Notes on the terms and in the manner
contemplated by the Prospectus, as amended or supplemented at the time
of such solicitation or at the time such offer to purchase was made;
and
(iii) 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;
12
<PAGE>
(A) except, in each case described in paragraph (i), (ii) or (iii) above,
as disclosed to the relevant Agent in writing by the Company prior to such
solicitation or, in the case of a purchase of Notes, as disclosed to the
relevant Agent before the offer to purchase such Notes was made, or (B)
unless in each case described in (ii) above, the relevant event shall have
occurred and been known to the relevant Agent before such solicitation or,
in the case of a purchase of Notes, before the offer to purchase such Notes
was made.
(b) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, the relevant Agents shall
have received a certificate, dated the Commencement Date or such Settlement
Date, as the case may be, signed by an executive officer of the Company to
the effect set forth in subparagraph (a)(iii) above and to the effect that
the representations and warranties of the Company contained herein are true
and correct as of such 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 such date.
The officer signing and delivering such certificate may rely upon
the best of his knowledge as to proceedings threatened.
(c) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, the relevant Agents shall
have received:
(i) The opinion, dated as of such date, of Irell & Manella,
counsel for the Company to the effect that:
(A) 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, as then amended or supplemented, and
is duly qualified to transact business and is in good standing in
the State of California;
(B) each of this Agreement and any applicable Written
Terms Agreement has been duly authorized, executed and delivered
by the Company;
(C) 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;
13
<PAGE>
(D) the Notes have been duly authorized and, if
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the purchasers
thereof on the date of such opinion, will be entitled to the
benefits of the Indenture and will be valid and binding
obligations 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) rights of acceleration and
the availability of equitable remedies may be limited by
equitable principles of general applicability;
(E) the execution and delivery by the Company of this
Agreement, the Notes, the Indenture and any applicable Written
Terms Agreement, and the performance by the Company of its
obligations under this Agreement, the Notes, the Indenture and
any applicable Terms Agreement 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 Notes, the Indenture and any applicable
Terms Agreement, 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 Notes;
(F) 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 Intellectual Property employed by them in
connection with the business 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 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 Agents;
(G) the statements (1) in the Prospectus, as then
amended or supplemented, under the captions "Description of
Notes," "Description of Debt Securities" and "Certain Federal
Income Tax
14
<PAGE>
Consequences" or "United States Income Tax Consequences to
Holders" 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;
(H) 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 developments in such
proceedings that are required to be described in the Registration
Statement or the Prospectus, as then amended or supplemented, and
are not so described or of any statutes, regulations, contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus, as then amended or
supplemented, or to be filed or incorporated by reference as
exhibits to such Registration Statement that are not so described
or filed or incorporated as required;
(I) 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;
(J) the Registration Statement has become effective
under the Act; the Prospectus, as then amended or supplemented,
has been filed as required hereunder; and to the best knowledge
of such counsel no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission;
(K) such counsel (1) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and the
Prospectus, as then amended or supplemented (except for financial
statements and schedules included therein 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, as then amended or supplemented (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
15
<PAGE>
(L) 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) each part of the Registration Statement, as then
amended, if applicable, when such part became effective did not
and, as of the date such opinion is delivered, does 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, and (2) believes that
(except for financial statements and schedules as to which such
counsel need not express any belief) the Prospectus, as then
amended or supplemented, if applicable, as of the date such
opinion is delivered does not contain any 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; provided that in the
--------
case of an opinion delivered on the Commencement Date or pursuant
to Section 5(c), the belief set forth in clause (2) above shall
be deemed not to cover information concerning an offering of
particular Notes to the extent such information will be set forth
in a supplement to the Basic Prospectus.
(ii) The opinion, dated as of such date, of the general
counsel or the assistant general counsel of the Company, to the effect
that:
(A) 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;
(B) based upon opinions, oral or written, of foreign
counsel, or of certificates of governmental officials, 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, as then amended or supplemented, 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;
16
<PAGE>
(C) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement, any applicable Written Terms Agreement, the Notes and
the Indenture will not contravene any agreement or other
instrument binding upon the Company or any of its subsidiaries
that is material, individually or in the aggregate, 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, any
applicable Terms Agreement, the Notes and the Indenture, 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
Notes;
(D) the Company and its subsidiaries own or possess the
Intellectual Property employed by them in connection with the
business operated by them, except to the extent that the failure
to own or possess the Intellectual Property would not have a
material adverse effect on the Company and its subsidiaries taken
as a whole, 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 Agents;
(E) 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 or the Prospectus, as then amended
or supplemented, and are not so described, or of any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus, as
then amended or supplemented, or to be filed or incorporated by
reference as exhibits to such Registration Statement that are not
so described or filed or incorporated as required;
(F) such counsel (1) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated
17
<PAGE>
by reference in the Registration Statement and the Prospectus, as
then amended or supplemented (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, as then amended or
supplemented (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
(G) 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) each part of the Registration Statement, as then
amended, if applicable, when such part became effective did not
and, as of the date such opinion is delivered, does 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, and (2) believes that
(except for financial statements and schedules as to which such
counsel need not express any belief) the Prospectus, as then
amended or supplemented, if applicable, as of the date such
opinion is delivered does not contain any 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; provided that in the
--------
case of an opinion delivered on the Commencement Date or pursuant
to Section 5(b), the belief set forth in clause (2) above shall
be deemed not to cover information concerning an offering of
particular Notes to the extent such information will be set forth
in a supplement to the Basic Prospectus.
(iii) The opinion, dated as of such date, of Latham &
Watkins, counsel for the Agents, covering the matters in subparagraphs
(B), (C), (D) and (G) (but only with respect to statements in the
Prospectus, as then amended or supplemented, under the captions
"Description of Notes" and "Description of Debt Securities"), and that
nothing has come to their attention with respect to the matters in
subparagraph (L) in paragraph (c)(i) above.
Notwithstanding the foregoing, the opinions described in
subparagraphs (D) (except as to due authorization of the Notes), (E),
(G)(1) and (L) of paragraph (c)(i) above, when contained in an opinion
delivered on the Commencement Date or pursuant to Sections 5(b) or 5(c),
shall be deemed not to address the application of the Commodity Exchange
Act, as amended, or the rules, regulations or interpretations of
18
<PAGE>
the Commodity Futures Trading Commission to Notes the payments of principal
or interest on which will be determined by reference to one or more
currency exchange rates, commodity prices, equity indices or other factors.
With respect to subparagraph (L) of paragraph (c)(i) 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 (L) of paragraph (c)(iii) 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 (other than 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)(i)
above shall be rendered to the relevant Agents at the request of the
Company and shall so state therein.
(d) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, the Company's independent
public accountants shall have furnished to the relevant Agents a letter or
letters, dated as of the Commencement Date or such Settlement Date, as the
case may be, in form and substance satisfactory to such Agents containing
statements and information of the type ordinarily included in accountant's
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in or incorporated by reference
into the Prospectus, as then amended or supplemented.
(e) On the Commencement Date and on each Settlement Date, the
Company shall have furnished to the relevant Agents such appropriate
further information, certificates and documents as they may reasonably
request.
5. Additional Agreements of the Company
------------------------------------
(a) Each time the Registration Statement or Prospectus is amended
or supplemented (other than by an amendment or supplement providing solely
for a change in the interest rates, redemption provisions, amortization
schedules or maturities offered on the Notes or for a change the Agents
deem to be immaterial or for an amendment or supplement by filing of a Form
8-K which the Company deems to be immaterial), the Company will deliver or
cause to be delivered forthwith to each Agent a certificate signed by an
executive officer of the Company, dated the date of such amendment or
supplement, as the case may be, in form reasonably satisfactory to the
Agents, of the same tenor as the certificate referred to in Section 4(b)
relating
19
<PAGE>
to the Registration Statement or the Prospectus as amended or supplemented
to the time of delivery of such certificate.
(b) Each time the Company furnishes a certificate pursuant to
Section 5(a), the Company will furnish or cause to be furnished forthwith
to each Agent a written opinion of the general counsel or assistant general
counsel of the Company. Any such opinion shall be dated the date of such
amendment or supplement, as the case may be, shall be in a form
satisfactory to the Agents and shall be of the same tenor as the opinion
referred to in Section 4(c)(ii), as the case may be, but modified to relate
to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion. In lieu of such
opinion, counsel last furnishing such an opinion to an Agent may furnish to
each Agent a letter to the effect that such Agent may rely on such last
opinion to the same extent as though it were dated the date of such letter
(except that statements in such last opinion will be deemed to relate to
the Registration Statement and the Prospectus as amended or supplemented to
the time of delivery of such letter.)
(c) Each time the Company files a Form 10-K or an amendment to a
Form 10-K and each time a Terms Agreement calls for a written opinion of
independent counsel for the Company, the Company will furnish or cause to
be furnished forthwith to each Agent a written opinion of independent
counsel for the Company. Any such opinion shall be dated the date of such
amendment or supplement, as the case may be, shall be in a form
satisfactory to the Agents and shall be of the same tenor as the opinion
referred to in Section 4(c)(i), as the case may be, but modified to relate
to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion. In lieu of such
opinion, counsel last furnishing such an opinion to an Agent may furnish to
each Agent a letter to the effect that such Agent may rely on such last
opinion to the same extent as though it were dated the date of such letter
(except that statements in such last opinion will be deemed to relate to
the Registration Statement and the Prospectus as amended or supplemented to
the time of delivery of such letter.)
(d) Each time the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Prospectus, the Company shall cause its independent public
accountants forthwith to furnish each Agent with a letter, dated the date
of such amendment or supplement, as the case may be, in form satisfactory
to the Agents, of the same tenor as the letter referred to in Section 4(d),
with regard to the amended or supplemental financial information included
or incorporated by reference in the Registration Statement or the
Prospectus as amended or supplemented to the date of such letter.
6. Indemnification and Contribution
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Agent
and each person, if any, who controls such Agent within the meaning of
either
20
<PAGE>
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
Agent 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 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 such Agent furnished to the Company in writing by such Agent
expressly for use therein.
(b) Each Agent 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 Agent, but only with reference to information relating to
such Agent furnished to the Company in writing by such Agent expressly for
use in the Registration Statement or 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 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 Morgan
Stanley or, if Morgan Stanley is not an indemnified party and is not
reasonably likely to become an indemnified party, by the Agents that are
indemnified
21
<PAGE>
parties, 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 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein in connection with any offering of Notes, 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 each
Agent on the other hand from the offering of such Notes or (ii) if the
allocation provided by clause (i) 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 each Agent 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 each Agent on
the other hand in connection with the offering of such Notes shall be
deemed to be in the same respective proportions as the total net proceeds
from the offering of such Notes (before deducting expenses) received by the
Company bear to the total discounts and commissions received by each Agent
in respect thereof. The relative fault of the Company on the one hand and
of each Agent 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 such Agent and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. Each
22
<PAGE>
Agent's obligation to contribute pursuant to this Section 6 shall be
several (in the proportion that the principal amount of the Notes the sale
of which by or through such Agent gave rise to such losses, claims, damages
or liabilities bears to the aggregate principal amount of the Notes the
sale of which by or through any Agent gave rise to such losses, claims,
damages or liabilities) and not joint.
(e) The Company and the Agents agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro
---
rata allocation (even if the Agents 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 paragraph (d) above 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 6, no Agent shall be required to contribute
any amount in excess of the amount by which the total price at which the
Notes referred to in paragraph (d) above that were offered and sold to the
public through such Agent exceeds the amount of any damages that such Agent
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 6 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.
7. Position of the Agents. In acting under this Agreement and in
----------------------
connection with the sale of any Notes by the Company (other than Notes sold to
an Agent pursuant to a Terms Agreement), each Agent is acting solely as agent of
the Company and does not assume any obligation towards or relationship of agency
or trust with any purchaser of Notes. An Agent shall make reasonable efforts to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Notes has been solicited by such Agent and accepted by the Company, but
such Agent shall not have any liability to the Company in the event any such
purchase is not consummated for any reason. If the Company shall default in its
obligations to deliver Notes to a purchaser whose offer it has accepted, the
Company shall hold the relevant Agent harmless against any loss, claim, damage
or liability arising from or as a result of such default and shall, in
particular, pay to such Agent the commission it would have received had such
sale been consummated.
8. Termination. This Agreement may be terminated at any time by
-----------
the Company or, as to any Agent, by the Company or such Agent upon the giving of
written notice of such termination to the other parties hereto, but without
prejudice to any rights, obligations or liabilities of any party hereto accrued
or incurred prior to such termination. The termination of this Agreement shall
not require termination of any Terms Agreement, and the termination of any such
Terms Agreement shall not require termination of this Agreement. If this
Agreement is terminated, the provisions of the third paragraph of Section
23
<PAGE>
2(a), Section 2(e), the last sentence of Section 3(b) and Sections 3(c), 3(h),
6, 7, 9, 11 and 14 shall survive; provided that if at the time of termination an
--------
offer to purchase Notes has been accepted by the Company but the time of
delivery to the purchaser or its agent of such Notes has not occurred, the
provisions of Sections 2(b), 2(c), 3(a), 3(e), 3(f), 3(g), 3(i), 4 and 5 shall
also survive until such delivery has been made.
9. Representations and Indemnities to Survive. The respective
------------------------------------------
indemnity and contribution agreements, representations, warranties and other
statements of the Company, its officers and the Agents set forth in or made
pursuant to this Agreement or any Terms Agreement will remain in full force and
effect, regardless of any termination of this Agreement or any such Terms
Agreement, any investigation made by or on behalf of an Agent or the Company or
any of the officers, directors or controlling persons referred to in Section 6
and delivery of and payment for the Notes.
10. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to Morgan Stanley, will be mailed,
delivered or telefaxed and confirmed to Morgan Stanley at 1221 Avenue of the
Americas, New York, New York 10020, Attention: Manager, Continuously Offered
Products (telefax number: 212-764-7490), with a copy to 1251 Avenue of the
Americas, New York, New York 10020, Attention: Peter Cooper, Investment Banking
Information Center, 28th Floor (telefax number: 212-703-6476), or, if sent to
CS First Boston, will be mailed, delivered or telefaxed and confirmed to CS
First Boston at 55 East 52nd Street, New York, New York 10055, Attention: Joseph
Fashano (telefax number: 212-318-0532), with a copy to Martha D. Bailey, or, if
sent to the Company, will be mailed, delivered or telefaxed and confirmed to the
Company at 333 Continental Boulevard, El Segundo, California 90245-5012,
Attention: William Stavro, Vice President and Treasurer (telefax number: 310-
252-3215), with a copy to Lee Smith, Assistant General Counsel.
11. Successors. This Agreement and any Terms Agreement will
----------
inure 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 6 and the purchasers of Notes (to the extent expressly
provided in Section 4), and no other person will have any right or obligation
hereunder.
12. Amendments. This Agreement may be amended or supplemented
----------
if, but only if, such amendment or supplement is in writing and is signed by the
Company and each Agent; provided that the Company may from time to time, on
--------
seven days' prior written notice to the Agents but without the consent of any
Agent, amend this Agreement to add as a party hereto one or more additional
firms registered under the Exchange Act, whereupon each such firm shall become
an Agent hereunder on the same terms and conditions as the other Agents that are
parties hereto. The Agents shall sign any amendment or supplement giving effect
to the addition of any such firm as an Agent under this Agreement.
13. Counterparts. This 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.
24
<PAGE>
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.
25
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and you.
Very truly yours,
MATTEL, INC.
By /s/ WILLIAM STAVRO
----------------------------
Name: William Stavro
Title: Vice President and
Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
MORGAN STANLEY & CO. INCORPORATED
By: /s/ LAURIE CAMPBELL
-------------------------------------
Name: Laurie Campbell
Title: Vice President
CS FIRST BOSTON CORPORATION
By: /s/ MARTHA D. BAILEY
--------------------------------------
Name: Martha D. Bailey
Title: Vice President
26
<PAGE>
EXHIBIT A
MATTEL, INC.
SERIES A MEDIUM-TERM NOTES
TERMS AGREEMENT
__________ __, 199_
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Attention:
Re: Distribution Agreement dated as of
September 19, 1994
(the "Distribution Agreement")
------------------------------
We agree to purchase your Series A Medium-Term Notes (the "Notes")
having the following terms:
We agree to purchase, severally and not jointly, the principal amount
of Notes set forth below opposite our names:
<TABLE>
<CAPTION>
Principal Amount
Name of Notes
---- ----------------
<S> <C>
Morgan Stanley & Co.
Incorporated
CS First Boston Corporation
Total................................. $
================
</TABLE>
A-1
<PAGE>
The Notes shall have the following terms:
<TABLE>
<CAPTION>
All Notes: Fixed Rate Notes: Floating Rate Notes:
- - ---------- ----------------- --------------------
<S> <C> <C>
Principal amount: Interest Rate: Base rate:
Purchase price: Applicability of modified Index maturity:
payment upon acceleration:
Price to public: Spread:
If yes, state issue price:
Settlement date and time: Spread multiplier:
Amortization schedule:
Place of delivery: Alternate rate event spread:
Specified currency: Initial interest rate:
Maturity date: Initial interest reset date:
Initial accrual period OID: Interest reset dates:
Total amount of OID: Interest reset period:
Original yield to maturity: Maximum interest rate:
Optional repayment date(s): Minimum interest rate:
Optional redemption date(s): Interest payment period:
Initial redemption date: Interest payment dates:
Initial redemption percentage: Calculation agent:
Annual redemption percentage
decrease:
Other terms:
</TABLE>
The provisions of Sections 1, 2(b) and 2(c) and 3 through 6, 9, 10, 11
and 14 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.
If on the Settlement Date any one or more of the Agents shall fail or
refuse to purchase Notes that it has or they have agreed to purchase on such
date, and the aggregate amount of Notes which such defaulting Agent or Agents
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate amount of the Notes to be purchased on such date, the other Agents
shall be obligated severally in the proportions that the amount of Notes set
forth opposite their respective names above bears to the aggregate amount of
Notes set forth opposite the names of all such non-defaulting Agents, or in such
other proportions as _______________________________ may specify, to purchase
the Notes which such defaulting Agent or Agents agreed but failed or refused to
purchase on such date; provided that in no event shall the amount of Notes that
--------
any Agent has agreed to purchase pursuant to
A-2
<PAGE>
this Agreement be increased pursuant to this paragraph by an amount in excess of
one-ninth of such amount of Notes without the written consent of such Agent. If
on the Settlement Date any Agent or Agents shall fail or refuse to purchase
Notes and the aggregate amount of Notes with respect to which such default
occurs is more than one-tenth of the aggregate amount of Notes to be purchased
on such date, and arrangements satisfactory to _________________________________
_________________________________________ and the Company for the purchase of
such Notes are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Agent or the
Company. In any such case either _________________________________________ or
the Company shall have the right to postpone the Settlement 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 Agent from liability in respect of any default of such
Agent under this Agreement.
This Agreement is subject to termination on the terms incorporated by
reference herein. If this Agreement is so terminated, the provisions of
Sections 3(h), 6, 9, 11 and 14 of the Distribution Agreement shall survive for
the purposes of this Agreement.
A-3
<PAGE>
The following information, opinions, certificates, letters and
documents referred to in Section 4 of the Distribution Agreement will be
required:
MORGAN STANLEY & CO. INCORPORATED
By:
---------------------------------
Name:
Title:
CS FIRST BOSTON CORPORATION
By:
----------------------------------
Name:
Title:
Accepted:
MATTEL, INC.
By:
-------------------------------
Name:
Title:
A-4
<PAGE>
EXHIBIT B
MATTEL, INC.
SERIES A MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
Explained below are the administrative procedures and specific terms
of the offering of Series A Medium-Term Notes (the "Notes"), on a continuous
basis by Mattel, Inc. (the "Company") pursuant to the Distribution Agreement,
dated as of September 19, 1994 (the "Distribution Agreement") among the Company
and Morgan Stanley & Co. Incorporated ("Morgan Stanley"), and CS First Boston
Corporation ("CS First Boston") (the "Agents"). The Notes will be issued under
an Indenture dated as of August 1, 1994 (the "Indenture") between the Company
and Chemical Trust Company of California, as trustee (the "Trustee"). In the
Distribution Agreement, the Agents have agreed to use reasonable efforts to
solicit purchases of the Notes, and the administrative procedures explained
below will govern the issuance and settlement of any Notes sold through an
Agent, as agent of the Company. An Agent, as principal, may also purchase Notes
for its own account, and if requested by such Agent, the Company and such Agent
will enter into a terms agreement (a "Terms Agreement"), as contemplated by the
Distribution Agreement. The administrative procedures explained below will
govern the issuance and settlement of any Notes purchased by an Agent, as
principal, unless otherwise specified in the applicable Terms Agreement.
Capitalized terms used herein without definition shall have the meaning ascribed
to them in the Notes.
The Trustee will be the Registrar, Calculation Agent, Authenticating
Agent and Paying Agent for the Notes and will perform the duties specified
herein. Each Note will be represented by either a Global Security (as defined
below) delivered to the Trustee, as agent for The Depository Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry
Note") or a certificate delivered to the holder thereof or a person designated
by such holder (a "Certificated Note"). Except as set forth in the Indenture,
an owner of a Book-Entry Note will not be entitled to receive a Certificated
Note.
Book-Entry Notes, which may be payable only in U.S. dollars, will be
issued in accordance with the administrative procedures set forth in Part I
hereof as they may subsequently be amended as the result of changes in DTC's
operating procedures. Certificated Notes will be issued in accordance with the
administrative procedures set forth in Part II hereof. Unless otherwise defined
herein, terms defined in the Indenture, the Notes or any prospectus supplement
relating to the Notes shall be used herein as therein defined.
The Company will advise the Agents in writing of the employees of the
Company with whom the Agents are to communicate regarding offers to purchase
Notes and the related settlement details.
B-1
<PAGE>
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representation from
the Company and the Trustee to DTC, dated as of September 19, 1994, and a
Medium-Term Note Certificate Agreement between Chemical Bank as agent for the
Trustee and DTC, dated as of December 2, 1988 (the "MTN Certificate Agreement"),
and its obligations as a participant in DTC, including DTC's Same-Day Funds
Settlement System ("SDFS").
<TABLE>
<S> <C>
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes, the Company will issue a single global
security in fully registered form without coupons
(a "Global Security") representing up to U.S.
$150,000,000 principal amount of all such Notes
that have the same Original Issue Date, Maturity
Date and other terms. Each Global Security will be
dated and issued as of the date of its
authentication by the Trustee. Each Global
Security will bear an "Interest Accrual Date,"
which will be (i) with respect to an original
Global Security (or any portion thereof), its
original issuance date and (ii) with respect to
any Global Security (or any portion thereof)
issued subsequently upon exchange of a Global
Security, or in lieu of a destroyed, lost or
stolen Global Security, the most recent Interest
Payment Date to which interest has been paid or
duly provided for on the predecessor Global
Security (or if no such payment or provision has
been made, the original issuance date of the
predecessor Global Security), regardless of the
date of authentication of such subsequently issued
Global Security. Book-Entry Notes may be payable
only in U.S. dollars. No Global Security will
represent any Certificated Note.
Denominations: Book-Entry Notes will be issued in principal
amounts of U.S. $1,000 or any amount in excess
thereof that is an integral multiple of U.S.
$1,000. Global Securities will be denominated in
principal amounts not in excess of U.S.
$150,000,000. If one or more Book-Entry Notes
having an aggregate principal amount in excess of
$150,000,000 would, but for the preceding
sentence, be represented by a single Global
Security, then one Global Security will be issued
to represent each U.S. $150,000,000 principal
amount of such Book-Entry Note or Notes and an
additional Global Security will be issued to
represent any remaining principal amount of such
Book-Entry Note or Notes. In such a case, each of
the Global Securities representing such Book-Entry
Note or Notes shall be assigned the same CUSIP
number.
</TABLE>
B-2
<PAGE>
<TABLE>
<S> <C>
Preparation of If any offer to purchase a Book-Entry Note is
Pricing accepted by or on behalf of the Company, the
Supplement: Company will prepare a pricing supplement (a
"Pricing Supplement") reflecting the terms of such
Note. The Company (i) will arrange to file such
Pricing Supplement with the Commission in
accordance with the applicable paragraph of Rule
424(b) under the Securities Act of 1933, as
amended, and (ii) will, as soon as possible and in
any event not later than 11:00 a.m. on the
business day immediately following the applicable
trade date, deliver the number of copies of such
Pricing Supplement to the relevant Agent as such
Agent shall request at the following address:
If to Morgan Stanley:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
Attn: Medium Term Note Trading Desk,
Carlos Cabrera
Telephone: (212) 296-5830
Telecopy: (212) 764-7490
with a copy to:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
4th Floor
New York, New York 10020
Attn: Manager - Continuously Offered Products
Telephone: (212) 296-6700
Telecopy: (212) 769-7490
If to CS First Boston:
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Attn: Joseph Fashano
Telephone: (212) 902-3107
Telecopy: (212) 318-0532
In each instance that a Pricing Supplement is
prepared, the relevant Agent will affix the
Pricing Supplement to Prospectuses prior to
their use.
</TABLE>
B-3
<PAGE>
<TABLE>
<S> <C>
Outdated Pricing Supplements, and the Prospectuses
to which they are attached (other than those
retained for files), will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-Entry Note
and the authentication and issuance of the Global
Security representing such Note shall constitute
"settlement" with respect to such Note. All offers
accepted by the Company will be settled on the
fifth Business Day next succeeding the date of
acceptance pursuant to the timetable for
settlement set forth below, unless the Company and
the purchaser agree to settlement on another day,
which shall be no earlier than the next Business
Day.
Settlement Settlement Procedures with regard to each
Procedures: Book-Entry Note sold by the Company to or
through an Agent (unless otherwise specified
pursuant to a Terms Agreement) shall be as
follows:
A. The relevant Agent will advise the Company
by telephone that such Note is a Book-Entry
Note and of the following settlement
information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry
Note, the Interest Rate, whether such Note
will pay interest annually or semi-
annually and whether such Note is an
Amortizing Note, and, if so, the
amortization schedule, or, in the case of
a Floating Rate Book-Entry Note, the
Initial Interest Rate (if known at such
time), Interest Payment Date(s), Interest
Payment Period, Calculation Agent, Base
Rate, Index Maturity, Interest Reset
Period, Initial Interest Reset Date,
Interest Reset Date, Spread or Spread
Multiplier (if any), Minimum Interest Rate
(if any), Maximum Interest Rate (if any),
and the Alternate Rate Event Spread (if
any).
4. Redemption or repayment provisions
(if any).
5. Settlement date and time (Original
Issue Date).
6. Interest Accrual Date.
7. Price.
8. Agent's commission (if any) determined as
provided in the Distribution Agreement.
</TABLE>
B-4
<PAGE>
<TABLE>
<S> <C>
9. Whether the Note is an Original Issue
Discount Note (an "OID Note"), and if it
is an OID Note, the total amount of OID,
the yield to maturity, the initial accrual
period OID and the applicability of
Modified Payment upon Acceleration (and,
if so, the Issue Price).
10. Whether the Note is an Indexed Note, and
if it is an Indexed Note, the Denominated
Currency, the Indexed Currency or
Currencies, the Payment Currency, the
Exchange Rate Agent, the Reference
Dealers, the Face Amount, the Fixed Amount
of each Indexed Currency, the Aggregate
Fixed Amount of each Indexed Currency and
the Authorized Denominations (if other
than U.S. Dollars).
11. Whether the Note is a Renewable Note, and
if it is a Renewable Note, the Initial
Maturity Date and the Final Maturity Date.
12. Whether the Company has the option to
extend the Original Maturity Date of the
Note, and if so, the Final Maturity Date
of such Note.
13. Whether the Company has the option to
reset the Interest Rate, the Spread or the
Spread Multiplier of the Note.
14. Any other applicable terms.
B. The Company will advise the Trustee by
telephone or electronic transmission
(confirmed in writing at any time on the same
date) of the information set forth in
Settlement Procedure "A" above. The Trustee
will then assign a CUSIP number to the Global
Security representing such Note and will
notify the Company and the relevant Agent of
such CUSIP number by telephone as soon as
practicable.
C. The Trustee will enter a pending deposit
message through DTC's Participant Terminal
System, providing the following settlement
information to DTC, to all relevant Agents and
the CUSIP Bureau of Standard & Poor's
Corporation:
1. The information set forth in Settlement
Procedure "A".
2. The Initial Interest Payment Date for such
Note, the number of days by which such
date succeeds the related DTC Record Date
(which in the case of Floating Rate Notes
which reset daily or weekly, shall be the
date five
</TABLE>
B-5
<PAGE>
<TABLE>
<S> <C>
calendar days immediately preceding the
applicable Interest Payment Date and, in
the case of all other Notes, shall be the
Record Date as defined in the Note) and,
if known, the amount of interest payable
on such Initial Interest Payment Date.
3. The CUSIP number of the Global Security
representing such Note.
4. Whether such Global Security will
represent any other Book-Entry Note (to
the extent known at such time).
5. Whether such Note is an Amortizing Note
(by an appropriate notation in the
comments field of DTC's Participant
Terminal System).
6. The number of participant accounts to be
maintained by DTC on behalf of the
relevant Agent and the Trustee.
D. The Trustee will complete and authenticate the
Global Security representing such Note.
E. DTC will credit such Note to the Trustee's
participant account at DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such
Note to the relevant Agent's participant
account and (ii) debit such Agent's settlement
account and credit the Trustee's settlement
account for an amount equal to the price of
such Note less such Agent's commission (if
any). The entry of such a deliver order shall
constitute a representation and warranty by
the Trustee to DTC that (a) the Global
Security representing such Book-Entry Note has
been issued and authenticated and (b) the
Trustee is holding such Global Security
pursuant to the MTN Certificate Agreement.
G. Unless the relevant Agent is the end purchaser
of such Note, such Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit
such Note to such Agent's participant account
and credit such Note to the participant
accounts of the Participants with respect to
such Note and (ii) to debit the settlement
accounts of such Participants and credit the
settlement account of such Agent for an amount
equal to the price of such Note.
</TABLE>
B-6
<PAGE>
<TABLE>
<S> <C>
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
I. The Trustee will credit to the account of the
Company maintained with respect to any
transaction conducted in U.S. Dollars at Bank
of America, Concord, California 94520, account
number 12354-07478, to the account of Mattel
Toys, ABA #121000358, or such other account as
the Company shall have specified to such Agent
and the Trustee, and with respect to any
transaction conducted in any Specified
Currency other than U.S. Dollars, to such
account as the Company shall have specified to
such Agent and the Trustee, in immediately
available funds the amount transferred to the
Trustee in accordance with Settlement
Procedure "F".
J. Unless the relevant Agent is the end purchaser
of such Note, such Agent will confirm the
purchase of such Note to the purchaser either
by transmitting to the Participants with
respect to such Note a confirmation order or
orders through DTC's institutional delivery
system or by mailing a written confirmation to
such purchaser.
K. Monthly, the Trustee will send to the Company
a statement setting forth the principal amount
of Notes outstanding as of that date under the
Indenture and setting forth a brief
description of any sales of which the Company
has advised the Trustee that have not yet been
settled.
Settlement For sales by the Company of Book-Entry Notes to or
Procedures through an Agent (unless otherwise specified
Timetable: pursuant to a Terms Agreement) for settlement on
the first Business Day after the sale date,
Settlement Procedures "A" through "J" set forth
above shall be completed as soon as possible but
not later than the respective times in New York
City set forth below:
</TABLE>
<TABLE>
<CAPTION>
Settlement
Procedure Time
---------- ----
<C> <S>
A 11:00 A.M. on sale date
B 12:00 Noon on sale date
C 2:00 P.M. on sale date
D 9:00 A.M. on settlement date
E 10:00 A.M. on settlement date
F-G 2:00 P.M. on settlement date
H 4:45 P.M. on settlement date
I-J 5:00 P.M. on settlement date
</TABLE>
B-7
<PAGE>
<TABLE>
<S> <C>
If a sale is to be settled more than one Business
Day after the sale date, Settlement Procedures
"A", "B" and "C" shall be completed as soon as
practicable but no later than 11:00 A.M., 12:00
Noon and 2:00 P.M., respectively, on the first
Business Day after the sale date. If the Initial
Interest Rate for a Floating Rate Book-Entry Note
has not been determined at the time that
Settlement Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed as soon
as such rate has been determined but no later than
12:00 Noon and 2:00 P.M., respectively, on the
first Business Day before the settlement date.
Settlement Procedure "H" is subject to extension
in accordance with any extension of Fedwire
closing deadlines and in the other events
specified in the SDFS operating procedures in
effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled
or cancelled, the Trustee, after receiving notice
from the Company or the relevant Agent, will
deliver to DTC, through DTC's Participant Terminal
System, a cancellation message to such effect by
no later than 2:00 p.m. on the Business Day
immediately preceding the scheduled settlement
date.
Failure If the Trustee fails to enter an SDFS deliver
to Settle: order with respect to a Book-Entry Note pursuant
to Settlement Procedure "F", the Trustee may
deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable a withdrawal
message instructing DTC to debit such Note to the
Trustee's participant account, provided that the
Trustee's participant account contains a principal
amount of the Global Security representing such
Note that is at least equal to the principal
amount to be debited. If a withdrawal message is
processed with respect to all the Book-Entry Notes
represented by a Global Security, the Trustee will
mark such Global Security "cancelled," make
appropriate entries in the Trustee's records and
send such cancelled Global Security to the
Company. The CUSIP number assigned to such Global
Security shall, in accordance with the procedures
of the CUSIP Service Bureau of Standard & Poor's
Corporation, be cancelled and not immediately
reassigned. If a withdrawal message is processed
with respect to one or more, but not all, of the
Book-Entry Notes represented by a Global Security,
the Trustee will exchange such Global Security for
two Global Securities, one of which shall
represent such Book-Entry Note or Notes and shall
be cancelled immediately after issuance and the
other of which shall represent the remaining Book-
Entry Notes previously represented by the
surrendered Global Security and shall bear the
CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Note is
not timely paid to the Participants with respect
to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in
DTC, acting on behalf of such purchaser), such
Participants and, in turn, the relevant Agent may
</TABLE>
B-8
<PAGE>
<TABLE>
<S> <C>
enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures "F" and
"G", respectively. Thereafter, the Trustee will
deliver the withdrawal message and take the
related actions described in the preceding
paragraph. Notwithstanding the foregoing, upon any
failure to settle with respect to a Book-Entry
Note, DTC may take any actions in accordance with
its SDFS operating procedures then in effect.
In the event of a failure to settle with respect
to one or more, but not all, of the Book-Entry
Notes to have been represented by a Global
Security, the Trustee will provide, in accordance
with Settlement Procedures "D" and "F", for the
authentication and issuance of a Global Security
representing the Book-Entry Notes to be
represented by such Global Security and will make
appropriate entries in its records.
</TABLE>
B-9
<PAGE>
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as Registrar in connection with the Certificated
Notes.
<TABLE>
<S> <C>
Issuance: Each Certificated Note will be dated and issued as
of the date of its authentication by the Trustee.
Each Certificated Note will bear an Original Issue
Date, which will be (i) with respect to an
original Certificated Note (or any portion
thereof), its original issuance date (which will
be the settlement date) and (ii) with respect to
any Certificated Note (or portion thereof) issued
subsequently upon transfer or exchange of a
Certificated Note or in lieu of a destroyed, lost
or stolen Certificated Note, the original issuance
date of the predecessor Certificated Note,
regardless of the date of authentication of such
subsequently issued Certificated Note.
Preparation If any offer to purchase a Certificated Note is
of Pricing accepted by or on behalf of the Company, the
Supplement: Company will prepare a Pricing Supplement
reflecting the terms of such Note. The Company (i)
will arrange to file such Pricing Supplement with
the Commission in accordance with the applicable
paragraph of Rule 424(b) under the Act and (ii)
will, as soon as possible and in any event not
later than 11:00 a.m. on the Business Day
immediately following the applicable trade date,
deliver the number of copies of such Pricing
Supplement to the relevant Agent as such Agent
shall request at the following address:
If to Morgan Stanley:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
4th Floor
New York, New York 10020
Attn: Medium Term Note Trading Desk,
Carlos Cabrera
Telephone: (212) 296-5830
Telecopy: (212) 764-7490
</TABLE>
B-10
<PAGE>
<TABLE>
<S> <C>
with a copy to:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
4th Floor
New York, New York 10020
Attn: Manager - Continuously Offered Products
Telephone: (212) 296-6700
Telecopy: (212) 769-7490
If to CS First Boston:
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Attn: Joseph Fashano
Telephone: (212) 902-3107
Telecopy: (212) 318-0532
In each instance that a Pricing Supplement is
prepared, the relevant Agent will affix the
Pricing Supplement to Prospectuses prior to their
use. Outdated Pricing Supplements, and the
Prospectuses to which they are attached (other
than those retained for files), will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in exchange for an authenticated
Certificated Note delivered to the relevant Agent
and such Agent's delivery of such Note against
receipt of immediately available funds shall
constitute "settlement" with respect to such Note.
All offers accepted by the Company will be settled
on the fifth Business Day next succeeding the date
of acceptance pursuant to the timetable for
settlement set forth below, unless the Company and
the purchaser agree to settlement on another date,
which date shall be no earlier than the next
Business Day.
Settlement Settlement Procedures with regard to each
Procedures: Certificated Note sold by the Company to or
through an Agent (unless otherwise specified
pursuant to a Terms Agreement) shall be as
follows:
A. The relevant Agent will advise the Company by
telephone that such Note is a Certificated
Note and of the following settlement
information:
1. Name in which Note is to be registered
("Registered Owner").
</TABLE>
B-11
<PAGE>
<TABLE>
<S> <C>
2. Address of the Registered Owner and
address for payment of principal and
interest.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate Certificated
Note, the Interest Rate, whether such Note
will pay interest annually or semi-
annually and whether such Note is an
Amortizing Note and, if so, the
amortization schedule, or, in the case of
a Floating Rate Certificated Note, the
Initial Interest Rate (if known at such
time), Interest Payment Date(s), Interest
Payment Period, Calculation Agent, Base
Rate, Index Maturity, Interest Reset
Period, Initial Interest Reset Date,
Interest Reset Dates, Spread or Spread
Multiplier (if any), Minimum Interest Rate
(if any), Maximum Interest Rate (if any)
and the Alternate Rate Event Spread (if
any).
7. Redemption or repayment provisions
(if any).
8. Settlement date and time
(Original Issue Date).
9. Interest Accrual Date.
10. Price.
11. Agent's commission (if any) determined as
provided in the Distribution Agreement.
12. Denominations.
13. Specified Currency.
14. Whether the Note is an OID Note, and if it
is an OID Note, the total amount of OID,
the yield to maturity, the initial accrual
period OID and the applicability of
Modified Payment upon Acceleration (and if
so, the Issue Price).
15. Whether the Note is an Indexed Note, and
if it is an Indexed Note, the Denominated
Currency, the Indexed Currency or
Currencies, the Payment Currency, the
</TABLE>
B-12
<PAGE>
<TABLE>
<S> <C>
Exchange Rate Agent, the Reference
Dealers, the Face Amount, the Fixed Amount
of each Indexed Currency, the Aggregate
Fixed Amount of each Indexed Currency and
the Authorized Denominations (if other
than U.S. Dollars).
16. Whether the Note is a Renewable Note, and
if it is a Renewable Note, the Initial
Maturity Date and the Final Maturity Date.
17. Whether the Company has the option to
extend the Original Maturity Date of the
Note, and, if so, the Final Maturity Date
of such Note.
18. Whether the Company has the option to
reset the Interest Rate, the Spread or the
Spread Multiplier of the Note.
19. Any other applicable terms.
B. The Company will advise the Trustee by
telephone or electronic transmissions
(confirmed in writing at any time on the same
date) of the information set forth in
Settlement Procedure "A" above.
C. The Company will have delivered
to the Trustee a packet for such
Note, which packet will contain the
following documents in forms that
have been approved by the Company,
the relevant Agent and the Trustee:
1. Note with customer confirmation.
2. Stub One - for the Trustee.
3. Stub Two - for the relevant Agent.
4. Stub Three - for the Company.
D. The Trustee will complete such Note and
authenticate such Note and deliver it (with
the confirmation) and Stubs One and Two to the
relevant Agent at the following applicable
addresses: If to Morgan Stanley to Bank of New
York, Dealer Clearance Department, Window B, 1
Wall Street, 4th Floor, New York, New York
10005, Attn: For the Account of Morgan Stanley
& Co., and if to CS First Boston to Five World
Trade Center, New York, New York 10048, Attn:
Paul Riley. Such Agent will acknowledge
receipt of the Note by stamping or otherwise
mailing Stub One and returning it to the
Trustee. Such delivery will be made only
against such acknowledgment of receipt of
evidence that
</TABLE>
B-13
<PAGE>
<TABLE>
<S> <C>
instructions have been given by such Agent for
payment to the account of the Company with
respect to any transaction conducted in U.S.
Dollars at Bank of America, Concord,
California 94520, account number 12354-07478,
to the account of Mattel Toys, ABA #121000358,
or such other account as the Company shall
have specified to such Agent and the Trustee,
and with respect to any transaction conducted
in any Specified Currency other than U.S
Dollars, to such account as the Company shall
have specified to such Agent and the Trustee,
in immediately available funds, of an amount
equal to the price of such Note less such
Agent's commission (if any). In the event that
the instructions given by such Agent for
payment to the account of the Company are
revoked, the Company will as promptly as
possible wire transfer to the account of such
Agent an amount of immediately available funds
equal to the amount of such payment made.
E. Unless the relevant Agent is the end purchaser
of such Note, such Agent will deliver such
Note (with confirmation) to the customer
against payment in immediately available
funds. Such Agent will obtain the
acknowledgment of receipt of such Note by
retaining Stub Two.
F. The Trustee will send Stub Three to the
Company by first-class mail. Monthly, the
Trustee will also send to the Company a
statement setting forth the principal amount
of the Notes outstanding as of that date under
the Indenture and setting forth a brief
description of any sales of which the Company
has advised the Trustee that have not yet been
settled.
Settlement For sales by the Company of Certificated Notes to
Procedures or through an Agent (unless otherwise specified
Timetable: pursuant to a Terms Agreement), Settlement
Procedures "A" through "F" set forth above shall
be completed on or before the respective times in
New York City set forth below:
<CAPTION>
Settlement
Procedure Time
---------- ----
<C> <S>
A 2:00 P.M on the day before settlement date
B 3:00 P.M. on the day before settlement date
C-D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
</TABLE>
B-14
<PAGE>
<TABLE>
<S> <C>
Failure to Settle: If a purchaser fails to accept delivery of and
make payment for any Certificated Note, the
relevant Agent will notify the Company and the
Trustee by telephone and return such Note to the
Trustee. Upon receipt of such notice, the Company
will immediately wire transfer to the account of
such Agent an amount equal to the price of such
Note less such Agent's commission in respect of
such Note (if any). Such wire transfer will be
made on the settlement date, if possible, and in
any event not later than the business Day
following the settlement date. If the failure
shall have occurred for any reason other than a
default by such Agent in the performance of its
obligations hereunder and under the Distribution
Agreement, then the Company will reimburse such
Agent or the Trustee, as appropriate, on an
equitable basis for its loss of the use of the
funds during the period when they were credited to
the account of the Company. Immediately upon
receipt of the Certificated Note in respect of
which such failure occurred, the Trustee will mark
such Note "cancelled," make appropriate entries in
the Trustee's records and send such Note to the
Company.
</TABLE>
B-15
