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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: April 11, 1996
MATTEL, INC.
------------
(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
----------------------------
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
- ------- ---------------------------------
(a) Financial statements of businesses acquired: None
(b) Pro forma financial information: None
(c) Exhibits:
4.1 Indenture dated as of February 15, 1996 between the
Registrant and Chemical Trust Company of California, as
Trustee, relating to the Debt Securities
99.0 Distribution Agreement dated as of April 11, 1996 among
the Registrant, Morgan Stanley & Co. Incorporated and
CS First Boston Corporation
2
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SIGNATURES
----------
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/ Leland P. Smith
-------------------------
Leland P. Smith
Assistant Secretary and
Date: April 11, 1996 Assistant General Counsel
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3
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EXHIBIT 4.1
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MATTEL, INC.
--------------------
INDENTURE
Dated as of February 15, 1996
--------------------
CHEMICAL TRUST COMPANY OF CALIFORNIA
Trustee
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<PAGE>
TABLE OF CONTENTS
PAGE
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
SECTION 7.3 Individual Rights of Trustee................... 32
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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
SECTION 10.10 Governing Laws.................................. 45
SECTION 10.11 No Adverse Interpretation of Other Agreements... 45
iii
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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
iv
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MATTEL, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of February 15, 1996
<TABLE>
<CAPTION>
<S> <C>
(S) 310(a)(1) ................................. 7.10
(a)(2) ................................. 7.10
(a)(3) ................................. Not Applicable
(a)(4) ................................. Not Applicable
(a)(5) ................................. 7.10
(b) ................................. 7.10
(S) 311(a) ................................. 7.11
(b) ................................. 7.11
(c) ................................. Not Applicable
(S) 312(a) ................................. 2.6
(b) ................................. 10.3
(c) ................................. 10.3
(S) 313(a) ................................. 7.6
(b)(1) ................................. 7.6
(b)(2) ................................. 7.6
(c)(1) ................................. 7.6
(d) ................................. 7.6
(S) 314(a) ................................. 4.2, 10.5
(b) ................................. Not Applicable
(c)(1) ................................. 10.4
(c)(2) ................................. 10.4
(c)(3) ................................. Not Applicable
(d) ................................. Not Applicable
(e) ................................. 10.5
(f) ................................. Not Applicable
(S) 315(a) ................................. 7.1
(b) ................................. 7.5
(c) ................................. 7.1
(d) ................................. 7.1
(e) ................................. 6.14
(S) 316(a) ................................. 2.10
(a)(1)(A) ................................... 6.2
................................... 6.12
(a)(1)(B) ................................... 6.13
(b) ................................... 6.8
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
(S) 317(a)(1) ................................. 6.3
(a)(2) ................................. 6.4
(b) ................................. 2.5
(S) 318(a) ................................. 10.1
</TABLE>
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Note: This reconciliation and tie shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE>
Indenture dated as of February 15, 1996 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" means (i) any direct or indirect Subsidiary
of the Company that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933,
as amended, as such regulation is in effect on the date hereof, or (ii) any
group of direct or indirect Subsidiaries of the Company that, taken together as
a group, would be a "significant subsidiary" as defined in Article 1, Rule 1-02
of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as
amended, as such regulation is in effect on the date hereof,
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any specified person means (i) a corporation a
majority of whose capital stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such person
or by such person and a subsidiary or subsidiaries of such person or by a
subsidiary or subsidiaries of such person or (ii) any other person (other than a
corporation) in which such person or such person and a subsidiary or
subsidiaries of such person or a subsidiary or subsidiaries of such person
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act as so amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each person who is then a Trustee hereunder, and
if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America which are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation evidenced by such
depository receipt.
6
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SECTION 1.2 Other Definitions.
------------------
DEFINED IN
TERM SECTION
---- ----------
"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
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 2.2.22) 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
9
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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 provisions, if any, granting special rights to the
Holders of Securities of the Series upon the occurrence of such events as
may be specified and the provisions, if any, relating to the subordination
of the Securities of the Series to other obligations of the Company;
2.2.15 any provision for the conversion or exchange of
Securities of the Series, either at the option of the Holder thereof or the
Company, into or for another security or securities of the Company, the
security or securities into or for which, the period or periods within
which, the price or prices, including any adjustments thereto, at which and
the other terms and conditions upon which any Securities of the Series
shall be converted or exchanged, in whole or in part, pursuant to such
obligation;
2.2.16 if the Securities of such Series are to be issued upon
the exercise of warrants, the time, manner and place for such Securities to
be authenticated and delivered;
2.2.17 the provisions, if any, relating to any security provided
for the Securities of the Series;
2.2.18 any addition to or change in the Events of Default which
applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 6.2;
2.2.19 any addition to or change in the covenants set forth in
Article IV which applies to Securities of the Series;
2.2.20 any other terms of the Securities of the Series (which
terms shall not be inconsistent with the provisions of this Indenture,
except as permitted by Section 9.1);
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2.2.21 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
2.2.22 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.
----------------------------
One Officer shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal, which may be in facsimile form, shall
be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution or Officers' Certificate detailing the adoption of terms pursuant to
the Board Resolution, upon receipt by the Trustee of a Company Order. If
provided for in such procedures, such Company Order may authorize authentication
and delivery pursuant to oral or electronic instructions from the Company or its
duly authorized agent or agents, which oral instructions shall be promptly
confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by Board Resolution or supplemental
indenture hereto.
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
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that Series, (b) an Officers' Certificate complying with Section 10.4, and (c)
an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
SECTION 2.4 Registrar and Paying Agent.
--------------------------
The Company shall maintain, with respect to each Series of Notes, at
the place or places specified with respect to such Series pursuant to Section
2.2, an office or agency where Securities of such Series may be presented or
surrendered for payment ("Paying Agent"), where Securities of such Series may be
surrendered for registration of transfer or exchange ("Registrar") and where
notices and demands to or upon the Company in respect of the Securities of such
Series and this Indenture may be served ("Service Agent"). The Registrar shall
keep a register with respect to each Series of Securities and to their transfer
and exchange. The Company will give prompt written notice to the Trustee of the
name and address, and any change in the name or address, of each Registrar,
Paying Agent or Service Agent. If at any time the Company shall fail to
maintain any such required Registrar, Paying Agent or Service Agent or shall
fail to furnish the Trustee with the name and address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more co-
registrars, additional paying agents or additional service agents and may from
time to time rescind such designations; provided, however, that no such
-------- -------
designation or rescission shall in any manner 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.
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The Company hereby appoints the Trustee the initial Registrar, Paying
Agent and Service Agent for each Series unless another Registrar, Paying Agent
or Service Agent, as the case may be, is appointed prior to the time Securities
of that Series are first issued.
SECTION 2.5 Paying Agent to Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by
the Paying Agent for the payment of principal or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for the money. If the Company or
a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of Securityholders of any Series of Securities all
money held by it as Paying Agent.
SECTION 2.6 Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA
(S) 312(a). If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten days before each interest payment date and at such
other times as the Trustee may request in writing a list, in such form and as of
such date as the Trustee may reasonably require, of the names and addresses of
Securityholders of each Series of Securities.
SECTION 2.7 Transfer and Exchange.
---------------------
Where Securities of a Series are presented to the Registrar or a co-
registrar with a request to register a transfer or to exchange them for an equal
principal amount of Securities of the same Series and date of maturity of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection 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
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or being called for redemption as a whole or the portion being redeemed of any
such Securities selected, called or being called for redemption in part.
SECTION 2.8 Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
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.
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If a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on the Maturity date of Securities of a Series
money sufficient to pay such Securities payable on that date, then on and after
that date such Securities of the Series cease to be outstanding and interest on
them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
In determining whether the Holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.2.
SECTION 2.10 Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver or consent,
Securities of a Series owned by the Company or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.
SECTION 2.11 Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon a Company
Order. Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee upon request shall authenticate definitive Securities of the same
Series and date of maturity in exchange for temporary Securities. Until so
exchanged, temporary securities shall have the same rights under this Indenture
as the definitive Securities.
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
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<PAGE>
Company may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation.
SECTION 2.13 Defaulted Interest.
------------------
If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date. The Company
shall fix the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of
interest to be paid. The Company may pay defaulted interest in any other lawful
manner.
SECTION 2.14 Global Securities.
-----------------
2.14.1 Terms of Securities. A supplemental indenture to the
-------------------
Indenture or a Board Resolution (and, to the extent not set forth in the
Board Resolution, an Officers' Certificate detailing the adoption of terms
pursuant to the Board Resolution) shall establish whether the Securities of
a Series shall be issued in whole or in part in the form of one or more
Global Securities and the Depository for such Global Security or
Securities.
2.14.2 Transfer and Exchange. Notwithstanding any provisions to the
---------------------
contrary contained in Section 2.7 of the Indenture and in addition thereto,
any Global Security shall be exchangeable pursuant to Section 2.7 of the
Indenture for securities registered in the names of Holders other than the
Depository for such Security or its nominee only if (i) such Depository
notifies the Company that it is unwilling or unable to continue as
Depository for such Global Security or if at any time such Depository
ceases to be a clearing agency registered under the Exchange Act, and, in
either case, the Company fails to appoint a successor Depository within 90
days of such event, (ii) the Company executes and delivers to the Trustee
an Officers' Certificate to the effect that such Global Security shall be
so exchangeable or (iii) an event shall have happened and be continuing
which is or after notice or lapse of time or both, would be, an Event of
Default with respect to the Securities represented by such Global Security.
Any Global Security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for Securities registered in such names as the
Depository shall direct in writing in an aggregate principal amount equal
to the principal amount of the Global Security with like tenor and terms.
Except as provided in this Section 2.14.2, a Global Security may not
be transferred except as a whole by the Depository with respect to such
Global Security to a 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.
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2.14.3 Legend. Any Global Security issued hereunder shall bear a
------
legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable
for Securities registered in the name of a person other than the Depository
or its nominee only in the limited circumstances described in the
Indenture, and may not be transferred except as a whole by the Depository
to a nominee of the Depository, by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such a successor
Depository."
2.14.4 Acts of Holders. The Depository, as a Holder, may appoint
---------------
agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
which a Holder is entitled to give or take under the Indenture.
2.14.5 Payments. Notwithstanding the other provisions of this
--------
Indenture, unless otherwise specified as contemplated by Section 2.2,
payment of the principal of and interest on any Global Security shall be
made to the person specified therein.
2.14.6 Consents, Declaration and Directions. Except as provided in
------------------------------------
Section 2.14.5, the Company, the Trustee and any Agent shall treat a person
as the Holder of such principal amount of outstanding Securities of such
Series represented by a Global Security as shall be specified in a written
statement of the Depositary with respect to such Global Security, for
purposes of obtaining any consents, declarations or directions required to
be given by the Holders pursuant to this Indenture.
SECTION 2.15 CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers
in notices of redemption as a convenience to Holders; provided that any
--------
such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
elements of identification printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such
numbers.
ARTICLE III
REDEMPTION
SECTION 3.1 Notice to Trustees.
------------------
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The Company may, with respect to any Series of Securities,
reserve the right to redeem and pay the Series of Securities or may
covenant to redeem and pay the Series of Securities or any part thereof
before maturity at such time and on such terms as provided for in such
Securities. If a Series of Securities is redeemable and the Company wants
or is obligated to redeem prior to the Stated Maturity thereof all or part
of the Series of Securities pursuant to the terms of such Securities, it
shall notify the Trustee of the redemption date and the principal amount of
Series of Securities to be redeemed. The Company shall give the notice at
least 60 days before the redemption date (or such shorter notice as may be
acceptable to the Trustee).
SECTION 3.2 Selection of Securities to be Redeemed.
--------------------------------------
Unless otherwise indicated for a particular Series by Board
Resolution or by a supplemental indenture hereto (or to the extent not set
forth in such Board Resolution or supplemental indenture, in an Officers'
Certificate so indicating pursuant to the Board Resolution), if less than
all the Securities of a Series are to be redeemed, the Trustee shall select
the Securities of the Series to be redeemed in any manner that the Trustee
deems fair and appropriate. The Trustee shall make the selection from
Securities of the Series outstanding not previously called for redemption.
The Trustee may select for redemption portions of the principal of
Securities of the Series that have denominations larger than $1,000.
Securities of the Series and portions of them it selects shall be in
amounts of $1,000 or whole multiples of $1,000 or, with respect to
Securities of any Series issuable in other denominations pursuant to
Section 2.2.8, the minimum principal denomination for each Series and
integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.
SECTION 3.3 Notice of Redemption.
--------------------
Unless otherwise indicated for a particular Series by Board
Resolution or by a supplemental indenture hereto, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail a notice
of redemption by first-class mail to each Holder whose Securities are to be
redeemed and if any Bearer Securities are outstanding, publish on one
occasion a notice in an Authorized Newspaper.
The notice shall identify the Securities of the Series to be
redeemed and shall state:
(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;
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(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.
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
19
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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 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.
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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;
(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
--------
21
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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 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
22
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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.
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 2.2.18 or Section 2.2.20 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
23
<PAGE>
(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 stated final maturity or the maturity of which has been
so accelerated, aggregates $25,000,000 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
24
<PAGE>
(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 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,
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<PAGE>
(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
(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
26
<PAGE>
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
(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.
27
<PAGE>
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.
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
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<PAGE>
(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
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
29
<PAGE>
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 (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
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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 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
31
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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 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
32
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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 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.
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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.
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;
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(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 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.
-----------------------------
35
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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
(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
36
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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 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.
37
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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 2.2.20, to be inapplicable to Securities of any Series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all
the outstanding Securities of any such Series on the 91st day after the
date of the deposit referred to in subparagraph (d) hereof, and the
provisions of this Indenture, as it relates to such outstanding Securities
of any such Series, shall no longer be in effect (and the Trustee, at the
expense of the Company, shall, at Company Request, execute proper
instruments acknowledging the same), except as to:
(a) the rights of Holders of Securities of such Series to receive,
from the trust funds described in subparagraph (d) hereof, (i) payment of
the principal of and each installment of principal of or interest on the
outstanding Securities of such Series on the Stated Maturity of such
principal or installment of principal or interest and (ii) the benefit of
any mandatory sinking fund payments applicable to the Securities of such
Series on the day on which such payments are due and payable in accordance
with the terms of this Indenture and the Securities of such Series;
(b) the Company's obligations with respect to such Securities of such
Series under Sections 2.4, 2.7 and 2.8; and
(c) the rights, powers, trust and immunities of the Trustee hereunder
and the duties of the Trustee under Section 8.2 and the duty of the Trustee
to authenticate Securities of such Series issued on registration of
transfer or exchange;
provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of such Securities (i) in
the case of Securities of such Series denominated in Dollars, cash in
Dollars (or such other money or currencies as shall then be legal tender in
the United States) and/or U.S. Government Obligations, or (ii) in the case
of Securities of such Series denominated in a Foreign Currency (other than
a composite currency), money and/or Foreign Government Securities in the
same Foreign Currency, which through the payment of interest and principal
in respect thereof, in accordance with their terms, will provide (and
without reinvestment and assuming no tax liability will be imposed on such
Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge each
installment of principal, (including mandatory sinking fund or analogous
payments) of and any interest on all the Securities of such Series on the
dates such installments of interest or principal are due;
38
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(e) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(f) such provision would not cause any outstanding Securities of such
Series then listed on the New York Stock Exchange or other securities
exchange to be delisted as a result thereof;
(g) no Default or Event of Default with respect to the Securities of
such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture,
there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such opinion shall confirm that,
the Holders of the Securities of such Series will not recognize income,
gain or loss for Federal income tax purposes as a result of such deposits,
defeasance and discharge and will be subject to Federal income tax on the
same amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred;
(i) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities of such Series over any
other creditors of the company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company; and
(j) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this
Section have been complied with.
SECTION 8.4 Defeasance of Certain Obligations.
---------------------------------
Unless this Section 8.4 is otherwise specified pursuant to
Section 2.2.20 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
39
<PAGE>
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 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.
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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
(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 a majority 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 at least a majority 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
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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);
(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
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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.
43
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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: Ned Mansour, President, Mattel USA
if to the Trustee:
Chemical Trust Company of California
50 California Street, 10th Floor
San Francisco, California 94111
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.
45
<PAGE>
SECTION 10.7 Legal Holidays.
--------------
Unless otherwise provided by Board Resolution or supplemental
indenture hereto for a particular Series, a "Legal Holiday" is a Saturday,
a Sunday, or a day on which banking institutions are not required to be
open. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 10.8 No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Securityholder
by accepting a Security waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
SECTION 10.9 Counterparts.
------------
This Indenture may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
SECTION 10.10 Governing Laws.
--------------
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA SHALL GOVERN THIS
INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISION THEREOF.
SECTION 10.11 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.12 Successors.
----------
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 10.13 Severability.
------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
46
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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
47
<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
48
<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.
49
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
MATTEL, INC.
(SEAL) By: /s/ WILLIAM STAVRO
---------------------------
William Stavro
Attest: Senior Vice President and Treasurer
CHEMICAL TRUST COMPANY OF
CALIFORNIA
By: /s/ HANS H. HELLEY
---------------------------
Hans H. Helley
Assistant Vice President
50
<PAGE>
EXHIBIT 99.0
MATTEL, INC.
$350,000,000
Series B Medium-Term Notes
Due More Than Nine Months From Date of Issue
DISTRIBUTION AGREEMENT
April 11, 1996
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 $350,000,000 (or the equivalent thereof in one or more
foreign currencies or composite currencies) aggregate initial public offering
price of its Series B 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
February 15, 1996 (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 on Form S-3 (No. 333-1307) for the
registration of the Notes under the Securities Act of 1933, as amended (the
"Securities Act") and the offering thereof from time to time in accordance with
Rule 415 of the Rules and regulations of the Commission promulgated pursuant to
the Securities Act. Such registration statement (and any further registration
statements which may be filed by the Company for the purpose of registering
additional Notes and in connection with which this Agreement is included or
incorporated by reference as an exhibit), including all documents incorporated
therein by reference, as from time to time amended or supplemented by the filing
of documents pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Securities Act or otherwise, are referred to herein as the
"Registration Statement." The Company proposes to file with the Commission from
time to time, pursuant to Rule 424 under 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. If the Company elects to rely on Rule 434 promulgated pursuant to the
Securities Act, all references to the Prospectus shall be deemed to include,
without limitation, the form of prospectus and the term sheet, taken together,
provided to the Agents by the Company in reliance on such Rule 434 (the "Rule
434 Prospectus"). Unless the context otherwise requires, all references in this
Agreement to documents, financial statements and schedules and other information
which is "contained," "included," "stated," "described in," or "referred to" in
the Registration Statement or the Prospectus shall be deemed to mean and include
all such documents, financial statements and schedules and other information
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references in this
Agreement to "amendments" or "supplements" to the Registration Statement or
Prospectus shall be deemed to mean and include the filing of any document under
the Exchange Act after the date of this Agreement which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be. If the Company files a registration statement to register a
portion of the Notes and relies on Rule 462(b) promulgated pursuant to the
Securities Act for such registration statement to become effective upon filing
with the Commission (the "Rule 462 Registration Statement"), then any reference
to "Registration Statement" herein shall be deemed to be to both the
registration statement referred to above (No. 333-1307) and the Rule 462
Registration Statement, as each such registration statement may be amended
pursuant to the Securities Act.
1. Representations and Warranties. The Company represents and
------------------------------
warrants to and agrees with each Agent as of the Commencement Date (as defined
below), 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
<PAGE>
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 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
3
<PAGE>
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.
(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.
4
<PAGE>
(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 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.
5
<PAGE>
(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 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,
6
<PAGE>
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 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:
Term Commission Rate
---- ---------------
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
7
<PAGE>
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 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)
8
<PAGE>
(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 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
9
<PAGE>
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 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.
10
<PAGE>
(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 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
11
<PAGE>
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 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;
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<PAGE>
(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;
(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.
13
<PAGE>
(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;
(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
14
<PAGE>
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 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;
15
<PAGE>
(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
(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 and,
as of the date such opinion is delivered, does 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) (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 contains any
untrue statement of a material fact or omits 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.
16
<PAGE>
(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;
(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
17
<PAGE>
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 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) (except for
financial
18
<PAGE>
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 contains any untrue statement of a material fact or
omits 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 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.
19
<PAGE>
(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 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
20
<PAGE>
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 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.
21
<PAGE>
(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 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.
22
<PAGE>
(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 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
23
<PAGE>
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 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 1585 Broadway, 2nd
Floor, New York, New York 10036, Attention: Manager, Continuously Offered
Products (telefax number: 212-761-0780), with a copy to 1585 Broadway, 2nd
Floor, New York, New York 10036, Attention: Peter Cooper, Investment Banking
Information Center, 34th Floor (telefax number: 212-761-0260), 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: Medium
Term Note
24
<PAGE>
Program (telefax number: 212-318-1498), 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, Senior Vice President and Treasurer (telefax number:
310-252-3215), with a copy to Lee Smith, Assistant General Counsel and Assistant
Secretary.
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.
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
----------------------------------------
William Stavro
Senior 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/ C. DANIEL EWELL
----------------------------------------------------
C. Daniel Ewell
Principal
CS FIRST BOSTON CORPORATION
By:/s/ MICHAEL HARTMEIER
---------------------------------------------------
Michael Hartmeier
Vice President
26
<PAGE>
EXHIBIT A
MATTEL, INC.
SERIES B MEDIUM-TERM NOTES
TERMS AGREEMENT
__________ __, 199_
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Attention:
Re: Distribution Agreement dated as of
April 11, 1996 (the "Distribution Agreement")
---------------------------------------------
We agree to purchase your Series B 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:
Name Principal Amount
---- of Notes
-----------------
Morgan Stanley & Co.
Incorporated
CS First Boston Corporation
Total..................... $________________
A-1
<PAGE>
The Notes shall have the following terms:
All Notes:
- ---------
Principal amount:
Purchase price:
Price to public:
Settlement date and time:
Place of delivery:
Specified currency:
Maturity date:
Initial accrual period OID:
Total amount of OID:
Original yield to maturity:
Optional repayment date(s):
Optional redemption date(s):
Initial redemption date:
Initial redemption percentage:
Annual redemption percentage decrease:
Other terms:
Fixed Rate Notes:
- ----------------
Interest Rate:
Applicability of modified payment upon acceleration:
If yes, state issue price:
Amortization schedule:
Floating Rate Notes:
- -------------------
Base rate:
Index maturity:
Spread:
Spread multiplier:
Alternate rate event spread:
Initial interest rate:
Initial interest reset date:
Interest reset dates:
Interest reset period:
Maximum interest rate:
Minimum interest rate:
Interest payment period:
Interest payment dates:
Calculation agent:
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 B MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
---------------------------------
Explained below are the administrative procedures and specific terms
of the offering of Series B Medium-Term Notes (the "Notes"), on a continuous
basis by Mattel, Inc. (the "Company") pursuant to the Distribution Agreement,
dated as of April 11, 1996 (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 February 15, 1996 (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 April 11, 1996, 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").
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. $200,000,000
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. $200,000,000. If one or more
Book-Entry Notes having an aggregate
principal amount in excess of
$200,000,000 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. $200,000,000
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.
B-2
<PAGE>
Preparation of If any offer to purchase a Book-Entry
Pricing Note is accepted by or on behalf of
Supplement: the Company, the 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
1585 Broadway, 2nd Floor
New York, New York 10036
Attn: Medium Term Note Trading Desk,
Carlos Cabrera and Lou Napoli
Telephone: (212) 761-2000
Telecopy: (212) 761-0780
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) 761-2000
Telecopy: (212) 761-0780
If to CS First Boston:
CS First Boston Corporation
5 World Trade Center, 7th Floor
New York, New York 10048
Attn: Ms. Joan Bryan
Telephone: (212) 322-5105
Telecopy: (212) 803-4096
B-3
<PAGE>
with a copy to:
CS First Boston Corporation
MTN Department
Park Avenue Plaza
New York, New York 10055
Attn: J. Walker
Telephone: (212) 909-2732
Telecopy: (212) 318-1498
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
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 third 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
Procedures: each 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
B-4
<PAGE>
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.
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
B-5
<PAGE>
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 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
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<PAGE>
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.
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.
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<PAGE>
Settlement For sales by the Company of
Procedures Book-Entry Notes to or through an
Timetable: Agent (unless otherwise specified
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:
Settlement Time
Procedure ----
- ---------
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
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
to Settle: deliver 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
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<PAGE>
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 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.
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<PAGE>
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as Registrar in connection with the Certificated
Notes.
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
of Pricing Certificated Note is accepted by or
Supplement: on behalf of the Company, the 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 and Lou Napoli
Telephone: (212) 761-2000
Telecopy: (212) 761-0780
B-10
<PAGE>
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) 761-2000
Telecopy: (212) 761-0780
If to CS First Boston:
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Attn: J. Walker
Telephone: (212) 909-2732
Telecopy: (212) 318-1498
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
third 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
Procedures: each 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").
B-11
<PAGE>
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
B-12
<PAGE>
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
B-13
<PAGE>
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
Procedures Certificated Notes to or through an
Timetable: Agent (unless otherwise specified
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:
Settlement Time
Procedure ----
- ----------
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
B-14
<PAGE>
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.
B-15
