<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 29, 1996
REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
MATTEL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1567322
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
333 CONTINENTAL BOULEVARD, EL SEGUNDO, CALIFORNIA 90245-5012 (310) 252-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
LELAND P. SMITH, ESQ.
ASSISTANT GENERAL COUNSEL AND ASSISTANT SECRETARY
MATTEL, INC.
333 CONTINENTAL BOULEVARD, EL SEGUNDO, CALIFORNIA 90245-5012 (310) 252-4821
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
RONALD M. LOEB, ESQ. BRIAN G. CARTWRIGHT, ESQ.
IRELL & MANELLA LATHAM & WATKINS
333 SO. HOPE STREET, SUITE 3300 633 W. FIFTH STREET
LOS ANGELES, CA 90071 LOS ANGELES, CA 90071
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
========================================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED(1) REGISTERED(1) UNIT(2) PRICE(2)(3)(4) REGISTRATION FEE(5)
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<S> <C> <C> <C> <C>
Common Stock ($1 par
value)(6)............. -- (9) -- --
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Preferred Stock ($1 par
value)(7)............. -- (9) -- --
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Debt Securities(8)..... -- (9) -- --
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Warrants............... -- (9) -- --
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Units.................. -- (9) -- --
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Total.................. $350,000,000 (9) $350,000,000 $120,690
========================================================================================================
</TABLE>
(1) Subject to Footnote (3), there are being registered hereunder (i) an
indeterminate amount of Common Stock, Preferred Stock, Debt Securities,
Warrants and Units issuable in primary offerings, (ii) an indeterminate
amount of Common Stock and Preferred Stock issuable upon conversion of
Debt Securities and Preferred Stock registered hereunder, and (iii) an
indeterminate amount of Common Stock, Preferred Stock and Debt Securities
issuable upon exercise of Warrants registered hereunder.
(2) In U.S. dollars or the equivalent thereof in one or more foreign
currencies or composite currencies. The proposed maximum offering price
per unit will be determined from time to time by the Registrant in
connection with the issuance of the securities registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee. In
no event will the aggregate maximum offering price of all securities
issued under this Registration Statement exceed $350,000,000 or the
equivalent thereof in one or more foreign currencies or composite
currencies or, if any Debt Securities are issued with original issue
discount, such greater amount as shall result in proceeds of $350,000,000
to the Registrant.
(4) With respect to Debt Securities, excluding accrued interest and accrued
amortization of discount, if any, to the date of delivery.
(5) The registration fee has been calculated in accordance with Rule 457(o) of
the Securities Act.
(6) Shares of Common Stock may be issued in primary offerings, upon conversion
of Debt Securities and/or Preferred Stock registered hereby, and/or upon
exercise of Warrants registered hereby. The aggregate amount of Common
Stock registered hereby is limited to that which is permissible under Rule
415(a)(4) under the Securities Act. Shares of Common Stock are accompanied
by the Company's Preference Share Purchase Rights which, until the
occurrence of any of certain prescribed events, are not exercisable, are
evidenced by the certificates for the Common Stock and will be transferred
along with and only with the Company's Common Stock.
(7) Shares of Preferred Stock may be issued in primary offerings, upon
conversion of Debt Securities registered hereby, and/or upon exercise of
Warrants registered hereby.
(8) Debt Securities may be issued in primary offerings and/or upon exercise of
Warrants registered hereby.
(9) Omitted pursuant to General Instruction II(D) of Form S-3 under the
Securities Act.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED FEBRUARY 29, 1996
[LOGO OF MATTEL, INC.]
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
WARRANTS OR RIGHTS
UNITS OF SECURITIES
-----------
The Company may offer from time to time under this Prospectus in one or more
series (i) shares of its common stock, $1.00 par value per share ("Common
Stock"), (ii) shares of its preferred stock, $1.00 par value per share
("Preferred Stock"), which may be convertible into shares of Common Stock,
(iii) debt securities of the Company ("Debt Securities"), which may be
convertible into shares of Common Stock and/or Preferred Stock, (iv) warrants
or rights ("Warrants") to acquire Common Stock, Preferred Stock and/or Debt
Securities, and (v) units ("Units") consisting of two or more of the foregoing
securities, with an aggregate initial public offering price of up to
$350,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies. The Common Stock, Preferred Stock, Debt Securities,
Warrants and Units (collectively, the "Securities") may be offered separately
or together, in separate series, in amounts, at prices and on terms to be
determined at the time of each offering hereunder and to be set forth in one or
more supplements to this Prospectus (each, a "Prospectus Supplement").
The specific terms of the Securities for which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement and will
include, where applicable, (i) in the case of Common Stock, the aggregate
number of shares offered and the offering price; (ii) in the case of Preferred
Stock, the specific designation and stated value per share, the aggregate
number of shares offered, any dividend (including the method of calculating
payment of dividends), liquidation, redemption, voting and other rights, any
terms for conversion or exchange into shares of Common Stock, and the offering
price; (iii) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking, priority, currency, denominations,
maturity (which may be fixed or extendible), any security, any premium or
discount, interest rate (or manner of calculation thereof) and time of payment
of interest, terms for redemption at the option of the Company or repayment at
the option of the holder, terms for sinking fund payments, terms for conversion
or exchange into Preferred Stock or Common Stock, form (which may be bearer or
registered, certificated or global), covenants and the offering price; (iv) in
the case of Warrants, the number and terms thereof, the designation of the
number and type of securities issuable upon their exercise, the exercise price,
the duration and detachability thereof, and the offering price; and (v) in the
case of Units, a description of the securities comprising such Units and the
offering price thereof.
The applicable Prospectus Supplement will also contain information, where
appropriate, about certain United States federal income tax considerations
relating to the Securities covered thereby, any listing on a securities
exchange of the Securities covered thereby, in the case of Debt Securities or
Warrants for Debt Securities, any relationships between the Company and the
applicable trustee or any other terms, as applicable.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The Securities may be offered directly by the Company or to or through
agents, underwriters or dealers designated from time to time by the Company, as
set forth in an accompanying Prospectus Supplement. See "Plan of Distribution."
No Securities may be sold without delivery of a Prospectus Supplement
describing the method and terms of the offering of such Securities.
-----------
, 1996
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND THEREIN, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER, DEALER OR
AGENT. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFERING
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY
THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR IN ANY
PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF
OR OF SUCH PROSPECTUS SUPPLEMENT.
AVAILABLE INFORMATION
Mattel, Inc. ("Mattel" or the "Company") has filed with the Securities and
Exchange Commission (the "Commission") in Washington, D.C. a Registration
Statement on Form S-3 (including all amendments thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Securities offered hereby. This Prospectus and any
Prospectus Supplement do not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Securities, reference is hereby made to the
Registration Statement and the exhibits and schedules thereto.
Mattel is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by
Mattel can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and at the Commission's regional offices located
at Seven World Trade Center, 13th Floor, New York, New York 10048, and in
Chicago at 500 West Madison Street, Room 1400, Chicago, Illinois 60661. Copies
of such materials can be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549. Reports, proxy statements and other information concerning Mattel
can also be inspected and copied at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005 and the Pacific Stock
Exchange, 115 Sansome Street, 2nd Floor, San Francisco, California 94104, on
which exchanges certain securities of Mattel are listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which Mattel has filed with the Commission pursuant
to the Exchange Act, are hereby incorporated by reference in, and shall be
deemed to be a part of, this Prospectus: Mattel's Annual Report on Form 10-K
for the year ended December 31, 1994, its Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995, its
Current Reports on Form 8-K dated January 4, 1995, February 7, 1995, March 21,
1995, April 18, 1995, July 18, 1995, August 11, 1995, August 29, 1995,
October 17, 1995, January 24, 1996, January 26, 1996, February 1, 1996,
February 2, 1996 and February 7, 1996, its Notice of Annual Meeting of
Stockholders and Proxy Statement, dated March 22, 1995, and the description of
the Company's Common Stock contained in the Company's Registration Statement
on Form 8-A filed with the Commission on February 28, 1996.
All documents filed by Mattel pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part thereof from the respective
dates of filing of such documents. Any statement contained in this Prospectus
or in any Prospectus Supplement or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and any Prospectus Supplement to the extent
that a statement contained herein or in any Prospectus Supplement (or in any
other subsequently filed document which also is incorporated or deemed
2
<PAGE>
to be incorporated by reference in this Prospectus) modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed to constitute a part of this Prospectus or any Prospectus Supplement
except as so modified or superseded.
Mattel will provide without charge to any person to whom this Prospectus is
delivered, on the written or oral request of such person, a copy of any or all
of the foregoing documents incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference therein). Requests should be directed to the attention of the
Corporate Secretary, Mattel, Inc., 333 Continental Boulevard, El Segundo,
California 90245-5012, or by telephone at (310) 252-3616.
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF SUCH SECURITIES OR OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY
BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
Mattel is a leading worldwide designer, manufacturer and marketer of toys.
The Company's four principal core brands are BARBIE fashion dolls and doll
clothing and accessories; FISHER-PRICE toys and juvenile products, including
the POWER WHEELS line of battery-powered, ride-on vehicles; the Company's
Disney-licensed toys; and die cast HOT WHEELS vehicles and playsets, each of
which has broad worldwide appeal. Additional core product lines consist of
large dolls, including CABBAGE PATCH KIDS; preschool toys, including SEE 'N
SAY talking toys; the UNO and SKIP-BO card games; and the SCRABBLE game, which
the Company owns in markets outside of the United States and Canada.
Mattel management has implemented three complementary business strategies
designed to achieve consistent, profitable growth: first, a concentration on
leveraging the consumer franchises of Mattel's time-tested core product lines;
second, expansion of the Company's international marketing and distribution
network; and third, organization of the Company's manufacturing capabilities
to maximize overall efficiency and flexibility and minimize risk. Mattel
management has also pursued a financial strategy of reducing risk through the
implementation of strict financial controls. These include the control of
expenses and the aggressive management of working capital, foreign exchange
risk and the financial risk associated with new product introductions. In
addition, management's objective is to minimize the cost of capital to the
Company by blending the sources of funds through the control of long-term
leverage, and the maintenance of sufficient operating cash and short-term
credit lines to finance the Company's seasonal working capital requirements.
Mattel was incorporated in California in 1948 and reincorporated in Delaware
in 1968. Its executive offices are located at 333 Continental Boulevard, El
Segundo, California 90245-5012, telephone(310) 252-2000.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, which may include additions to working capital,
reduction of indebtedness of the Company, financing of capital expenditures,
potential acquisitions and the repurchase by the Company of its Common Stock.
Funds not required immediately for such purposes may be invested temporarily
in short-term marketable securities.
3
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's unaudited ratios of earnings to
fixed charges and earnings to combined fixed charges and preferred stock
dividends for the periods indicated.
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED FOR THE YEARS ENDED(a)(b)
--------------------------- -----------------------------
SEPTEMBER 30, SEPTEMBER 30,
1995 1994 1994 1993 1992 1991 1990
------------- ------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges(c)(d).... 6.89 7.99 6.88 4.20 4.51 4.00 3.40
Ratio of earnings to
combined fixed charges
and preferred stock
dividends(c)(d)........ 6.54 7.43 6.43 3.94 4.25 3.71 2.97
</TABLE>
- --------
(a) The consolidated ratios of earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividends for 1993, 1992 and
1991 have been restated for the effects of the November 1993 merger of
Fisher-Price, Inc. into a wholly-owned subsidiary of the Company,
accounted for as a pooling of interests. Fisher-Price, Inc. was excluded
from periods prior to July 1, 1991, while its business was operated as a
division of The Quaker Oats Company.
(b) The Company's financial reporting year ended on December 31 for years 1991
through 1994 and on the last Saturday of December in 1990.
(c) The ratio of earnings to fixed charges is computed by dividing income
before taxes, extraordinary items, cumulative effect of changes in
accounting principles, fixed charges, minority interest and undistributed
income of less-than-majority-owned affiliates (as used in this footnote
(c), "earnings") by fixed charges. Fixed charges are the sum of interest
costs (whether expensed or capitalized) and the portion of aggregate
rental expense (one-third) which is estimated to represent the interest
factor in such rentals. The ratio of earnings to combined fixed charges
and preferred stock dividends is computed by dividing earnings by the sum
of fixed charges plus dividends on the Company's outstanding shares of
preferred stock during the indicated period. The Company currently has no
outstanding shares of preferred stock.
(d) Until July 1, 1991, the Company was a guarantor of certain foreign bank
lines of credit extended to less-than-majority-owned joint ventures.
Performance by the Company pursuant to these guarantees was deemed
unlikely; thus the associated fixed charges have been excluded from
computation of the ratios of earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividends. The portion of fixed
charges paid by less-than-majority-owned joint ventures for which the
Company was guarantor was approximately $4.5 million and $4.8 million in
1991 and 1990, respectively.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities offered hereby are to be issued under an indenture,
dated as of February 15, 1996 (the "Indenture"), between Mattel and Chemical
Trust Company of California, as Trustee (the "Trustee"), which Indenture may
be supplemented from time to time by supplemental indentures. The following
summary of certain provisions of the Indenture, a copy of which was filed as
an exhibit to the Registration Statement, does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, all
provisions of the Indenture, including the definition therein of certain
terms. Wherever particular sections or defined terms of the Indenture are
referred to, it is intended that such sections or defined terms shall be
incorporated herein by reference.
GENERAL
The Debt Securities will rank equally with all other unsecured and
unsubordinated indebtedness of Mattel.
The Debt Securities that may be offered under the Indenture are not limited
in amount. The Debt Securities may be issued in one or more series with the
same or various maturities, at par, at a premium, or with an original
4
<PAGE>
issue discount. The Prospectus Supplement will set forth the initial offering
price, the aggregate principal amount and the following terms of the Debt
Securities in respect of which this Prospectus is delivered: (1) the title of
such Debt Securities; (2) any limit on the aggregate principal amount of such
Debt Securities; (3) the date or dates on which principal on such Debt
Securities will be payable; (4) the rate or rates and, if applicable, the
method used to determine the rate including any commodity, commodity index,
stock exchange index or financial index, at which such Debt Securities will
bear interest, if any, the date or dates from which such interest will accrue,
the dates on which such interest shall be payable and the record date for the
interest payable on any interest payment date; (5) the place or places where
principal of, premium, if any, and interest on such Debt Securities will be
payable; (6) the period or periods within which, the price or prices at which
and the terms and conditions upon which the Debt Securities may be redeemed;
(7) the obligation, if any, of the Company to redeem or purchase the Debt
Securities pursuant to any sinking fund or analogous provisions or at the
option of a holder thereof; (8) the denominations of such Debt Securities, if
other than denominations of $1,000 and any integral multiple thereof; (9) the
portion of principal amount of such Debt Securities that shall be payable upon
acceleration, if other than the principal amount thereof; (10) the currency of
denomination of such Debt Securities; (11) the designation of the currency or
currencies in which payment of principal of and interest on such Debt
Securities will be made; (12) if payments of principal of, premium, if any, or
interest on the Debt Securities are to be made in currency other than the
denominated currency, the manner in which the exchange rate with respect to
such payments will be determined; (13) the manner in which the amounts of
payment of principal of, premium, if any, or interest on such Debt Securities
will be determined, if such amounts may be determined by reference to an index
based on a currency or currencies other than that in which the Debt Securities
are denominated or designated to be payable or by reference to a commodity,
commodity index, stock exchange index or financial index; (14) the
subordination provisions, if any, relating to such Debt Securities; (15) any
provision for the conversion or exchange of such Debt Securities; (16) if such
Debt Securities are to be issued upon the exercise of Warrants, the
authentication and delivery provisions relating to such Debt Securities; (17)
the provisions, if any, relating to any security provided for such Debt
Securities; (18) any addition to or change in the Events of Default described
herein or in the Indenture with respect to such Debt Securities and any change
in the acceleration provisions described herein or in the Indenture with
respect to such Debt Securities; (19) any addition to or change in the
covenants described herein or in the Indenture with respect to such Debt
Securities; (20) any other terms of such Debt Securities, which other terms
will not be inconsistent with the provisions of the Indenture; and (21) any
depositaries, interest rate calculation agents, exchange rate calculation
agents or other agents with respect to the Debt Securities other than those
originally appointed. (Indenture (S) 2.2) The Prospectus Supplement will set
forth any federal income tax, accounting or special considerations applicable
to the Debt Securities.
PAYMENT OF INTEREST AND EXCHANGE
Each Debt Security will be represented by either a global security (a
"Global Debt Security") registered in the name of The Depository Trust
Company, as Depository (the "Depository") or a nominee of the Depository (each
such Debt Security represented by a Global Debt Security being herein referred
to as a "Book-Entry Debt Security") or a certificate issued in definitive
registered form (a "Certificated Debt Security"), as set forth in the
applicable Prospectus Supplement. Except as set forth under "Global Debt
Securities and Book-Entry System" below, Book-Entry Debt Securities will not
be issuable in certificated form.
Certificated Debt Securities. Certificated Debt Securities may be
transferred or exchanged at the Trustee's office or paying agencies in
accordance with the terms of the Indenture. No service charge will be made for
any transfer or exchange of Certificated Debt Securities, but Mattel may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Certificated Debt Securities will not
be exchangeable for Book-Entry Debt Securities, except under the circumstances
described below under "Global Debt Securities and Book-Entry System."
(Indenture (S)(S) 2.4 and 2.7)
The transfer of Certificated Debt Securities and the right to the principal
of, premium, if any, and interest on such Certificated Debt Securities may be
effected only by surrender of the old certificate representing such
Certificated Debt Securities and either reissuance by Mattel or the Trustee of
the old certificate to the new Holder or the issuance by Mattel or the Trustee
of a new certificate to the new Holder.
5
<PAGE>
Global Debt Securities and Book-Entry System. Each Global Debt Security
representing Book-Entry Debt Securities will be deposited with, or on behalf
of, the Depository, and registered in the name of the Depository or a nominee
of the Depository. Except as set forth below, Book-Entry Debt Securities will
not be exchangeable for Certificated Debt Securities and will not otherwise be
issuable as Certificated Debt Securities.
The procedures that the Depository has indicated it intends to follow with
respect to Book-Entry Debt Securities are set forth below.
Ownership of beneficial interests in Book-Entry Debt Securities will be
limited to persons that have accounts with the Depository for the related
Global Debt Security ("participants") or persons that may hold interests
through participants. Upon the issuance of a Global Debt Security, the
Depository will credit, on its book-entry registration and transfer system,
the participants' accounts with the respective principal amounts of the Book-
Entry Debt Securities represented by such Global Debt Security beneficially
owned by such participants. The accounts to be credited shall be designated by
any dealers, underwriters or agents participating in the distribution of such
Book-Entry Debt Securities. Ownership of Book-Entry Debt Securities will be
shown on, and the transfer of such ownership interests will be effected only
through, records maintained by the Depository for the related Global Debt
Security (with respect to interests of participants) and on the records of
participants (with respect to interests of persons holding through
participants). The laws of some states may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to own, transfer or pledge
beneficial interests in Book-Entry Debt Securities.
So long as the Depository for a Global Debt Security, or its nominee, is the
registered owner of such Global Debt Security, such Depository or such
nominee, as the case may be, will be considered the sole owner or holder of
the Book-Entry Debt Securities represented by such Global Debt Security for
all purposes under the Indenture. Except as set forth below, owners of Book-
Entry Debt Securities will not be entitled to have such securities registered
in their names, will not receive or be entitled to receive physical delivery
of a certificate in definitive form representing such securities and will not
be considered the owners or holders thereof under the Indenture. Accordingly,
each person owning Book-Entry Debt Securities must rely on the procedures of
the Depository for the related Global Debt Security and, if such person is not
a participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder under the Indenture.
The Company understands, however, that under existing industry practice, the
Depository will authorize the persons on whose behalf it holds a Global Debt
Security to exercise certain rights of holders of Debt Securities, and the
Indenture provides that the Company, the Trustee and their respective agents
will treat as the holder of a Debt Security the persons specified in a written
statement of the Depository with respect to such Global Debt Security for
purposes of obtaining any consents or directions required to be given by
holders of the Debt Securities pursuant to the Indenture. (Indenture
(S) 2.14.6)
Payments of principal, premium, if any, and interest on Book-Entry Debt
Securities will be made to the Depository or its nominee, as the case may be,
as the registered holder of the related Global Debt Security. (Indenture
(S) 2.14.5) None of Mattel, the Trustee or any other agent of Mattel or agent
of the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in such Global Debt Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Mattel expects that the Depository, upon receipt of any payment of
principal, premium, if any, or interest on a Global Debt Security, will
immediately credit participants' accounts with payments in amounts
proportionate to the respective amounts of Book-Entry Debt Securities held by
each such participant as shown on the records of such Depository. Mattel also
expects that payments by participants to owners of beneficial interests in
Book-Entry Debt Securities held through such participants will be governed by
standing customer instructions and customary practices, as is now the case
with the securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants.
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If the Depository is at any time unwilling or unable to continue as
Depository or ceases to be a clearing agency registered under the Exchange
Act, and a successor Depository registered as a clearing agency under the
Exchange Act is not appointed by Mattel within 90 days, Mattel will issue
Certificated Debt Securities in exchange for such Global Debt Security. In
addition, Mattel may at any time and in its sole discretion determine not to
have any of the Book-Entry Debt Securities represented by one or more Global
Debt Securities and, in such event, will issue Certificated Debt Securities in
exchange for such Global Debt Security or Securities. Any Certificated Debt
Securities issued in exchange for a Global Debt Security will be registered in
such name or names as the Depository shall instruct the Trustee. It is
expected that such instructions will be based upon directions received by the
Depository from participants with respect to ownership of Book-Entry Debt
Securities relating to such Global Debt Security.
The foregoing information in this section concerning the Depository and the
Depository's Book-Entry System has been obtained from sources the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
NO PROTECTION IN THE EVENT OF A CHANGE OF CONTROL
Unless otherwise set forth in the Prospectus Supplement, the Debt Securities
will not contain any provisions which may afford holders of the Debt
Securities protection in the event of a change in control of the Company or in
the event of a highly leveraged transaction (whether or not such transaction
results in a change in control of the Company).
CERTAIN COVENANTS OF MATTEL
Limitation on Liens. The Company shall not and shall not permit any
Subsidiary to create, incur, assume or suffer to exist any Lien (as defined)
upon any of the their respective assets, except for: (i) Liens existing on the
date of the Indenture or arising under the Indenture; (ii) any extension,
renewal or replacement (or successive extensions, renewals or replacements) of
any Lien existing on the date of the Indenture; (iii) Liens on Current Assets
(as defined) (or on any promissory notes received in satisfaction of any of
the accounts receivable of the Company or any of its Subsidiaries) securing
Indebtedness (as defined) incurred to finance working capital requirements,
provided, however, that the Indebtedness secured by such Lien does not mature
later than 36 months from the date incurred; (iv) certain Liens incurred in
the ordinary course of business; (v) Liens on property that are in existence
at the time the Company or its Subsidiaries acquire such property, provided
that such Liens (A) are not incurred in connection with, or in contemplation
of, the acquisition of the property acquired and (B) do not extend to or cover
any property or assets of the Company or any Subsidiary other than the
property so acquired; (vi) purchase money Liens upon or in any real or
personal property (including fixtures and other equipment) acquired or held by
the Company or any Subsidiary in the ordinary course of business to secure the
purchase price of such property or to secure Indebtedness incurred solely for
the purpose of financing or refinancing the acquisition or improvement of or
construction costs related to such property, provided that no such Lien shall
extend to or cover any property other than the property being acquired or
improved; (vii) any interest or title of a lessor in the property subject to
any Capitalized Lease or Sale/Leaseback Transaction that is permitted under
the restrictions described below under "--Limitation on Sale/Leaseback
Transactions;" or (viii) other Liens securing Indebtedness in an aggregate
principal amount which, together with the aggregate outstanding principal
amount of all other Indebtedness of the Company and its Subsidiaries secured
by Liens permitted under the terms of this subsection (viii) and the aggregate
amount of the Sale/Leaseback Transactions which would otherwise be permitted
under the restrictions described below in clause (i) under the caption"--
Limitation on Sale/Leaseback Transactions," does not at the time any such Lien
is incurred exceed ten percent of the Consolidated Net Tangible Assets (as
defined) as shown in the latest audited consolidated balance sheet of the
Company and its Subsidiaries.
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Limitation on Sale/Leaseback Transactions. The Company shall not, and shall
not permit any Subsidiary, to enter into any Sale/Leaseback Transaction,
unless either (i) the Company or such Subsidiary would be entitled, pursuant
to subsection (viii) under "--Limitation on Liens," to incur Indebtedness in a
principal amount equal to or exceeding the amount of such Sale/Leaseback
Transaction, secured by a Lien on the property to be leased; or (ii) the
Company or such Subsidiary, within 90 days after the effective date of such
transaction, applies or unconditionally agrees to apply to the retirement of
Indebtedness an amount equal to the greater of the net proceeds of the
Sale/Leaseback Transaction or the fair value, in the opinion of the Board of
Directors, of such property at the time of such transaction (in either case
adjusted to reflect the remaining term of the lease).
Merger, Consolidation, or Sale of Assets. The Company may not consolidate or
merge with or into, or sell, lease, convey or otherwise dispose of all or
substantially all of its assets to, another corporation, person or entity
unless (i) the Company is the surviving person or the successor or transferee
is a corporation organized under the laws of the United States, any state
thereof or the District of Columbia, (ii) the successor assumes all the
obligations of the Company under the Debt Securities and the Indenture, and
(iii) immediately after such transaction no Event of Default (as defined)
exists.
CERTAIN DEFINITIONS
Set forth below are certain significant terms which are defined in Section
1.1 of the Indenture:
"Consolidated Net Tangible Assets" means the total amount of assets of the
Company and its Subsidiaries on a consolidated basis (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups occurring after January 1, 1988 of capital assets
(excluding in any case write-ups in connection with accounting for
acquisitions in conformity with generally accepted accounting principles),
after deducting therefrom (i) all current liabilities of the Company and its
Subsidiaries, (ii) all investments in unconsolidated Subsidiaries of the
Company and in persons which are not Subsidiaries of the Company (except, in
each case, investments in marketable securities) and (iii) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other
intangible items, all as set forth on the most recently available consolidated
balance sheet of the Company and its Subsidiaries, prepared in conformity with
generally accepted accounting principles.
"Current Assets" means any asset of the Company or any of its Subsidiaries
that would be classified as a current asset on an audited consolidated balance
sheet of the Company prepared, in accordance with generally accepted
accounting principles, on the date any Lien on such asset is incurred.
"Discount Security" means any Debt Security that provides for an amount less
than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to the terms of
the Indenture.
"Indebtedness" means, with respect to any person, and without duplication:
(1) any liability of such person (A) for borrowed money, or (B) for any
letter of credit for the account of such person supporting obligations of
such person or other persons, or (C) evidenced by a bond, note, debenture
or similar instrument (including a purchase money obligation) given in
connection with the acquisition of any businesses, properties or assets of
any kind (other than a trade payable or a current liability arising in the
ordinary course of business), or (D) for the payment of money relating to a
Capitalized Lease;
(2) any liability of others described in the preceding clause (1) that
the person has guaranteed or that is otherwise its legal liability; and
(3) any amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to in clauses (1) and
(2) above.
"Lien" means any lien, security interest, charge, mortgage, pledge or other
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to
give any security interest).
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"Sale/Leaseback Transaction" means any arrangement with any person (other
than the Company or any of its Subsidiaries) providing for the leasing by the
Company or any of its Subsidiaries of any property which has been or is to be
sold or transferred by the Company or such Subsidiary to such person or to any
person (other than the Company or any of its Subsidiaries) to which funds have
been or are to be advanced by such person on the security of the leased
property.
"Subsidiary" of any specified person means (i) a corporation a majority of
whose capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by such person or by
such person and a subsidiary or subsidiaries of such person or by a subsidiary
or subsidiaries of such person or (ii) any other person (other than a
corporation) in which such person or such person and a subsidiary or
subsidiaries of such person or a subsidiary or subsidiaries of such person
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
Debt Securities of any series: (a) default in the payment of any interest upon
any Debt Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; (b) default in the
payment of principal of or premium, if any, on any Debt Security of that
series when due; (c) default in the deposit of any sinking fund payment, when
and as due in respect of any Debt Security of that series; (d) default in the
performance or breach of any other covenant or warranty of Mattel in the
Indenture (other than a covenant or warranty that has been included in the
Indenture solely for the benefit of a series of Debt Securities other than
that series), which default continues uncured for a period of 60 days after
written notice to the Company by the Trustee or to the Company and the Trustee
by the holders of at least 25% in principal amount of the outstanding Debt
Securities of that series as provided in the Indenture; (e) unless the terms
of such series otherwise provide, an event of default under any Indebtedness
for money borrowed by the Company (including a default with respect to Debt
Securities of any series other than that series) or any Subsidiary, whether
such Indebtedness now exists or shall hereafter be created, if (A) such
default either (1) results from the failure to pay any such Indebtedness at
its stated final maturity or (2) relates to an obligation other than the
obligation to pay such Indebtedness at its stated final maturity and results
in the holder or holders of such Indebtedness causing such Indebtedness to
become due prior to its stated maturity and (B) the principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at stated final maturity
or the maturity of which has been so accelerated, aggregates $25 million or
more at any one time outstanding; (f) certain events of bankruptcy, insolvency
or reorganization; and (g) any other Event of Default provided with respect to
Debt Securities of that series that is described in the Prospectus Supplement
accompanying this Prospectus. No Event of Default with respect to a particular
series of Debt Securities (except as to the certain events in bankruptcy,
insolvency or reorganization) necessarily constitutes an Event of Default with
respect to any other series of Debt Securities. (Indenture (S) 6.1) The
occurrence of an Event of Default would constitute an event of default under
certain of Mattel's existing bank lines. In addition, the occurrence of
certain Events of Default or an acceleration under the Indenture would
constitute an event of default under certain other indebtedness of Mattel.
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then in every such case the Trustee
or the holders of not less than 25% in principal amount of the outstanding
Debt Securities of that series may, by a notice in writing to Mattel (and to
the Trustee if given by the holders), declare to be due and payable
immediately the principal (or, if the Debt Securities of that series are
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) and premium, if any, of all Debt Securities of
that series. In the case of an Event of Default resulting from certain events
of bankruptcy, insolvency or reorganization, the principal (or such specified
amount) and premium, if any, of all outstanding Debt Securities shall ipso
facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any holder of outstanding Debt
Securities. At any time after a declaration of acceleration with respect to
Debt Securities of any series has been made, but before a judgment or decree
for payment of the money due has been obtained by the Trustee, the holders of
a majority in principal
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amount of the outstanding Debt Securities of that series may, subject to the
Company having paid or deposited with the Trustee a sum sufficient to pay
overdue interest and principal which has become due other than by acceleration
and certain other conditions, rescind and annul such acceleration if all
Events of Default, other than the non-payment of accelerated principal and
premium, if any, with respect to Debt Securities of that series, have been
cured or waived as provided in the Indenture. (Indenture (S) 6.2) For
information as to waiver of defaults see the discussion set forth below under
"--Modification and Waiver." Reference is made to the Prospectus Supplement
relating to any series of Debt Securities that are Discount Securities for the
particular provisions relating to acceleration of a portion of the principal
amount of such Discount Securities upon the occurrence of an Event of Default
and the continuation thereof.
The Indenture provides that the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
holder of outstanding Debt Securities, unless the Trustee receives indemnity
satisfactory to it against any loss, liability or expense. (Indenture (S) 7.1
(e)) Subject to certain rights of the Trustee, the holders of a majority in
principal amount of the outstanding Debt Securities of any series shall have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Debt Securities of that series.
(Indenture (S) 6.12)
No holder of any Debt Security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to the Indenture
or for the appointment of a receiver or trustee, or for any remedy under the
Indenture, unless such holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt
Securities of that series and unless also the holders of at least 25% in
principal amount of the outstanding Debt Securities of that series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the holders of a majority in principal amount of the outstanding Debt
Securities of that series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. (Indenture (S) 6.7)
Notwithstanding the foregoing, the holder of any Debt Security will have an
absolute and unconditional right to receive payment of the principal of,
premium, if any, and any interest on such Debt Security on or after the due
dates expressed in such Debt Security and to institute suit for the
enforcement of any such payment.(Indenture (S) 6.8)
The Indenture requires Mattel, within 90 days after the end of each of its
fiscal years, to furnish to the Trustee a statement as to compliance with the
Indenture. (Indenture (S) 4.3) The Indenture provides that the Trustee may
withhold notice to the holders of Debt Securities of any series of any Default
or Event of Default (except in payment on any Debt Securities of such series)
with respect to Debt Securities of such series if it in good faith determines
that withholding such notice is in the interest of the holders of Debt
Securities.(Indenture (S) 7.5)
MODIFICATION AND WAIVER
Modifications to, and amendments of, the Indenture may be made by Mattel and
the Trustee with the consent of the holders of at least 50% in principal
amount of the outstanding Debt Securities of each series affected by such
modifications or amendments, provided, however, that no such modification or
amendment may, without the consent of the holder of each outstanding Debt
Security affected thereby: (a) change the amount of Debt Securities whose
holders must consent to an amendment or waiver; (b) reduce the rate of or
extend the time for payment of interest (including default interest) on any
Debt Security; (c) reduce the principal or premium, if any, or change the
fixed maturity of any Debt Security or reduce the amount of, or postpone the
date fixed for, the payment of any sinking fund or analogous obligation with
respect to any series of Debt Securities; (d) waive a default in the payment
of the principal of, premium, if any, or interest on any Debt Security (except
a rescission of acceleration of the Debt Securities of any series by the
holders of at least a majority in aggregate principal amount of the then
outstanding Debt Securities of such series and a waiver of the payment default
that resulted from such acceleration); (e) make the Debt Security payable in
currency other than
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that stated in the Debt Security; (f) make any change to certain provisions of
the Indenture relating to, among other things, the right of holders of Debt
Securities to receive payment of the principal, premium, if any, and interest
on such Debt Securities and to institute suit for the enforcement of any such
payment and to waivers or amendments; or (g) waive a redemption payment with
respect to any Debt Security or change any of the provisions with respect to
the redemption of any Debt Securities. (Indenture (S) 9.3)
The holders of at least 50% in principal amount of the outstanding Debt
Securities of any series may on behalf of the holders of all Debt Securities of
that series waive, insofar as that series is concerned, compliance by Mattel
with provisions of the Indenture other than certain specified provisions.
(Indenture (S) 9.2) The holders of a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the holders of all
the Debt Securities of such series waive any past default under the Indenture
with respect to such series and its consequences, except a default in the
payment of the principal of, premium, if any, or any interest on any Debt
Security of that series or in respect of a provision which under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Debt Security of that series affected. (Indenture (S) 6.13)
DEFEASANCE OF DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
Defeasance and Discharge. The Indenture provides that Mattel may be
discharged from any and all obligations in respect of the Debt Securities of
any series (except for certain obligations to register the transfer or exchange
of Debt Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, to maintain paying agencies and the treatment of
funds held by paying agents) upon the deposit with the Trustee, in trust, of
money and/or government obligations in the same currency as such series that,
through the payment of interest and principal in respect thereof in accordance
with their terms, will provide money in an amount sufficient in the opinion of
a nationally recognized firm of independent public accountants to pay and
discharge each installment of principal (and premium, if any) and interest on
and any mandatory sinking fund payments in respect of the Debt Securities of
such series on the stated maturity of such payments in accordance with the
terms of the Indenture and such Debt Securities. Such discharge may occur only
if, among other things, (a) Mattel has received from, or there has been
published by, the United States Internal Revenue Service a ruling, or, since
the date of execution of the Indenture, there has been a change in the
applicable United States federal income tax law, in either case to the effect
that holders of the Debt Securities of such series will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to United States federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit, defeasance and discharge had not
occurred; and (b) such discharge will not be applicable to any Debt Securities
of such series then listed on the New York Stock Exchange or any other
securities exchange if such discharge would cause said Debt Securities to be
de-listed as a result thereof. (Indenture (S) 8.3)
Defeasance of Certain Covenants. The Indenture provides that unless otherwise
provided by the terms of the applicable series of Debt Securities, upon
compliance with certain conditions, (i) Mattel may omit to comply with the
restrictive covenants contained in Sections 4.2 (except as to corporate
existence), 4.3 through 4.8 and Section 5.1 of the Indenture, including the
restrictive covenants described above under the caption "Certain Covenants of
Mattel"; and (ii) cross accelerations constituting Events of Default under
Section 6.1(e) shall be inapplicable to such series. The conditions include:
the deposit with the Trustee of money and/or government obligations in the same
currency as such series that, through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an amount
sufficient in the opinion of a nationally recognized firm of independent public
accountants to pay principal, premium, if any, and interest on and any
mandatory sinking fund payments in respect of the Debt Securities of such
series on the stated maturity of such payments in accordance with the terms of
the Indenture and such Debt Securities; and the delivery to the Trustee of an
opinion of counsel to the effect that the holders of the Debt Securities of
such series will not recognize income, gain or loss for United States federal
income tax purposes as a result of such deposit and related covenant defeasance
and will be subject to United States federal income tax in the same amount and
in the same manner and at the same times as would have been the case if such
deposit and related covenant defeasance had not occurred. (Indenture (S) 8.4)
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Defeasance and Events of Default. In the event Mattel exercises its option
to omit compliance with certain covenants of the Indenture with respect to any
series of Debt Securities and the Debt Securities of such series are declared
due and payable because of the occurrence of any Event of Default, the amount
of money and government obligations on deposit with the Trustee will be
sufficient to pay amounts due on the Debt Securities of such series at the
time of their stated maturity but may not be sufficient to pay amounts due on
the Debt Securities of such series at the time of the acceleration resulting
from such Event of Default. However, Mattel shall remain liable for such
payments.
CONVERSION INTO CAPITAL STOCK OF THE COMPANY
If and to the extent set forth in the Indenture and described in the
applicable Prospectus Supplement, any portion of the principal amount of any
Debt Securities of any series that is $1,000 or an integral multiple thereof
may be converted into shares of Common Stock and/or Preferred Stock of the
Company at any time prior to redemption (if applicable) or maturity, following
the date set forth in the applicable Prospectus Supplement. The specific class
of capital stock of the Company into which Debt Securities are convertible and
the other terms pertaining to such conversion right will be set forth in the
applicable Prospectus Supplement.
CONCERNING THE TRUSTEE
Mattel maintains banking relationships in the ordinary course of business
with one or more affiliates of the Trustee. The trustee also serves as trustee
under the Company's indenture dated as of August 1, 1994.
DESCRIPTION OF CAPITAL STOCK
The following statements with respect to the Company's capital stock are
subject to the detailed provisions of the Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation") and By-laws, as amended
(the "By-laws"), and the Rights Agreement (as defined below). These statements
do not purport to be complete and are qualified in their entirety by reference
to the terms of the Certificate of Incorporation, the By-laws and the Rights
Agreement, which are incorporated by reference as exhibits to the Registration
Statement.
GENERAL
Mattel's authorized capital stock as of the date of this Prospectus consists
of 300,000,000 shares of Common Stock, $1.00 par value per share, 3,000,000
shares of Preferred Stock, $1.00 par value per share, and 20,000,000 shares of
Preference Stock, $.01 par value per share. No shares of Preferred Stock are
presently outstanding. Mattel does not presently have outstanding, and
Mattel's Certificate of Incorporation does not authorize, any other classes of
capital stock. The issued and outstanding shares of Common Stock are, and any
shares of Common Stock issued as Securities and any shares of Common Stock
issuable upon the exercise of Warrants for Common Stock or upon conversion or
exchange of Debt Securities or Preferred Stock that are convertible into or
exchangeable for Common Stock will be, duly authorized, validly issued, fully
paid and nonassessable.
COMMON STOCK
Holders of shares of Common Stock have no preemptive, redemption or
conversion rights. The holders of Common Stock are entitled to receive
dividends when and as declared by the Mattel Board of Directors out of funds
legally available therefor. Upon liquidation, dissolution or winding up of
Mattel, the holders of Common Stock may share ratably in the net assets of
Mattel and liquidating distributions to holders of Preferred Stock or
Preference Stock, if any. Each holder of Common Stock is entitled to one vote
per share of Common Stock held of record by such holder and may cumulate its
votes in the election of directors. As of February 15, 1996, there were
279,067,715 shares of Common Stock issued (as adjusted to reflect the five-
for-four stock split payable as a stock dividend declared February 6, 1996).
Each outstanding share of Common Stock is accompanied by a right to purchase
one one-hundredth (128/37,500ths as adjusted to reflect a series of stock
splits) of a share of Mattel Series E Junior Participating Preference Stock,
$.01 par value per share (the "Series E Preference Shares"). See "--Preferred
and Preference Stock."
The registrar and transfer agent for the Common Stock is The First National
Bank of Boston.
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PREFERRED AND PREFERENCE STOCK
The Mattel Board of Directors has the power, without further vote of
shareholders, to authorize the issuance of up to 3,000,000 shares of Preferred
Stock and 20,000,000 shares of Preference Stock and to fix and determine the
terms, limitations and relative rights and preferences of any shares of
Preferred Stock or Preference Stock that it causes to be issued. This power
includes the authority to establish voting, dividend, redemption, conversion,
liquidation and other rights of any such shares. No shares of Preferred Stock
or Preference Stock are now outstanding.
If and to the extent set forth in the applicable Prospectus Supplement,
shares of Preferred Stock may be convertible into shares of Common Stock in
accordance with the terms of such Preferred Stock. The specific terms
pertaining to any such conversion right will be set forth in the applicable
Prospectus Supplement.
Each outstanding share of Common Stock is accompanied by a right to purchase
one one-hundredth (128/37,500ths as adjusted) of a Series E Preference Share
under certain circumstances. There are 1,500,000 shares of Series E Preference
Shares authorized for issuance. There are currently no Series E Preference
Shares outstanding.
DESCRIPTION OF PREFERENCE SHARE PURCHASE RIGHTS
On February 7, 1992, the Mattel Board of Directors declared a dividend of
one preference share purchase right (a "Right") for each outstanding share of
Common Stock. The dividend was paid on February 17, 1992 (the "Record Date")
to the stockholders of record on that date. At the date the dividend was
declared and paid, each Right entitled the registered holder to purchase from
the Company one one-hundredth of a Series E Preference Share at a price per
share of $150 (the "Purchase Price"), subject to adjustment. Subsequent to the
Record Date, and pursuant to the terms of the Rights, the number of one one-
hundredths of a share of Series E Preference Shares purchasable from the
Company upon exercise of a Right was adjusted to 128/37,500ths of a share of
Series E Preference Shares, reflecting a series of stock splits in the
underlying Common Stock paid in the form of a series of dividends on the
Common Stock. The description and terms of the Rights are set forth in a
Rights Agreement dated as of February 7, 1992 (the "Rights Agreement") between
the Company and The First National Bank of Boston, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") have acquired beneficial ownership of 20% or more of the outstanding
Common Stock or (ii) 10 business days (or such later date as may be determined
by action of the Board of Directors prior to such time as any person or group
of affiliated persons becomes an Acquiring Person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a person
or group of 20% or more of the outstanding Common Stock (the earlier of such
dates being called the "Distribution Date"), the Rights are evidenced, with
respect to any Common Stock certificate outstanding as of the Record Date, by
such Common Stock certificate with a copy of the Summary of Rights pertaining
to such Rights (the "Summary of Rights") attached thereto.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with
and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuance of Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Stock outstanding as of
the Record Date, even without such notation or a copy of the Summary of Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
13
<PAGE>
The Rights are not exercisable until the Distribution Date. The Rights will
expire on February 17, 2002 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of Series E Preference Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Series E Preference Shares, (ii) upon the grant to holders of the Series E
Preference Shares of certain rights or warrants to subscribe for or purchase
Series E Preference Shares at a price, or securities convertible into Series E
Preference Shares with a conversion price, less than the then-current market
price of the Series E Preference Shares or (iii) upon the distribution to
holders of the Series E Preference Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Series E Preference Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preference Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivision,
consolidation or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Series E Preference Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preference Share will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled
to an aggregate dividend of 292.969 (as adjusted) times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of the
Series E Preference Shares will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled to an aggregate
payment of 292.969 (as adjusted) times the payment made per share of Common
Stock. Each Series E Preference Share will have 292.969 (as adjusted) votes,
voting together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each Series E Preference Share will be entitled to receive 292.969
(as adjusted) times the amount received per share of Common Stock. These
rights are protected by customary antidilution provisions.
Because of the nature of the Series E Preference Shares' dividend,
liquidation and voting rights, the value of the fractional interest
(128/37,500ths as adjusted) in a Preference Share purchasable upon exercise of
each Right should approximate the value of one share of Common Stock.
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times
the exercise price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, proper
provisions shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void),
will thereafter have the right to receive upon exercise that number of shares
of Common Stock having a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-hundredth (128/37,500ths as adjusted) of a Series E Preference
Share (or of a share of a class or series of the Company's preference stock
having equivalent rights, preferences and privileges), per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Series E Preference Shares will be issued
(other than fractions which are integral multiples of one one-hundredth of a
Series E Preference Share,
14
<PAGE>
which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Series E Preference Shares on the last trading date prior
to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.0034133 per Right (as adjusted) (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less than the
greater of (i) the sum of .001% and the largest percentage of the outstanding
shares of Common Stock then known to the Company to be beneficially owned by
any person or group of affiliated or associated persons (other than (a) the
Company, (b) any subsidiary of the Company, (c) any employee benefit plan of
the Company or any subsidiary of the Company, (d) any entity holding Common
Stock for or pursuant to the terms of any such plan or (e) E.M. Warburg,
Pincus & Co., Inc., a Delaware corporation, and its affiliates and associates)
and (ii) 10%, except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, no such
amendment may adversely affect the interests of the holders of the Rights.
For the purpose of calculating the various percentage ownership thresholds
contained in the Rights Agreement, shares issued in connection with the
capital investment approved by the Company's shareholders at the 1984 Annual
Meeting and still owned by the original owner, or owned by certain qualified
transferees, are excluded from the amount deemed to be beneficially owned by
such persons. However, if such original owner or qualified transferee becomes
a member of a group with certain other persons, such shares will be included
in the amount attributable to, and will be deemed to be beneficially owned by,
such other persons.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire Mattel on
terms not approved by Mattel's Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Mattel Board of Directors since the Rights may be redeemed by Mattel at
the Redemption Price prior to the time that a person or group has acquired
beneficial ownership of 20% or more of the Common Stock.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Warrants for the purchase of Debt Securities ("Debt
Warrants"), Preferred Stock ("Preferred Stock Warrants") or Common Stock
("Common Stock Warrants"). Each series of Warrants will be issued under a
separate warrant agreement (a "Warrant Agreement") to be entered into between
the Company and a bank or trust company, as Warrant Agent, all as set forth in
the applicable Prospectus Supplement relating to the particular issue of
Warrants. The Warrant Agent will act solely as an agent of the Company in
connection with the Warrant Agreement or any certificates evidencing the
Warrants ("Warrant Certificates") and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrant
Certificates or beneficial owners of Warrants. Copies of the forms of Warrant
Agreements and the forms of Warrant Certificates representing the Warrants
will be filed by a post-effective amendment to the Registration Statement or
incorporated by reference in connection with the offering of any Warrants. The
following summaries of certain provisions of the forms of Warrant Agreements
and Warrant Certificates do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the
Warrant Agreements and the Warrant Certificates.
15
<PAGE>
GENERAL
If Warrants are offered, the applicable Prospectus Supplement will describe
the terms of such Warrants, including, in the case of Warrants for the
purchase of Debt Securities (the "Underlying Debt Securities"), the following,
where applicable: (i) the title and aggregate number of such Debt Warrants;
(ii) the title, rank, aggregate principal amount, denominations, and terms of
the Underlying Debt Securities; (iii) the currencies in which such Debt
Warrants are being offered; (iv) the principal amount of the series of Debt
Securities purchasable upon exercise of each such Debt Warrant and the
exercise price, or the manner of determining such price, at which and
currencies in which such Debt Securities may be purchased; (v) the time or
times, or period or periods, in which such Debt Warrants may be exercised and
the date (the "Expiration Date") on which such exercise right shall expire;
(vi) United States federal income tax consequences; (vii) the terms of any
right of the Company to redeem or accelerate the exercisability of such Debt
Warrants; (viii) the offering price of such Debt Warrants; and (ix) any other
terms of such Debt Warrants.
In the case of Warrants for the purchase of Preferred Stock (the "Underlying
Preferred Stock"), the Prospectus Supplement will describe the terms of such
Warrants, including the following, where applicable: (i) the title and
aggregate number of such Preferred Stock Warrants; (ii) the specific
designation and stated value per share and any dividend (including the method
of calculating payment of dividends), liquidation, redemption, voting and
other rights of the Underlying Preferred Stock; (iii) the number of shares of
Preferred Stock that may be purchased on exercise of each Preferred Stock
Warrant; (iv) the exercise price or manner of determining such price and, if
other than cash, the property and manner in which the exercise price may be
paid and any minimum number of Preferred Stock Warrants exercisable at one
time; (v) the terms of any right of the Company to redeem or accelerate the
exercisability of such Preferred Stock Warrants; (vi) the time or times, or
period or periods, in which the Preferred Stock Warrants may be exercised and
the Expiration Date; (vii) United States federal income tax consequences; and
(viii) any other terms of such Preferred Stock Warrants.
In the case of Common Stock Warrants, the Prospectus Supplement will
describe the terms of such Warrants, including the following, where
applicable: (i) the title and aggregate number of such Common Stock Warrants;
(ii) the number of shares of Common Stock that may be purchased on exercise of
each Common Stock Warrant; (iii) the exercise price or manner of determining
such price and, if other than cash, the property and manner in which the
exercise price may be paid and any minimum number of Common Stock Warrants
exercisable at one time; (iv) the terms of any right of the Company to redeem
or accelerate the exercisability of such Common Stock Warrants; (v) the time
or times, or period or periods, in which the Common Stock Warrants may be
exercised and the Expiration Date; (vi) United States federal income tax
consequences; and (vii) any other terms of such Common Stock Warrants.
Warrants may be exchanged for new Warrants of different denominations, may
(if in registered form) be presented for registration of transfer and may be
exercised at the corporate trust office of the Warrant Agent or any other
office indicated in the applicable Prospectus Supplement. No service charge
will be made for any permitted transfer or exchange of Warrant Certificates,
but the Company may require payment of any tax or other governmental charge
payable in connection therewith. Prior to the exercise of any Debt Warrants,
Preferred Stock Warrants or Common Stock Warrants, holders of such Warrants,
as such, will not have any of the rights of holders of the Debt Securities,
Preferred Stock or Common Stock, respectively, purchasable upon such exercise,
including (i) in the case of Debt Warrants, the right to receive payments of
principal of (or premium, if any) or interest, if any, on the Debt Securities
purchasable upon such exercise or to enforce covenants in the applicable
indenture, or (ii) in the case of Preferred Stock and Common Stock Warrants,
the right to receive payments of dividends, if any, on the Preferred Stock or
Common Stock, as the case may be, purchasable upon such exercise or to
exercise any applicable right to vote.
16
<PAGE>
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal
amount of Debt Securities or number of shares of Preferred Stock or Common
Stock, as the case may be, at such exercise price as shall in each case
be set forth in, or calculable from, the Prospectus Supplement relating to the
offered Warrants. After the close of business on the Expiration Date (or such
later date to which such Expiration Date may be extended by the Company),
unexercised Warrants will become void.
Warrants may be exercised by delivering to the Warrant Agent payment as
provided in the applicable Prospectus Supplement of the amount required to
purchase the underlying Debt Securities, Preferred Stock or Common Stock, as
the case may be, together with certain information set forth on the reverse
side of the Warrant. Warrants will be deemed to have been exercised upon
receipt of payment of the exercise price, subject to the receipt, within five
business days, of the Warrant Certificate evidencing such Warrants. Upon
receipt of such payment and such Warrant Certificate properly completed and
duly executed at the corporate trust office of the Warrant Agent or any other
office indicated in the applicable Prospectus Supplement, the Company will, as
soon as practicable, issue and deliver the underlying Debt Securities,
Preferred Stock or Common Stock, as the case may be. If fewer than all of the
Warrants represented by such Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining amount of Warrants. The holder of
a Warrant will be required to pay any tax or other governmental charge that
may be imposed in connection with any transfer involved in the issuance of the
underlying Debt Securities, Preferred Stock or Common Stock, as the case may
be.
MODIFICATIONS
The Warrant Agreements and the terms of the Warrants may be modified or
amended by the Company and the Warrant Agent, without the consent of any
holder, for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective or inconsistent provision contained therein, or in
any other manner that the Company deems necessary or desirable and that will
not materially adversely affect the interests of the holders of the Warrants.
The Company and the Warrant Agent may also modify or amend the Warrant
Agreement and the terms of the Warrants with the consent of the holders of not
less than a majority in number of the then outstanding unexercised Warrants
affected thereby; provided that no such modification or amendment that
accelerates the Expiration Date, increases the exercise price, reduces the
number of outstanding Warrants the consent of the holders of which is required
for any such modification or amendment, or otherwise materially adversely
affects the rights of the holders of the Warrants, may be made without the
consent of each holder affected thereby.
PREFERRED STOCK AND COMMON STOCK WARRANT ADJUSTMENT
The terms and conditions on which the exercise price of and/or the number of
shares of Preferred Stock or Common Stock covered by a Preferred Stock Warrant
or Common Stock Warrant, respectively, are subject to adjustment will be set
forth in the Preferred Stock Warrant Certificate or Common Stock Warrant
Certificate, as the case may be, and the applicable Prospectus Supplement.
Such terms will include provisions for adjusting the exercise price of and/or
the number of shares of Preferred Stock or Common Stock covered by such
Preferred Stock Warrant or Common Stock Warrant, as the case may be; the
events requiring such adjustment; the events upon which the Company may, in
lieu of making such adjustment, make proper provisions so that the holder of
such Preferred Stock Warrant or Common Stock Warrant, as the case may be, upon
exercise thereof, would be treated as if such holder had exercised such
Preferred Stock Warrant or Common Stock Warrant, as the case may be, prior to
the occurrence of such events; and provisions affecting exercise in the event
of certain events affecting the Preferred Stock or Common Stock, as the case
may be.
17
<PAGE>
DESCRIPTION OF UNITS OF SECURITIES
The Company may issue Units consisting of two or more other constituent
Securities, which Units may be issuable as, and for the period of time specified
therein may be transferable as, a single Security only, as distinguished from
the separate constituent Securities comprising such Units. Any such Units will
be offered pursuant to a Prospectus Supplement which will (i) identify and
designate the title of any series of Units; (ii) identify and describe the
separate constituent Securities comprising such Units; (iii) set forth the price
or prices at which such Units will be issued; (iv) describe, if applicable, the
date on and after which the constituent Securities comprising the Units will
become separately transferable; (v) provide information with respect to book-
entry procedures, if any; (vi) discuss applicable United States federal income
tax considerations relating to the Units; and (vii) set forth any other terms of
the Units and their constituent Securities.
PLAN OF DISTRIBUTION
GENERAL
Mattel may sell the Securities being offered hereby: (i) directly to
purchasers; (ii) through agents; (iii) through dealers; (iv) through
underwriters; or (v) through a combination of any such methods of sale.
The distribution of the Securities may be effected from time to time in one
or more transactions either: (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase Securities may be solicited directly by Mattel. Offers to
purchase Securities may also be solicited by agents designated by Mattel from
time to time. Any such agent, who may be deemed to be an "underwriter" as that
term is defined in the Securities Act, involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named, and
any commissions payable by Mattel to such agent will be set forth, in the
Prospectus Supplement.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, Mattel will sell such Securities to the dealer,
as principal. The dealer, who may be deemed to be an "underwriter" as that
term is defined in the Securities Act, may then resell such Securities to the
public at varying prices to be determined by such dealer at the time of
resale.
If an underwriter is, or underwriters are, utilized in the sale, Mattel will
execute an underwriting agreement with such underwriters at the time of sale
to them and the names of the underwriters will be set forth in the Prospectus
Supplement, which will be used by the underwriters to make resales of the
Securities in respect of which this Prospectus is delivered to the public. In
connection with the sale of Securities, such underwriters may be deemed to
have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
Securities for whom they may act as agents. Underwriters may also sell
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents. Any
underwriting compensation paid by the Company to underwriters in connection
with the offering of Securities, and any discounts, concessions or commissions
allowed by underwriters to participating dealers, will be set forth in the
Prospectus Supplement.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with Mattel, to indemnification by Mattel
against certain civil liabilities, including liabilities under the Securities
Act. Underwriters and agents may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
18
<PAGE>
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, Mattel will authorize
underwriters, dealers or other persons to solicit offers by certain
institutions to purchase Securities pursuant to contracts providing for
payment and delivery on a future date or dates. Institutions with which such
contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (a) the purchase of
the Securities shall not at the time of delivery be prohibited under the laws
of the jurisdiction to which such purchaser is subject and (b) if the
Securities are also being sold to underwriters, Mattel shall have sold to such
underwriters the Securities not sold for delayed delivery. The underwriters,
dealers and such other persons will not have any responsibility in respect of
the validity or performance of such contracts. The Prospectus Supplement
relating to such contracts will set forth the price to be paid for Securities
pursuant to such contracts, the commissions payable for solicitation of such
contracts and the date or dates in the future for delivery of Securities
pursuant to such contracts.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by Irell
& Manella, Los Angeles, California. Ronald M. Loeb, a partner of the law firm
of Irell & Manella, is a Director of the Company and is the record owner of
83,795 shares of Common Stock. Certain legal matters will be passed upon for
any underwriters or agents by Latham & Watkins, Los Angeles, California.
EXPERTS
The consolidated financial statements and financial statement schedules of
the Company, incorporated in this Prospectus by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994 (the "Form 10-
K"), have been so incorporated in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts
in auditing and accounting and, with respect to the historical financial
statements of Fisher Price, Inc. for the fiscal year ended January 3, 1993, in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on authority of said firm as experts in auditing and accounting.
19
<PAGE>
[LOGO OF MATTEL, INC.]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration fee................................................ $120,690
Rating agency fees.............................................. 180,000
Printing and engraving expenses................................. 25,000
Accounting fees and expenses.................................... 60,000
Legal fees and expenses......................................... 70,000
Blue sky fees and expenses...................................... 15,000
Fees and expenses of Trustee.................................... 10,000
Miscellaneous................................................... 9,310
--------
Total.......................................................... $490,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Mattel, Inc. (the "Company" or the "Registrant") has adopted provisions in
its Restated Certificate of Incorporation (the "Certificate") which require
the Company to indemnify any and all persons whom it has the power to
indemnify pursuant to the Delaware General Corporation Law (the "DGCL")
against any and all expenses, judgments, fines, amounts paid in settlement,
and any other liabilities to the fullest extend permitted by the DGCL.
The Certificate also empowers the Registrant by action of its Board of
Directors to purchase and maintain insurance, at its expense, to protect
itself and such persons against any such expense, judgment, fine, amount paid
in settlement or other liability, whether or not the Registrant would have the
power to indemnify any such individual under the DGCL.
In addition, the Registrant's By-laws require that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a director, officer, employee or
agent of the Registrant or is or was serving at the request of the Registrant,
a director, officer, employee or agent of the Registrant as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent, or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Registrant to the fullest extent
authorized by the DGCL, as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment
permits the Registrant to provide broader indemnification rights than said law
permitted the Registrant to provide prior to such amendment) against all
expense, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and
such indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that except for
claims by such persons for non-payment of entitled indemnification claims
against the Registrant, the Registrant shall indemnify such person seeking
indemnification in connection with a proceeding initiated by such person only
if such proceeding was authorized by the Registrant's Board of Directors. The
By-laws specify that the right to indemnification so provided is a contract
right, set forth certain procedural and evidentiary standards applicable to
the enforcement of a claim under the By-laws, entitle the persons to be
indemnified to be reimbursed for the expenses of prosecuting any such claim
against the Registrant and entitle them to have all expenses incurred in
advance of the final disposition of a proceeding paid by the Registrant. Such
provisions, however, are intended to be in furtherance and not in limitation
of the general right to indemnification provided in the By-laws.
II-1
<PAGE>
The Company has entered into indemnity agreements (the "Indemnity
Agreements") with each director of the Company, including directors who are
also officers and employees of the Company, and certain senior officers of the
Company. The Indemnity Agreements provide that the Company will pay any costs
which an indemnitee actually and reasonably incurs because of claims made
against him or her by reason of the fact that he or she is or was a director
or officer of the Company. The payments to be made under the Indemnity
Agreements include, but are not limited to, expenses of investigation,
judicial or administrative proceedings or appeals, damages, judgments, fines,
amounts paid in settlement, and attorneys' fees and disbursements, except the
Company is not obligated to make any payment under the Indemnity Agreements
which the Company is prohibited by law from paying as indemnity, or where (a)
indemnification is provided to an indemnitee under an insurance policy, except
for amounts in excess of insurance coverage, (b) the claim is one for which an
indemnitee is otherwise indemnified by the Company, (c) final determination is
rendered in a claim based upon the indemnitee obtaining a personal profit or
advantage to which he or she is not legally entitled, (d) final determination
is rendered on a claim for an accounting of profits made in connection with a
violation of Section 16(b) of the Securities Exchange Act of 1934 (the
"Exchange Act"), or similar state or common law provisions, (e) the indemnitee
was adjudged to be deliberately dishonest, or (f) (with respect to a director)
liability arises out of a breach of certain of his or her fiduciary duties.
The directors and officers of the Company and its subsidiaries are insured
under certain insurance policies against claims made during the period of the
policies against liabilities arising out of claims for certain acts in their
capacities as directors and officers of the Company and its subsidiaries.
II-2
<PAGE>
ITEM 16.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF
NUMBER EXHIBIT
------- --------------
<C> <S>
1.1 Form of Underwriting Agreement for Debt Securities
1.2 Form of Underwriting Agreement for Equity Securities*
1.3 Form of Underwriting Agreement for Warrants*
4.1 Indenture dated as of February 15, 1996 between the Registrant and Chemical
Trust Corporation of California, as Trustee, relating to the Debt
Securities
4.2 Form of Floating Rate Note
4.3 Form of Fixed Rate Note
4.4 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.0 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993)
4.5 By-laws of the Company, as amended to date (incorporated by reference to
Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992)
4.6 Rights Agreement, dated as of February 7, 1992, between the Company and The
First National Bank of Boston, as Rights Agent (incorporated by reference
to Exhibit 1 to the Company's Registration Statement on Form 8-A, dated
February 12, 1992)
4.7 Specimen Stock Certificate with respect to Common Stock*
4.8 Certificate of Designation of Preferred Stock*
4.9 Specimen Stock Certificate with respect to Preferred Stock*
4.10 Form of Warrant Agreement pertaining to Common Stock (including the form of
Certificate representing a Warrant for Common Stock)*
4.11 Form of Warrant Agreement pertaining to Preferred Stock (including the form
of Certificate representing a Warrant for Preferred Stock)*
4.12 Form of Warrant Agreement pertaining to Debt Securities (including the form
of Certificate representing a Warrant for Debt Securities)*
5 Opinion of Irell & Manella as to the validity of the Securities
12 Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
23.1 Consent of Price Waterhouse LLP relating to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994 (the
"Form 10-K")
23.2 Consent of Coopers & Lybrand L.L.P. relating to the Form 10-K
23.3 Consent of Irell & Manella (included in their opinion)
24 Power of Attorney (set forth on pages II-5 and II-6)
25 Form T-1 Statement of Eligibility and Qualification of the Trustee
Under the Trust Indenture Act of 1939
</TABLE>
- --------
* To be filed by a post-effective amendment to the Registration Statement or
incorporated by reference in the event of an offering of the specified
Securities.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) of this section do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to section 13 or section 15(d) of
the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of El Segundo, State of California, on
February 29, 1996.
MATTEL, INC.
By: /s/ Francesca Luzuriaga
___________________________________
Name: Francesca Luzuriaga
Title: Executive Vice President
and Chief Financial Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Mattel, Inc., do hereby
severally constitute and appointJohn W. Amerman, Ned Mansour, Leland P. Smith
and John L. Vogelstein, and each of them, our true and lawful attorneys and
agents, to do any and all acts and things in our name and behalf in our
capacities as directors and officers and to execute any and all instruments
for us and in our names in the capacities indicated below, which said
attorneys and agents, or any of them, may deem necessary or advisable to
enable said Company to comply with the Securities Act of 1933, as amended, and
any rules, regulations and requirements of the Securities and Exchange
Commission, in connection with this Registration Statement on Form S-3,
including specifically, but without limitation, power and authority to sign
for us or any of us, in our names in the capacities indicated below, any and
all amendments (including post-effective amendments) hereto; and we do each
hereby ratify and confirm all that said attorneys and agents, or any one of
them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John W. Amerman Chairman of the Board and February 29, 1996
____________________________________ Chief Executive Officer
John W. Amerman
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Francesca Luzuriaga Executive Vice President and February 29, 1996
____________________________________ Chief Financial Officer
Francesca Luzuriaga
/s/ Gary P. Rolfes Senior Vice President and February 29, 1996
____________________________________ Controller (Chief Accounting
Gary P. Rolfes Officer)
/s/ Jill E. Barad Director, President and February 29, 1996
____________________________________ Chief Operating Officer
Jill E. Barad
/s/ Harold Brown Director February 29, 1996
____________________________________
Harold Brown
/s/ James A. Eskridge Director and Group February 29, 1996
____________________________________ President, Mattel, Worldwide
James A. Eskridge
Director
____________________________________
Tully M. Friedman
/s/ Ronald M. Loeb Director February 29, 1996
____________________________________
Ronald M. Loeb
/s/ Edward H. Malone Director February 29, 1996
____________________________________
Edward H. Malone
/s/ Edward N. Ney Director February 29, 1996
____________________________________
Edward N. Ney
/s/ William D. Rollnick Director February 29, 1996
____________________________________
William D. Rollnick
/s/ Christopher A. Sinclair Director February 29, 1996
____________________________________
Christopher A. Sinclair
/s/ John L. Vogelstein Director February 29, 1996
____________________________________
John L. Vogelstein
</TABLE>
II-6
<PAGE>
EXHIBIT 1.1
SHELF
UNDERWRITING AGREEMENT
_____________, 199__
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Dear Sirs:
We (the "Manager") are acting on behalf of the underwriter or underwriters
(including ourselves) named below (such underwriter or underwriters being herein
called the "Underwriters"), and we understand that Mattel, Inc., a Delaware
corporation (the "Company"), proposes to issue and sell [Currency and Principal
Amount] aggregate initial offering price of [Full title of Debt Securities] (the
"Debt Securities"). The Debt Securities will be issued pursuant to the
provisions of an Indenture dated as of February 15, 1996 (the "Indenture")
between the Company and Chemical Trust Company of California, as Trustee (the
"Trustee").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective principal amounts of Debt
Securities set forth below opposite their names at a purchase price of ____% of
the principal amount of Debt Securities [, plus accrued interest, if any, from
[Date of Debt Securities] to the date of payment and delivery]/1/:
<TABLE>
<CAPTION>
Principal Amount of
Name Debt Securities
- ---- -------------------
<S> <C>
[Insert syndicate list]
Total....................
===================
</TABLE>
- ------------------
/1/ To be added only if the transaction does not close flat.
<PAGE>
[The principal amount of Debt Securities to be purchased by the
several Underwriters shall be reduced by the aggregate principal amount of Debt
Securities sold pursuant to delayed delivery contracts.]/2/
The Underwriters will pay for the Debt Securities [(less any Debt
Securities sold pursuant to delayed delivery contracts)] on _______________,
199__, or at such other time, not later than 5:00 p.m. (New York time) on
_______________, 199__, as shall be designated by the Manager. The time and
date of such payment and delivery are hereinafter referred to as the Closing
Date./3/
The Debt Securities shall have the terms set forth in the Prospectus
dated _____________, 199__, and the Prospectus Supplement dated _______________,
199__, including the following:
Terms of Debt Securities
- ------------------------
Maturity Date:
Interest Rate:
Redemption Provisions:
Interest Payment Dates: _______________ __ and
_______________ __ commencing
_______________ __, ____
[(Interest accrues from
_______________ __, ____)]/4/
Form and Denomination:
[Other Terms:]
[The commission to be paid to the Underwriters in respect of the Debt
Securities purchased pursuant to delayed delivery contracts arranged by the
Underwriters shall be ___% of the principal amount of the Debt Securities so
purchased.]/5/
- ------------------
/2/ To be added only if delayed delivery contracts are contemplated.
/3/ This paragraph would have to be modified for any Debt Securities that are
to be issued in bearer form.
/4/ To be added only if the transaction does not close flat.
/5/ To be added only if delayed delivery contracts are contemplated.
2
<PAGE>
All provisions contained in the document entitled "Mattel, Inc.
Underwriting Agreement Standard Provisions (Debt Securities)" dated
_______________, 199__, a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that (i) if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control and (ii) all
references in such document to a type of agreement that has not been entered
into in connection with the transactions contemplated hereby shall not be deemed
to be a part of this Agreement.
3
<PAGE>
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
MANAGER
Acting severally on behalf of themselves and
the several Underwriters named herein
By: MANAGER
By:
--------------------------------------------
Name:
Title:
Accepted:
MATTEL, INC.
By:
-----------------------------
Name:
Title:
4
<PAGE>
MATTEL, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
_______________, 199__
From time to time, Mattel, Inc., a Delaware corporation (the
"Company"), may enter into one or more underwriting agreements that provide for
the sale of designated securities to the several underwriters named therein.
The standard provisions set forth herein may be incorporated by reference in any
such underwriting agreement (an "Underwriting Agreement"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
sometimes referred to as this Agreement. Terms defined in the Underwriting
Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-_______________) for
the registration of the Debt Securities 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 has filed with,
or transmitted for filing to, or shall promptly hereafter file with or transmit
for filing to, the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Debt Securities pursuant to Rule 424
under the Securities Act of 1933, as amended (the "Securities Act"). The term
"Basic Prospectus" means the prospectus included in the Registration Statement.
The term "Prospectus" means the Basic Prospectus together with the Prospectus
Supplement. The term "preliminary prospectus" means a preliminary prospectus
supplement specifically relating to the Debt Securities, together with the Basic
Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus" and
"preliminary prospectus" shall include in each case the documents, if any,
incorporated by reference therein. 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
<PAGE>
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-___________) and the Rule 462 Registration Statement, as each such
registration statement may be amended pursuant to the Securities Act.
The term Contract Securities means the Debt Securities to be purchased
pursuant to the delayed delivery contracts substantially in the form of Schedule
I hereto, with such changes therein as the Company may approve (the "Delayed
Delivery Contracts"). The term "Underwriters' Securities" means the Debt
Securities other than Contract Securities.
1. Representations and Warranties. The Company represents and warrants
-------------------------------
to each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened to the
Company by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder, (ii)
each part of the Registration Statement, when such part became effective,
did not contain and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
(b) do not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon
2
<PAGE>
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Manager expressly for use therein or (B) to
that part of the Registration Statement that constitutes the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), of the Trustee.
(c) The financial statements of the Company and its subsidiaries set
forth in the Registration Statement and Prospectus fairly present the
financial condition of the Company and its subsidiaries as of the dates
indicated and the results of operations and changes in financial position
for the periods therein specified in conformity with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise stated therein).
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
except to the extent that the failure of any such subsidiary, singly or in
the aggregate, to be so duly incorporated or validly existing or to have
such corporate power and authority, would not have a material adverse
effect on the Company and its subsidiaries taken as a whole or on the
business of the Company and its subsidiaries taken as a whole. Each
subsidiary of the Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to
the extent that the failure of any such subsidiary, singly or in the
aggregate, to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole or on the business of the Company and its subsidiaries taken as a
whole.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in accordance
with its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.
3
<PAGE>
(h) The Delayed Delivery Contracts have been duly authorized, executed
and delivered by the Company and are valid and binding agreements of the
Company, enforceable in accordance with their respective terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles
of general applicability.
(i) The Debt Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of the Underwriting Agreement, in the case of the Underwriters' Securities,
or by institutional investors in accordance with the terms of the Delayed
Delivery Contracts, in the case of the Contract Securities, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, in each case enforceable in accordance with
their respective terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration, if any, and the
availability of equitable remedies may be limited by equitable principles
of general applicability.
(j) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture, the
Debt Securities and the Delayed Delivery Contracts will not contravene any
provision of applicable law or the certificate of incorporation or by-laws
of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture, the Debt Securities or the Delayed Delivery Contracts, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Debt Securities.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus.
(l) There are no legal or governmental proceedings pending or
threatened to the Company to which the Company or any of its subsidiaries
is a party or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement, the Prospectus or any documents incorporated by
reference in the Registration Statement or the Prospectus that are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement, the Prospectus
or any documents incorporated by reference in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement
that are not so described or filed as required.
4
<PAGE>
(m) The Company and its subsidiaries own or possess the patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks
and trade names presently employed by them in connection with the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice of infringement of or conflict with asserted rights
of others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in any material adverse change, or any notice of any other
development with respect to the foregoing involving a prospective material
adverse change, in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries taken as a whole, except as may be described in writing to,
and accepted for exclusion by, the Manager.
(n) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(o) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(p) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(q) Neither the Company nor any of its subsidiaries has, directly or
indirectly, paid or delivered any fee, commission or other sum of money or
item or property, however characterized, to any finder, agent, government
official or other party, in the United States or any other country, which
is in any manner related to the business, assets or operations of Company
or any of its subsidiaries, which is, or may be with the
5
<PAGE>
passage of time or discovery, illegal under any federal, state or local
laws of the United States (including without limitation the U.S. Foreign
Corrupt Practices' Act) or any other country having jurisdiction; and
neither the Company nor any of its subsidiaries has participated, directly
or indirectly, in any boycotts or other similar practices affecting any of
its actual or potential customers.
(q) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or any affiliate located in Cuba.
2. Delayed Delivery Contracts. If the Prospectus provides for sales
--------------------------
of Debt Securities pursuant to Delayed Delivery Contracts, the Company hereby
authorizes the Underwriters to solicit offers to purchase Contract Securities on
the terms and subject to the conditions set forth in the Prospectus pursuant to
Delayed Delivery Contracts. Delayed Delivery Contracts may be entered into only
with institutional investors approved by the Company of the types set forth in
the Prospectus. On the Closing Date, the Company will pay to the Manager as
compensation for the accounts of the Underwriters the commission set forth in
the Underwriting Agreement in respect of the Contract Securities. The
Underwriters will not have any responsibility in respect of the validity or the
performance of any Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the aggregate amount of Debt Securities to be purchased
by the several Underwriters shall be reduced by the aggregate amount of Contract
Securities; such reduction shall be applied to the commitment of each
Underwriter pro rata in proportion to the amount of Debt Securities set forth
opposite such Underwriter's name in the Underwriting Agreement, except to the
extent that the Manager determines that such reduction shall be applied in other
proportions and so advises the Company; provided, however, that the total amount
-------- -------
of Debt Securities to be purchased by all Underwriters shall be the aggregate
amount set forth above, less the aggregate amount of Contract Securities.
3. Public Offering. The Company is advised by the Manager that the
---------------
Underwriters propose to make a public offering of their respective portions of
the Underwriters' Securities as soon after this Agreement has been entered into
as in the Manager's judgment is advisable. The terms of the public offering of
the Underwriters' Securities are set forth in the Prospectus.
4. Purchase and Delivery. Except as otherwise provided in this
---------------------
Section 4, payment for the Underwriters' Securities shall be made by certified
or official bank check or checks payable to the order of the Company in New York
Clearing House funds at the time and place set forth in the Underwriting
Agreement, upon delivery to the Manager for the respective accounts of the
several Underwriters of the Underwriters' Securities, registered in such names
and in such denominations as the Manager shall request in writing not less than
two full business days prior to the date of delivery, with any transfer taxes
payable in connection with the transfer of the Underwriters' Securities to the
Underwriters duly paid.
6
<PAGE>
Delivery on the Closing Date of any Underwriters' Securities that are
Debt Securities in bearer form shall be effected by delivery of a single
temporary global Debt Security without coupons (the "Global Debt Security")
evidencing the Debt Securities that are Debt Securities in bearer form to a
common depositary for Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euro-clear System ("Euro-clear"), and for Centrale de
Livraison de Valeurs Mobilieres S.A. ("CEDEL") for credit to the respective
accounts at Euro-clear or CEDEL of each Underwriter or to such other accounts as
such Underwriter may direct. Any Global Debt Security shall be delivered to the
Manager not later than the Closing Date, against payment of funds to the Company
in the net amount due to the Company for such Global Debt Security by the method
and in the form set forth in the Underwriting Agreement. The Company shall
cause definitive Debt Securities in bearer form to be prepared and delivered in
exchange for such Global Debt Security in such manner and at such time as may be
provided in or pursuant to the Indenture; provided, however, that the Global
-------- -------
Debt Security shall be exchangeable for definitive Debt Securities in bearer
form only on or after the date specified for such purpose in the Prospectus.
5. Conditions to Closing. The several obligations of the
---------------------
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus, that, in the judgment of the Manager, is material and
adverse and that makes it, in the judgment of the Manager,
impracticable to market the Debt Securities on the terms and in the
manner contemplated in the Prospectus.
(b) The Manager shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company,
to the effect set forth in clause (a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
7
<PAGE>
(c) The Manager shall have received on the Closing Date an opinion of
Irell & Manella, counsel for the Company, dated the Closing Date, to the
effect that
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in the State of California;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(iv) the Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and are valid and binding
agreements of the Company, enforceable in accordance with their
respective terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (b) the availability of equitable remedies may be
limited by equitable principles of general applicability;
(v) the Debt Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, in the case
of Underwriters' Securities, or by institutional investors in
accordance with the terms of the Delayed Delivery Contracts, in the
case of the Contract Securities, will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the
Company, in each case enforceable in accordance with their respective
terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration, if any, and the availability
of equitable remedies may be limited by equitable principles of
general applicability;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Debt Securities and the Delayed Delivery Contracts
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon
the Company or any of its
8
<PAGE>
subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Indenture, the
Debt Securities or the Delayed Delivery Contract except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Debt Securities;
(vii) to the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with
respect to any of the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names presently
employed by them in connection with the business now operated by the
Company or its subsidiaries which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
any material adverse change, or notice of any other development with
respect to the foregoing involving a prospective material adverse
change, in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries, taken as a whole, except as may be disclosed in writing
by the Company to, and accepted for exclusion by, the Manager;
(viii) the statements (1) in the Prospectus under the
captions "Description of Debt Securities," "Plan of Distribution" and
"Certain Federal Tax Consequences," and (2) in the Registration
Statement under Item 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(ix) to the best of such counsel's knowledge after due
inquiry, there are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject or any development in such proceedings that
are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference in the
Registration Statement or the Prospectus that are not so described and
there are no statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement, the
Prospectus or any documents incorporated by reference in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not so described or filed as
required;
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<PAGE>
(x) the Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended;
(xi) such counsel (1) is of the opinion that each document
filed pursuant to the Exchange Act and incorporated by reference in
the Registration Statement and the Prospectus (except for financial
statements and schedules as to which such counsel need not express any
opinion) complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder and (2) is of the opinion that the Registration
Statement and the Prospectus (except for financial statements and
schedules included therein as to which such counsel need not express
any opinion) comply as to form in all material respects with the
Securities Act, the rules and regulations of the Commission thereunder
and the Trust Indenture Act; and
(xii) no facts have come to the attention of such counsel
that would lead such counsel to believe that (1) (except for financial
statements and schedules as to which such counsel need not express any
belief and except for that part of the Registration Statement that
constitutes the Form T-1 heretofore referred to) the Registration
Statement and the prospectus included therein at the time the
Registration Statement (and the documents incorporated by reference in
the Registration Statement and such prospectus) became effective
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (2) (except for financial
statements and schedules as to which such counsel need not express any
belief) the Prospectus and the documents incorporated by reference
therein as of the Closing Date contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The Manager shall have received on the Closing Date an opinion of
the general counsel or the assistant general counsel of the Company, dated
the Closing Date, to the effect that
(i) the Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole;
(ii) based upon opinions, oral or written, of foreign counsel,
each of the subsidiaries of the Company meeting the definition of
"Significant Subsidiary" under Regulation S-X of the Commission has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
10
<PAGE>
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on such subsidiary;
(iii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Debt Securities and the Delayed Delivery Contracts
will not contravene any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and
its subsidiaries, taken as a whole, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or
order of or qualification with any governmental body or agency is
required for the performance by the Company of its obligations under
this Agreement, the Indenture, the Debt Securities or the Delayed
Delivery Contracts except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and
sale of the Debt Securities;
(iv) the Company and its subsidiaries own or possess the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names presently employed by them
in connection with the business now operated by them, and neither the
Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
result in any material adverse change, or notice of any other
development with respect to the foregoing involving a prospective
material adverse change, in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company
and its subsidiaries, taken as a whole, except as may be disclosed in
writing by the Company to, and accepted for exclusion by, the Manager;
(v) there are no legal or governmental proceedings pending or
threatened to the Company to which the Company or any of its
subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject or any development in
such proceedings that are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
in the Registration Statement or the Prospectus that are not so
described and there are no statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement, the Prospectus or any documents incorporated by reference
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or
filed as required;
11
<PAGE>
(vi) such counsel (1) is of the opinion that each document
filed pursuant to the Exchange Act and incorporated by reference in
the Registration Statement and the Prospectus (except for financial
statements and schedules as to which such counsel need not express any
opinion) complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder and (2) is of the opinion that the Registration
Statement and the Prospectus (except for financial statements and
schedules included therein as to which such counsel need not express
any opinion) comply as to form in all material respects with the
Securities Act, the rules and regulations of the Commission thereunder
and the Trust Indenture Act; and
(vii) no facts have come to the attention of such counsel
that would lead such counsel to believe that (1) (except for financial
statements and schedules as to which such counsel need not express any
belief and except for that part of the Registration Statement that
constitutes the Form T-1 heretofore referred to) the Registration
Statement and the prospectus included therein at the time the
Registration Statement (and the documents incorporated by reference in
the Registration Statement and such prospectus) became effective
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (2) (except for financial
statements and schedules as to which such counsel need not express any
belief) the Prospectus and the documents incorporated by reference
therein as of the Closing Date contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(e) The Manager shall have received on the Closing Date an opinion of
Latham & Watkins, special counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in subparagraphs (ii), (iii), (iv),
(v), (viii) (but only as to the statements in the Prospectus under
"Description of Debt Securities" and "Plan of Distribution") and (xii) of
paragraph (c) above.
With respect to the subparagraph (xii) of paragraph (c) above, Irell &
Manella may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are without
independent check or verification, except as specified. With respect to
subparagraph (xii) of paragraph (c) above, Latham & Watkins may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
(but not including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated therein by
reference), but are without independent check or verification, except as
specified.
The opinion of Irell & Manella described in paragraph (c) above shall
be rendered to the Manager at the request of the Company and shall so state
therein.
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<PAGE>
(f) The Manager shall have received on the Closing Date a letter,
dated the Closing Date, in form and substance satisfactory to the Manager,
from the Company's independent public accountants, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
into the Prospectus.
6. Covenants of the Company. In further consideration of the
------------------------
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To furnish the Manager, without charge, a signed copy of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to the
Registration Statement as the Manager may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus with respect to the Debt Securities, to furnish to the Manager a
copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which the Manager reasonably objects;
provided, however, that the foregoing requirement shall not apply to any of
-------- -------
the Company's periodic filings with the Commission required to be filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act or
pursuant to Item 5 (including related exhibits filed pursuant to Item 7) of
Form 8-K, copies of which filings the Company will cause to delivered to
the Manager promptly after being transmitted for filing with the
Commission.
(c) If, during such period after the first date of the public offering
of the Debt Securities as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare, file
with the Commission and furnish, at its own expense, to the Underwriters,
and to the dealers (whose names and addresses the Manager will furnish to
the Company) to which Debt Securities may have been sold by the Manager on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Debt Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualification for as long as
the Manager shall reasonably request.
13
<PAGE>
(e) To make generally available to its security holders and to the
Manager as soon as practicable an earning statement covering a twelve-month
period beginning on the first day of the first full fiscal quarter after
the date of this Agreement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder. If such fiscal quarter is the
last fiscal quarter of the Company's fiscal year, such earning statement
shall be made available not later than 90 days after the close of the
period covered thereby and in all other cases shall be made available not
later than 45 days after the close of the period covered thereby.
(f) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase debt securities of the Company
substantially similar to the Debt Securities (other than (i) the Debt
Securities and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of the Manager.
(g) Whether or not any sale of Debt Securities is consummated, to pay
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements thereto,
(ii) the preparation, issuance and delivery of the Debt Securities, (iii)
the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel, (iv) the qualification of the Debt Securities
under securities or Blue Sky laws in accordance with the provisions of
Section 6(d), including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with
the preparation of any Blue Sky or Legal Investment Memoranda, (v) the
printing and delivery to the Underwriters in quantities as hereinabove
stated of copies of the Registration Statement and all amendments thereto
and of the Prospectus and any amendments or supplements thereto, (vi) any
fees charged by rating agencies for the rating of the Debt Securities,
(vii) the fees and expenses, if any, incurred with respect to any filing
with the National Association of Securities Dealers, Inc. and (viii) all
document production charges and expenses of counsel to the Underwriters
(but not including their fees for professional services) in connection with
the preparation of this Agreement.
7. Covenants of the Underwriters.
-----------------------------
Each of the several Underwriters represents and agrees with the
Company that:
(i) except to the extent permitted under U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D) (the "D Rules"), (A) it has not offered or sold, and
during the restricted period will not offer or sell, Debt Securities in
bearer form (including any Debt Security in global form that is
exchangeable for Debt Securities in bearer form) to a person who is within
the United States or its possessions or to a United States person and (B)
it has not delivered and will not deliver within the United States or its
14
<PAGE>
possessions definitive Debt Securities in bearer form that are sold during
the restricted period;
(ii) it has, and throughout the restricted period will have, in
effect procedures reasonably designed to ensure that its employees or
agents who are directly engaged in selling Debt Securities in bearer form
are aware that such Debt Securities may not be offered or sold during the
restricted period to a person who is within the United States or its
possessions or to a United States person, except as permitted by the D
Rules;
(iii) if it is a United States person, it is acquiring the Debt
Securities in bearer form for purposes of resale in connection with their
original issuance and if it retains Debt Securities in bearer form for its
own account, it will only do so in accordance with the requirements of U.S.
Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6);
(iv) if it transfers to any affiliate Debt Securities in bearer
form for the purpose of offering or selling such Debt Securities during the
restricted period, it will either (A) obtain from such affiliate for the
benefit of the Company the representations and agreements contained in
clauses (i), (ii) and (iii) or (B) repeat and confirm the representations
and agreements contained in clauses (i), (ii) and (iii) on such affiliate's
behalf and obtain from such affiliate the authority to so obligate it;
(v) it will obtain for the benefit of the Company the
representations and agreements contained in clauses (i), (ii), (iii) and
(iv) from any person other than its affiliate with whom it enters into a
written contract, as defined in U.S. Treas. Reg. Section 1.163-5(c) (2)
(i) (D) (4) for the offer or sale during the restricted period of Debt
Securities in bearer form; and
(vi) it will comply with or observe any other restrictions or
limitations set forth in the Prospectus on persons to whom, or the
jurisdictions in which, or the manner in which, the Debt Securities may be
offered, sold, resold or delivered.
All other terms used in the preceding paragraph have the meaning given to them
by the U.S. Internal Revenue Code (the "Code") and regulations thereunder,
including the D Rules. The restricted period is defined at U.S. Treas. Reg.
Section 1.163-5(c)(2)(i)(D)(7).
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with investigating or defending any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material
15
<PAGE>
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Manager expressly for use
therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such
16
<PAGE>
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party (which consent shall not be unreasonably withheld), effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
(b) of this Section 8 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Debt Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Debt Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering of such
Debt Securities (before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus Supplement,
bear to the aggregate public offering price of the Debt Securities. The
relative fault of the Company on the one hand and of the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
8 are several in proportion to the respective principal amounts of Debt
Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Debt
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of
17
<PAGE>
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
9. Termination. This Agreement shall be subject to termination, by
-----------
notice given by the Manager to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on the New York Stock
Exchange, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Manager, is
material and adverse and (b) in the case of any of the events specified in
clauses (a) (i) through (iv), such event, singly or together with any other such
event, makes it, in the judgment of the Manager, impracticable to market the
Debt Securities on the terms and in the manner contemplated in the Prospectus.
10. Defaulting Underwriters. If, on the Closing Date, any one or
-----------------------
more of the Underwriters shall fail or refuse to purchase Underwriters'
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate amount of Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate amount of the Underwriters' Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the amount of Underwriters' Securities set forth opposite
their respective names in the Underwriting Agreement bears to the aggregate
amount of Underwriters' Securities set forth opposite the names of all such non-
defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the amount of Underwriters' Securities
--------
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such amount of Underwriters' Securities without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Underwriters' Securities and the aggregate amount of
Underwriters' Securities with respect to which such default occurs is more than
one-tenth of the aggregate amount of Underwriters' Securities to be purchased on
such date, and arrangements satisfactory to the Manager and the Company for the
purchase of such Underwriters' Securities are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either the
Manager or the Company shall have the right to postpone the Closing Date but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
18
<PAGE>
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering of the Debt Securities.
11. Representations and Indemnities to Survive. The respective
------------------------------------------
indemnity and contribution agreements and the representations, warranties and
other statements of the Company, its officers and the Underwriters set forth in
this Agreement will remain in full force and effect, regardless of any
termination of this Agreement, any investigation made by or on behalf of any
Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Section 8 and delivery of and payment for the Debt
Securities.
12. Successors. This Agreement will enure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 8, and no
other person will have any right or obligation hereunder.
13. Counterparts. The Underwriting Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have
--------
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
19
<PAGE>
Schedule I
DELAYED DELIVERY CONTRACT
______________, 199__
Dear Sirs:
The undersigned hereby agrees to purchase from Mattel, Inc., a
Delaware corporation (the "Company"), and the Company agrees to sell to the
undersigned the Company's securities described in Schedule A annexed hereto (the
"Securities"), offered by the Company's Prospectus dated _______________, 199__
and Prospectus Supplement dated _______________, 199__, receipt of copies of
which are hereby acknowledged, at a purchase price stated in Schedule A and on
the further terms and conditions set forth in this Agreement. The undersigned
does not contemplate selling Securities prior to making payment therefor.
The undersigned will purchase from the Company Securities in the
principal amount and numbers on the delivery dates set forth in Schedule A. Each
such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Company or its order by
certified or official bank check in New York Clearing House funds at the office
of _______________________________, New York, N.Y., at 10:00 A.M. (New York
time) on the Delivery Date, upon delivery to the undersigned of the Securities
to be purchased by the undersigned on the Delivery Date, in such denominations
and registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than three full
business days prior to the Delivery Date.
The undersigned represents and warrants to the Company that as of the
date hereof the purchase of Securities to be made by the undersigned is not
prohibited under the laws of the jurisdiction to which the undersigned is
subject.
The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above of, such part of the Securities as is to
be sold to them.
<PAGE>
Promptly after completion of sale and delivery to the Underwriters, the Company
will mail or deliver to the undersigned as its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.
This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
If this Agreement is acceptable to the Company, it is requested that
the Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This
will become a binding agreement, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
I-2
<PAGE>
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
Yours very truly,
------------------------------------------
(Purchaser)
By
----------------------------------------
Name:
Title:
------------------------------------------
------------------------------------------
------------------------------------------
(Address)
Accepted:
MATTEL, INC.
By
-------------------------------
PURCHASER --- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)
Telephone No.
Name (Including Area Code) Department
---- --------------------- ----------
---------------------- --------------------------- -------------------
I-3
<PAGE>
SCHEDULE A
----------
Securities:
- ----------
Principal Amounts or Numbers to be Purchased:
- --------------------------------------------
Purchase Price:
- --------------
Delivery Dates:
- --------------
I-4
<PAGE>
Exhibit 4.1
================================================================================
MATTEL, INC.
---------------------
INDENTURE
Dated as of February 15, 1996
---------------------
CHEMICAL TRUST COMPANY OF CALIFORNIA
Trustee
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
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
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
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
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
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
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
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
</TABLE>
iv
<PAGE>
MATTEL, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of February 15, 1996
<TABLE>
<S> <C>
(S) 310(a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... Not Applicable
(a)(4)................................................... Not Applicable
(a)(5)................................................... 7.10
(b)...................................................... 7.10
(S) 311(a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... Not Applicable
(S) 312(a)...................................................... 2.6
(b)...................................................... 10.3
(c)...................................................... 10.3
(S) 313(a)...................................................... 7.6
(b)(1)................................................... 7.6
(b)(2)................................................... 7.6
(c)(1)................................................... 7.6
(d)...................................................... 7.6
(S) 314(a)...................................................... 4.2, 10.5
(b)...................................................... Not Applicable
(c)(1)................................................... 10.4
(c)(2)................................................... 10.4
(c)(3)................................................... Not Applicable
(d)...................................................... Not Applicable
(e)...................................................... 10.5
(f)...................................................... Not Applicable
(S) 315(a)...................................................... 7.1
(b)...................................................... 7.5
(c)...................................................... 7.1
(d)...................................................... 7.1
(e)...................................................... 6.14
(S) 316(a)...................................................... 2.10
(a)(1)(A)................................................ 6.2
....................................................... 6.12
(a)(1)(B)....................................................... 6.13
(b)....................................................... 6.8
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(S) 317(a)(1)................................................. 6.3
(a)(2)................................................. 6.4
(b).................................................... 2.5
(S) 318(a).................................................... 10.1
</TABLE>
- ---------------------
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE>
Indenture dated as of 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.
-----------
"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.
<PAGE>
"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.
2
<PAGE>
"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
<PAGE>
"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
<PAGE>
(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
<PAGE>
"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
<PAGE>
SECTION 1.2 Other Definitions.
------------------
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
---- -----------
<S> <C>
"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
</TABLE>
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein are used herein as so defined.
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:
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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);
10
<PAGE>
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
11
<PAGE>
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.
12
<PAGE>
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
13
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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.
14
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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
15
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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.
------------------
17
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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.
20
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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.
SECTION 6.5 Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
27
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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
28
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(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
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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
36
<PAGE>
(ii) all such Securities not theretofore delivered to the Trustee
for cancellation
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity
within one year, or
(3) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company, or
(4) are deemed paid and discharged pursuant to Section 8.3,
as applicable;
and the Company, in the case of (1), (2) or (3) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust in
an amount sufficient for the purpose of paying and discharging the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and interest to the date
of such deposit (in the case of Securities which become due and
payable) or to the Stated Maturity or redemption date, as the case
may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.7, and, if money shall
have been deposited with the Trustee pursuant to clause (a) of this Section or
if money or obligations shall have been deposited with or received by the
Trustee pursuant to Section 8.3, the obligations of the Trustee under Section
8.2 and Section 8.5 shall survive.
SECTION 8.2 Application of Trust Funds; Indemnification.
-------------------------------------------
(a) Subject to the provisions of Section 8.5, all money deposited
with the Trustee pursuant to Section 8.1, all money and U.S. Government
Obligations or Foreign Government Securities deposited with the Trustee
pursuant to Section 8.3 or 8.4 and all money received by the Trustee in
respect of U.S. Government Obligations or Foreign Government Securities
deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in
trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the
37
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persons entitled thereto, of the principal and interest for whose payment
such money has been deposited with or received by the Trustee or to make
mandatory sinking fund payments or analogous payments as contemplated by
Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against U.S. Government
Obligations or Foreign Government Securities deposited pursuant to Sections
8.3 or 8.4 or the interest and principal received in respect of such
obligations other than any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time to time
upon Company Request any U.S. Government Obligations or Foreign Government
Securities or money held by it as provided in Sections 8.3 or 8.4 which, in
the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Trustee, are then in excess of the amount thereof which then would have
been required to be deposited for the purpose for which such Obligations or
Foreign Government Securities or money were deposited or received. This
provision shall not authorize the sale by the Trustee of any U.S.
Government Obligations or Foreign Government Securities held under this
Indenture.
SECTION 8.3 Satisfaction, Discharge and Defeasance of Securities of any Series.
------------------------------------------------------------------
Unless this Section 8.3 is otherwise specified, pursuant to
Section 2.2.20, 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;
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provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of such Securities (i) in
the case of Securities of such Series denominated in Dollars, cash in
Dollars (or such other money or currencies as shall then be legal tender in
the United States) and/or U.S. Government Obligations, or (ii) in the case
of Securities of such Series denominated in a Foreign Currency (other than
a composite currency), money and/or Foreign Government Securities in the
same Foreign Currency, which through the payment of interest and principal
in respect thereof, in accordance with their terms, will provide (and
without reinvestment and assuming no tax liability will be imposed on such
Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge each
installment of principal, (including mandatory sinking fund or analogous
payments) of and any interest on all the Securities of such Series on the
dates such installments of interest or principal are due;
(e) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(f) such provision would not cause any outstanding Securities of such
Series then listed on the New York Stock Exchange or other securities
exchange to be delisted as a result thereof;
(g) no Default or Event of Default with respect to the Securities of
such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture,
there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such opinion shall confirm that,
the Holders of the Securities of such Series will not recognize income,
gain or loss for Federal income tax purposes as a result of such deposits,
defeasance and discharge and will be subject to Federal income tax on the
same amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred;
(i) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities of such Series over any
other creditors of the company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company; and
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(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 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
40
<PAGE>
the same times as would have been the case if such deposit and defeasance
had not occurred;
(e) the Company shall have delivered to the Trustee an Officers'
Certificate stating the deposit was not made by the Company with the intent
of preferring the Holders of the Securities of such Series over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company; and
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated by
this Section have been complied with.
SECTION 8.5 Repayment to Company.
--------------------
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal and interest that
remains unclaimed for two years. After that, Securityholders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.
ARTICLE IX
AMENDMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders.
--------------------------
The Company and the Trustee may amend or supplement this
Indenture or the Securities of one or more Series without the consent of
any Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided that such amendment or
--------
supplement does not adversely affect the rights of any Securityholders;
(d) to make any change that does not adversely affect the rights of
any Securityholder;
(e) to provide for the issuance of and establish the form and terms
and conditions of Securities of any Series as permitted by this Indenture;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee; or
41
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(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 50% 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 50% in
principal amount of the outstanding Securities of each Series affected by such
waiver by notice to the Trustee may waive compliance by the Company with any
provision of this Indenture or the Securities with respect to such Series.
It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a supplemental indenture or waiver under
this section becomes effective, the Company shall mail to the Holders of
Securities affected thereby and, if any Bearer Securities affected thereby are
outstanding, publish on one occasion in an Authorized Newspaper, a notice
briefly describing the supplemental indenture or waiver. Any failure by the
Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
SECTION 9.3 Limitations.
-----------
Without the consent of each Securityholder affected, an amendment or
waiver may not:
(a) change the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of interest
(including default interest) on any Security;
(c) reduce the principal or change the Stated Maturity of any
Security or reduce the amount of, or postpone the date fixed for, the
payment of any sinking fund or analogous obligation;
(d) waive a Default or Event of Default in the payment of the
principal of or interest on any Security (except a rescission of
acceleration of the Securities of any Series by the Holders of at least a
majority in aggregate principal amount of the then outstanding Securities
of such Series and a waiver of the payment default that resulted from such
acceleration);
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(e) make the Security payable in currency other than that stated in
the Security;
(f) make any change in Sections 6.8, 6.13, 9.3 (this sentence), 10.15
or 10.16; or
(g) waive a redemption payment with respect to any Security or change
any of the provisions with respect to the redemption of any Securities.
SECTION 9.4 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the Securities of one or more
Series shall be set forth in a supplemental indenture hereto that complies with
the TIA as then in effect.
SECTION 9.5 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it
by a Holder of a Security is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of a Security if the Trustee receives
the notice of revocation before the date the amendment or waiver becomes
effective.
Any amendment or waiver once effective shall bind every Securityholder
of each Series affected by such amendment or waiver unless it is of the type
described in any of clauses (a) through (g) of Section 9.3. In that case, the
amendment or waiver shall bind each Holder of a Security who has consented to it
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 9.6 Notation on or Exchange of Securities.
-------------------------------------
The Trustee may place an appropriate notation about an amendment or
waiver on any Security of any Series thereafter authenticated. The Company in
exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the
amendment or waiver.
SECTION 9.7 Trustee Protected.
-----------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights.
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ARTICLE X
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control.
SECTION 10.2 Notices.
-------
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail:
if to the Company:
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Attention: Ned Mansour, Executive Vice President,
General Counsel and Secretary
if to the Trustee:
Chemical Trust Company of California
50 California, 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.
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SECTION 10.7 Legal Holidays.
--------------
Unless otherwise provided by Board Resolution or supplemental
indenture hereto for a particular Series, a "Legal Holiday" is a Saturday, a
Sunday, or a day on which banking institutions are not required to be open. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 10.8 No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.
SECTION 10.9 Counterparts.
------------
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 10.10 Governing Laws.
--------------
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA SHALL GOVERN THIS
INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISION
THEREOF.
SECTION 10.11 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 10.12 Successors.
----------
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 10.13 Severability.
------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
46
<PAGE>
SECTION 10.14 Table of Contents, Headings, Etc.
--------------------------------
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 10.15 Securities in a Foreign Currency or in ECU.
------------------------------------------
Unless otherwise specified in an Officers' Certificate delivered
pursuant to Section 2.2 of this Indenture with respect to a particular Series of
Securities, whenever for purposes of this Indenture any action may be taken by
the Holders of a specified percentage in aggregate principal amount of
Securities of all Series or all Series affected by a particular action at the
time outstanding and, at such time, there are outstanding Securities of any
Series which are denominated in a coin or currency other than Dollars (including
ECUs), then the principal amount of Securities of such Series which shall be
deemed to be outstanding for the purpose of taking such action shall be that
amount of Dollars that could be obtained for such amount at the Market Exchange
Rate at such time. For purposes of this Section 10.15, "Market Exchange Rate"
shall mean the noon Dollar buying rate in New York City for cable transfers of
that currency as published by the Federal Reserve Bank of New York; provided,
--------
however, in the case of ECUs, Market Exchange Rate shall mean the rate of
- -------
exchange determined by the Commission of the European Union (or any successor
thereto) as published in the Official Journal of the European Union (such
publication or any successor publication, the "Journal"). If such Market
Exchange Rate is not available for any reason with respect to such currency, the
Trustee shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York or, in the case of ECUs,
the rate of exchange as published in the Journal, as of the most recent
available date, or quotations or, in the case of ECUs, rates of exchange from
one or more major banks in The City of New York or in the country of issue of
the currency in question or, in the case of ECUs, in 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:_______________________________
Name:
Attest: Title:
CHEMICAL TRUST COMPANY OF CALIFORNIA
By:_________________________________
Name:
Title:
50
<PAGE>
Exhibit 4.2
(FORM OF FACE OF SECURITY)
MATTEL, INC.
SERIES B MEDIUM-TERM NOTE
Floating Rate Note
REGISTERED REGISTERED
No. FLR- [PRINCIPAL AMOUNT]
CUSIP:
If the registered owner of this Security (as indicated below) is The
Depository Trust Company (the "Depository") or a nominee of the Depository, this
Security is a Global Security and the following two legends apply:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of the Depository or a
nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Indenture, and may not be
transferred except as a whole by the Depository to a nominee of the Depository,
by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor of the
Depository or a nominee of such successor.
Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Issuer (as defined below) or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY" AND
"INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET FORTH
BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME
TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
1
<PAGE>
<TABLE>
<S> <C> <C>
BASE RATE: ORIGINAL ISSUE DATE: ORIGINAL MATURITY
DATE:
INDEX MATURITY: INTEREST ACCRUAL FINAL MATURITY
DATE: DATE:
SPREAD (PLUS OR INITIAL INTEREST INTEREST PAYMENT
MINUS): RATE: DATE(S):
ALTERNATE RATE INITIAL INTEREST INTEREST PAYMENT
EVENT SPREAD: RESET DATE: PERIOD:
SPREAD MULTIPLIER: MAXIMUM INTEREST INTEREST RESET
RATE: PERIOD:
APPLICABILITY OF MINIMUM INTEREST INTEREST RESET
MODIFIED PAYMENT RATE: DATES:
UPON ACCELERATION:
If yes, state INITIAL REDEMPTION CALCULATION AGENT:
ISSUE PRICE: DATE:
INITIAL REDEMPTION SPECIFIED CURRENCY:
PERCENTAGE:
ANNUAL REDEMPTION INDEX CURRENCY:
PERCENTAGE
REDUCTION:
OPTIONAL REPAYMENT TOTAL AMOUNT OF
DATE(S): OID:
ORIGINAL YIELD TO
MATURITY:
OTHER TERMS: INITIAL ACCRUAL
PERIOD OID:
</TABLE>
Mattel, Inc., a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to
or registered assignees, the principal sum of _________________________________,
on the Original Maturity Date specified above (except to the extent redeemed or
repaid prior to the Original Maturity Date) or, if the maturity hereof is
extended in accordance with the procedures set forth below to an Extended
Maturity Date, as defined below, on such Extended Maturity Date (except to the
extent previously redeemed or repaid) and to pay interest thereon, from the
Interest Accrual Date specified above at a rate per annum equal to the Initial
Interest Rate specified above until the Initial Interest Reset Date specified
above, and thereafter at a rate
2
<PAGE>
per annum determined in accordance with the provisions specified on the reverse
hereof (including the provisions relating to extension of maturity) until the
principal hereof is paid or duly made available for payment. The Issuer will
pay interest in arrears monthly, quarterly, semiannually or annually as
specified above as the Interest Payment Period on each Interest Payment Date (as
specified above), commencing with the first Interest Payment Date next
succeeding the Interest Accrual Date specified above, and at maturity (or on any
redemption or repayment date); provided, however, that if the Interest Accrual
Date occurs between a Record Date, as defined below, and the next succeeding
Interest Payment Date, interest payments will commence on the second Interest
Payment Date succeeding the Interest Accrual Date to the registered holder of
this Note on the Record Date with respect to such second Interest Payment Date;
and provided, further, that if an Interest Payment Date or the Maturity Date or
redemption or repayment date would fall on a day that is not a Business Day, as
defined on the reverse hereof, such Interest Payment Date, Maturity Date or
redemption or repayment date shall be the following day that is a Business Day,
except that if the Base Rate specified above is LIBOR and such next Business Day
falls in the next calendar month, the Interest Payment Date, Maturity Date or
redemption or repayment date shall be the immediately preceding day that is a
Business Day.
Except as provided above, unless otherwise specified on the face
hereof, interest on Notes will be payable: (i) in the case of Notes with a
daily, weekly or monthly Interest Reset Date, on the third Wednesday of each
month or on the third Wednesday of March, June, September and December, as
specified on the face hereof; (ii) in the case of Notes with a quarterly
Interest Reset Date, on the third Wednesday of March, June, September and
December specified on the face hereof; (iii) in the case of Notes with a
semiannual Interest Reset Date, on the third Wednesday of the two months
specified on the face hereof; and (iv) in the case of Notes with an annual
Interest Reset Date, on the third Wednesday of the month specified on the face
hereof.
Interest on this Note will accrue from the most recent date on which
interest has been paid or duly provided for, or, if no interest has been paid or
duly provided for, from the Interest Accrual Date, until the principal hereof
has been paid or duly made available for payment (except as provided below).
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, subject to certain exceptions described herein, be
paid to the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the date 15 calendar days prior to such
Interest Payment Date (whether or not a Business Day) (each such date a "Record
Date"); provided, however, that interest payable at maturity (or on any
-------- -------
redemption or repayment date) will be payable to the person to whom the
principal hereof shall be payable.
Payment of the principal of this Note, any premium and the interest
due at maturity (or on any redemption or repayment date) will be made in
immediately available funds upon surrender of this Note at the principal
corporate trust office of the Trustee or at the office or agency of the Trustee
maintained for that purpose in The City of New York, New York, or at such other
paying agency as the Issuer may determine. Payment of the principal of and
premium, if any, and interest on this Note will be made in the Specified
Currency indicated above; provided, however, that U.S. dollar payments of
-------- -------
interest, other than interest due at
3
<PAGE>
maturity or any date of redemption or repayment, will be made by U.S. dollar
check mailed to the address of the person entitled thereto as such address shall
appear in the Note register. A holder of U.S. $10,000,000 or more in aggregate
principal amount of Notes having the same Interest Payment Date will be entitled
to receive payments of interest, other than interest due at maturity or any date
of redemption or repayment, by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received by the Paying Agent in
writing not less than 15 calendar days prior to the applicable Interest Payment
Date. If this Note is denominated in a Specified Currency other than U.S.
dollars, payments of interest hereon will be made by wire transfer of
immediately available funds to an account maintained by the holder hereof with a
bank located outside the United States if appropriate wire transfer instructions
have been received by the Paying Agent in writing not less than 15 calendar days
prior to the applicable Interest Payment Date. If such wire transfer
instructions are not so received, such interest payments (other than interest
payable at maturity or on any redemption or repayment date) will be made by
check payable in such Specified Currency mailed to the address of the person
entitled thereto as such address shall appear in the Note register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
4
<PAGE>
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed under its corporate seal.
DATED: MATTEL, INC.
By_______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes
referred to in the within-
mentioned Indenture.
CHEMICAL TRUST COMPANY OF CALIFORNIA,
as Trustee
By_____________________________________
Authorized Officer
5
<PAGE>
(FORM OF REVERSE OF SECURITY)
This Note is one of a duly authorized issue of Series B Medium-Term
Notes having maturities of more than nine months from the date of issue (the
"Notes") of the Issuer. The Notes are issuable under an indenture dated as of
February 15, 1996, duly executed and delivered by the Issuer to Chemical Trust
Company of California, Trustee (herein called the "Trustee"), to which indenture
and all indentures supplemental thereto (herein called the "Indenture")
reference is hereby made for a statement of the respective rights, limitations
of rights and immunities of the Issuer, the Trustee and holders of the Notes and
terms upon which the Notes are, and are to be, authenticated and delivered. The
Issuer has appointed Chemical Trust Company of California as the paying agent
(the "Paying Agent," which term includes any additional or successor Paying
Agent appointed by the Issuer) with respect to the Notes. The terms of
individual Notes may vary with respect to interest rates, interest rate
formulas, issue dates, maturity dates, or otherwise, all as provided in the
Indenture. To the extent not inconsistent herewith, the terms of the Indenture
are hereby incorporated by reference herein.
This Note will not be subject to any sinking fund and, unless
otherwise provided on the face hereof in accordance with the provisions of the
following two paragraphs, will not be redeemable or subject to repayment at the
option of the holder prior to maturity.
If so indicated on the face of this Note, this Note may be redeemed in
whole or in part at the option of the Issuer on or after the Initial Redemption
Date specified on the face hereof on the terms set forth on the face hereof and
at a redemption price (expressed as a percentage of the principal amount hereof)
equal to the Initial Redemption Percentage, together with interest accrued and
unpaid hereon to the date of redemption. If this Note is subject to "Annual
Redemption Percentage Reduction," the Initial Redemption Percentage indicated on
the face hereof will be reduced on each anniversary of the Initial Redemption
Date by the Annual Redemption Percentage Reduction specified on the face hereof
until the redemption price of this Note is 100% of the principal amount hereof,
together with interest accrued and unpaid hereon to the date of redemption.
Notice of redemption shall be mailed by first class mail, postage prepaid, to
the registered holders of the Notes designated for redemption at their addresses
as the same shall appear on the Note register not less than 30 nor more than 60
days prior to the date fixed for redemption, subject to all the conditions and
provisions of the Indenture. In the event of redemption of this Note in part
only, a new Note or Notes for the amount of the unredeemed portion hereof shall
be issued in the name of the holder hereof upon the cancellation hereof, but, in
any event, the principal amount of the Note remaining outstanding after
redemption must be an Authorized Denomination.
If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments of
$1,000 or, if this Note is denominated in a Specified Currency other than U.S.
dollars, in increments of 1,000 units of such Specified Currency (provided that
any remaining principal amount hereof shall not be less than the minimum
Authorized
6
<PAGE>
Denomination hereof) at the option of the holder hereof at a price equal to 100%
of the principal amount to be repaid, together with interest accrued and unpaid
hereon to the date of repayment. For this Note to be repaid at the option of
the holder hereof, the Paying Agent must receive at its principal corporate
trust office in San Francisco, California, or at its office in The City of New
York, New York, at least 30 but not more than 60 days prior to the date of
repayment, (i) this Note with the form entitled "Option to Elect Repayment"
below duly completed or (ii) a telegram, telex, facsimile transmission or a
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or a trust company
in the United States setting forth the name of the holder of this Note, the
principal amount hereof, the principal amount hereof to be repaid, the
certificate number of this Note or a description of this Note's tenor and terms,
a statement that the option to elect repayment is being exercised thereby and a
guarantee that this Note, together with the form entitled "Option to Elect
Repayment" duly completed, will be received by the Paying Agent not later than
the third Business Day after the date of such telegram, telex, facsimile
transmission or letter; provided, however, that such telegram, telex, facsimile
-------- -------
transmission or letter shall only be effective if this Note and such form duly
completed are received by the Paying Agent by such third Business Day.
Effective exercise of such repayment option by the holder hereof shall be
irrevocable. In the event of repayment of this Note in part only, a new Note or
Notes for the amount of the unpaid portion hereof shall be issued in the name of
the holder hereof upon the cancellation hereof, but, in any event, the principal
amount of the Note remaining outstanding after repayment must be an Authorized
Denomination.
If so indicated on the face of this Note, the Issuer has the option to
extend the Original Maturity Date hereof for one or more periods of one or more
whole years (each an "Extension Period") up to but not beyond the Final Maturity
Date specified on the face hereof and in connection therewith to establish a new
interest rate (calculated with reference to a Base Rate and the Spread and/or
Spread Multiplier, if any) and new redemption provisions for the Extension
Period.
The Issuer may exercise such option by notifying the Paying Agent of
such exercise at least 45 but not more than 60 days prior to the Original
Maturity Date or, if the maturity hereof has already been extended, prior to the
maturity date then in effect (an "Extended Maturity Date"), such notice to be
accompanied by the form of the Extension Notice referred to below. No later
than 38 days prior to the Original Maturity Date or an Extended Maturity Date,
as the case may be (each, a "Maturity Date"), the Paying Agent will mail to the
holder hereof a notice (the "Extension Notice") relating to such Extension
Period, by first class mail, postage prepaid, setting forth (a) the election of
the Issuer to extend the maturity of this Note; (b) the new Extended Maturity
Date; (c) the interest rate applicable to the Extension Period (calculated with
reference to a Base Rate and the Spread and/or Spread Multiplier, if any); and
(d) the provisions, if any, for redemption during the extension period,
including the date or dates on which, the period or periods during which and the
price or prices at which such redemption may occur during the Extension Period.
Upon the mailing by the Paying Agent of an Extension Notice to the holder of
this Note, the maturity hereof shall be extended automatically, and, except as
modified by the Extension Notice and as described in the next paragraph, this
Note will have the same terms it had prior to the mailing of such Extension
Notice.
7
<PAGE>
Notwithstanding the foregoing, not later than 10:00 A.M., New York
City time, on the twentieth calendar day prior to the Maturity Date in effect
immediately preceding the mailing of the applicable Extension Notice (or if such
day is not a Business Day, not later than 10:00 A.M., New York City time, on the
immediately succeeding Business Day), the Issuer may, at its option, revoke the
interest rate provided for in such Extension Notice and establish a higher
Spread and/or Spread Multiplier, if any, for the Extension Period by causing the
Paying Agent to send notice of such higher Spread and/or Spread Multiplier, if
any, within seven days of receipt of such notice to the holder of this Note by
first class mail, postage prepaid, or by such other means as shall be agreed
between the Issuer and the Paying Agent. Such notice shall be irrevocable. All
Notes with respect to which the Maturity Date is extended in accordance with an
Extension Notice will bear such higher Spread and/or Spread Multiplier, if any,
for the Extension Period, whether or not tendered for repayment.
If the Issuer elects to extend the maturity hereof, the holder of this
Note will have the option to require the Issuer to repay this Note on the
Maturity Date in effect immediately preceding the mailing of the applicable
Extension Notice at a price equal to the principal amount hereof plus any
accrued and unpaid interest to such date. In order for this Note to be so
repaid on such Maturity Date, the holder hereof must follow the procedures set
forth above for optional repayment, except that the period for delivery of this
Note or notification to the Paying Agent shall be at least 25 but not more that
35 days prior to the Maturity Date in effect immediately preceding the mailing
of the applicable Extension Notice and except that if the holder hereof has
tendered this Note for repayment pursuant to this paragraph he may, by written
notice to the Paying Agent, revoke any such tender for repayment until 3:00
P.M., New York City time, on the twentieth calendar day prior to the Maturity
Date then in effect (or, if such day is not a Business Day, until 3:00 P.M., New
York City time, on the immediately succeeding Business Day).
This Note will bear interest at the rate determined in accordance with
the applicable provisions below by reference to the Base Rate shown on the face
hereof based on the Index Maturity, if any, shown on the face hereof (i) plus or
minus the Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if
any, specified on the face hereof. Commencing with the Initial Interest Reset
Date specified on the face hereof, the rate at which interest on this Note is
payable shall be reset as of each Interest Reset Date (as used herein, the term
"Interest Reset Date" shall include the Initial Interest Reset Date). The
Interest Reset Dates will be the Interest Reset Dates specified on the face
hereof; provided, however, that (i) the interest rate in effect for the period
-------- -------
from the Interest Accrual Date to the Initial Interest Reset Date will be the
Initial Interest Rate and (ii) the interest rate in effect hereon for the ten
calendar days immediately prior to maturity hereof (or, with respect to any
principal amount to be redeemed or repaid, any redemption or repayment date)
shall be that in effect on the tenth calendar day preceding maturity hereof or
such date of redemption or repayment, as the case may be. If any Interest Reset
Date would otherwise be a day that is not a Business Day, such Interest Reset
Date shall be postponed to the next succeeding day that is a Business Day,
except that if the Base Rate specified on the face hereof is LIBOR and such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day. As used herein, "Business Day"
means (1) any day, other than a Saturday or Sunday, and that is neither a legal
holiday nor a day on which banking institutions are authorized or required by
law or
8
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regulation to close in The City of New York, New York, or San Francisco,
California, and (2)(i) with respect to LIBOR Notes (as defined below), is also a
London Banking Day, (ii) with respect to Notes denominated in a Specified
Currency other than U.S. dollars, Australian dollars, or ECUs, in the principal
financial center of the country of the Specified Currency, (iii) with respect to
Notes denominated in Australian dollars, in Sydney, and (iv) with respect to
Notes denominated in ECUs, in Luxemburg and that is not a non-ECU clearing day,
as determined by the ECU Banking Association in Paris.
The Interest Reset Date will be, in the case of Notes which reset
daily, each Business Day; in the case of Notes (other than Notes whose Base Rate
is the Treasury Rate) which reset weekly, the Wednesday of each week; in the
case of Notes whose Base Rate is the Treasury Rate which reset weekly, the
Tuesday of each week, except as provided below; in the case of Notes which reset
monthly, the third Wednesday of each month; in the case of Notes which reset
quarterly, the third Wednesday of March, June, September and December; in the
case of Notes which reset semiannually, the third Wednesday of two months of
each year, as specified on the face hereof; and in the case of Notes which reset
annually, the third Wednesday of one month of each year, as specified on the
face hereof.
In the case where the Interest Payment Date or the Maturity Date (or
any redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but will be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.
The Interest Determination Date pertaining to an Interest Reset Date
for Notes bearing interest calculated by reference to the CD Rate, Commercial
Paper Rate, Federal Funds Rate, CMT Rate and Prime Rate will be the second
Business Day next preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date for Notes bearing
interest calculated by reference to LIBOR shall be the second London Banking Day
preceding such Interest Reset Date. As used herein, "London Banking Day" means
any day on which dealings in deposits in the Index Currency are transacted in
the London interbank market. The Interest Determination Date pertaining to an
Interest Reset Date for Notes bearing interest calculated by reference to the
Treasury Rate shall be the day of the week in which such Interest Reset Date
falls on which Treasury bills normally would be auctioned; provided, however,
-------- -------
that if, as a result of a legal holiday, an auction is held on the Friday of the
week preceding such Interest Reset Date, the related Interest Determination Date
shall be such preceding Friday; and provided, further, that if an auction shall
-------- -------
fall on any Interest Reset Date, then the Interest Reset Date shall instead be
the first Business Day following the date of such auction.
The "Calculation Date" pertaining to any Interest Determination Date
will be the earlier of (i) the tenth calendar day after such Interest
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day, or (ii) the Business Day preceding the
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<PAGE>
applicable Interest Payment Date or Maturity Date or date of redemption or
payment, as the case may be.
Determination of CD Rate. If the Base Rate specified on the face
------------------------
hereof is the CD Rate, the CD Rate with respect to this Note shall be determined
on each Interest Determination Date and shall be the rate on such date for
negotiable certificates of deposit having the Index Maturity specified on the
face hereof as published by the Board of Governors of the Federal Reserve System
in "Statistical Release H.15(519), Selected Interest Rates," or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)"), under the heading "CDs (Secondary Market)," or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the CD Rate will be the rate on such
Interest Determination Date for negotiable certificates of deposit of the Index
Maturity specified on the face hereof as published by the Federal Reserve Bank
of New York City in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Certificates of Deposit." If neither of such rates is published by
3:00 P.M., New York City time, on such Calculation Date, then the CD Rate on
such Interest Determination Date will be calculated by the Calculation Agent
referred to on the face hereof and will be the arithmetic mean of the secondary
market offered rates as of 10:00 A.M., New York City time, on such Interest
Determination Date for certificates of deposit in the denomination of U.S.
$5,000,000 with a remaining maturity closest to the Index Maturity specified on
the face hereof of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money center
banks; provided, however, that if the dealers selected as aforesaid by the
-------- -------
Calculation Agent are not quoting as mentioned in this sentence, the rate of
interest in effect for the applicable period will be the same as the CD Rate for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate).
Determination of Commercial Paper Rate. If the Base Rate specified on
--------------------------------------
the face hereof is the Commercial Paper Rate, the Commercial Paper Rate with
respect to this Note shall be determined on each Interest Determination Date and
shall be the Money Market Yield (as defined herein) of the rate on such date for
commercial paper having the Index Maturity specified on the face hereof, as such
rate shall be published in H.15(519) under the heading "Commercial Paper," or if
not so published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Commercial Paper Rate shall
be the Money Market Yield of the rate on such Interest Determination Date for
commercial paper of the Index Maturity specified on the face hereof as published
in Composite Quotations under the heading "Commercial Paper." If neither of
such rates is published by 3:00 P.M., New York City time, on such Calculation
Date, then the Commercial Paper Rate shall be the Money Market Yield of the
arithmetic mean of the offered rates as of 11:00 A.M., New York City time, on
such Interest Determination Date of three leading dealers in commercial paper in
The City of New York selected by the Calculation Agent for commercial paper of
the Index Maturity specified on the face hereof, placed for an industrial issuer
whose bond rating is "AA," or the equivalent, from a nationally recognized
rating agency; provided, however, that if the dealers selected as aforesaid by
--------- -------
the Calculation Agent are not quoting as mentioned in this sentence, the rate of
interest in effect for the applicable period will be the same as the
10
<PAGE>
Commercial Paper Rate for the immediately preceding Interest Reset Period, (or,
if there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
"Money Market Yield" shall be the yield calculated in accordance with
the following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the Index Maturity specified on the face hereof.
Determination of Federal Funds Rate. If the Base Rate specified on
-----------------------------------
the face hereof is the Federal Funds Rate, the Federal Funds Rate with respect
to this Note shall be determined on each Interest Determination Date and shall
be the rate on such date for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)," or, if not so published by 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate will be the rate on such Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If neither of such rates is published by 3:00
P.M., New York City time, on such Calculation Date, the Federal Funds Rate for
such Interest Determination Date will be calculated by the Calculation Agent and
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds as of 9:00 A.M., New York City time, on such Interest
Determination Date arranged by three leading brokers in Federal funds
transactions in The City of New York selected by the Calculation Agent;
provided, however, that if the brokers selected as aforesaid by the Calculation
- -------- -------
Agent are not quoting as mentioned in this sentence, the rate of interest in
effect for the applicable period will be the same as the Federal Funds Rate for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate).
Determination of LIBOR. If the Base Rate specified on the face hereof
----------------------
is LIBOR, LIBOR with respect to this Note shall be determined on each Interest
Determination Date as follows:
(i) As of the Interest Determination Date, LIBOR shall be either (a)
if "LIBOR Reuters" is specified on the face hereof, the arithmetic
mean of the offered rates (unless the specified Designated LIBOR Page
(as defined below) by its terms provides only for a single rate, in
which case such single rate shall be used) for deposits in the Index
Currency having the Index Maturity designated on the face hereof,
commencing on such Interest Determination Date, that appear on the
Designated LIBOR Page as of 11:00 A.M., London time, on that Interest
Determination Date, if at least two such offered rates appear (unless,
as aforesaid, only a single rate is required) on such Designated LIBOR
Page, or (b) if "LIBOR Telerate" is specified on the face hereof, the
rate for deposits in the Index
11
<PAGE>
Currency having the Index Maturity designated on the face hereof,
commencing on such Interest Determination Date, that appears on the
Designated LIBOR Page as of 11:00 A.M., London time, on that Interest
Determination Date. If fewer than two offered rates appear, or no rate
appears, as applicable, LIBOR in respect of the related Interest
Determination Date shall be determined as if the parties had specified
the rate described in clause (ii) below.
(ii) With respect to an Interest Determination Date on which fewer
than two offered rates appear (unless, as aforesaid, only a single
rate is required), or no rate appears, as the case may be, on the
applicable Designated LIBOR Page as specified in clause (i) above, the
Calculation Agent will request the principal London offices of each of
four major reference banks in the London interbank market, as selected
by the Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the period of
the Index Maturity designated on the face hereof, commencing on the
second London Banking Day immediately following such Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such Interest Determination
Date and in a principal amount of not less than $1,000,000 (or the
equivalent in the Index Currency, if the Index Currency is not the
U.S. dollar) that is representative for a single transaction in such
Index Currency in such market at such time. If at least two such
quotations are provided, LIBOR determined on such Interest
Determination Date will be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR determined on such
Interest Determination Date will be the arithmetic mean of the rates
quoted at approximately 11:00 A.M. (or such other time specified on
the face hereof), in the applicable principal financial center for the
country of the Index Currency on such Interest Determination Date, by
three major banks in such principal financial center selected by the
Calculation Agent for loans in the Index Currency to leading European
banks, having the Index Maturity designated on the face hereof and in
a principal amount of not less than $1,000,000 commencing on the
second London Banking Day immediately following such Interest
Determination Date (or the equivalent in the Index Currency, if the
Index Currency is not the U.S. dollar) that is representative for a
single transaction in such Index Currency in such market at such time;
provided however, that if the banks so selected by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR for such
Interest Reset Period will be the same as LIBOR for the immediately
preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate).
"Index Currency" means the currency (including composite currencies)
specified on the face hereof as the currency for which LIBOR shall be
calculated. If no such currency is specified on the face hereof, the Index
Currency shall be U.S. dollars.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is
designated on the face hereof, the display on the Reuters Monitor Money Rates
Service for the purpose of
12
<PAGE>
displaying the London interbank rates of major banks for the applicable Index
Currency, or (b) if "LIBOR Telerate" is designated on the face hereof, the
display on the Dow Jones Telerate Service for the purpose of displaying the
London interbank rates of major banks for the applicable Index Currency. If
neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof, LIBOR
for the applicable Index Currency will be determined as if LIBOR Telerate (and,
if the U.S. dollar is the Index Currency, Page 3750) had been specified.
Determination of Prime Rate. If the Base Rate specified on the face
---------------------------
hereof is the Prime Rate, the Prime Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate set forth
in H.15(519) for such date opposite the caption "Bank Prime Loan." If such rate
is not yet published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Prime Rate for such Interest
Determination Date will be the arithmetic mean of the rates of interest publicly
announced by each bank named on the Reuters Screen U.S. Prime 1 Page (as defined
below) as such bank's prime rate or base lending rate as in effect for such
Interest Determination Date as quoted on the Reuters Screen U.S. Prime 1 Page on
such Interest Determination Date, or, if fewer than four such rates appear on
the Reuters Screen U.S. Prime 1 Page for such Interest Determination Date, the
rate shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as of the close of business on
such Interest Determination Date by at least two of the three major money center
banks in The City of New York selected by the Calculation Agent from which
quotations are requested. If fewer than two quotations are provided, the Prime
Rate shall be calculated by the Calculation Agent and shall be determined as the
arithmetic mean on the basis of the prime rates in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, in each case
having total equity capital of at least U.S. $500 million and being subject to
supervision or examination by federal or state authority, selected by the
Calculation Agent to quote such rate or rates; provided, however, that if the
-------- -------
banks or trust companies selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the Prime Rate in effect for such
Interest Reset Date will be the same as the Prime Rate for the immediately
preceding Interest Reset Period (or, if there was no such Interest Reset Period,
the rate of interest payable hereon shall be the Initial Interest Rate).
"Reuters Screen U.S. Prime 1 Page" means the display designated as Page "U.S.
Prime 1" on the Reuters Monitor Money Rates Service (or such other page as may
replace the U.S. Prime 1 Page on that Service for the purpose of displaying
prime rates or base lending rates of major United States banks).
Determination of Treasury Rate. If the Base Rate specified on the
------------------------------
face hereof is the Treasury Rate, the Treasury Rate with respect to this Note
shall be determined on each Interest Determination Date and shall be the rate
for the auction held on such date of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified on the face hereof, as
published in H.15(519) under the heading "Treasury Bills -- auction average
(investment)," or if not so published by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the auction
average rate on such Interest Determination Date (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of Treasury Bills
having
13
<PAGE>
the Index Maturity specified on the face hereof are not published or reported as
provided above by 3:00 P.M., New York City time, on such Calculation Date or if
no such auction is held on such Interest Determination Date, then the Treasury
Rate shall be calculated by the Calculation Agent and shall be a yield to
maturity (expressed as a bond equivalent, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) calculated using the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Interest Determination Date, of three leading
primary United States government securities dealers selected by the Calculation
Agent for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified on the face hereof; provided, however, that if the
-------- -------
dealers selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, the Treasury Rate for such Interest Reset Date
will be the same as the Treasury Rate for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the rate of
interest payable hereon shall be the Initial Interest Rate).
Determination of CMT Rate. If the Base Rate specified on the face
-------------------------
hereof is the CMT Rate, the CMT Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate on such
date displayed for the Index Maturity specified on the face hereof on the
Designated CMT Telerate Page (as defined below) under the caption "...Treasury
Constant Maturities...Federal Reserve Board Release H.15...Mondays Approximately
3:45 p.m.," under the column for the Designated CMT Maturity Index (as defined
below) for (i) if the Designated CMT Telerate Page is 7055, the rate on such
Interest Determination Date and (ii) if the Designated CMT Telerate Page is
7052, the week or the month, as applicable, ended immediately preceding the week
in which the related Interest Determination Date occurs. If such rate is no
longer displayed on the relevant page, or if not displayed by 3:00 p.m., New
York City time, on the related Calculation Date, then the CMT Rate for such
Interest Determination Date will be such Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published, or, if not published by 3:00 p.m., New York City
time, on the related Calculation Date, then the CMT Rate for such Interest
Determination Date will be such Treasury Constant Maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the Interest Determination Date with respect
to such Interest Reset Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate for the Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
offer side prices as of approximately 3:30 p.m., New York City time on the
Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York (which may include the Agents or
their affiliates) selected by the Calculation Agent (from five such Reference
Dealers selected by the Calculation Agent, after consultation with the Company,
and eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate
14
<PAGE>
obligations of the United States ("Treasury notes") with an original maturity of
approximately the Designated CMT Maturity Index and remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent cannot obtain three such Treasury notes quotations, the CMT
Rate for such Interest Determination Date will be calculated by the Calculation
Agent and will be a yield to maturity based on the arithmetic mean of the
secondary market offer side prices as of approximately 3:30 p.m., New York City
time, on the Interest Determination Date of three Reference Dealers in The City
of New York (from five such Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least $100,000,000. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided however, that if fewer than
three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the CMT Rate for such Interest Reset Date will be the same as
the CMT Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable on the CMT Rate
Notes for which the CMT Rate is being determined shall be the Initial Interest
Rate). If two Treasury notes with an original maturity as described in the
second preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the quotes for the Treasury note with the shorter
remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in an applicable Pricing Supplement (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)), for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519). If no such
page is specified in the applicable Pricing Supplement, the Designated CMT
Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" shall be the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in an applicable Pricing Supplement with respect to which the CMT Rate
will be calculated. If no such maturity is specified in the applicable Pricing
Supplement, the Designated CMT Maturity Index shall be two years.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by California law, as the same may be
modified by United States Federal law of general application.
15
<PAGE>
At the request of the holder hereof, the Calculation Agent will
provide to the holder hereof the interest rate hereon then in effect and, if
determined, the interest rate that will become effective as of the next Interest
Reset Date.
Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or at maturity (or on any earlier
redemption or repayment date), as the case may be; provided, however, that if
-------- -------
the Interest Reset Period with respect to this Note is daily or weekly, interest
payable on any Interest Payment Date, other than interest payable on any date on
which principal hereof is payable, will include interest accrued from and
including the Original Issue Date or from but excluding the last Record Date to
which interest has been paid, as the case may be, to and including the Record
Date immediately preceding the applicable Interest Payment Date. Accrued
interest hereon shall be an amount calculated by multiplying the face amount
hereof by an accrued interest factor. Such accrued interest factor shall be
computed by adding the interest factor calculated for each day in the period for
which interest is being paid. The interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the Base
Rate is the CD Rate, Commercial Paper Rate, Federal Funds Rate, Prime Rate or
LIBOR, as specified on the face hereof, or by the actual number of days in the
year if the Base Rate is the Treasury Rate or the CMT Rate, as specified on the
face hereof. All percentages used in or resulting from any calculation of the
rate of interest on this Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward, and all dollar amounts used in or resulting
from such calculation on this Note will be rounded to the nearest cent (with
one-half cent rounded upward). The interest rate in effect on any Interest
Reset Date will be the applicable rate as reset on such date. The interest rate
applicable to any other day is the interest rate from the immediately preceding
Interest Reset Date (or, if none, the Initial Interest Rate).
This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured and
---- -----
unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or exchange
hereof, is issuable only in fully registered form, without coupons, and, if
denominated in U.S. dollars, is issuable only in denominations of U.S. $1,000
and any integral multiple of U.S. $1,000 in excess thereof. If this Note is
denominated in a Specified Currency other than U.S. dollars, then, unless a
higher minimum denomination is required by applicable law, it is issuable only
in denominations of the equivalent of U.S. $1,000 (rounded to an integral
multiple of 1,000 units of such Specified Currency), or any amount in excess
thereof which is an integral multiple of 1,000 units of such Specified Currency,
as determined by reference to the noon dollar buying rate in New York City for
cable transfers of such Specified Currency as published by the Federal Reserve
Bank of New York (the "Market Exchange Rate") on the Business Day immediately
preceding the date of issuance; provided, however, that in the case of ECUs, the
-------- -------
Market Exchange Rate shall be the rate of exchange determined by the Commission
of the European Union (or any successor thereto) as published in the Official
Journal of the European
16
<PAGE>
Union, or any successor publication, on the Business Day immediately preceding
the date of issuance.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in San Francisco, California, a register for
the registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee or at the office of the Trustee in the City of
New York, New York, by surrendering this Note for cancellation, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and duly
executed by the registered holder hereof in person or by the holder's attorney
duly authorized in writing, and thereupon the Trustee shall issue in the name of
the transferee or transferees, in exchange herefor, a new Note or Notes having
identical terms and provisions and having a like aggregate principal amount in
authorized denominations, subject to the terms and conditions set forth herein;
provided, however, that the Trustee will not be required (i) to register the
- -------- -------
transfer of or exchange any Note that has been called for redemption in whole or
in part, except the unredeemed portion of Notes being redeemed in part, (ii) to
register the transfer of or exchange any Note if the holder thereof has
exercised his right, if any, to require the Issuer to repurchase such Note in
whole or in part, except the portion of such Note not required to be
repurchased, or (iii) to register the transfer of or exchange Notes to the
extent and during the period so provided in the Indenture with respect to the
redemption of Notes. Notes are exchangeable at said office for other Notes of
other authorized denominations of equal aggregate principal amount having
identical terms and provisions. All such exchanges and transfers of Notes will
be free of charge, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge in connection therewith. All Notes
surrendered for exchange shall be accompanied by a written instrument of
transfer in form satisfactory to the Trustee and executed by the registered
holder in person or by the holder's attorney duly authorized in writing. The
date of registration of any Note delivered upon any exchange or transfer of
Notes shall be determined by the Issuer and shall be such that no gain or loss
of interest results from such exchange or transfer.
In case any Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and such Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, a new Note of like tenor will be issued by the Issuer
in exchange for the Note so mutilated or defaced, or in lieu of the Note so
destroyed or lost or stolen, but, in the case of any destroyed or lost or stolen
Note, only upon receipt of evidence satisfactory to the Trustee and the Issuer
that such Note was destroyed or lost or stolen and, if required, upon receipt
also of indemnity satisfactory to each of them. All expenses and reasonable
charges associated with procuring such indemnity and with the preparation,
authentication and delivery of a new Note shall be borne by the holder of the
Note mutilated, defaced, destroyed, lost or stolen.
The Indenture provides that if an Event of Default, as defined in the
Indenture, shall occur and be continuing with respect to any series of debt
securities issued under the Indenture, including the series of Series B Medium-
Term Notes of which this Note forms a part, the Trustee or the holders of not
less than 25% in aggregate principal amount of the debt securities then
outstanding of the series may, by a notice in writing to the Issuer (and to the
17
<PAGE>
Trustee if given by such holders), declare the principal of, and the premium, if
any, on such series to be due and payable, together with interest accrued
thereon. Any Event of Default with respect to a particular series of debt
securities may be waived by the holders of a majority in aggregate principal
amount of the outstanding debt securities of the series affected, except in each
case a failure to pay the principal of, or premium, if any, or interest on, such
debt securities.
If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is declared to be
due and payable as described in the preceding paragraph, the amount of principal
due and payable with respect to this Note shall be limited to the aggregate
principal amount hereof multiplied by the sum of the Issue Price specified on
the face hereof (expressed as a percentage of the aggregate principal amount)
plus the original issue discount amortized from the Interest Accrual Date to the
date of declaration, which amortization shall be calculated using the "interest
method" (computed in accordance with generally accepted accounting principles in
effect on the date of declaration), (ii) for the purpose of any vote of
securityholders taken pursuant to the Indenture prior to the acceleration of
payment of this Note, the principal amount hereof shall equal the amount that
would be due and payable hereon, calculated as set forth in clause (i) above, if
this Note were declared to be due and payable on the date of any such vote and
(iii) for the purpose of any vote of securityholders taken pursuant to the
Indenture following the acceleration of payment of this Note, the principal
amount hereof shall equal the amount of principal due and payable with respect
to this Note, calculated as set forth in clause (i) above.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the debt securities at the time outstanding of all series
affected (or not less than 66 2/3% in aggregate principal amount of any series
affected in case one or more but not all of the series are affected) evidenced
as provided in the Indenture, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the securities of each such series; provided, however,
-------- -------
that no such supplemental indenture shall, among other matters, (i) change the
fixed maturity of any debt security, or reduce the rate of or extend the time of
payment of any interest thereon, or reduce the principal amount thereof or any
premium thereon, or make the principal thereof or any interest or premium
thereon payable in any currency other than that hereinbefore provided, without
the consent of the holder of each debt security so affected, or (ii) reduce the
aforesaid percentage of debt securities, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holder of
each debt security affected.
Except as set forth below, if the principal of, premium, if any, or
interest on, this Note is payable in a Specified Currency other than U.S.
dollars and such Specified Currency is not available to the Issuer for making
payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
then the Issuer will be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis
18
<PAGE>
of the Market Exchange Rate on the date of such payment or, if the Market
Exchange Rate is not available on such date, as of the most recent practicable
date. Any payment made under such circumstances in U.S. dollars where the
required payment is in a Specified Currency other than U.S. dollars will not
constitute an Event of Default.
If payment in respect of this Note is required to be made in ECUs and
ECUs are unavailable due to the imposition of exchange controls or other
circumstances beyond the Issuer's control or are no longer used in the European
Monetary System, then all payments in respect of this Note shall be made in U.S.
dollars until ECUs are again available or so used. The amount of each payment
in U.S. dollars shall be computed on the basis of the equivalent of the ECU in
U.S. dollars, determined as described below, as of the second Business Day prior
to the date on which such payment is due.
The equivalent of the ECU in U.S. dollars as of any date shall be
determined by the Issuer or Chemical Trust Company of California as Exchange
Rate Agent on the following basis. The component currencies of the ECU for this
purpose (the "Components") shall be the currency amounts that were components of
the ECU as of the last date on which the ECU was used in the European Monetary
System. The equivalent of the ECU in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Components. The U.S. dollar
equivalent of each of the Components shall be determined by the Issuer or such
agent on the basis of the most recently available Market Exchange Rates for such
Components.
If the official unit of any Component is altered by way of combination
or subdivision, the number of units of that currency as a Component shall be
combined or subdivided in the same proportion. If two or more Components are
consolidated into a single currency, the amounts of those currencies as
Components shall be replaced by an amount in such single currency equal to the
sum of the appropriate amounts of the consolidated component currencies
expressed in such single currency. If any Component is divided into two or more
currencies, the amount of the original component currency shall be replaced by
the appropriate amounts of such two or more currencies, the sum of which shall
be equal to the amount of the original component currency.
All determinations referred to above made by the Issuer or its agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive to the extent permitted by law for all purposes and binding on the
holder of this Note.
So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in The City of New York,
and an office or agency in said City for the registration, transfer and exchange
as aforesaid of the Notes and where notices and demands to or upon the Issuer in
respect of the Notes may be served. The Issuer may designate other agencies for
the payment of said principal, premium and interest at such place or places
(subject to applicable laws and regulations) as the Issuer may decide. So long
as there shall be such an agency, the Issuer shall keep the Trustee advised of
the names and locations of such agencies, if any are so designated.
19
<PAGE>
With respect to moneys paid by the Issuer and held by the Trustee or
any Paying Agent for payment of the principal of or interest or premium, if any,
on any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting in
any way any obligation that the Issuer may have to pay the principal of or
interest or premium if any, on this Note as the same shall become due.
No provision of this Note or of the Indenture shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place, and
rate, and in the coin or currency, herein prescribed unless otherwise agreed
between the Issuer and the registered holder of this Note; provided, however, if
-------- -------
the principal of, premium, if any, or interest on, this Note is payable in a
Specified Currency other than U.S. dollars and such Specified Currency is not
available to the Issuer for making payments hereon due to circumstances beyond
the control of the Issuer, as described above, then the Issuer will be entitled
to satisfy its obligations to the holder of this Note by making such payments in
U.S. dollars as set forth above.
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.
Upon any consolidation by the Issuer with or merger by the Issuer into
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Issuer substantially as an entirety in accordance with the
Indenture, the successor corporation formed by such consolidation or into which
the Issuer is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Issuer under the Indenture with the same effect as if such successor
corporation had been named as the Issuer therein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under the Indenture and the Notes.
No recourse shall be had for the payment of the principal of, premium,
if any, or the interest on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture or any
supplemental indenture thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
20
<PAGE>
THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
21
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -____________________ Custodian ______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act ______________________________________
State
Additional abbreviations may also be used though not in the above list.
22
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
_______________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE, OF ASSIGNEE)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.
Dated: _____________________ ________________________________________________
NOTICE: The signature to this assignment must
correspond to the name as written upon the face of
this Note in every particular, without alteration
or any change whatsoever; signature(s) must be
guaranteed by an eligible guarantor institution
(banks, stock brokers, savings and loan
associations and credit unions with membership in
an approved signature guarantee medallion program)
pursuant to Securities and Exchange Commission
Rule 17Ad-15.
23
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Issuer
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the Optional Repayment Date, to the undersigned at
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name,
address and telephone number of the undersigned,
and name of contact person, if any)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
______________________________; and specify the denomination or denominations
(which shall not be less than the minimum authorized denomination) of the Notes
to be issued to the holder for the portions of the within Note not being repaid
(in the absence of any such specification, one such Note will be issued for the
portion not being repaid):_____________________________________________
Dated: _________________________ ___________________________________
NOTICE: The signature to the foregoing Election must correspond to the
name as written upon the face of this Note in every particular, without
alteration or any change whatsoever; signature(s) must be guaranteed by an
eligible guarantor institution (banks, stock brokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Securities and Exchange Commission Rule
17Ad-15.
24
<PAGE>
Exhibit 4.3
(FORM OF FACE OF SECURITY)
MATTEL, INC.
SERIES B MEDIUM-TERM NOTE
Fixed Rate Note
REGISTERED REGISTERED
No. FXR- [PRINCIPAL AMOUNT]
CUSIP:
If the registered owner of this Security (as indicated below) is The
Depository Trust Company (the "Depository") or a nominee of the Depository, this
Security is a Global Security and the following two legends apply:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of the Depository or a
nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Indenture, and may not be
transferred except as a whole by the Depository to a nominee of the Depository,
by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor of the
Depository or a nominee of such successor.
Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Issuer (as defined below) or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY" AND
"INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET FORTH
BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME
TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
<TABLE>
<S> <C> <C> <C>
ORIGINAL INITIAL INTEREST RATE: ORIGINAL
ISSUE DATE: REDEMPTION MATURITY DATE:
PERCENTAGE:
</TABLE>
1
<PAGE>
<TABLE>
<S> <C> <C> <C>
INTEREST ANNUAL APPLICABILITY FINAL MATURITY
ACCRUAL DATE: REDEMPTION OF MODIFIED DATE:
PERCENTAGE PAYMENT UPON
REDUCTION: ACCELERATION:
TOTAL AMOUNT If yes, state OPTIONAL
OF OID: ISSUE PRICE: REPAYMENT
DATES:
ORIGINAL YIELD SPECIFIED APPLICABILITY
TO MATURITY: CURRENCY: OF ANNUAL INTEREST
PAYMENTS:
INITIAL ACCRUAL
REDEMPTION
DATE:
INITIAL RECORD DATES
REDEMPTION (IF OTHER
DATE: THAN MAY 1
AND NOVEMBER 1):
OTHER TERMS:
</TABLE>
Mattel, Inc., a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to
,
or registered assignees, the principal sum of _________________________________,
on the Original Maturity Date specified above (except to the extent redeemed or
repaid prior to the Original Maturity Date) or, if the maturity hereof is
extended in accordance with the procedures set forth below to an Extended
Maturity Date, as defined below, on such Extended Maturity Date (except to the
extent previously redeemed or repaid) and to pay interest thereon at the
Interest Rate per annum specified above or, if the interest rate herein is reset
or re-established in connection with an extension of maturity in accordance with
the procedures specified on the reverse hereof, at the interest rate per annum
determined pursuant to such procedures, from the Interest Accrual Date specified
above until the principal hereof is paid or duly made available for payment
(except as provided below), semiannually (unless otherwise specified on the face
hereof) in arrears on the fifteenth day of May and November in each year (unless
otherwise specified on the face hereof) (each such date an "Interest Payment
Date") commencing on the Interest Payment Date next succeeding the Interest
Accrual Date specified above, and at maturity (or on any redemption or repayment
date); provided, however, that if the Interest Accrual Date occurs between a
Record Date, as defined below, and the next succeeding Interest Payment Date,
interest payments will commence on the second Interest Payment Date succeeding
the Interest Accrual Date to the registered holder of this Note on the Record
Date with respect to such second Interest Payment Date; and provided, further,
that if this Note is subject to "Annual
2
<PAGE>
Interest Payments," interest payments shall be made annually in arrears and the
term "Interest Payment Date" shall be deemed to mean the fifteenth day of
November in each year.
Interest on this Note will accrue from the most recent Interest
Payment Date to which interest has been paid or duly provided for, or, if no
interest has been paid or duly provided for, from the Interest Accrual Date,
until the principal hereof has been paid or duly made available for payment
(except as provided below). The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, subject to certain
exceptions described herein, be paid to the person in whose name this Note (or
one or more predecessor Notes) is registered at the close of business on the
date 15 calendar days prior to such Interest Payment Date, whether or not a
Business Day, unless otherwise provided on the face hereof (each such date a
"Record Date"); provided, however, that interest payable at maturity (or on any
-------- -------
redemption or repayment date) will be payable to the person to whom the
principal hereof shall be payable. As used herein, "Business Day" means (1) any
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which banking institutions are authorized or required by law or regulation to
close in The City of New York, New York, or San Francisco, California, and
(2)(i) with respect to Notes denominated in a Specified Currency other than U.S.
dollars, Australian dollars, or ECUs, in the principal financial center of the
country of the Specified Currency, (ii) with respect to Notes denominated in
Australian dollars, in Sydney, and (iii) with respect to Notes denominated in
ECUs, in Luxemburg and that is not a non-ECU clearing day, as determined by the
ECU Banking Association in Paris.
Payment of the principal of this Note, any premium and the interest
due at maturity (or on any redemption or repayment date) will be made in
immediately available funds upon surrender of this Note at the principal
corporate trust office of the Trustee or at the office or agency of the Trustee
maintained for that purpose in The City of New York, New York, or at such other
paying agency as the Issuer may determine. Payment of the principal of and
premium, if any, and interest on this Note will be made in the Specified
Currency indicated above; provided, however, that U.S. dollar payments of
-------- -------
interest, other than interest due at maturity or on any date of redemption or
repayment, will be made by U.S. dollar check mailed to the address of the person
entitled thereto as such address shall appear in the Note register. A holder of
U.S. $10,000,000 or more in aggregate principal amount of Notes having the same
Interest Payment Date will be entitled to receive payments of interest, other
than interest due at maturity or on any date of redemption or repayment, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date. If this Note is
denominated in a Specified Currency other than U.S. dollars, payments of
interest hereon will be made by wire transfer of immediately available funds to
an account maintained by the holder hereof with a bank located outside the
United States if appropriate wire transfer instructions have been received by
the Paying Agent in writing not less than 15 calendar days prior to the
applicable Interest Payment Date. If such wire transfer instructions are not so
received, such interest payments will be made by check payable in such Specified
Currency mailed to the address of the person entitled thereto as such address
shall appear in the Note register.
3
<PAGE>
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed under its corporate seal.
DATED: MATTEL, INC.
By______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred to
in the within-mentioned Indenture.
CHEMICAL TRUST COMPANY OF CALIFORNIA,
as Trustee
By____________________________________
Authorized Officer
4
<PAGE>
(FORM OF REVERSE OF SECURITY)
This Note is one of a duly authorized issue of Series B Medium-Term
Notes having maturities of more than nine months from the date of issue (the
"Notes") of the Issuer. The Notes are issuable under an indenture dated as of
February 15, 1996, duly executed and delivered by the Issuer to Chemical Trust
Company of California, Trustee (herein called the "Trustee"), to which indenture
and all indentures supplemental thereto (herein called the "Indenture")
reference is hereby made for a statement of the respective rights, limitations
of rights and immunities of the Issuer, the Trustee and holders of the Notes and
the terms upon which the Notes are, and are to be, authenticated and delivered.
The Issuer has appointed Chemical Trust Company of California as the paying
agent (the "Paying Agent," which term includes any additional or successor
Paying Agent appointed by the Issuer) with respect to the Notes. The terms of
individual Notes may vary with respect to interest rates, interest rate
formulas, issue dates, maturity dates, or otherwise, all as provided in the
Indenture. To the extent not inconsistent herewith, the terms of the Indenture
are hereby incorporated by reference herein.
This Note will not be subject to any sinking fund and, unless
otherwise provided on the face hereof in accordance with the provisions of the
following two paragraphs, will not be redeemable or subject to repayment at the
option of the holder prior to maturity.
If so indicated on the face of this Note, this Note may be redeemed in
whole or in part at the option of the Issuer on or after the Initial Redemption
Date specified on the face hereof on the terms set forth on the face hereof and
at a redemption price (expressed as a percentage of the principal amount hereof)
equal to the Initial Redemption Percentage, together with interest accrued and
unpaid hereon to the date of redemption. If this Note is subject to "Annual
Redemption Percentage Reduction," the Initial Redemption Percentage indicated on
the face hereof will be reduced on each anniversary of the Initial Redemption
Date by the Annual Redemption Percentage Reduction specified on the face hereof
until the redemption price of this Note is 100% of the principal amount hereof,
together with interest accrued and unpaid hereon to the date of redemption.
Notice of redemption shall be mailed by first class mail, postage prepaid, to
the registered holders of the Notes designated for redemption at their addresses
as the same shall appear on the Note register not less than 30 nor more than 60
days prior to the date fixed for redemption, subject to all the conditions and
provisions of the Indenture. In the event of redemption of this Note in part
only, a new Note or Notes for the amount of the unredeemed portion hereof shall
be issued in the name of the holder hereof upon the cancellation hereof, but, in
any event, the principal amount of the Note remaining outstanding after
redemption must be an Authorized Denomination.
If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments of
$1,000 or, if this Note is denominated in a Specified Currency other than U.S.
dollars, in increments of 1,000 units of such Specified Currency (provided that
any remaining principal amount hereof shall not be less than the minimum
Authorized Denomination hereof) at the option of the holder hereof at a price
equal to 100% of the principal
5
<PAGE>
amount to be repaid, together with interest accrued and unpaid hereon to the
date of repayment. For this Note to be repaid at the option of the holder
hereof, the Paying Agent must receive at its principal corporate trust office in
San Francisco, California, or at its office in The City of New York, New York,
at least 30 days but not more than 60 days prior to the date of repayment, (i)
this Note with the form entitled "Option to Elect Repayment" below duly
completed or (ii) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States setting forth the name of the holder of this Note, the principal amount
hereof, the principal amount hereof to be repaid, the certificate number of this
Note or a description of this Note's tenor and terms, a statement that the
option to elect repayment is being exercised thereby and a guarantee that this
Note, together with the form entitled "Option to Elect Repayment" duly
completed, will be received by the Paying Agent not later than the third
Business Day after the date of such telegram, telex, facsimile transmission or
letter; provided, however, that such telegram, telex, facsimile transmission or
-------- -------
letter shall only be effective if this Note and such form duly completed are
received by the Paying Agent by such third Business Day. Effective exercise of
such repayment option by the holder hereof shall be irrevocable. In the event
of repayment of this Note in part only, a new Note or Notes for the amount of
the unpaid portion hereof shall be issued in the name of the holder hereof upon
the cancellation hereof, but, in any event, the principal amount of the Note
remaining outstanding after repayment must be an Authorized Denomination.
If so indicated on the face of this Note, the Issuer has the option to
extend the Original Maturity Date hereof for one or more periods of one or more
whole years (each an "Extension Period") up to but not beyond the Final Maturity
Date specified on the face hereof and in connection therewith to establish a new
interest rate and new redemption provisions for the Extension Period.
The Issuer may exercise such option by notifying the Paying Agent of
such exercise at least 45 but not more than 60 days prior to the Original
Maturity Date or, if the maturity hereof has already been extended, prior to the
maturity date then in effect (an "Extended Maturity Date"), such notice to be
accompanied by the form of the Extension Notice referred to below. No later
than 38 days prior to the Original Maturity Date or an Extended Maturity Date,
as the case may be (each, a "Maturity Date"), the Paying Agent will mail to the
holder hereof a notice (the "Extension Notice") relating to such Extension
Period, by first class mail, postage prepaid, setting forth (a) the election of
the Issuer to extend the maturity of this Note; (b) the new Extended Maturity
Date; (c) the interest rate applicable to the Extension Period; and (d) the
provisions, if any, for redemption during the extension period, including the
date or dates on which, the period or periods during which and the price or
prices at which such redemption may occur during the Extension Period. Upon the
mailing by the Paying Agent of an Extension Notice to the holder of this Note,
the maturity hereof shall be extended automatically, and, except as modified by
the Extension Notice and as described in the next paragraph, this Note will have
the same terms it had prior to the mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 10:00 A.M., New York
City time, on the twentieth calendar day prior to the Maturity Date in effect
immediately preceding the
6
<PAGE>
mailing of the applicable Extension Notice (or if such day is not a Business
Day, not later than 10:00 A.M., New York City time, on the immediately
succeeding Business Day), the Issuer may, at its option, revoke the interest
rate provided for in such Extension Notice and establish a higher interest rate
for the Extension Period by causing the Paying Agent to send notice of such
higher interest rate within seven days of receipt of such notice to the holder
of this Note by first class mail, postage prepaid, or by such other means as
shall be agreed between the Issuer and the Paying Agent. Such notice shall be
irrevocable. All Notes with respect to which the Maturity Date is extended in
accordance with an Extension Notice will bear such higher interest rate for the
Extension Period, whether or not tendered for repayment.
If the Issuer elects to extend the maturity hereof, the holder of this
Note will have the option to require the Issuer to repay this Note on the
Maturity Date in effect immediately preceding the mailing of the applicable
Extension Notice at a price equal to the principal amount hereof plus any
accrued and unpaid interest to such date. In order for this Note to be so
repaid on such Maturity Date, the holder hereof must follow the procedures set
forth above for optional repayment, except that the period for delivery of this
Note or notification to the Paying Agent shall be at least 25 but not more than
35 days prior to the Maturity Date in effect immediately preceding the mailing
of the applicable Extension Notice and except that if the holder hereof has
tendered this Note for repayment pursuant to this paragraph he may, by written
notice to the Paying Agent, revoke any such tender for repayment until 3:00
P.M., New York City time, on the twentieth calendar day prior to the Maturity
Date then in effect (or, if such day is not a Business Day, until 3:00 P.M., New
York City time, on the immediately succeeding Business Day).
Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Unless otherwise specified
on the face hereof, interest payments for this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months.
In the case where the Interest Payment Date or the Maturity Date (or
any redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but will be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.
This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured and
---- -----
unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or exchange
hereof, is issuable only in fully registered form, without coupons, and, if
denominated in U.S. dollars, is issuable only in denominations of U.S. $1,000
and any integral multiple of U.S. $1,000 in
7
<PAGE>
excess thereof. If this Note is denominated in a Specified Currency other than
U.S. dollars, then, unless a higher minimum denomination is required by
applicable law, it is issuable only in denominations of the equivalent of U.S.
$1,000 (rounded to an integral multiple of 1,000 units of such Specified
Currency), or any amount in excess thereof which is an integral multiple of
1,000 units of such Specified Currency, as determined by reference to the noon
dollar buying rate in New York City for cable transfers of such Specified
Currency published by the Federal Reserve Bank of New York (the "Market Exchange
Rate") on the Business Day immediately preceding the date of issuance; provided,
--------
however, that in the case of ECUs, the Market Exchange Rate shall be the rate of
- -------
exchange determined by the Commission of the European Union (or any successor
thereto) as published in the Official Journal of the European Union, or any
successor publication, on the Business Day immediately preceding the date of
issuance.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in San Francisco, California, a register for
the registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee or at the office of the Trustee in The City of
New York, New York, by surrendering this Note for cancellation, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and duly
executed by the registered holder hereof in person or by the holder's attorney
duly authorized in writing, and thereupon the Trustee shall issue in the name of
the transferee or transferees, in exchange herefor, a new Note or Notes having
identical terms and provisions and having a like aggregate principal amount in
authorized denominations, subject to the terms and conditions set forth herein;
provided, however, that the Trustee will not be required (i) to register the
- -------- -------
transfer of or exchange any Note that has been called for redemption in whole or
in part, except the unredeemed portion of Notes being redeemed in part, (ii) to
register the transfer of or exchange any Note if the holder thereof has
exercised his right, if any, to require the Issuer to repurchase such Note in
whole or in part, except the portion of such Note not required to be
repurchased, or (iii) to register the transfer of or exchange Notes to the
extent and during the period so provided in the Indenture with respect to the
redemption of Notes. Notes are exchangeable at said offices for other Notes of
other authorized denominations of equal aggregate principal amount having
identical terms and provisions. All such exchanges and transfers of Notes will
be free of charge, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge in connection therewith. All Notes
surrendered for exchange shall be accompanied by a written instrument of
transfer in form satisfactory to the Trustee and executed by the registered
holder in person or by the holder's attorney duly authorized in writing. The
date of registration of any Note delivered upon any exchange or transfer of
Notes shall be determined by the Issuer and shall be such that no gain or loss
of interest results from such exchange or transfer.
In case any Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and such Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, a new Note of like tenor will be issued by the Issuer
in exchange for the Note so mutilated or defaced, or in lieu of the Note so
destroyed or lost or stolen, but, in the case of any destroyed or lost or stolen
Note, only upon receipt of evidence satisfactory to the Trustee and the Issuer
that such Note was destroyed, lost or stolen and, if required, upon receipt also
of indemnity satisfactory to each of them. All expenses and
8
<PAGE>
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
holder of the Note mutilated, defaced, destroyed, lost or stolen.
The Indenture provides that if an Event of Default, as defined in the
Indenture, shall occur and be continuing with respect to any series of debt
securities issued under the Indenture including the series of Series B Medium-
Term Notes of which this Note forms a part, the Trustee or the holders of not
less than 25% in aggregate principal amount of the debt securities then
outstanding of the series may, by a notice in writing to the Issuer (and to the
Trustee if given by such holders), declare the principal of, and the premium, if
any, on such series to be due and payable, together with interest accrued
thereon. Any Event of Default with respect to a particular series of debt
securities may be waived by the holders of a majority in aggregate principal
amount of the outstanding debt securities of the series affected, except in each
case a failure to pay the principal of, or premium, if any, or interest on, such
debt securities.
If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is declared to be
due and payable as described in the preceding paragraph, the amount of principal
due and payable with respect to this Note shall be limited to the aggregate
principal amount hereof multiplied by the sum of the Issue Price specified on
the face hereof (expressed as a percentage of the aggregate principal amount)
plus the original issue discount amortized from the Interest Accrual Date to the
date of declaration, which amortization shall be calculated using the "interest
method" (computed in accordance with generally accepted accounting principles in
effect on the date of declaration), (ii) for the purpose of any vote of
securityholders taken pursuant to the Indenture prior to the acceleration of
payment of this Note, the principal amount hereof shall equal the amount that
would be due and payable hereon, calculated as set forth in clause (i) above, if
this Note were declared to be due and payable on the date of any such vote and
(iii) for the purpose of any vote of securityholders taken pursuant to the
Indenture following the acceleration of payment of this Note, the principal
amount hereof shall equal the amount of principal due and payable with respect
to this Note, calculated as set forth in clause (i) above.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the debt securities at the time outstanding of all series to
be affected (or not less than 66 2/3% in aggregate principal amount of any
series affected in case one or more but not all of the series are affected)
evidenced as provided in the Indenture, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in any
manner the rights of the holders of the securities of each such series;
provided, however, that no such supplemental indenture shall, among other
- -------- -------
matters, (i) change the fixed maturity of any debt security, or reduce the rate
of or extend the time of payment of any interest thereon, or reduce the
principal amount thereof or any premium thereon, or make the principal thereof
or any interest or premium thereon payable in any currency other than that
hereinbefore provided, without the consent of the holder of each debt security
so affected, or (ii) reduce the aforesaid percentage of debt securities, the
9
<PAGE>
holders of which are required to consent to any such supplemental indenture,
without the consent of the holder of each debt security affected.
Except as set forth below, if the principal of, premium, if any, or
interest on, this Note is payable in a Specified Currency other than U.S.
dollars and such Specified Currency is not available to the Issuer for making
payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
then the Issuer will be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis of the Market
Exchange Rate on the date of such payment or, if the Market Exchange Rate is not
available on such date, as of the most recent practicable date. Any payment
made under such circumstances in U.S. dollars where the required payment is in a
Specified Currency other than U.S. dollars will not constitute an Event of
Default.
If payment in respect of this Note is required to be made in ECUs and
ECUs are unavailable due to the imposition of exchange controls or other
circumstances beyond the Issuer's control or are no longer used in the European
Monetary System, then all payments in respect of this Note shall be made in U.S.
dollars until ECUs are again available or so used. The amount of each payment
in U.S. dollars shall be computed on the basis of the equivalent of the ECU in
U.S. dollars, determined as described below, as of the second Business Day prior
to the date on which such payment is due.
The equivalent of the ECU in U.S. dollars as of any date shall be
determined by the Issuer or Chemical Trust Company of California as Exchange
Rate Agent on the following basis. The component currencies of the ECU for this
purpose (the "Components") shall be the currency amounts that were components of
the ECU as of the last date on which the ECU was used in the European Monetary
System. The equivalent of the ECU in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Components. The U.S. dollar
equivalent of each of the Components shall be determined by the Issuer or such
agent on the basis of the most recently available Market Exchange Rates for such
Components.
If the official unit of any Component is altered by way of combination
or subdivision, the number of units of that currency as a Component shall be
combined or subdivided in the same proportion. If two or more Components are
consolidated into a single currency, the amounts of those currencies as
Components shall be replaced by an amount in such single currency equal to the
sum of the appropriate amounts of the consolidated component currencies
expressed in such single currency. If any Component is divided into two or more
currencies, the amount of the original component currency shall be replaced by
the appropriate amounts of such two or more currencies, the sum of which shall
be equal to the amount of the original component currency.
All determinations referred to above made by the Issuer or its agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive to the extent permitted by law for all purposes and binding on the
holder of this Note.
10
<PAGE>
So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and the
premium, if any, and interest on this Note as herein provided in The City of New
York, and an office or agency in said City for the registration, transfer and
exchange as aforesaid of the Notes and where notices and demands to or upon the
Issuer in respect of the Notes may be served. The Issuer may designate other
agencies for the payment of said principal, premium and interest at such place
or places (subject to applicable laws and regulations) as the Issuer may decide.
So long as there shall be such an agency, the Issuer shall keep the Trustee
advised of the names and locations of such agencies, if any are so designated.
With respect to moneys paid by the Issuer and held by the Trustee or
any Paying Agent for payment of the principal of or interest or premium, if any,
on any Notes that remain unclaimed at the end of the two years after such
principal, interest or premium shall have become due and payable (whether at
maturity or upon call for redemption or otherwise), (i) the Trustee or such
Paying Agent shall notify the holders of such Notes that such moneys shall be
repaid to the Issuer and any person claiming such moneys shall thereafter look
only to the Issuer for payment thereof and (ii) such moneys shall be so repaid
to the Issuer. Upon such repayment all liability of the Trustee or such Paying
Agent with respect to such moneys shall thereupon cease, without, however,
limiting in any way any obligation that the Issuer may have to pay the principal
of or interest or premium, if any, on this Note as the same shall become due.
No provision of this Note or of the Indenture shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place, and
rate, and in the coin or currency, herein prescribed unless otherwise agreed
between the Issuer and the registered holder of this Note; provided, however, if
-------- -------
the principal of, premium, if any, or interest on, this Note is payable in a
Specified Currency other than U.S. dollars and such Specified Currency is not
available to the Issuer for making payments hereon due to circumstances beyond
the control of the Issuer, as described above, then the Issuer will be entitled
to satisfy its obligations to the holder of this Note by making such payments in
U.S. dollars as set forth above.
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.
Upon any consolidation by the Issuer with or merger by the Issuer into
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Issuer substantially as an entirety in accordance with the
Indenture, the successor corporation formed by such consolidation or into which
the Issuer is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and power
of the Issuer under the Indenture with the same effect as if such successor
corporation had been named as the Issuer therein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under the Indenture and the Notes.
11
<PAGE>
No recourse shall be had for the payment of the principal of, premium,
if any, or the interest on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture or any
supplemental indenture thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
12
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT -____________________ Custodian ______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act ______________________________________
State
Additional abbreviations may also be used though not in the above list.
13
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
_______________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE, OF ASSIGNEE)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.
Dated: _____________________ ________________________________________________
NOTICE: The signature to this assignment must
correspond to the name as written upon the face of
this Note in every particular, without alteration
or any change whatsoever; signature(s) must be
guaranteed by an eligible guarantor institution
(banks, stock brokers, savings and loan
associations and credit unions with membership in
an approved signature guarantee medallion program)
pursuant to Securities and Exchange Commission
Rule 17Ad-15.
14
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Issuer
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the Optional Repayment Date, to the undersigned at
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name,
address and telephone number of the undersigned,
and name of contact person, if any)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
______________________________; and specify the denomination or denominations
(which shall not be less than the minimum authorized denomination) of the Notes
to be issued to the holder for the portions of the within Note not being repaid
(in the absence of any such specification, one such Note will be issued for the
portion not being repaid):_____________________________________________
Dated: _________________________ ___________________________________
NOTICE: The signature to the foregoing Election must correspond to the name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever; signature(s) must be guaranteed by an eligible guarantor
institution (banks, stock brokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program)
pursuant to Securities and Exchange Commission Rule 17Ad-15.
15
<PAGE>
EXHIBIT 5
February 29, 1996
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Ladies and Gentlemen:
We have acted as counsel to Mattel, Inc., a Delaware corporation (the
"Company"), in connection with the Company's Registration Statement on Form S-3
(the "Registration Statement"), filed with the Securities and Exchange
Commission with respect to the registration under the Securities Act of 1933, as
amended (the "Act"), of up to $350,000,000 aggregate initial offering price of
an indeterminate amount of the following: (i) shares of the Company's common
stock, $1.00 par value per share ("Common Stock"), (ii) shares of the Company's
preferred stock, $1.00 par value per share ("Preferred Stock"), which may be
convertible into shares of Common Stock, (iii) the Company's debt securities
(the "Debt Securities"), which may be convertible into shares of Common Stock
and/or Preferred Stock and which are to be issued pursuant to an Indenture (the
"Indenture") between the Company and Chemical Trust Company of California, as
trustee ("the "Trustee"), (iv) warrants or rights ("Warrants") to acquire Common
Stock, Preferred Stock and/or Debt Securities, and (v) units ("Units")
consisting of two or more of the foregoing securities. The Debt Securities,
Common Stock, Preferred Stock, Warrants and Units (collectively, the
"Securities") may be issued from time to time pursuant to Rule 415 under the Act
and will be subject to specific terms pertaining to each respective series of
Securities as determined at the time of sale and as set forth in one or more
supplements to the Prospectus constituting part of the Registration Statement.
As such counsel, we have examined the Registration Statement, a form of the
Indenture and such records of the Company's corporate proceedings and such other
documents and have made such other factual and legal investigations as we deemed
necessary or appropriate in order to render this opinion. Further, we are
familiar with additional corporate
<PAGE>
Mattel, Inc.
February 29, 1996
Page 2
procedures that the Company contemplates taking prior to the issuance of any
Securities.
Based upon such examinations and investigations and subject to (i) the
occurrence of such additional corporate procedures as are now contemplated prior
to the issuance of any Securities, (ii) the effectiveness of the Registration
Statement under the Act, (iii) the establishment of the terms of each series of
Securities in accordance with the terms of (a) the Company's Restated
Certificate of Incorporation and Bylaws, (b) any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the Company, (c)
any agreement, indenture, mortgage, deed of trust, undertaking or other
instrument that is binding upon the Company, and (d) applicable law, (iv) the
due authorization, execution and delivery of the Indenture, and (v) the
execution, delivery and, as applicable, authentication of and payment for the
Securities, it is our opinion that:
1. The Common Stock (including any Common Stock that may be issuable
pursuant to the conversion of any Preferred Stock or Debt Securities or the
exercise of any Warrants or as part of any Units) will, upon the issuance and
sale thereof in the manner contemplated by the Registration Statement, be
validly issued, fully paid and nonassessable.
2. The Preferred Stock (including any Preferred Stock that may be issuable
pursuant to the conversion of any Debt Securities or the exercise of any
Warrants or as part of any Units) will, upon the issuance and sale thereof in
the manner contemplated by the Registration Statement, be validly issued, fully
paid and nonassessable.
3. The Debt Securities (including any Debt Securities that may be issuable
pursuant to the exercise of any Warrants or as part of any Units) will, upon the
issuance and sale thereof in the manner contemplated by the Registration
Statement, constitute legally valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to the
binding and enforceable nature of such obligations, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
<PAGE>
Mattel, Inc.
February 29, 1996
Page 3
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
4. The Warrants (including any Warrants that may be issuable as part of
any Units) will, upon the issuance and sale thereof in the manner contemplated
by the Registration Statement, constitute legally valid and binding obligations
of the Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to the binding and enforceable nature of such obligations, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
This opinion is rendered solely for your benefit in connection with the
transactions described above. This opinion may not be used or relied upon by
any other person and may not be disclosed, quoted, filed with a governmental
agency or otherwise referred to without our prior written consent. However, we
hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of our name under the heading "Legal Matters" in the
Prospectus constituting part of the Registration Statement.
Sincerely,
Irell & Manella
JJC/pmj
<PAGE>
EXHIBIT 12
(Page 1 of 2)
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in thousands, except ratios)
<TABLE>
<CAPTION>
(Unaudited)
FOR THE
NINE MONTHS ENDED FOR THE YEAR ENDED (a)
--------------------- -------------------------------------------------------------
Sept. 30, Sept. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 29,
1995 1994 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR
FIXED CHARGES:
Income before income taxes,
cumulative effect of changes in
accounting principles and
extraordinary item $369,580 $330,171 $393,632 $236,646 $282,945 $214,326 $143,482
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net (136) 183 215 124 (23) 2,432 3,319
Add:
Interest expense 51,804 37,887 55,449 62,614 68,716 64,334 49,929
Appropriate portion of rents (b) 10,448 9,123 11,242 11,276 11,898 7,871 7,115
-------- -------- -------- -------- -------- -------- --------
Earnings available for fixed charges $431,696 $377,364 $460,538 $310,660 $363,536 $288,963 $203,845
======== ======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense $51,804 $37,887 $55,449 $62,614 $68,716 $64,334 $49,929
Capitalized interest 430 210 285 - - - 4,240
Appropriate portion of rents (b) 10,448 9,123 11,242 11,276 11,898 7,871 7,115
-------- -------- -------- -------- -------- -------- --------
Fixed charges (c) $62,682 $47,220 $66,976 $73,890 $80,614 $72,205 $61,284
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 6.89X 7.99X 6.88X 4.20X 4.51X 4.00X 3.33X
======== ======== ======== ======== ======== ======== ========
</TABLE>
(a) Consolidated financial information for 1993, 1992 and 1991 has been
restated for the effects of the November 1993 merger of Fisher-Price, Inc.
into a wholly-owned subsidiary of the Company, accounted for as a pooling
of interests. Fisher-Price, Inc. was excluded from periods prior to July 1,
1991, while its business was operated as a division of The Quaker Oats
Company.
(b) Portion of rental expenses which is deemed representative of an interest
factor, not to exceed one-third of total rental expense.
(c) Until July 1, 1991, the Company was a guarantor of certain foreign bank
lines of credit extended to less-than-majority-owned joint ventures.
Performance by the Company pursuant to these guarantees was deemed
unlikely, thus the associated fixed charges have been excluded from
computation of the ratio of earnings to fixed charges. The portion of fixed
charges paid by less-than-majority-owned joint ventures for which the
Company was guarantor was approximately $4.5 million and $4.8 million in
1991 and 1990, respectively.
<PAGE>
EXHIBIT 12
(Page 2 of 2)
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Amounts in thousands, except ratios)
<TABLE>
<CAPTION>
(Unaudited)
FOR THE
NINE MONTHS ENDED FOR THE YEAR ENDED (a)
--------------------- -------------------------------------------------------------
Sept. 30, Sept. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 29,
1995 1994 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR
FIXED CHARGES:
Income before income taxes,
cumulative effect of changes in
accounting principles and
extraordinary item $369,580 $330,171 $393,632 $236,646 $282,945 $214,326 $143,482
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net (136) 183 215 124 (23) 2,432 3,319
Add:
Interest expense 51,804 37,887 55,449 62,614 68,716 64,334 49,929
Dividends - STAR preferred stock - - - - - 1,257 3,990
Appropriate portion of rents (b) 10,448 9,123 11,242 11,276 11,898 7,871 7,115
-------- -------- -------- -------- -------- -------- --------
Earnings available for fixed charges $431,696 $377,364 $460,538 $310,660 $363,536 $290,220 $207,835
======== ======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense $51,804 $37,887 $55,449 $62,614 $68,716 $64,334 $49,929
Capitalized interest 430 210 285 - - - 4,240
Dividends - STAR preferred stock - - - - - 1,257 3,990
Dividends - Series F preference stock 3,297 3,598 4,689 4,894 4,826 4,830 4,811
Appropriate portion of rents (b) 10,448 9,123 11,242 11,276 11,898 7,871 7,115
-------- -------- -------- -------- -------- -------- --------
Fixed charges (c) $65,979 $50,818 $71,665 $78,784 $85,440 $78,292 $70,085
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to combined
fixed charges and preferred
stock dividends 6.54X 7.43X 6.43X 3.94X 4.25X 3.71X 2.97X
======== ======== ======== ======== ======== ======== ========
</TABLE>
(a) Consolidated financial information for 1993, 1992 and 1991 has been
restated for the effects of the November 1993 merger of Fisher-Price, Inc.
into a wholly-owned subsidiary of the Company, accounted for as a pooling
of interests. Fisher-Price, Inc. was excluded from periods prior to July 1,
1991, while its business was operated as a division of The Quaker Oats
Company.
(b) Portion of rental expenses which is deemed representative of an interest
factor, not to exceed one-third of total rental expense.
(c) Until July 1, 1991, the Company was a guarantor of certain foreign bank
lines of credit extended to less-than-majority-owned joint ventures.
Performance by the Company pursuant to these guarantees was deemed
unlikely, thus the associated fixed charges have been excluded from
computation of the ratio of earnings to fixed charges. The portion of fixed
charges paid by less-than-majority-owned joint ventures for which the
Company was guarantor was approximately $4.5 million and $4.8 million in
1991 and 1990, respectively.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 6, 1995, which appears on page 51 of the 1994 Annual Report to
Shareholders of Mattel, Inc., which is incorporated by reference in Mattel,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1994. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedules, which appears on page 28 of such Annual Report on
Form 10-K. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
PRICE WATERHOUSE LLP
Los Angeles, California
February 29, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in this Registration Statement of
Mattel, Inc. on Form S-3 of our report dated February 4, 1993, on our audit of
the consolidated financial statements and financial statement schedules of
Fisher-Price, Inc. for the fiscal year ended January 3, 1993, which report is
included in the Mattel, Inc. Annual Report on Form 10-K for the year ended
December 31, 1994. We also consent to the reference to our firm under the
caption "Experts".
COOPERS & LYBRAND L.L.P.
Rochester, New York
February 29, 1996
<PAGE>
Exhibit 25
CONFORMED
--------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------
FORM T-l
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
---------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(B)(2)_________
---------------------------
CHEMICAL TRUST COMPANY OF CALIFORNIA
(formerly Manufacturers Hanover Trust Company of California)
(Exact name of trustee as specified in its charter)
CALIFORNIA 94-2926573
(State of incorporation I.R.S. employer
if not a national bank) identification No.)
50 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94111
(Address of principal executive offices) (Zip Code)
Francis J. Farrell
Vice President & Manager
50 California Street
San Francisco, CA 94111
Tel: (415) 954-9525
(name, address and telephone number of agent for service)
---------------------------
MATTEL, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 95-1567322
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
333 CONTINENTAL BOULEVARD
EL SEGUNDO, CALIFORNIA 90245-5012
(Address of principal executive offices) (Zip Code)
---------------------------
Debt Securities
(Title of the indenture securities)
---------------------------
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the State of California,
235 Montgomery Street, San Francisco, California 94104-2980.
Board of Governors of the Federal Reserve System,
Washington, DC 20551
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
ITEM 16. LIST OF EXHIBITS
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Incorporation of the Trustee as now in
effect, including the Restated Articles of Incorporation dated December 23, 1986
and the Certificate of Amendment dated March 26, 1992 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 33-55136, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (See Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-55136, which is incorporated by reference).
3. Authorization to exercise corporate trust powers (Contained in
Exhibit 2).
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 33-55136, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 21(b) of the Act (See
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-55136, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical Trust Company of California, a corporation organized and
existing under the laws of the State of California, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of San Francisco and State of
California, on the 22nd day of February, 1996.
CHEMICAL TRUST COMPANY OF CALIFORNIA
By /s/Hans H Helley
---------------------------------
HANS H HELLEY
Assistant Vice President
3
<PAGE>
EXHIBIT 7. Report of Condition of the Trustee.
==============================================================================
4
<PAGE>
TRUST COMPANY
CONSOLIDATED REPORT OF CONDITION OF Chemical Trust Company of California
--------------------------------------
(Legal Title)
LOCATED AT San Francisco San Francisco CA 94111
-------------------------------------------------------------------
(City) (County) (State) (Zip)
AS OF CLOSE OF BUSINESS ON December 31, 1995 BANK NO. 1476
--------------------- ------------------
================================================================================
================================================================================
ASSETS DOLLAR AMOUNT IN THOUSANDS
1. Cash and due from banks 16,578
2. U.S. Treasury securities 4,518
3. Obligations of other U.S. Government agencies and corporations
4. Obligations of States and political subdivisions
5. Other securities (including $___________ corporate stock
(a) Loans
(b) Less: Reserve for possible loan losses
(c) Loans (Net)
7. Bank Premises, furniture and fixtures and other assets
representing bank premises (including $ -0- capital leases) 154
-----------
8. Real estate owned other than bank premises
9. Investments in subsidiaries not consolidated
10. Other assets (complete schedule on reverse) (including
$_________ intangibles) 1,477
11. TOTAL ASSETS 22,727
=======
LIABILITIES
12. Liabilities For borrowed money
13. Mortgage indebtedness (including $________ capital leases)
14. Other liabilities (complete on schedule on reverse) 4,098
15. TOTAL LIABILITIES 4,098
=======
16. Capital notes and debentures
SHAREHOLDERS EQUITY
17. Preferred stock--
(Number shares outstanding ) Amount $
--------------------
18. Common stock--
(Number shares authorized 100 ) Amount $
--------------------
(Number shares outstanding 100 ) Amount $ 10
--------------------
19. Surplus Amount $ 9,990
20. TOTAL CONTRIBUTED CAPITAL 10,000
21. Retained earnings and other capital reserves 8,629
22. TOTAL SHAREHOLDERS EQUITY 18,629
23. TOTAL LIABILITIES AND CAPITAL ACCOUNTS 22,727
=======
5
<PAGE>
MEMORANDA
1. Assets deposited with State Treasurer to qualify for exercise
of fiduciary powers (market value) 605
===============================================================================
The undersigned, Francis J. Farrell, VP, Manager & CFO and
------------------------------------------
(Name and Title)
C. Scott Boone, Senior Vice President
- --------------------------------------
(Name and Title)
of the above named trust company, each declares, for himself alone and not for
the other: I have a personal knowledge of the matters contained in this report
(including the reverse side hereof), and I believe that each statement in said
report is true. Each of the undersigned, for himself alone and not for the
other, certifies under penalty of perjury that the foregoing is true and
correct.
Executed on 1./10/96, at San Francisco, California
-------- -------------
(Date) (City)
/s/Francis J. Farrell /s/C. Scott Boone
--------------------- -----------------
(Signature) (Signature)
SCHEDULE OF OTHER ASSETS
Accounts Receivable-Trade 802
Accounts Receivable-Chemical 7
Accrued Interest 116
Deferred Taxes 396
Other 156
Total (same as Item 10) 1,477
=====
SCHEDULE OF OTHER LIABILITIES
Accrued Income Taxes 2,284
Accrued Expenses & A/P 187
Accrued Inter company Exp./Pay 220
Accrued Pension & Benefits 1,407
Total (same as Item 14) 4,098
=====
6
