Exhibit 1.0
MATTEL, INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT
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1. Introductory. Mattel, Inc., a Delaware corporation ("Company"),
proposes to issue and sell from time to time certain of its unsecured debt
securities registered under the registration statement referred to in Section
2(a) ("Registered Securities"). The Registered Securities will be issued under
an indenture, dated as of February 15, 1996 ("Indenture"), between the Company
and Chase Manhattan Bank and Trust Company, National Association, as Trustee, in
one or more series, which series may vary as to interest rates, maturities,
redemption provisions, selling prices and other terms, with all such terms for
any particular series of the Registered Securities being determined at the time
of sale. Particular series of the Registered Securities will be sold pursuant to
a Terms Agreement referred to in Section 3, for resale in accordance with terms
of offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Offered Securities". The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"Underwriters" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "Representatives"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives", as used in this Agreement (other than in Sections
2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company. The Company, as of the
date of each Terms Agreement referred to in Section 3, represents and warrants
to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-38625), including a
prospectus, relating to the Registered Securities has been filed with the
Securities and Exchange Commission ("Commission") and has become effective.
Such registration statement, as amended at the time of any Terms Agreement
referred to in Section 3, is hereinafter referred to as the "Registration
Statement", and the prospectus included in such Registration Statement, as
supplemented as contemplated by Section 3 to reflect the terms of the
Offered Securities and the terms of offering thereof, as first filed with
the Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Securities Act of 1933 ("Act"), including all material
incorporated by reference therein, is hereinafter referred to as the
"Prospectus". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(b) On the effective date of the registration statement relating
to the Registered Securities, such registration statement conformed in all
material respects to the requirements of the Act, the Trust Indenture Act
of 1939 ("Trust Indenture Act") and the rules and regulations of the
Commission ("Rules and Regulations") and did not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in Section
3, the Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act, the Trust Indenture Act
and the Rules and Regulations, and neither of such documents will include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that the foregoing
does not apply to statements in or omissions from any of such documents
based upon written information furnished to the Company by any Underwriter
through the Representatives, if any, specifically for use therein.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business 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.
(d) Each subsidiary of the Company has been duly incorporated and
is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate and
other) to own its properties and 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 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; and each
subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business 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; and the capital stock of each subsidiary
owned by the Company, directly or through subsidiaries, is owned free from
liens, encumbrances and defects except any liens, encumbrances or defects
which, individually or in the aggregate, would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(e) The Indenture has been duly authorized, executed and delivered
and has been duly qualified under the Trust Indenture Act; the Offered
Securities have been duly authorized; and when the Offered Securities are
delivered and paid for pursuant to the Terms Agreement on the Closing Date
(as defined below) or pursuant to Delayed Delivery Contracts (as
hereinafter defined), such Offered Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description
thereof contained in the Prospectus and the Indenture and such Offered
Securities will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability.
(f) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement
(including the provisions of this Agreement) in connection with the
issuance and sale of the Offered Securities by the Company, except such as
have been obtained and made under the Act and the Trust Indenture Act and
such as may be required under state securities laws.
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(g) The execution, delivery and performance of the Indenture, the
Terms Agreement (including the provisions of this Agreement) and any
Delayed Delivery Contracts and the issuance and sale of the Offered
Securities and compliance with the terms and provisions thereof will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order of
any governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any subsidiary of the Company or any of
their properties, or any agreement or instrument to which the Company or
any such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the Company or any
such subsidiary is subject that is material to the Company and its
subsidiaries, taken as a whole, or the charter or by-laws of the Company,
and the Company has full power and authority to authorize, issue and sell
the Offered Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement).
(h) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company.
(i) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects except such that would not, individually or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries taken as a whole; and except as disclosed in the Prospectus,
the Company and its subsidiaries hold any leased real or personal property
under valid and enforceable leases with no exceptions except such that
would not, individually or in the aggregate, have a material adverse effect
on the Company and its subsidiaries taken as a whole.
(j) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(k) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently
employed by them, except to the extent that the failure to own or possess
the intellectual property rights would not have a material adverse effect
on the Company and its subsidiaries taken as a whole, and have not received
any notice of infringement of or conflict with asserted rights of others
with respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(l) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), owns or operates any real property
contaminated with any substance that is subject to any environmental laws,
is liable for any off-site
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disposal or contamination pursuant to any environmental laws, or is subject
to any claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the aggregate
have a material adverse effect on the Company and its subsidiaries taken as
a whole; and the Company is not aware of any pending investigation which
might lead to such a claim.
(m) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a material adverse effect on the condition (financial
or other), business, properties or results of operations of the Company and
its subsidiaries taken as a whole, or would materially and adversely affect
the ability of the Company to perform its obligations under the Indenture,
the Terms Agreement (including the provisions of this Agreement), or any
Delayed Delivery Contracts, or which are otherwise material in the context
of the sale of the Offered Securities; and no such actions, suits or
proceedings are, to the Company's knowledge, threatened or contemplated.
(n) The financial statements included in the Registration Statement
and Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent basis;
any schedules included in the Registration Statement present fairly the
information required to be stated therein; and if pro forma financial
statements are included in the Registration Statement and Prospectus: the
assumptions used in preparing the pro forma financial statements included
in the Registration Statement and the Prospectus provide a reasonable basis
for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(o) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole.
(p) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be, an "investment company" as
defined in the Investment Company Act of 1940.
(q) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes and the Company
agrees to comply with such Section if prior to the completion of the
distribution of the Offered Securities it commences doing such business.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("Terms
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Agreement") at the time the Company determines to sell the Offered Securities.
The Terms Agreement will incorporate by reference the provisions of this
Agreement, except as otherwise provided therein, and will specify the firm or
firms which will be Underwriters, the names of any Representatives, the
principal amount to be purchased by each Underwriter, the purchase price to be
paid by the Underwriters and the terms of the Offered Securities not already
specified in the Indenture, including, but not limited to, interest rate,
maturity, any redemption provisions and any sinking fund requirements and
whether any of the Offered Securities may be sold to institutional investors
pursuant to Delayed Delivery Contracts (as defined below). The Terms Agreement
will also specify the time and date of delivery and payment (such time and date,
or such other time not later than seven full business days thereafter as the
Underwriter first named in the Terms Agreement (the "Lead Underwriter") and the
Company agree as the time for payment and delivery, being herein and in the
Terms Agreement referred to as the "Closing Date"), the place of delivery and
payment and any details of the terms of offering that should be reflected in the
prospectus supplement relating to the offering of the Offered Securities. For
purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, the Closing
Date (if later than the otherwise applicable settlement date) shall be the date
for payment of funds and delivery of securities for all the Offered Securities
sold pursuant to the offering, other than Contract Securities for which payment
of funds and delivery of securities shall be as hereinafter provided. The
obligations of the Underwriters to purchase the Offered Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Offered Securities for sale as set forth in the Prospectus.
If the Terms Agreement provides for sales of Offered Securities pursuant to
delayed delivery contracts, the Company authorizes the Underwriters to solicit
offers to purchase Offered Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date the
Company will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount of Offered Securities to be sold pursuant to Delayed Delivery
Contracts ("Contract Securities"). The Underwriters will not have any
responsibility in respect of the validity or the performance of Delayed Delivery
Contracts. If the Company executes and delivers Delayed Delivery Contracts, the
Contract Securities will be deducted from the Offered Securities to be purchased
by the several Underwriters and the aggregate principal amount of Offered
Securities to be purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount of Offered Securities set forth opposite each
Underwriter's name in such Terms Agreement, except to the extent that the Lead
Underwriter determines that such reduction shall be otherwise than pro rata and
so advises the Company. The Company will advise the Lead Underwriter not later
than the business day prior to the Closing Date of the principal amount of
Contract Securities.
If the Terms Agreement specifies "Book-Entry Only" settlement or otherwise
states that the provisions of this paragraph shall apply, the Company will
deliver against payment of the purchase price the Offered Securities in the form
of one or more permanent global securities in definitive form (the "Global
Securities") deposited with the Trustee as custodian for The Depository Trust
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent global securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Offered Securities shall be made by the Underwriters
(if the Terms Agreement specifies that the Offered Securities will not trade in
DTC's Same Day Funds Settlement System) by certified or official bank check or
checks in New York Clearing House (next day) funds or (if the Terms Agreement
specifies that the Offered Securities will trade in DTC's Same Day Funds
Settlement System) in Federal (same day) immediately available funds by official
check or checks or wire transfer to an account in New York previously designated
to the Lead Underwriter by the Company at a bank acceptable to the Lead
Underwriter, in each case drawn to the order of the Company at the place of
payment specified in the Terms Agreement on the Closing Date, against delivery
to the Trustee as custodian for DTC of the Global Securities representing all of
the Offered Securities.
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4. Certain Agreements of the Company. The Company agrees with the several
Underwriters that it has or will furnish to counsel for the Underwriters, one
signed copy of the registration statement relating to the Registered Securities,
including all exhibits, in the form it became effective and of all amendments
thereto and that, in connection with each offering of Offered Securities:
(a) The Company will file the Prospectus with the
Commission pursuant to and in accordance with Rule 424(b)(2)
(or, if applicable and if consented to by the Lead Underwriter,
subparagraph (5)) not later than the second business day
following the execution and delivery of the Terms Agreement.
(b) The Company will advise the Lead Underwriter promptly
of any proposal to amend or supplement the Registration
Statement or the Prospectus and will afford the Lead Underwriter
a reasonable opportunity to comment on any such proposed
amendment or supplement; and the Company will also advise the
Lead Underwriter promptly of the filing of any such amendment or
supplement and of the institution by the Commission of any stop
order proceedings in respect of the Registration Statement or of
any part thereof and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the
Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, any event
occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at
any time to amend the Prospectus to comply with the Act, the
Company promptly will notify the Lead Underwriter of such event
and will promptly prepare and file with the Commission, at its
own expense, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. Neither the Lead Underwriter's consent to, nor the
Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in
Section 5.
(d) As soon as practicable, but not later than 16 months,
after the date of each Terms Agreement, the Company will make
generally available to its security holders an earnings
statement covering a period of at least 12 months beginning
after the later of (i) the effective date of the registration
statement relating to the Registered Securities, (ii) the
effective date of the most recent post-effective amendment to
the Registration Statement to become effective prior to the date
of such Terms Agreement and (iii) the date of the Company's most
recent Annual Report on Form 10-K filed with the Commission
prior to the date of such Terms Agreement, which will satisfy
the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies
of the Registration Statement, including all exhibits, any
related preliminary prospectus, any related preliminary
prospectus supplement, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available
and in such quantities as the Lead Underwriter reasonably
requests. The Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their
eligibility for investment under the laws of such jurisdictions
as the Lead Underwriter designates and will continue such
qualifications
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in effect so long as required for the distribution; provided
that in connection therewith the Company shall not be required
to qualify as a foreign corporation or file a general consent to
service of process in any jurisdiction.
(g) During the period of five years after the date of any
Terms Agreement, the Company will furnish to the Representatives
and, upon request, to each of the other Underwriters, if any, as
soon as practicable after the end of each fiscal year, a copy of
its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a
copy of each report and any definitive proxy statement of the
Company filed with the Commission under the Securities Exchange
Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as the Lead
Underwriter may reasonably request.
(h) The Company will pay all expenses incident to the
performance of its obligations under the Terms Agreement
(including the provisions of this Agreement), for any filing
fees or other expenses (including fees and disbursements of
counsel) in connection with qualification of the Offered
Securities for sale and determination of their eligibility for
investment under the laws of such jurisdictions as the Lead
Underwriter may designate and the printing of memoranda relating
thereto, for any fees charged by investment rating agencies for
the rating of the Offered Securities, for any applicable filing
fee incident to, and the reasonable fees and disbursements of
counsel for the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. of the
Offered Securities, for any travel expenses of the Company's
officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective
purchasers of Offered Securities and for expenses incurred in
distributing the Prospectus, any preliminary prospectuses, any
preliminary prospectus supplements or any other amendments or
supplements to the Prospectus to the Underwriters.
(i) The Company will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file
with the Commission a registration statement under the Act
relating to United States dollar-denominated debt securities
issued or guaranteed by the Company and having a maturity of
more than one year from the date of issue, or publicly disclose
the intention to make any such offer, sale, pledge, disposition
or filing, without the prior written consent of the Lead
Underwriter for a period beginning at the time of execution of
the Terms Agreement and ending the number of days after the
Closing Date specified under "Blackout" in the Terms Agreement.
5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Offered Securities will
be subject to the accuracy of the representations and warranties on the part of
the Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of PricewaterhouseCoopers LLP confirming that
they are independent public accountants within the meaning of
the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
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(i) in their opinion the financial statements and any schedules
examined by them and included in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on any unaudited financial statements included in
the Registration Statement;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any, and any
summary of earnings included in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such
unaudited financial statements and summary of earnings for them
to be in conformity with generally accepted accounting
principles;
(B) if any unaudited "capsule" information is contained in
the Prospectus, the unaudited consolidated net sales, net
operating income, net income and net income per share amounts or
other amounts constituting such "capsule" information and
described in such letter do not agree with the corresponding
amounts set forth in the unaudited consolidated financial
statements or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
statements of income;
(C) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of the Terms
Agreement, there was any change in the capital stock or any
increase in borrowings of the Company and its consolidated
subsidiaries, as compared with amounts shown on the latest
balance sheet included in the Prospectus; or
(D) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year, in consolidated net sales, net
operating income, per share amounts of consolidated income before
extraordinary items or net income or in the ratio of earnings to
fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
subsidiaries subject to
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the internal controls of the Company's accounting system or are
derived directly from such records by analysis or computation) with
the results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such letter and
have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise
specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, shall be contemplated
by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries, taken as a whole, which, in the judgment of a majority
in interest of the Underwriters including any Representatives, is
material and adverse and makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and
payment for the Offered Securities; (ii) any downgrading in the rating
of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or material
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iv) any
banking moratorium declared by U.S. Federal or New York authorities;
or (v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters
including any Representatives, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
the Closing Date, of Irell & Xxxxxxx LLP, counsel for the Company, to
the effect that:
(i) the Company is in good standing under the laws of the
jurisdiction of its incorporation, has been duly incorporated, is
validly existing as a corporation with 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) the Terms Agreement (including the provisions of this Agreement)
has been duly authorized, executed and delivered by the Company;
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(iii) the Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company
and, assuming the due authorization, execution and delivery by the Trustee,
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;
(iv) the Offered Securities have been duly authorized; the Offered
Securities (other than any Contract Securities) have been executed and,
assuming they have been duly authenticated by a duly authorized officer of
the Trustee, delivered by the Company; the Offered Securities constitute,
and any Contract Securities, when executed, authenticated, issued and
delivered in the manner provided in the Indenture and sold pursuant to
Delayed Delivery Contracts, will constitute, valid and binding obligations
of the Company, enforceable in accordance with their respective terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(v) the execution and delivery by the Company of the Terms
Agreement, the Offered Securities and the Indenture, and the performance by
the Company of its obligations under the Terms Agreement (including the
provisions of this Agreement), the Offered Securities and the Indenture
will not contravene any provision of applicable law that such counsel has,
in the exercise of customary professional diligence, recognized as
applicable to the Company or any of its subsidiaries or to transactions of
the type contemplated by the Terms Agreement (including the provisions of
this Agreement), or the certificate of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries taken as a whole, or, to the
best of such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under the Terms Agreement
(including the provisions of this Agreement), the Offered Securities and
the Indenture, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Offered Securities;
(vi) to the best of such counsel's knowledge, neither the Company
nor any of its subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights employed by them in connection with the business operated
by the Company or its subsidiaries which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would result in
any material adverse change, or notice of any other development with
respect to the foregoing involving a prospective material adverse change,
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries, taken as
a whole, except as may be disclosed in writing by the Company to, and
accepted for exclusion by, the Representatives;
(vii) the statements (1) in the Prospectus, as then amended or
supplemented, under the captions "Description of Debt Securities" and
"Description of Securities" 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,
-10-
fairly present, in all material respects, the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize, in all material respects, the matters referred to therein;
(viii) to the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject or any developments in such
proceedings that are required to be described or incorporated therein by
reference, in the Registration Statement or the Prospectus, as then
amended or supplemented, and are not so described or incorporated therein
by reference, or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the Prospectus, as then amended or supplemented, or to be filed or
incorporated by reference as exhibits to such Registration Statement that
are not so described or filed or incorporated as required;
(ix) 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;
(x) the Registration Statement has become effective under the Act;
the Prospectus, as then amended or supplemented, has been filed as
required hereunder; and to the best knowledge of such counsel no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or
threatened by the Commission;
(xi) such counsel (1) is of the opinion that each document, if any,
filed pursuant to the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus, as then amended or supplemented
(except for financial statements, schedules and other financial data
included therein as to which such counsel need not express any opinion),
complied when so filed as to form in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, and (2) is of the opinion that the Registration Statement and
the Prospectus, as then amended or supplemented (excepted for financial
statements, schedules and other financial data included therein as to
which such counsel need not express any opinion), comply as to form in all
material respects with the 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,
schedules and other financial data 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) each part of the Registration Statement, as
then amended, if applicable, when such part became effective contained any
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, schedules and
other financial data as to which such counsel need not express any belief)
the Prospectus, as then amended or supplemented, if applicable, as of the
date such opinion is delivered contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
-11-
With respect to subparagraph (xii) above, Irell & Xxxxxxx LLP may
state that their opinion and belief are based upon their participation in
conferences in connection with 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.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of the general counsel or the associate general counsel of
the Company, 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, or of
certificates of governmental officials, each of the subsidiaries of the
Company meeting the definition of "Significant Subsidiary" under Regulation
S-X of the Commission has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus, as then amended
or supplemented, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on such subsidiary;
(iii) the execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Terms Agreement (including the
provisions of this Agreement), the Offered Securities and the Indenture
will not contravene any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material, individually or in the
aggregate, to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of or qualification with any governmental body or
agency is required for the performance by the Company of its obligations
under the Terms Agreement (including the provisions of this Agreement), the
Offered Securities and the Indenture, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Offered Securities;
(iv) the Company and its subsidiaries own or possess the intellectual
property rights employed by them in connection with the business operated
by them, except to the extent that the failure to own or possess the
intellectual property would not have a material adverse effect on the
Company and its subsidiaries taken as a whole, and neither the Company and
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,
-12-
taken as a whole, except as may be disclosed in writing by the Company to,
and accepted for exclusion by, the Representatives;
(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 or the Prospectus,
as then amended or supplemented, and are not so described, or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus, as then amended
or supplemented, or to be filed or incorporated by reference as exhibits to
such Registration Statement that are not so described or filed or
incorporated as required;
(vi) such counsel (1) is of the opinion that each document, if any,
filed pursuant to the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus, as then amended or supplemented
(except for financial statements, schedules and other financial data as to
which such counsel need not express any opinion) complied when so filed as
to form in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, and (2) is of the
opinion that the Registration Statement and the Prospectus, as then amended
or supplemented (expect for financial statements, schedules and other
financial data included therein as to which such counsel need not express
any opinion), comply as to form in all material respects with the 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,
schedules and other financial data as to which such counsel need not
express any belief and except for that part of the Registration Statement
that constitutes the Form T-1 heretofore referred to) each part of the
Registration Statement, as then amended, if applicable, when such part
became effective did not and, as of the date such opinion is delivered,
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (2) (except for financial
statements, schedules and other financial data as to which such counsel
need not express any belief) the Prospectus, as then amended or
supplemented, if applicable, as of the date such opinion is delivered
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(f) The Representatives shall have received from O'Melveny & Xxxxx
LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities, the Registration Statement, the
Prospectus and other related matters as the Representatives may require,
and the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
-13-
hereunder at or prior to the Closing Date, that no stop order suspending
the effectiveness of the Registration Statement or of any part thereof has
been issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries
taken as a whole except as set forth in or contemplated by the Prospectus
or as described in such certificate.
(h) The Representatives shall have received a letter, dated the
Closing Date, of PricewaterhouseCoopers, LLP which meets the requirements
of subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three business days
prior to the Closing Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as the Representatives
reasonably request. The Lead Underwriter may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters under this Agreement and the Terms Agreement.
6. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives, if any,
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in the Terms Agreement; and, provided, further, that with respect to any
untrue statement or alleged untrue statement in or omission or alleged omission
from any preliminary prospectus the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased the
Offered Securities concerned, to the extent that a prospectus relating to such
Offered Securities was required to be delivered by such Underwriter under the
Act in connection with such purchase and any such loss, claim, damage or
liability of such Underwriter results from the fact that there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such Offered Securities to such person, a copy of the P rospectus (exclusive of
material incorporated by reference) if the Company had previously furnished
copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary
-14-
prospectus or preliminary prospectus supplement, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives, if any, specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in the Terms
Agreement.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action 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 any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (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 from the offering of the Offered
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 the Underwriters on the other in
connection with the statements or omissions which 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 shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault 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 the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty
-15-
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities under the Terms Agreement and
the aggregate principal amount of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of Offered Securities, the Lead Underwriter may make
arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments under the
Terms Agreement (including the provisions of this Agreement), to purchase the
Offered Securities that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of Offered Securities with respect to which such default or
defaults occur exceeds 10% of the total principal amount of Offered Securities
and arrangements satisfactory to the Lead Underwriter and the Company for the
purchase of such Offered Securities by other persons are not made within 36
hours after such default, the Terms Agreement will terminate without liability
on the part of any non-defaulting Underwriter or the Company, except as provided
in Section 8. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default. The respective
commitments of the several Underwriters for the purposes of this Section shall
be determined without regard to reduction in the respective Underwriters'
obligations to purchase the principal amounts of the Offered Securities set
forth opposite their names in the Terms Agreement as a result of Delayed
Delivery Contracts entered into by the Company.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to the Terms Agreement (including the provisions of this Agreement)
will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the Company or any of their respective representatives, officers or directors or
any controlling person, and will survive delivery of and payment for the Offered
Securities. If the Terms Agreement is terminated pursuant to Section 7 or if for
any reason the purchase of the Offered Securities by the Underwriters is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 4 and the respective obligations of the
Company and the Underwriters pursuant to Section 6 shall remain in effect. If
the purchase of the Offered Securities by the Underwriters is not consummated
for any reason other than solely because of the termination of the Terms
Agreement pursuant to Section 7 or the occurrence of any event specified in
clause (iii), (iv) or (v) of Section 5(c), the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Offered Securities.
9. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their address furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or
-16-
telegraphed and confirmed to it at 000 Xxxxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx,
Xxxxxxxxxx 00000-0000 , Attention: Xxxxxxx Xxxxxx, Senior Vice President &
Treasurer.
10. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon the Company and such
Underwriters as are identified in the Terms Agreement and their respective
successors and the officers and directors and controlling persons referred to in
Section 6, and no other person will have any right or obligation hereunder.
11. Representation of Underwriters. Any Representatives will act for the
several Underwriters in connection with the financing described in the Terms
Agreement, and any action under such Terms Agreement (including the provisions
of this Agreement) taken by the Representatives jointly or by the Lead
Underwriter will be binding upon all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement.
13. APPLICABLE LAW. THIS AGREEMENT AND THE TERMS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to the Terms Agreement (including the
provisions of this Agreement) or the transactions contemplated thereby.
-17-
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and
returned to the address shown below so as to arrive not later
than 9:00 A.M., New York time, on ........ ...., 19.../(1)/)
DELAYED DELIVERY CONTRACT
-------------------------
[Insert date of initial public offering]
MATTEL, INC.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, N.Y. 10010-3629
Attention: Investment Banking Department - Transactions Advisory Group
Gentlemen:
The undersigned hereby agrees to purchase from Mattel, Inc., a Delaware
corporation ("Company"), and the Company agrees to sell to the undersigned, [If
one delayed closing, insert--as of the date hereof, for delivery on
, 19 ("Delivery Date"),]
[$]..............[shares]
principal amount of the Company's [Insert title of securities] ("Securities"),
offered by the Company's Prospectus dated , 19 and a Prospectus
Supplement dated , 19 relating thereto, receipt of copies
of which is hereby acknowledged, at % of the principal amount thereof plus
accrued interest, if any, and on the further terms and conditions set forth in
this Delayed Delivery Contract ("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof, for
delivery on the dates set forth below, Securities in the principal amounts set
forth below:
-----------------------------
/(1)/ Insert date which is third full business day prior to Closing Date under
the Terms Agreement.
-18-
DELIVERY DATE PRINCIPAL AMOUNT
------------- ----------------
..................... .............
..................... .............
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase for
delivery on--the--each--Delivery Date shall be made to the Company or its order
by certified or official bank check in New York Clearing House (next day) funds
at the office of at .M. on--the--such--Delivery Date
upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date--in definitive fully registered
form and in such denominations and registered in such names as the undersigned
may designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to--the--such--Delivery Date.
It is expressly agreed that the provisions for delayed delivery and payment
are for the sole convenience of the undersigned; that the purchase hereunder of
Securities is to be regarded in all respects as a purchase as of the date of
this Contract; that the obligation of the Company to make delivery of and
accept payment for, and the obligation of the undersigned to take delivery of
and make payment for, Securities on--the--each--Delivery Date shall be subject
only to the conditions that (1) investment in the Securities shall not at--the--
such--Delivery Date be prohibited under the laws of any jurisdiction in the
United States to which the undersigned is subject and (2) the Company shall have
sold to the Underwriters the total principal amount of the Securities less the
principal amount thereof covered by this and other similar Contracts. The
undersigned represents that its investment in the Securities is not, as of the
date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by copies of the opinions of counsel for the Company
delivered to the Underwriters in connection therewith.
This Contract 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.
-19-
It is understood that the acceptance of any such Contract is in the Company's
sole discretion and, without limiting the foregoing, need not be on a first-
come, first-served basis. If this Contract 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 contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
..............................
(Name of Purchaser)
By ...........................
...........................
(Title of Signatory)
...........................
...........................
(Address of Purchaser)
Accepted, as of the above date.
MATTEL, INC.
By .........................
[Insert Title]
-20-
MATTEL, INC.
("COMPANY")
Debt Securities
TERMS AGREEMENT
---------------
July 21, 1998
To: The Underwriters identified herein
Dear Sirs:
The undersigned agrees to sell to the several Underwriters named below for
their respective accounts, and such Underwriters agree, severally and not
jointly, to purchase from the Company, on and subject to the terms and
conditions of the Underwriting Agreement attached hereto ("Underwriting
Agreement"), the following securities ("Offered Securities") on the following
terms:
TITLE: 6% Notes Due July 15, 2003 (the "2003 Notes") and 6-1/8% Notes Due
July 15, 2005 (the "2005 Notes" and with the 2003 Notes, collectively the
"Securities").
PRINCIPAL AMOUNT: $150,000,000 of 2003 Notes and $150,000,000 of 2005
Notes.
INTEREST: 6% per annum on the 2003 Notes and 6-1/8% per annum on the 2005
Notes, in each case from July 24, 1998, payable semiannually on January 15 and
July 15, commencing January 15, 1999, to holders of record on the preceding
January 1 or July 1, as the case may be.
MATURITY: July 15, 2003 for the 2003 Notes and July 15, 2005 for the 2005
Notes.
OPTIONAL REDEMPTION: The Securities will be redeemable, in whole or in
part, at the option of the Company at any time at a redemption price equal to
the greater of (i) 100% of the principal amount of such Securities or (ii) as
determined by a Quotation Agent (as defined in the Prospectus), the sum of
the present values of the remaining scheduled payments of principal and
interest thereon discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate (as defined in the Prospectus), plus in each case, accrued
interest thereon to the date of redemption.
SINKING FUND: None
LISTING: None.
DELAYED DELIVERY CONTRACTS: None.
PURCHASE PRICE: 99.109% of principal amount of the 2003 Notes and 98.797%
of principal amount of the 2005 Notes, in each case plus accrued interest, if
any, from July 24, 1998.
-21-
EXPECTED REOFFERING PRICE: 99.709% of principal amount of the 2003 Notes
and 99.422% of principal amount of the 2005 Notes, in each case subject to
change by the Underwriters.
CLOSING: 7:00 A.M. on July 24, 1998, at Irell & Xxxxxxx LLP, 000 Xxxxx
Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx, in Federal (same day)
immediately available funds.
SETTLEMENT AND TRADING: Book-Entry Only via DTC. The Securities will
trade in DTC's Same Day Funds Settlement System.
BLACKOUT: Until the Closing Date.
NAMES AND ADDRESSES OF UNDERWRITERS:
The respective principal amounts of the Securities to be purchased by each
of the Underwriters are set forth opposite their names in Schedule A hereto.
The addresses of the Underwriters are as follows:
Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Investment Banking Department -
Transaction Advisory Group
Xxxxxx Xxxxxxx & Co., Incorporated
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndicate Department
The provisions of the Underwriting Agreement are incorporated herein by
reference.
The Offered Securities will be made available for checking and packaging at
least 24 hours prior to the Closing Date.
For purposes of Section 6 of the Underwriting Agreement, the only
information furnished to the Company by any Underwriter for use in the
Prospectus consists of (i) the following information in the Prospectus
furnished on behalf of each Underwriter: the last paragraph at the bottom of
the prospectus supplement cover page concerning the terms of the offering by
the Underwriters, the legend concerning over-allotments and stabilizing on the
inside front cover page of the prospectus supplement and the concession and
reallowance figures appearing in the second paragraph under the caption
"Underwriting" in the prospectus supplement and the information contained in
the second sentence of the fourth paragraph under the caption "Underwriting"
in the prospectus supplement.
-22-
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
MATTEL, INC.
By /s/ XXXXXXX XXXXXX
--------------------------------
Xxxxxxx Xxxxxx
Senior Vice President and
Treasurer
The foregoing Terms Agreement is hereby confirmed and accepted as of the date
first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ XXXXXXX XXXXXXXXX
------------------------------------
Xxxxxxx Xxxxxxxxx
Director
XXXXXX XXXXXXX & CO. INCORPORATED
By /s/ XXXXX X. XXXXXX
------------------------------------------
Xxxxx X. Xxxxxx
Principal
-23-
SCHEDULE A
PRINCIPAL AMOUNT
----------------
2003 2005
NOTES NOTES
--------------- ---------------
UNDERWRITER
-----------
Credit Suisse First Boston Corporation......................... $ 75,000,000 $ 75,000,000
Xxxxxx Xxxxxxx & Co. Incorporated.............................. 75,000,000 75,000,000
------------ ------------
Total.......................................................... $150,000,000 $150,000,000
-24-
