Exhibit 10.3
$100,000,000
MATTEL, INC.
6 3/4% NOTES DUE 2000
UNDERWRITING AGREEMENT
May 19, 1993
May 19, 1993
Morgan Stanley & Co. Incorporated
Kidder, Peabody & Co. Incorporated
c/o Morgan Stanley & Co.
Incorporated
1251 Avenue of the Americas
New York, New York 10020
Ladies and Gentlemen:
Mattel, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters") $100,000,000 principal amount of its 6 3/4%
Notes due May 15, 2000 (the "Securities") to be issued pursuant to the
provisions of an Indenture dated as of May 15, 1993 (the "Indenture")
between the Company and PNC Bank, National Association, as Trustee
(the "Trustee").
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a
prospectus, relating to the Securities. The registration statement as
amended at the time it becomes effective, including the information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
amended (the "Securities Act"), is hereinafter referred to as the
Registration Statement; the prospectus in the form first used to confirm
sales of Securities is hereinafter referred to as the Prospectus. Any
reference herein to the Registration Statement or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein, and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus
shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated
by reference therein.
I.
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 Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by
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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 I(b) do not apply (A) to statements or
omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Com-
pany in writing by such Underwriter through you 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 cor-
porate 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 in any individual
country as described in the Prospectus. Each subsidiary of the
Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of
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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 in any individual country as described in the Prospectus.
(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 Com-
pany, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(h) The 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 this Agreement, will be entitled to the
benefits of the Indenture, and will be valid and binding obligations
of the Company, enforceable in accordance with their terms except
as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.
(i) The execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement, the Indenture and the Securities 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
or the Securities, 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 Securities.
(j) There has not occurred any material adverse change,
or any development involving a prospective material adverse change,
in the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus.
(k) There are no legal or governmental proceedings
pending or threatened to the Company to which the Company or
any of its subsidiaries is a party or to
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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.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with
the Securities Act and the rules and regulations of the Commission
thereunder.
(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 considered as one enterprise,
except as may be described in writing to, and accepted for exclusion
by, the Underwriters.
(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
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of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(q) Neither the Company nor any of its subsidiaries has,
directly or indirectly, paid or delivered any fee, commission or other
sum of money or item or property, however characterized, to any
finder, agent, government official or other party, in the United
States or any other country, which is in any manner related to the
business, assets or operations of Company or any of its subsidiaries,
which is, or may be with the passage of time or discovery, illegal
under any federal, state or local laws of the United States (including
without limitation the U.S. Foreign Corrupt Practices' Act) or any
other country having jurisdiction; and neither the Company nor any
of its subsidiaries has participated, directly or indirectly, in any
boycotts or other similar practices affecting any of its actual or
potential customers and has at all times done business in an open
and ethical manner.
(r) 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.
II.
The Company hereby agrees to sell to the several
Underwriters, and the Underwriters, upon the basis of the representations
and warranties herein contained, but subject to the conditions hereinafter
stated, agree, severally and not jointly, to purchase from the Company the
respective principal amounts of Securities set forth in Schedule I hereto
opposite their names at 99.35% of their principal amount -- the purchase
price -- plus accrued interest, if any, from May 15, 1993 to the date of
payment and delivery.
III
The Company is advised by you that the Underwriters
propose to make a public offering of their respective portions of the
Securities as soon after the Registration Statement and this Agreement
have become effective as in your judgment is advisable. The Company is
further advised by you that the Securities are to be offered to the public
initially at 100% of their principal amount -- the public offering price --
plus accrued interest, if any, and to certain dealers selected by you at a
price that represents a concession not in excess of .40% of their principal
amount under the public offering price, and that any Underwriter
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may allow, and such dealer may reallow, a concession, not in excess of .25% of
their principal amount, to any Underwriter or to certain other dealers.
IV.
Payment for the 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 office of Latham & Watkins, 633 W.
Fifth Street, Los Angeles, California at 7:00 A.M., local time, on May 26,
1993 or at such other time on the same or such other date, not later than
June 3, 1993, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the Closing Date.
Payment for the Securities shall be made against delivery to
you for the respective accounts of the several Underwriters of the
Securities registered in such names and in such denominations as you shall
request in writing not later than two full business days prior to the date of
delivery, with any transfer taxes payable in connection with the transfer of
the Securities to the Underwriters duly paid.
V.
The obligations of the Company and the several obligations
of the Underwriters hereunder are subject to the condition that the
Registration Statement shall have become effective not later than the date
hereof.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this
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;
(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 Registration Statement, that,
in your judgment, is material and adverse and that makes it,
in your judgment, impracticable to market the Securities on
the terms and in the manner contemplated in the Prospectus;
and
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(iii) the Prospectus shall have been filed as required
hereunder; and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the
Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) The Underwriters 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)
above (except as to the knowledge of the Underwriters in clause
(a)(iii)) and to the effect that the representations and warranties of
the Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may
rely upon the best of his knowledge as to proceedings threatened.
(c) You 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 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 this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (a) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally
and (b) rights of
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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,
and the performance by the Company of its obligations
under, this Agreement, the Securities and the Indenture 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 listed by the Company in an
officer's certificate by the Company as significant agreements
(which officer's certificate shall be provided to, and approved
by, the Underwriters) 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
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 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 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 Underwriters;
(vii) the statements (1) in the Prospectus under the
captions "Description of Notes," "Certain Federal Income Tax
Consequences" and "Underwriting" and (2) in the
Registration Statement under Item 15, in each case insofar as
such statements constitute summaries of the legal matters,
documents and 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;
(viii) 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
9
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;
(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; and
(x) the Registration Statement has become
effective under the Act; the Prospectus 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 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 or the Exchange Act, as the case may be, the
rules and regulations of the Commission thereunder and the
Trust Indenture Act;
(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
10
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) You shall have received on the Closing Date an
opinion of the 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 Securities and Exchange Commission has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on such subsidiary;
(iii) the execution and delivery by the Company of,
and the performance by the Company of its obligations
under, this Agreement, the 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 this
Agreement, the 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
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
11
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 Underwriters;
(v) there are no legal or governmental proceedings
pending or threatened to the Company to which the
Company or any of its subsidiaries is a party or to which any
of the properties of the Company or any of its subsidiaries is
subject or any development in such proceedings that are
required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference in the
Registration Statement or the Prospectus that are not so
described and there are no statutes, regulations, contracts or
other documents that are required to be described in the
Registration Statement, the Prospectus or any documents
incorporated by reference in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration
Statement that are not so described or filed as required;
(vi) such counsel (1) is of the opinion that each
document filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and
the Prospectus (except for financial statements and schedules
as to which such counsel need not express any opinion)
complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and
regulations of the Commission thereunder and (2) is of the
opinion that the Registration Statement and the Prospectus
(except for financial statements and schedules included
therein as to which such counsel need not express any
opinion) comply as to form in all material respects with the
Securities Act or the Exchange Act, as the case may be, the
rules and regulations of the Commission thereunder and the
Trust Indenture Act;
(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
12
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) You 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 sub-
paragraphs (ii), (iii), (iv), (vii) (but only as to the statements in the
Prospectus under "Description of Notes" and "Underwriting") and
that nothing has come to their attention with respect to the matters
in subparagraph (xii) of paragraph (c) above.
With respect to 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 the
Prospectus and any amendments or supplements thereto 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 (e) above, Latham & Watkins may state that their opinion and
belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or
supplements thereto (other than the documents incorporated by reference)
and review and discussion of the contents thereof (including documents
incorporated 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 you at the request of the Company and shall so
state therein.
(f) You shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to you,
from Price Waterhouse, independent public accountants for the
Company, 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
Registration Statement and the Prospectus.
(g) Prior to or on the Closing Date, the Company shall
have furnished to the Underwriters such further information,
certificates, opinions and documents as the Underwriters may
reasonably request.
VI.
In further consideration of the agreements of the
Underwriters herein contained, the Company covenants as follows:
(a) The Company will cause the Prospectus to be filed as
required hereunder (but only if you have not reasonably objected
thereto by notice to the Company after having been furnished a
copy a reasonable time prior to filing) and will notify you promptly
of such filing; it will notify you promptly of the time when
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any subsequent amendment to the Registration Statement has become
effective or any supplement to the Prospectus has been filed and of
any request by the Commission for any amendment or supplement
to the Registration Statement or Prospectus or for additional
information; it will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the
Registration Statement or Prospectus that, in your opinion, may be
necessary or advisable in connection with the distribution of the
Securities by the Underwriters; it will file no amendment or
supplement to the Registration Statement or Prospectus (other than
any document required to be filed under the Exchange Act that
upon filing is deemed to be incorporated by reference therein) to
which you shall reasonably object by notice to the Company after
having been furnished a copy a reasonable time prior to the filing;
and it will furnish to you at or prior to the filing thereof a copy of
any document that upon filing is deemed to be incorporated by
reference in the Registration Statement or Prospectus.
(b) To furnish to you, without charge, three signed copies
of the Registration Statement (including exhibits thereto and all
documents incorporated by reference therein) and for delivery to
each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto but including all documents
incorporated by reference therein) 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 you
may reasonably request.
(c) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceeding for any such purpose; and it will
promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such a stop order should be
issued.
(d) If, during such period after the first date of the public
offering of the Securities as in the opinion of your counsel 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 so that it 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, in the light of
the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of your counsel, 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 you will furnish to the Company) to which Securities
may have been sold by you 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
14
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.
(e) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection with such qualification and
in connection with the determination of the eligibility of the
Securities for investment under the laws of such jurisdictions as you
may designate.
(f) During the period beginning on the date hereof 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 Securities (other than (i) the Securities
and (ii) commercial paper issued in the ordinary course of business),
without your prior written consent.
(g) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending June 30, 1994 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder.
(h) To pay all document production charges and expenses
of Latham & Watkins, special counsel for the Underwriters (but not
including their fees for professional services), in connection with the
preparation of this Agreement.
VII.
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 defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission
or alleged untrue statement or omission based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and
15
each person, if any, who controls the
Company within the meaning 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 you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
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 of the two preceding
paragraphs, such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection with
any proceeding or related proceedings in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated, in the case of
parties indemnified pursuant to the second preceding paragraph, and by
the Company, in the case of parties indemnified pursuant to the first
preceding paragraph. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the second and
third sentences of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld),
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding.
16
If the indemnification provided for in the first or second
paragraph of this Article VII 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 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 Securities shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the 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, bear to the aggregate
public offering price of the 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 Article VII are several in proportion to the
respective principal amounts of Securities they have purchased hereunder,
and not joint.
The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Article VII 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 the
immediately preceding paragraph. 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 Article VII, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Article VII 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.
17
The indemnity and contribution provisions contained in this
Article VII and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Securities.
VIII.
This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of
the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade, (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 your judgment,
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 your judgment, impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus.
IX.
This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement by the
Commission.
If, on the Closing Date, any one or more of the Underwriters
shall fail or refuse to purchase Securities that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of the Securities to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the
principal amount of Securities set forth opposite their respective names in
Schedule I bears to the principal amount of Securities set forth opposite
the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the principal amount
of Securities that any Underwriter has agreed to purchase pursuant to
Article II be increased pursuant to this Article IX by an amount in excess
of one-ninth of such principal amount of Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters
18
shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is
more than one-tenth of the aggregate principal amount of Securities to be
purchased on such date, and arrangements satisfactory to you and the
Company for the purchase of such 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 you 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 Agree-
ment.
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
contemplated hereunder.
This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
19
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
Very truly yours,
MATTEL, INC.
By: /s/ Francesca Luzuriaga
-----------------------
Name: Francesca Luzuriaga
Title: Senior Vice President &
Treasurer
ACCEPTED, May 19, 1993
MORGAN STANLEY & CO. INCORPORATED
KIDDER, PEABODY & CO. INCORPORATED
By MORGAN STANLEY & CO. INCORPORATED
By: /s/ C. Daniel Ewell
-------------------
C. Daniel Ewell
Vice President
20
SCHEDULE I
Principal
Amount of
Securities
to be
Purchased
----------
Underwriter
- -----------
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . $ 50,000,000
Kidder, Peabody & Co. Incorporated. . . . . . . . . . . . 50,000,000
------------
Total .. . . . . . . . . . . . . . . $100,000,000
============
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