EXHIBIT 10.6
SHELF
UNDERWRITING AGREEMENT
March __, 1997
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Dear Sirs and Mesdames:
We (the "Representatives") are acting on behalf of the
underwriter or underwriters (including ourselves) named below (such
underwriter or underwriters being herein called the "Underwriters"), and we
understand that Mattel, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell from time to time shares (the "Common Shares")
of its common stock, $1.00 par value per share ("Common Stock").
All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the document entitled "Mattel, Inc.
Underwriting Agreement Standard Provisions (Common Stock)" dated March __,
1997 (the "Underwriting Agreement"), a copy of which is attached hereto.
All terms and conditions of the Underwriting Agreement are herein
incorporated by reference in their entirety and shall be deemed to be
a part of this agreement (this "Agreement") to the same extent as if
such provisions had been set forth in full herein, except that (i) if any
term defined in such document is otherwise defined herein, the definition
set forth herein shall control and (ii) all references in such document to
a type of agreement that has not been entered into in connection with the
transactions contemplated hereby shall not be deemed to be a part of this
Agreement.
Subject to the terms and conditions set forth in the Underwriting
Agreement and on the basis of the representations and warranties contained
therein, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective number of Common Shares
set forth below opposite their names at a purchase price of $_____ per
share (the "Purchase Price").
Number of
Common Shares
Name ----------------
- ----
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Total......
=================
3,000,000
The Underwriters will pay for the Common Shares on March __,
1997 against delivery of the Common Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on such date.
The time and date of such payment and delivery are hereinafter referred to
as the "Closing Date".
The Company is advised by the Representatives that the
Underwriters propose to make a public offering of the respective portions
of the Common Shares as soon after this Agreement has become effective, as
in the Representative's judgment is advisable. The Company is further
advised by the Representatives that the Common Shares are to be offered to
the public initially at a price of $____ per share (the "Public Offering
Price") and to certain dealers at a price that represents a concession not
in excess of $______ per share under the Public Offering Price, and that
any Underwriter may allow, and such dealers may reallow, a concession, not
in excess of $_____ per share, to any Underwriter or to certain other
dealers.
The Company hereby agrees that, without the prior written consent
of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will
not, during the period ending 30 days after the date of the Prospectus, (i)
issue, offer, pledge, sell, contract to sell, sell any option or contract
to issue or sell any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into
or exercisable or exchangeable for Common Stock or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to: (A) the Common Shares to be sold
pursuant hereto, (B) the issuance by the Company of shares of Common Stock
upon the exercise of options, warrants or other rights to acquire Common
Stock outstanding as of the date hereof and which are disclosed in the
Prospectus or incorporated by reference therein, or (C) the issuance of
Common Stock and other securities convertible into Common Stock in
accordance with the provisions of the Acquisition Agreement.
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Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO.
INCORPORATED
CREDIT SUISSE FIRST BOSTON
CORPORATION
Acting severally on behalf of themselves
and the several Underwriters named herein
By: MORGAN STANLEY & CO.
INCORPORATED
By:
-----------------------------
Glenn R. Robson
Principal
Accepted:
MATTEL, INC.
By:
-----------------------------
William Stavro
Senior Vice President and Treasurer
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MATTEL, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(COMMON STOCK)
March __, 1997
From time to time, Mattel, Inc., a Delaware corporation (the
"Company"), may enter into one or more underwriting agreements that provide
for the sale of Common Stock, $1.00 par value per share ("Common Stock"),
to the several underwriters named therein. The standard provisions set
forth herein may be incorporated by reference in any such underwriting
agreement (an "Underwriting Agreement"). The Underwriting Agreement,
including the provisions incorporated therein by reference, is herein
sometimes referred to as this "Agreement." Terms defined in the
Underwriting Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-1307) for
the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of shares of Common Stock (the "Common Shares"), and the
offering thereof from time to time in accordance with Rule 415 of the Rules
and regulations of the Commission promulgated pursuant to the Securities
Act. Such registration statement (and any further registration statements
which may be filed by the Company for the purpose of registering additional
shares of Common Stock or other securities of the Company and in connection
with which this Agreement is included or incorporated by reference as an
exhibit), including all documents incorporated therein by reference, as
from time to time amended or supplemented by the filing of documents
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Securities Act or otherwise, are referred to herein as the
"Registration Statement." The Company has filed with, or transmitted for
filing to, or shall promptly hereafter file with or transmit for filing to,
the Commission a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Common Shares pursuant to Rule 424 under the
Securities Act. The term "Basic Prospectus" means the prospectus included
in the Registration Statement. The term "Prospectus" means the Basic
Prospectus together with the Prospectus Supplement. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating
to the Common Shares, together with the Basic Prospectus. As used herein,
the terms "Basic Prospectus," "Prospectus" and "preliminary prospectus"
shall include in each case the documents, if any, incorporated by reference
therein. If the Company elects to rely on Rule 434 promulgated pursuant to
the Securities Act, all references to the Prospectus shall be deemed to
include, without limitation, the form of
prospectus and the term sheet, taken together, provided to the Agents
by the Company in reliance on such Rule 434 (the "Rule 434 Prospectus").
Unless the context otherwise requires, all references in this Agreement
to documents, financial statements and schedules and other information
which is "contained," "included," "stated," "described in," or "referred to"
in the Registration Statement or the Prospectus shall be deemed to mean and
include all suchdocuments, financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all
references in this Agreement to "amendments" or "supplements" to the
Registration Statement or Prospectus shall be deemed to mean and include
the filing of any document under the Exchange Act after the date of this
Agreement which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be. If the Company
files a registration statement to register securities and relies on Rule 462(b)
promulgated pursuant to the Securities Act for such registration statement
to become effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to "Registration Statement" herein shall be
deemed to be to both the registration statement referred to above (No. 333-
1307) and the Rule 462 Registration Statement, as each such registration
statement may be amended pursuant to the Securities Act.
1. Representations and Warranties. The Company represents and
warrants to each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened to the Company by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the
Commission thereunder, (ii) each part of the Registration Statement,
when such part became effective, did not contain and each such part,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use
therein.
(c) The firm of accountants that has certified the applicable
financial statements and supporting schedules of the Company and its
subsidiaries and the firm of
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accountants that has reviewed the historical financial information of
Tyco Toys, Inc., a Delaware Corporation ("Tyco") that is included in
certain pro forma financial statements (the "Tyco Historical Financial
Information") filed with the Commission as part of the Registration
Statement and the Prospectus are independent public accountants with
respect to the Company and its subsidiaries and, to the best knowledge
of the Company, after due inquiry, Tyco, as the case may be, as required
by the Securities Act and the Exchange Act. The historical and pro forma
financial statements, together with related schedules and notes, set forth
in the Prospectus and the Registration Statement comply as to form in
all material respects with the requirements of the Securities Act,
including, without limitation, Regulation S-X. Such historical financial
statements of the Company and its subsidiaries and, to the best knowledge
of the Company, after due inquiry, the Tyco Historical Financial
Information fairly present in all material respects the financial position
of the Company and its subsidiaries, on the one hand, and Tyco, on the
other hand, 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). Such pro forma financial statements have been prepared on a
basis consistent with the historical financial statements of the Company
and its subsidiaries and, to the best knowledge of the Company, after due
inquiry, the Tyco Historical Financial Information, except for the pro
forma adjustments specified therein, and give effect to assumptions
made on a reasonable basis and present fairly in all material respects
the historical financial position of the Company and its subsidiaries,
on the one hand, and Tyco, on the other hand, and present fairly in
all material respects the acquisition of Tyco by the Company (the
"Acquisition"), pursuant to the terms of the Agreement and Plan of
Merger, dated as of November 17, 1996, as amended as of November 22,
1996 (the "Acquisition Agreement"), by and among the Company, Truck
Acquisition Corp., a Delaware corporation, and Tyco, and which pro
forma financial statements are set forth in the Current Report on Form
8-K, as filed with the Commission on March 4, 1997 (the "Tyco
Acquisition Current Report").
(d) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus except to the extent that the failure of any such
subsidiary, singly or in the aggregate, to be so duly incorporated or
validly existing or to have such corporate power and authority, would
not have a material adverse effect on the Company and its subsidiaries
taken as a whole or on the business of the Company and its
subsidiaries taken as a whole. Each subsidiary of the Company is duly
qualified
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to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure of any such subsidiary, singly or in the aggregate, to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole or on the
business of the Company and its subsidiaries taken as a whole.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(h) All outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable.
(i) The Common Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, 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 Common Shares.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(l) There are no legal or governmental proceedings pending or
threatened to the Company to which the Company or any of its
subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement, the Prospectus or any
documents incorporated by reference in the Registration Statement or
the Prospectus that are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement, the Prospectus or any documents incorporated
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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.
(m) The Company and its subsidiaries own or possess the patents,
patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks and trade names presently employed by them in connection with
the business now operated by them, and neither the Company nor any of
its subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material
adverse change, or any notice of any other development with respect to
the foregoing involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
taken as a whole, except as may be described in writing to, and
accepted for exclusion by, the Representatives.
(n) Each preliminary prospectus filed as a 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 applicable rules and regulations of the Commission
thereunder.
(o) The Company is not and, after giving effect to the offering
and sale of the Common Shares and the application of the net proceeds
thereof as described in the Prospectus, will not be 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.
(p) 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.
(q) In the ordinary course of its business, the Company conducts
a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on
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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.
(r) 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.
(s) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company to include any securities of the Company held by such
person with the Common Shares registered pursuant to the Registration
Statement.
(t) The terms, conditions and provisions of the Acquisition and
the Acquisition Agreement are fairly and accurately described in all
material respects in that certain Registration Statement on Form S-4
(No. 333-21785), as filed with the Commission on February 14, 1997
(the "Tyco Acquisition Registration Statement"). The representations
and warranties contained in Section 4.4 of the Acquisition Agreement
are true and correct.
(u) To the best of the Company's knowledge, the representations
and warranties of Tyco set forth in the Acquisition Agreement are true
and correct in all material respects.
(v) The Common Shares are listed on the New York Stock Exchange
and the Pacific Stock Exchange.
2. Public Offering. The Company is advised by the
Representatives that the Underwriters propose to make a public offering of
their respective portions of the Underwriters' Common Shares as soon after
this Agreement has been entered into as in the Representatives' judgment is
advisable. The terms of the public offering of the Common Shares is set
forth in the Prospectus.
3. Purchase and Delivery. Except as otherwise provided in this
Section 3, payment for the Common Shares shall be made by wire transfer of
immediately available (same day) funds to an account designated by the
Company at the time set forth in the Underwriting Agreement, upon delivery
to the Representatives for the respective accounts of the several
Underwriters of the Common Shares, registered in such names and in such
denominations as the
6
Representatives shall request in writing not less than one full business day
prior to the Closing Date.
4. Conditions to Closing. The several obligations of the
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus, that, in the
judgment of the Representatives, is material and adverse and that
makes it, in the judgment of the Representatives, impracticable
to market the Common Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Representatives shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in clause (a)(i) above
and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his knowledge as to proceedings threatened.
(c) The Representatives shall have received on the Closing Date
an opinion of Irell & Manella LLP, 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;
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(iii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(iv) the Common Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable,
and the issuance of such Common Shares will not be subject to any
preemptive rights contained in any charter document of the
Company or, to such counsel's knowledge, any similar rights;
(v) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or, to
the best of such counsel's knowledge, any agreement or other
instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a
whole, or, to the best of such counsel's knowledge, any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, 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
Common Shares.
(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
Representatives;
(vii) the statements (1) in the Prospectus under the captions
"Description of Capital Stock," "The Underwriters" (relating
solely to this Agreement or the Underwriting Agreement) and "Plan
of Distribution," and (2) in the Registration Statement under
Item 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred
to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein in all material
respects;
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(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 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, and after giving effect to the
offering and sale of the Common Shares and the application of the
net proceeds thereof as described in the Prospectus, will not be
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) 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 and the
rules and regulations of the Commission thereunder; and
(xi) 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) the Registration Statement and the
prospectus included therein at the time the Registration
Statement (and the documents incorporated by reference in the
Registration Statement and such prospectus) became effective
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (2) (except for
financial statements and schedules as to which such counsel need
not express any belief) the Prospectus and the documents
incorporated by reference therein as of the Closing Date contain
an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely on such
certificates of officers of the Company and/or governmental entities
as such counsel deems appropriate, subject to reasonable approval of
counsel to the Underwriters.
9
(d) The Representatives shall have received on the Closing Date
an opinion of the general counsel or the assistant general counsel of
the Company, dated the Closing Date, to the effect that:
(i) the Company is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a
whole;
(ii) based upon opinions, oral or written, of foreign
counsel, each of the subsidiaries of the Company meeting the
definition of "Significant Subsidiary" under Regulation S-X of
the Commission has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the
Prospectus and is duly qualified to 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;
(iii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not contravene any agreement or other instrument
binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole,
or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any subsidiary,
and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required
for the performance by the Company of its obligations under this
Agreement, 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 Common Shares;
(iv) the Company and its subsidiaries own or possess the
patents, patent rights, licenses, inventions, copyrights, know-
how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names presently
employed by them in connection with the business now operated by
them, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in any material adverse
change, or notice of any other development with respect to the
foregoing involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its
10
subsidiaries, 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, 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) the terms, conditions and provisions of the Acquisition
and the Acquisition Agreement are fairly and accurately described
in all material respects in the Tyco Acquisition Registration
Statement;
(vii) 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 and the
rules and regulations of the Commission thereunder; and
(viii) 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 opinion) the Registration Statement and the
prospectus included therein at the time the Registration
Statement (and the documents incorporated by reference in the
Registration Statement and such prospectus) became effective
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (2) (except for
financial statements and schedules as to which such counsel need
not express any belief) the Prospectus and the documents
incorporated by reference therein as of the Closing Date contain
an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
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In rendering such opinion, such counsel may rely on such
certificates of officers of the Company and/or governmental entities
as such counsel deems appropriate, subject to reasonable approval of
counsel to the Underwriters.
(e) The Representatives shall have received on the Closing Date
an opinion of Latham & Watkins, special counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in
subparagraphs (ii), (iii), (iv), (vii) (but only as to the statements
in the Prospectus under "Description of Capital Stock," "The
Underwriters" and "Plan of Distribution") and (xi) of paragraph (c)
above.
With respect to the subparagraph (xi) of paragraph (c) above,
Irell & Manella LLP may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but are without independent check or verification, except as
specified. With respect to subparagraph (xi) of paragraph (c) above,
Latham & Watkins may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto (but not including
documents incorporated therein by reference) and review and discussion of
the contents thereof (including documents incorporated therein by
reference), but are without independent check or verification, except as
specified.
The opinion of Irell & Manella LLP described in paragraph (c)
above shall be rendered to the Representatives at the request of the
Company and shall so state therein.
(f) The Representatives shall have received on or prior to the
Closing Date letters, in form and substance satisfactory to the
Representatives, from the Company's independent public accountants
(dated the Closing Date) and from Tyco's independent accountants (dated
on or prior to the Closing Date), 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 of the Company and the Tyco Historical
Financial Information contained in or incorporated by reference into
the Prospectus.
5. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To furnish the Representatives, without charge, a signed
copy of the Registration Statement (including exhibits thereto) and
for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and, during the
period mentioned in paragraph (c) below, as many copies of the
Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto or to the Registration Statement as
the Representatives may reasonably request.
(b) Before amending or supplementing the Registration Statement
or the Prospectus with respect to the Common Shares, to furnish to the
Representatives a copy
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of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which the Representatives reasonably
object; provided, however, that the foregoing requirement shall not
apply to any of the Company's periodic filings with the Commission
required to be filed pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act or pursuant to Item 5 (including related exhibits filed
pursuant to Item 7) of Form 8-K, copies of which filings the Company
will cause to delivered to the Representatives promptly after being
transmitted for filing with the Commission.
(c) If, during such period after the first date of the public
offering of the Common Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters, and to the dealers
(whose names and addresses the Representatives will furnish to the
Company) to which Common Shares may have been sold by the
Representatives on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) To endeavor to qualify the Common Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and to maintain such
qualification for as long as the Representatives shall reasonably
request.
(e) To make generally available to its security holders and to
the Representatives as soon as practicable an earning statement
covering a twelve-month period beginning on the first day of the first
full fiscal quarter after the date of this Agreement, which earning
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission
thereunder. If such fiscal quarter is the last fiscal quarter of the
Company's fiscal year, such earning statement shall be made available
not later than 90 days after the close of the period covered thereby
and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(f) Whether or not any sale of Common Shares is consummated, to
pay all expenses incident to the performance of its obligations under
this Agreement, including: (i) the preparation and filing of the
Registration Statement and the Prospectus and all amendments and
supplements thereto, (ii) the preparation, issuance and delivery of
the Common Shares, (iii) the fees and disbursements of the Company's
counsel and the Company's and Tyco's accountants, (iv) the
qualification of the Common Shares under securities or Blue Sky laws
in accordance with the provisions of Section 5(d), including
13
filing fees and the fees and disbursements of counsel for the Underwriters
in connection therewith and in connection with the preparation of any
Blue Sky or Legal Investment Memoranda, (v) the printing and delivery
to the Underwriters in quantities as hereinabove stated of copies of
the Registration Statement and all amendments thereto and of the
Prospectus and any amendments or supplements thereto, (vi) the fees
and expenses, if any, incurred with respect to any filing with the
National Association of Securities Dealers, Inc., and (vii) all
document production charges and expenses of counsel to the
Underwriters (but not including their fees for professional services)
in connection with the preparation of this Agreement.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred by any Underwriter or any
such controlling person in connection with investigating or defending any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for use
in the Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party
14
and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in addition to any
local counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representatives, in the case of parties
indemnified pursuant to paragraph (a) above, and by the Company, in the case
of parties indemnified pursuant to paragraph (b) above. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, 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 Common Shares 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 Common Shares shall be
deemed to be in the same respective proportions as (x) the net proceeds
from the offering of such Common Shares (before deducting expenses)
received by the Company, as set forth on the cover page of the Prospectus
Supplement, and (y) the amount by which the aggregate Public Offering Price
of the Common Shares exceeds the aggregate Purchase Price paid by the
15
Underwriters for the Common Shares, as set forth in the Underwriting
Agreement, bear to the aggregate public offering price of the Common
Shares. The relative fault of the Company, on the one hand, and of the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 6 are several
in proportion to the respective number of Common Shares they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 6, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Common Shares
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
Section 6 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
7. Termination. This Agreement shall be subject to
termination, by notice given by the Representatives to the Company, if (a)
after the execution and delivery of the Underwriting Agreement and prior to
the Closing Date (i) trading generally shall have been suspended or
materially limited on the New York Stock Exchange, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal
or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or
any calamity or crisis that, in the judgment of the Representatives, is
material and adverse and (b) in the case of any of the events specified in
clauses (a) (i) through (iv), such event, singly or together with any other
such event, makes it, in the judgment of the Representatives, impracticable
to market the Common Shares on the terms and in the manner contemplated in
the Prospectus.
8. Defaulting Underwriters. If, on the Closing Date, any one
or more of the Underwriters shall fail or refuse to purchase Common Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate amount of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
16
one- tenth of the aggregate amount of the Common Shares to be purchased
on such date, the other Underwriters shall be obligated severally in the
proportions that the amount of Common Shares set forth opposite their
respective names in the Underwriting Agreement bears to the aggregate
amount of Common Shares set forth opposite the names of all such non-
defaulting Underwriters, or in such other proportions as the
Representatives may specify, to purchase the Common Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the amount of Common
Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 8 by an amount in excess of
one-ninth of such amount of Common Shares without the written consent of
such Underwriter. If, on the Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Common Shares and the aggregate amount of
Common Shares with respect to which such default occurs is more than one-
tenth of the aggregate amount of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company
for the purchase of such Common Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either
the Representatives or the Company shall have the right to postpone the
Closing Date but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter
under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including
the fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering of the
Common Shares.
9. Representations and Indemnities to Survive. The respective
indemnity and contribution agreements and the representations, warranties
and other statements of the Company, its officers and the Underwriters set
forth in this Agreement will remain in full force and effect, regardless of
any termination of this Agreement, any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 6 and delivery of and payment
for the Common Shares.
10. Successors. This Agreement will enure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6, and
no other person will have any right or obligation hereunder.
11. Counterparts. The Underwriting Agreement may be signed in
any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
17
12. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
18
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first written above.
MATTEL, INC.
By:
--------------------------------------
William Stavro
Senior Vice President and Treasurer
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
Acting severally on behalf of themselves
and the several Underwriters named herein
By: MORGAN STANLEY & CO. INCORPORATED
By:
------------------------------------
Glenn R. Robson
Principal
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