EXHIBIT 4.6
THIS WARRANT IS NON-TRANSFERABLE OTHER THAN TO THE XXXX DISNEY COMPANY OR ANY OF
ITS DIRECTLY OR INDIRECTLY WHOLLY-OWNED SUBSIDIARIES PRIOR TO THE COMMENCEMENT
DATE (AS DEFINED HEREIN). THIS WARRANT CONTAINS CERTAIN ADDITIONAL RESTRICTIONS
ON ITS TRANSFER AND EXERCISE ON AND SUBSEQUENT TO THE COMMENCEMENT DATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION
THEREFROM. THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE
HOLDER HEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER
RESTRICTIONS, AND THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
(INCLUDING ANY FUTURE HOLDER) IS BOUND BY THE TERMS OF A WARRANT PURCHASE
AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY (COPIES OF WHICH MAY
BE OBTAINED FROM THE COMPANY).
WARRANT TO PURCHASE 3,000,000 SHARES OF COMPANY STOCK OF
MATTEL, INC.
This certifies that the holder hereof (the "Holder"), for value received is
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entitled to purchase from Mattel, Inc., a Delaware corporation (the "Company"),
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three million (3,000,000) fully paid and nonassessable shares (the "Warrant
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Shares") of the Company's Common Stock, par value $1.00 per share (the "Common
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Stock"), at a price of $27.375 per share (the "Stock Purchase Price") (such
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price determined as the closing price for the Company's Common Stock on the New
York Stock Exchange on Apri 1, 1996, the date specified by the Company and
Purchaser upon their execution of that certain letter of intent with respect to
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the transactions contemplated by the Warrant Purchase Agreement between the
Company and Purchaser dated June 27, 1996 (the "Warrant Purchase Agreement") and
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the License Agreement referred to therein), at any time on or after the
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Commencement Date (as defined below) up to and including 5:00 p.m. (Pacific
time) on the Expiration Date (as defined below), upon surrender to the Company
at its principal offices at 000 Xxxxxxxxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxxxxxxx
00000 (or at such other location as the Company may advise the Holder in
writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly completed and signed and either (a) upon payment by wire
transfer of immediately available funds of the aggregate Stock Purchase Price
for the Warrant Shares or (b) at the election of the Holder (such election
referred to herein as "Cashless Exercise" of this Warrant), as provided for in
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Section 1(B) below. The exercise of this Warrant is hereby expressly conditioned
upon the accuracy of all representations and warranties contained in such Form
of Subscription. The Stock Purchase Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 3 of this Warrant.
"Commencement Date" shall mean April 2, 1999, whether or not a business day.
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"Expiration Date" shall mean April 2, 2004 (or, in the event that April 2, 2004
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is not a business day, the next succeeding business day); provided, however,
that if the Company's use of the rights granted under the License Agreement is
not extended for three years from its initial term, in accordance with the
provisions of Subparagraph 1(R) of the License Agreement, then the "Expiration
Date" for this Warrant shall mean April 2, 2001 (or, in the event that April 2,
2001 is not a business day, the next succeeding business day); and provided,
further, that if the Company's use of the rights granted under the License
Agreement is extended for five years from its initial term, in accordance with
the provisions of Subparagraph
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2(K) of the License Agreement, then the "Expiration Date" for this Warrant shall
mean April 2, 2006 (or, in the event that April 2, 2006 is not a business day,
the next succeeding business day); and provided, further, the "Expiration Date",
as so established, with respect to the exercise of this Warrant for Registrable
Securities, may be extended for up to the specified number of additional days
pursuant to the provisions of Section 5(E)(iii) of the Warrant Purchase
Agreement. Notwithstanding the above, this Warrant shall terminate immediately
in the event that the License Agreement has been terminated by the Company as a
result of a material breach by Purchaser. Termination by Purchaser as a result
of a material breach by the Company shall not result in termination of the
Warrant.
At any time prior to the Expiration Date, at the election of the Holder
hereof, this Warrant, which represents the Holder's right to purchase three
million (3,000,000) fully-paid and non-assessable shares of the Company's Common
Stock at the Stock Purchase Price (the "Original Warrant"), may be divided into
two equal Warrants (each, a "One-half Warrant"), each One-half Warrant
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representing the right to purchase one and one-half million (1,500,000) fully-
paid and non-assessable shares of the Company's Common Stock at the Stock
Purchase Price. Except for such number of shares issuable upon exercise thereof,
each One-half Warrant shall have the same terms and provisions, and be subject
to the same conditions, notice provisions and restrictions on exercise and
transfer, and be identical in all other respects, to the Original Warrant. From
and after the time the Original Warrant becomes divided into two One-half
Warrants, all references herein and in the Warrant Purchase Agreement (as
defined below) to (x) the "Holder" of this Warrant shall be deemed to refer to
the rightful holder of each One-half Warrant and (y) this "Warrant" shall be
deemed to refer to each One-half Warrant.
This Warrant (or One-half Warrant, as the case may be) may only be
exercised as a whole and may not be exercised in part or from time to time.
This Warrant is issued pursuant to, and subject of the provisions of, the
Warrant Purchase Agreement and, by its acceptance of this Warrant, the Holder
expressly agrees to comply with the provisions of the Warrant Purchase Agreement
applicable to this Warrant (including, without limitation, the provisions
contained in Section 5(C) relating to subsequent transfers of this Warrant and
in Section 5 (E) relating to the exercise procedure applicable to this Warrant).
Terms used but not defined in this Warrant shall have the respective meanings
assigned to them in the Warrant Purchase Agreement, to which reference is
hereby made.
This Warrant is subject to the following further terms and conditions:
1. Exercise.
(A) Exercise Procedure; Issuance of Certificates; Payment for Shares.
This Warrant is exercisable at the option of the Holder at any time on or after
the Commencement Date and prior to or on the Expiration Date for the Warrant
Shares which may be purchased hereunder. The Company agrees that the Warrant
Shares purchased under this Warrant shall be and are deemed to be issued to the
Holder as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such
shares. Subject to the provisions of Section 2 hereof, certificates for the
Warrant Shares to be purchased, together with any other securities or property
to which the Holder is entitled upon such exercise, shall be delivered to the
Holder by the Company's transfer agent at the Company's expense within a
reasonable time after the rights represented by this Warrant have been
exercised. Each stock certificate so delivered shall be in such denominations of
Warrant Shares as may be requested by the Holder and shall be registered in the
name of the Holder.
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The Holder further agrees to comply with the provisions of Section
5(E) of the Warrant Purchase Agreement respecting any proposed exercise of this
Warrant.
(B) Cashless Exercise of this Warrant. The Holder may, at its
election, exercise its right to receive shares of Common Stock on a net basis
such that, without the exchange of any funds and upon surrender of this
Warrant, the Holder receives shares of Common Stock equal to the value (as
determined below) of this Warrant by surrender of this Warrant to the Company at
its principal offices (at the above address) together with notice of such
election, in which event the Company shall issue to the Holder a number of
shares of Common Stock computed using the following formula:
X = Y x (A-B)
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A
where:
X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock subject to this
Warrant
A = the market price of a share of Common Stock for the date
of exercise (the market price determined, for any date, as the average of the
closing prices of the Common Stock on the New York Stock Exchange (or such other
principal securities exchange or automated quotation system upon which the
Common Stock may then be listed for public trading) for the five immediately
preceding trading days on such exchange)
B = the then current Stock Purchase Price
2. Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all Warrant Shares which may be issued upon the exercise of this
Warrant will, upon issuance, be validly issued, fully paid and nonassessable and
free from all preemptive or any similar rights of any stockholder of the Company
and free of any liens or encumbrances arising through the Company. The Company
further covenants and agrees that during the period within which this Warrant
may be exercised the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of this Warrant, a sufficient
number of authorized but unissued shares of Common Stock, when and as required
to provide for the exercise of the rights represented by this Warrant. The
Company will take all such action as may be necessary to assure that such shares
of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange or automated quotation system upon which the Common Stock may be
listed.
3. Adjustment of Stock Purchase Price; Number of Shares. The Stock Purchase
Price and the number of Warrant Shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3; provided, however, that if a certain
event shall cause the Stock Purchase Price to be adjusted to a price less than
the par value of the Common Stock, the Company prior to such event shall
decrease the par value of the Common Stock so that the Stock Purchase Price
shall not be less than the par value of the Common Stock following the
occurrence of such event.
(A) Adjustment of Purchase Price. In the event that the Company at any
time or from time to time after the issuance of this Warrant shall declare or
pay, without consideration, any dividend on the Common Stock payable in Common
Stock or in any right to acquire Common Stock for no consideration, or shall
effect a subdivision of the outstanding shares of
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Common Stock into a greater number of shares of Common Stock (by stock split,
reclassification or otherwise than by payment of a dividend in Common Stock or
in any right to acquire Common Stock), or in the event the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, then the Stock
Purchase Price in effect immediately prior to such event shall, concurrently
with the effectiveness of such event, be proportionately decreased or
increased, as appropriate. In the event that the Company shall declare or pay,
without consideration, any dividend on the Common Stock payable in any right to
acquire Common Stock for no consideration, then the Company shall be deemed to
have made a dividend payable in Common Stock in an amount of shares equal to the
maximum number of shares issuable upon exercise of such rights to acquire Common
Stock. Upon each adjustment of the Stock Purchase Price pursuant to this Section
3(A), the Holder of this Warrant shall thereafter be entitled to purchase, at
the Stock Purchase Price resulting from such adjustment, the number of shares of
Common Stock obtained by multiplying the Stock Purchase Price in effect
immediately prior to such adjustment by the number of shares of COmmon Stock
purchasable pursuant hereto immediately prior to such adjustment, and dividing
the product thereof by the Stock Purchase Price resulting from such adjustment.
(B) Adjustment for Reorganization, Reclassification, Consolidation,
Merger or Sale. If any capital reorganization or reclassification of the
capital stock of the Company, or any consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets
to another corporation shall be effected (other than as provided for in Section
3(A)) in such a way that holders of Common Stock shall be entitled to receive
cash, stock, securities or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provisions shall be made
whereby the Holder shall thereafter have the right to purchase and receive upon
the basis and upon the terms and conditions specified in this Warrant upon
exercise of this Warrant and in lieu of the shares of the Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby, such cash, shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of such Common
Stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby, and in any such case appropriate provision shall
be made with respect to the rights and interest of the Holder that the
provisions thereof shall hereafter be applicable, as nearly as may be, in
relation to any shares of cash, stock, securities or assets thereafter
deliverable upon the exercise hereof.
(C) Notice of Adjustment. Upon any adjustment of the Stock Purchase
Price or any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise this Warrant, the Company shall within ten
business days give written notice thereof, by first class mail, postage prepaid,
addressed to the Holder at the address of the Holder as shown on the books of
the Company. The notice shall be signed by the Company's chief financial officer
and shall state the Stock Purchase Price resulting from such adjustment and the
increase or decrease, if any, in the number of shares purchasable at such price
upon the exercise of this Warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.
4. Issue Tax. The issuance of certificates in the name of the Holder
for the Warrant Shares upon the exercise of this Warrant shall be made without
charge to the Holder of this Warrant for any issue tax in respect thereof.
Notwithstanding the foregoing, the Holder shall be responsible for payment of
all stock transfer taxes, if any, in respect of any transfer of this Warrant or
any Warrant Shares.
5. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder in
respect of meetings of stockholders for the election of directors
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of the Company or any other matters or any rights whatsoever as a stockholder of
the Company. Except for the adjustment to the Stock Purchase Price pursuant to
Section 3(A) hereof in the event of a dividend on the Common Stock payable in
shares of Common Stock, no dividends or interest shall be payable or accrued in
respect of this Warrant or the interest represented hereby or the shares
purchasable hereunder until, and only to the extent that, this Warrant shall
have been exercised.
6. Restrictions on Transferability of Securities; Compliance With
Securities Act.
(A) Restrictions on Transferability of the Warrant Shares. The
Warrant Shares shall not be transferable except upon the conditions specified in
the Warrant Purchase Agreement.
(B) Restrictions on Transferability of this Warrant; Company Right of
First Refusal; Transfers Not Permitted to Significant Competitors of the
Company.
(i) This Warrant shall not be transferable prior to the Commencement
Date. On and after the Commencement Date, this Warrant shall not be
transferable, except (a) as a whole Warrant (or whole One-half Warrant) to a
single transferee (where not more than one person or entity has a beneficial
interest in this Warrant or One-half Warrant, as the case may be), and (b) only
to a person or entity that is not a Significant Competitor (as defined in the
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License Agreement), and (c) only upon the conditions specified in the Warrant
Purchase Agreement, which conditions are intended to ensure compliance with the
provisions of the Securities Act and applicable "blue sky" laws and (d) only in
accordance with the other provisions of this Section 6.
(ii) By acceptance of this Warrant, the Holder agrees to provide to
the Company five (5) business days' prior written notice of the Holder's
intention, directly or indirectly, to sell, offer or contract to sell, pledge or
otherwise dispose or transfer (collectively, "transfer") this Warrant, which
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notice shall include (a) the identity, in reasonable and specific detail, of the
proposed direct or indirect transferee (including, if the proposed transferee is
a broker or dealer, the identity, in reasonable and specific detail, of any
subsequent transferee to whom such broker or dealer intends or expects to
transfer this Warrant following its receipt hereof), (b) a copy of a binding
agreement (subject only to the Company's right of first refusal discussed
below), executed by the Holder, as the proposed transferor, and the proposed
transferee, (c) in the event the amount of the agreed upon consideration for the
proposed sale of this Warrant is all cash (such amount, the "Warrant Transfer
Cash Price"), the Warrant Transfer Cash Price and a certification that the
Warrant Transfer Cash Price was determined on the basis of bona fide arms'
length negotiations between the parties to such agreement, (d) in the event that
some or all of the agreed upon consideration for the proposed sale of this
Warrant is property (tangible or intangible) other than cash, a reasonably
specific description of such property intended as consideration for the transfer
and (e) all other material terms of the proposed transaction (such notice shall
be referred to herein as a "Holder's Notice of Proposed Transfer of Warrant").
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(iii) Prior to the time and date of the proposed transfer set forth
in a Holder's Notice of Proposed Transfer of Warrant, the Company may elect to
exercise a right of first refusal to purchase the Warrant at the Right of First
Refusal Price by providing the Holder with written notice of such election. If
the Company so notifies the Holder of its election to exercise such right of
first refusal, then the Company shall tender to the Holder as payment for this
Warrant a wire transfer of immediately available funds in the amount of the
Right of First Refusal Price, and the closing with respect to the purchase of
this Warrant a shall occur (a) in the event the proposed consideration is all
cash, no later than ten (10) business days after the Company receives the
Holder's Notice of Proposed Transfer of Warrant and (b) in the event the
proposed consideration is other than all cash, within the later of (w) ten (10)
business days after the Company receives the Holder's Notice of Proposed
Transfer of Warrant and (x) three (3) business days following the
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Company's receipt from the investment banking firm referred to below of a letter
setting forth the price determined by such firm to be fair (including a
reasonable description of the basis for such determination) and evidence of the
Holder's payment of fees and disbursements of such investment banking firm as
provided below. If the Company does not so notify the Holder of its election to
exercise such right of first refusal, then the Holder may transfer the Warrant
on the terms and to the persons set forth in the Notice of Proposed Transfer of
Warrant within 45 days of the date of such Notice, subject to the limitations
set forth elsewhere in this Warrant and in the Warrant Purchase Agreement. In
the event that such transfer is not made within such 45-day period, any
subsequent transfer shall be subject to the right of first refusal contained in
this Section 5(B). The "Right of First Refusal Price" shall be calculated as (y)
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in the event the proposed consideration is all cash, the Warrant Transfer Cash
Price or (z) in the event the proposed consideration is other than all cash, a
price determined to be fair by a nationally-recognized investment banking firm
chosen by the Company to value the aggregate consideration which is the subject
of such proposed transfer (provided, however, that the Holder shall be obligated
to pay all fees and disbursements of such investment banking firm incurred in
connection with such valuation and any matters related thereto).
(C) Restrictive Legend. Each certificate representing this Warrant or
the Warrant Shares (collectively, the "Securities") or any other securities
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issued in respect of Securities upon any such stock split, stock dividend,
reclassification or reorganization shall (unless otherwise permitted by the
provisions of the Warrant Purchase Agreement) be stamped or otherwise imprinted
with a legend substantially in the following form (in addition to any legend
required under applicable federal or state securities laws or the Company's
Certificate of Incorporation):
In the case of this Warrant:
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THIS WARRANT IS NON-TRANSFERABLE OTHER THAN TO THE XXXX DISNEY COMPANY OR
ANY OF ITS DIRECTLY OR INDIRECTLY WHOLLY-OWNED SUBSIDIARIES PRIOR TO THE
COMMENCEMENT DATE (AS DEFINED HEREIN). THIS WARRANT CONTAINS CERTAIN
ADDITIONAL RESTRICTIONS ON ITS TRANSFER AND EXERCISE ON AND SUBSEQUENT TO
THE COMMENCEMENT DATE.
In the case of the Warrant Shares:
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THE SECURITIES ARE NON-TRANSFERABLE PRIOR TO THE COMMENCEMENT DATE (AS
DEFINED HEREIN).
In the case of this Warrant and Warrant Shares:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN
EXEMPTION THEREFROM. THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE
RIGHTS OF THE HOLDER HEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND
OTHER RESTRICTIONS, AND THE HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE (INCLUDING ANY FUTURE HOLDER) IS BOUND BY THE TERMS OF A WARRANT
PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY (COPIES OF
WHICH MAY BE OBTAINED FROM THE COMPANY).
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7. Modification and Waiver. This Warrant and any provision hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.
8. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified or registered mail, postage prepaid, to
the Holder at its address as shown on the books of the Company or to the Company
at the address indicated therefor in the first paragraph of this Warrant.
9. Descriptive Headings and Governing Law. The descriptive headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of Delaware without regard
to conflict of laws.
10. Lost Warrants or Stock Certificates. The Company represents and
warrants to the Holder that upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of any Warrant or
stock certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity and, if requested, bond reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
11. Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the Holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the market price of the Common Stock (the market price
determined, for any date, as the average of the closing prices of the Common
Stock on the New York Stock Exchange (or such other principal securities
exchange or automated quotation system upon which the Common Stock may then be
listed for public trading) for the five immediately preceding trading days on
such exchange).
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers, thereunto duly authorized this 27th day of June 1996.
Mattel, Inc.
/s/ Xxx Xxxxxxx
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By: Xxx Xxxxxxx
Title: President, Mattel USA
