EXHIBIT 4 (d)
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
Dated as of
March 19, 2002
Among
HASBRO, INC.,
HASBRO SA,
the BANKS party hereto, and
FLEET NATIONAL BANK,
AS AGENT
with
FLEET SECURITIES, INC.,
having acted as Arranger
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION. 1
1.1. Definitions. 1
1.2. Rules of Interpretation. 20
2. THE SYNDICATED AND COMPETITIVE BID LOAN FACILITY. 21
2.1. Commitment to Lend Syndicated Loans. 21
2.2. Commitment Fee. 22
2.3. Reduction of Total Commitment. 22
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2.4. Requests for Syndicated Loans. 22
2.5. Competitive Bid Loans. 23
2.5.1. Competitive Bid Borrowings. 23
2.5.2. Repayment of Competitive Bid Loans. 27
2.6. The Notes. 27
2.7. Interest on Loans. 28
2.8. Prepayments. 28
2.9. Funds for Loans. 29
2.10. Mandatory Repayments. 30
2.11. Application of Payments; Commitment Reduction. 32
3. THE SWING LINE. 32
3.1. The Swing Line Loans. 32
3.2. Notice of Borrowing. 32
3.3. Interest on Swing Line Loans. 33
3.4. Repayment of Swing Line Loans. 33
3.5. The Swing Line Note. 34
4. INTEREST; PAYMENTS AND COMPUTATIONS. 34
4.1. Interest; Costs and Expenses. 34
4.2. Concerning Interest Periods. 39
4.3. Interest on Overdue Amounts. 39
4.4. Payments. 39
4.5. Computations. 40
4.6. Interest Limitation. 40
4.7. Indemnification. 40
4.8. Banks' Obligations Several. 41
5. LETTERS OF CREDIT. 41
5.1. Letter of Credit Commitments. 41
5.1.1. Commitment to Issue Letters of Credit. 41
5.1.2. Letter of Credit Applications. 42
5.1.3. Terms of Letters of Credit. 42
5.1.4. Reimbursement Obligations of Banks. 42
5.1.5. Participations of Banks. 42
5.2. Reimbursement Obligation of the Company. 42
5.3. Letter of Credit Payments. 43
5.4. Obligations Absolute. 44
5.5. Reliance by Issuer. 44
5.6. Letter of Credit Fee. 45
6. COLLATERAL SECURITY AND GUARANTIES. 45
6.1. Security of Company. 45
6.2. Guaranties and Security of Restricted Subsidiaries. 45
6.3. Release of Collateral. 46
6.4. Limitation of Security. 47
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7. FEES. 47
7.1. Closing Fees. 47
7.2. Agent's Fee. 47
8. REPRESENTATIONS AND WARRANTIES. 47
8.1. Corporate Existence. 47
8.2. Corporate Authority, etc. 47
8.3. Binding Effect of Documents, etc. 48
8.4. Governmental Approvals. 48
8.5. No Event of Default, etc. 48
8.6. Chief Executive Offices. 48
8.7. Title to Properties; Leases. 49
8.8. Financial Statements and Projections. 49
8.8.1. Fiscal Year. 49
8.8.2. Financial Statements. 49
8.8.3. Projections. 49
8.9. No Material Changes, Etc. 49
8.10. Franchises, Patents, Copyrights, Etc. 49
8.11. Litigation. 50
8.12. No Materially Adverse Contracts, Etc. 50
8.13. Compliance With Other Instruments, Laws, Etc. 50
8.14. Taxes. 50
8.15. Absence of Financing Statements, Etc. 50
8.16. Perfection of Security Interest. 50
8.17. Indebtedness. 51
8.18. True Copies of Charter and Other Documents. 51
8.19. Employee Benefit Plans. 51
8.19.1. In General. 51
8.19.2. Terminability of Welfare Plans. 51
8.19.3. Guaranteed Pension Plans. 51
8.19.4. Multiemployer Plans. 52
8.20. Holding Company and Investment Company Acts. 52
8.21. Certain Transactions. 52
8.22. Use of Proceeds. 53
8.22.1. General. 53
8.22.2. Regulations U and X. 53
8.23. Environmental Compliance. 53
8.24. Subsidiaries. 54
8.25. Disclosure. 54
8.26. Indebtedness of Foreign Subsidiaries. 54
8.27. Bank Accounts. 54
9. AFFIRMATIVE COVENANTS OF THE COMPANY. 55
9.1. Punctual Payment. 55
9.2. Use of Loan Proceeds. 55
9.3. Maintenance of Office. 55
9.4. Records and Accounts. 55
9.5. Financial Statements, Certificates and Information. 55
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9.6. Notices. 57
9.6.1. Defaults. 57
9.6.2. Environmental Events. 57
9.6.3. Notification of Claim against Collateral. 58
9.6.4. Notices Concerning Inventory Collateral. 58
9.6.5. Notice of Litigation and Judgments. 58
9.7. Corporate Existence; Maintenance of Properties. 58
9.8. Insurance. 59
9.9. Taxes. 59
9.10. Access. 59
9.11. Compliance with Laws, Contracts, Licenses, and Permits. 60
9.12. Employee Benefit Plans. 60
9.13. Fiscal Year. 60
9.14. Additional Significant Subsidiaries and
Restricted Subsidiaries. 60
9.15. Ratings. 61
9.16. Agency Account Agreements. 61
9.17. Further Assurances. 61
10. CERTAIN NEGATIVE COVENANTS OF THE COMPANY. 61
10.1. Restrictions on Indebtedness. 62
10.2. Restrictions on Liens. 62
10.3. Restrictions on Investments. 64
10.4. Restricted Payments. 67
10.5. Merger, Consolidation and Disposition of Assets. 67
10.5.1. Mergers and Acquisitions. 67
10.5.2. Disposition of Assets. 68
10.6. Sale and Leaseback. 69
10.7. Compliance with Environmental Laws. 69
10.8. Subordinated Debt. 69
10.9. Employee Benefit Plans. 70
10.10. Business Activities. 70
10.11. Transactions with Affiliates. 70
10.12. Restrictions on Negative Pledges. 71
10.13. Cash Management. 71
10.14. Hedging Agreements. 71
11. FINANCIAL COVENANTS. 71
11.1. Minimum EBITDA. 71
11.2. Total Funded Debt to EBITDA. 72
11.3. Minimum Interest Coverage Ratio. 72
11.4. Capital Expenditures. 73
12. CONDITIONS TO EFFECTIVENESS. 73
12.1. Loan Documents, etc. 73
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12.2. Performance, etc. 74
12.3. Certified Copies of Charter Documents. 74
12.4. Proof of Corporate Action. 74
12.5. Incumbency Certificates. 74
12.6. Proceedings and Documents. 74
12.7. Validity of Liens. 74
12.8. Certificates of Insurance. 75
12.9. Agency Account Agreements. 75
12.10. Legal Opinions. 75
12.11. Payment of Fees. 75
12.12. Legality of Transactions. 75
13. CONDITIONS TO LOANS. 75
13.1. Conditions to Loans to the Company. 75
13.1.1. Legality of Transactions. 75
13.1.2. Representations and Warranties. 75
13.1.3. Performance, etc. 76
13.1.4. Proceedings and Documents. 76
13.1.5. Loan Documents. 76
13.2. Conditions to Loans to Hasbro SA. 76
13.2.1. Legality of Transactions. 76
13.2.2. Representations and Warranties. 76
13.2.3. Performance, etc. 77
13.2.4. Proceedings and Documents. 77
13.2.5. Loan Documents. 77
13.2.6. No Defaults. 77
14. EVENTS OF DEFAULT; ACCELERATION. 78
14.1. Remedies Upon Default. 78
14.2. Termination of Commitments. 81
14.3. Remedies. 81
14.4. Certain Rights of Cure. 82
14.5. Distribution of Collateral Proceeds. 82
14.6. Judgment Currency. 83
15. SETOFF. 84
16. THE AGENT. 84
16.1. Authorization. 84
16.2. Employees and Agents. 85
16.3. No Liability. 85
16.4. No Representations. 85
16.4.1. General. 85
16.4.2. Closing Documentation, etc. 86
16.5. Indemnification. 86
16.6. Reimbursement. 86
16.7. Non-Reliance on Agent and Other Banks. 87
16.8. Payments. 87
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16.8.1. Payments to Agent. 87
16.8.2. Distribution by Agent. 87
16.8.3. Delinquent Banks. 88
16.9. Holders of Notes. 88
16.10. Agent as Bank. 88
16.11. Resignation or Removal of Agent. 88
16.12. Notification of Defaults and Events of Default. 89
16.13. Duties in the Case of Enforcement. 89
17. EXPENSES. 89
18. INDEMNIFICATION. 90
19. SURVIVAL OF COVENANTS, ETC. 91
20. ASSIGNMENT AND PARTICIPATION. 91
20.1. Conditions to Assignment by Banks. 91
20.2. Certain Representations and Warranties;
Limitations; Covenants. 92
20.3. Register. 93
20.4. New Notes. 93
20.5. Participations. 93
20.6. Assignee or Participant Affiliated with the Company. 94
20.7. Miscellaneous Assignment Provisions. 94
20.8. Increased Costs. 95
20.9. Assignment by Company. 95
21. NOTICES, ETC. 95
22. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. 96
22.1. Confidentiality. 96
22.2. Prior Notification. 96
22.3. Other. 96
23. CONSENTS, AMENDMENTS, WAIVERS, ETC. 97
24. PROVISIONS OF GENERAL APPLICATIONS. 98
24.1. Governing Law. 98
24.2. Headings. 99
24.3. Counterparts. 99
24.4. Entire Agreement, Etc. 99
24.5. Waiver of Jury Trial. 99
24.6. Severability. 99
25. TRANSITIONAL ARRANGEMENTS. 100
25.1. Existing Credit Agreement Superseded. 100
25.2. Return and Cancellation of Notes. 100
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25.3. Interest and Fees Under Superseded Agreement. 100
26. LIABILITY FOR THE OBLIGATIONS. 100
27. GUARANTY. 100
27.1. Guaranty of Payment and Performance. 100
27.2. The Company's Agreement to Pay Enforcement Costs, etc. 101
27.3. Waivers by the Company; Banks' Freedom to Act. 101
27.4. Unenforceability of Hasbro SA Obligations Against Hasbro SA. 102
27.5. Subrogation; Subordination. 102
27.5.1. Waiver of Rights Against Hasbro SA. 102
27.5.2. Subordination. 102
27.5.3. Provisions Supplemental. 103
27.6. Termination; Reinstatement. 103
27.7. Successors and Assigns. 103
27.8. Severability, etc. 103
SCHEDULES AND EXHIBITS
Schedule 1 Banks, Commitments and Commitment Percentages
Schedule 8.7 Title to Properties; Leases
Schedule 8.11 Litigation
Schedule 8.23 Environmental Compliance
Schedule 8.24 Subsidiaries
Schedule 8.26 Foreign Scheduled Facilities
Schedule 8.27 Bank Accounts
Schedule 10.1 Existing Indebtedness
Schedule 10.2 Existing Liens
Schedule 10.12 Restrictions on Negative Pledges
Exhibit A-1 Form of Syndicated Note
Exhibit A-2 Form of Syndicated Loan Request
Exhibit B-1 Form of Competitive Bid Note
Exhibit B-2 Form of Competitive Bid Quote Request
Exhibit B-3 Form of Invitation for Competitive Bid Quotes
Exhibit B-4 Form of Competitive Bid Quote
Exhibit B-5 Form of Notice of Competitive Bid Borrowing
Exhibit C Form of Swing Line Loan Request
Exhibit D Form of Swing Line Note
Exhibit E Form of Compliance Certificate
Exhibit F Form of Subordination Agreement
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Confidentiality Agreement
SECOND AMENDED AND RESTATED
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REVOLVING CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT, is dated as of
March 19, 2002, by and among HASBRO, INC. (the "Company"), a Rhode Island
corporation having its principal place of business at 0000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxx 00000, HASBRO SA, a corporation organized under the laws
of Switzerland and wholly owned subsidiary of the Company ("Hasbro SA"), and
FLEET NATIONAL BANK and the other lending institutions listed on Schedule 1
(collectively, the "Banks") and FLEET NATIONAL BANK, as agent for the Banks (the
"Agent").
WITNESSETH:
WHEREAS, pursuant to that certain Amended and Restated
Revolving Credit
Agreement, dated as of February 16, 2001 (as amended and in effect from time to
time, the "Existing Credit Agreement"), by and among the Company, Hasbro SA, the
Banks, and the Agent, the Banks have made available certain financing to the
Company and Hasbro SA upon the terms and conditions contained therein; and
WHEREAS, the Company has requested, among other things, to amend and
restate the Existing Credit Agreement and the Banks are willing to amend and
restate the Existing Credit Agreement on the terms and conditions set forth
herein;
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, the Company, the Banks and the Agent agree that as
of the date hereof, the Existing Credit Agreement shall be amended and restated
in its entirety as set forth herein:
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions.
The following terms shall have the meanings set forth in this 1.1 or
elsewhere in the provisions of this Agreement referred to below:
Affiliate. Any Person that would be considered to be an affiliate of the
Company under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Company were
issuing securities.
Affected Bank. See 4.1(c).
Page 8
Agent. Fleet, acting as agent for the Banks, and each other Person
appointed as the successor Agent in accordance with 16.11.
Agent's Fee. See 7.2.
Agent's Fee Letter. The fee letter, dated as of the Effective Date, by and
between the Company and the Agent, as the same may be amended and in effect from
time to time.
Agent's Office. The Agent's office located at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, or at such other location as the Agent may designate from
time to time.
Agreement. This Amended and Restated
Revolving Credit Agreement, including
the Exhibits and Schedules hereto, as originally executed, or if this Amended
and Restated
Revolving Credit Agreement is further amended, varied or
supplemented from time to time, as so amended, varied or supplemented.
Applicable Pension Legislation. At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to the Company or any of its Subsidiaries.
Arranger. Fleet Securities, Inc.
Asset Sale. Any one or series of related transactions on which the Company
or any of its Subsidiaries conveys, sells, leases, licenses or otherwise
disposes of, directly or indirectly, any of its properties, businesses or assets
whether owned on the Effective Date or thereafter acquired.
Assignee. A bank or other institution to which a Bank assigns all, or a
proportionate part of all, of such Bank's rights and obligations under this
Agreement and the Notes payable to such transferor Bank, pursuant to the terms
of 20.
][
Assignment and Acceptance. See 20.1.
Authorized Financial Officers. The Chief Financial Officer of the Company,
the Controller of the Company and any other officer of the Company designated by
the Company from time to time as the chief financial officer or the chief
accounting officer of the Company and qualified to certify as to financial
information delivered on behalf of the Company and its Subsidiaries pursuant to
9.5 hereof; and "Authorized Financial
Page 9
Officer" means any one of the Authorized Financial Officers.
Balance Sheet Date. December 31, 2000.
Bank Affiliate. (a) With respect to any Bank, (i) an affiliate of such
Bank or (ii) any entity (whether a corporation, partnership, limited liability
company, trust or legal entity) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by such Bank or
an affiliate of such Bank and (b) with respect to any Bank that is a fund which
invests in bank loans and similar extensions of credit, any other entity
(whether a corporation, partnership, limited liability company, trust or other
legal entity) that is a fund that invests in bank loans and similar extensions
of credit and is managed by the same investment advisor as such Bank or by an
affiliate of such investment advisor.
Banks. As defined in the Preamble, and any bank or
institution that becomes an Assignee pursuant to, and fulfills
the conditions of, 20.
Banks' Special Counsel. Xxxxxxx Xxxx LLP, or such other
counsel as the Agent may approve.
Base Rate. The rate (rounded to the nearest 1/100 of 1%) equal to the
higher of (a) the variable annual rate of interest so designated from time to
time by Fleet as its "prime rate", such rate being a reference rate and not
necessarily representing the lowest or best rate being charged to any customer,
and (b) one-half of one percent (0.5%) above the Federal Funds Effective Rate.
For the purposes of this definition, "Federal Funds Effective Rate" shall mean
for any day, the rate per annum equal to the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three funds brokers of recognized standing selected
by the Agent.
Base Rate Loan(s). Loan(s) denominated in Dollars bearing
interest calculated by reference to the Base Rate.
Borrowing. A borrowing hereunder by the Company consisting
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of a Loan to the Company by the Banks or the Swing Line Bank.
Business Day. Any day on which banking institutions in Boston,
Massachusetts and New York City, New York are open for the conduct of normal
banking business, and, in addition, if Eurocurrency Rate Loans are involved, a
day on which dealings in Dollars can be carried on in the relevant Eurocurrency
Interbank Market and Dollar settlements of such dealings may be effected in New
York City.
Capital Expenditures. With respect to the Company and its Subsidiaries and
for any period, the aggregate of all amounts included in "Additions to property,
plant and equipment" as shown in the Company's statement of cash flows for such
period, determined in accordance with GAAP.
Capitalized Leases. Leases under which the Company or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.
Capital Stock. Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
Casualty Event. With respect to any property (including any interest in
property) of any Hasbro Company, any loss of, damage to, or condemnation or
other taking of, such property for which such Person receives insurance
proceeds, proceeds of a condemnation award or other compensation.
CERCLA. See 8.23.
Change of Control. An event or series of events by which any person or
group of persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act), directly or indirectly, of fifty-one percent (51%) or more of
the outstanding shares of Capital Stock of the Company; or, during any period of
twelve (12) consecutive calendar months, Continuing Directors shall cease to
constitute a majority of the board of directors of the Company.
Code. The Internal Revenue Code of 1986, as amended.
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Collateral. All of the property, rights and interests of
the Company and the Restricted Subsidiaries that are or are
intended to be subject to the security interests and mortgages
created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the maximum amount of such Bank's commitment to make Syndicated Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Company, as the same may be reduced from time to
time; or if such Bank's commitment is terminated pursuant to the provisions
hereof, zero. Each Bank's Commitment shall be deemed to be reduced, while any
Competitive Bid Loans are outstanding, by an amount equal to such Bank's
Commitment Percentage of such outstanding Competitive Bid Loans.
Commitment Fee. See 2.2.
Commitment Fee Rate. At any time of determination, an annual percentage
rate determined in accordance with the Pricing Grid.
Commitment Percentage. With respect to each Bank, the percentage set forth
opposite such Bank's name on Schedule 1 hereto.
Company. See preamble.
Company Loans. The Loans other than the Hasbro SA Loans.
Company Security Agreement. The Second Amended and Restated Security
Agreement, dated as of the Effective Date, as the same may be amended from time
to time, by and between the Company and the Agent, in form and substance
reasonably satisfactory to the Agent.
Competitive Bid Loan(s). A Borrowing hereunder consisting of one or more
revolving credit loans made by any of the Banks whose offer to make a revolving
credit loan as part of such Borrowing has been accepted by the Company under the
auction bidding procedure described in 2.5 hereof.
Competitive Bid Notes. See 2.6.
Competitive Bid Note Record. A Record with respect to a
Competitive Bid Note.
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Competitive Bid Quote. An offer by a Bank to make a
Competitive Bid Loan in accordance with 2.5 hereof.
Competitive Bid Quote Request. See 2.5.1(b).
Competitive Bid Rate. See 2.5.1(d)(ii)(C).
Compliance Certificate. See 9.5(c) hereof.
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Company and all of its
Subsidiaries, consolidated in accordance with GAAP.
Consolidated Cash. The consolidated cash and cash equivalents of the
Company and its Subsidiaries, determined in accordance with GAAP.
Consolidated Net Earnings (or Loss). The consolidated net earnings (or
loss) of the Company and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with GAAP, after
eliminating therefrom all extraordinary items of income.
Consolidated Operating Profit (or Loss). The consolidated operating profit
(or loss) of the Company and its Subsidiaries identified as such on the
Company's income statement for any period, determined in accordance with GAAP.
Consolidated Total Funded Debt. As at any date of determination, with
respect to the Company and its Subsidiaries, the amount equal to, without
duplication, (a) the aggregate amount of Indebtedness of the Company and its
Subsidiaries, on a consolidated basis, relating to (i) the borrowing of money or
the obtaining of credit, (ii) the deferred purchase price of assets (other than
trade payables incurred in the ordinary course of business), (iii) in respect of
any Synthetic Leases or any Capitalized Leases and (iv) the face amount of all
letters of credit outstanding plus (b) the aggregate amount of Indebtedness of
the type referred to in clause (a) of another Person (other than the Company or
a Subsidiary thereof) guaranteed by the Company or any of its Subsidiaries minus
(c) fifty percent (50%) of the amount (if positive) equal to (x) the aggregate
amount of Consolidated Cash minus (y) $25,000,000.
Consolidated Total Interest Expense. For any period, the aggregate amount
of interest expense of the Company and its Subsidiaries determined on a
consolidated basis in accordance
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with GAAP for such period.
Continuing Directors. With respect to any period of twelve (12)
consecutive calendar months, any member of the board of directors of the Company
who (a) was a member of such board of directors on the first day of such period
or (b) was nominated for election or elected to such board of directors with the
approval of a majority of the Continuing Directors who were members of such
board of directors at the time of such nomination or election.
Copyright Memorandum. The Amended and Restated Memorandum of Grant of
Security Interest in Copyrights, dated as of the Effective Date, as the same may
be amended from time to time, by and among the Company, the Restricted
Subsidiaries and the Agent, in form and substance reasonably satisfactory to the
Agent.
Default. Any Event of Default and any event which, but for
the giving of notice or the lapse of time, or both, would
constitute an Event of Default.
Delinquent Bank. See 16.8.3.
Distribution. Any of (a) the declaration or payment of any dividend on or
in respect of any shares of any class of Capital Stock of the Company other than
dividends payable solely in shares of common stock of the Company (or payable
pursuant to the Rights Agreement, dated June 16, 1999, between the Company and
Fleet National Bank (f/k/a BankBoston, N.A.) as amended); (b) the purchase,
redemption, defeasance, retirement or other acquisition of any shares of any
class of Capital Stock of the Company directly or indirectly through a
Subsidiary of the Company or otherwise (including the setting apart of assets
for a sinking or other analogous fund to be used for such purpose, and excluding
any such acquisition by way of payment of any portion of the exercise price for
any stock option in such shares, or in respect to any withholding taxes related
to any such stock option exercise); or (c) the return of capital by the Company
to its shareholders as such; or any other distribution on or in respect of any
shares of any class of Capital Stock of the Company.
Dollar(s) and $. The lawful currency of the United States of America.
Domestic Subsidiary. Any Subsidiary of the Company that is not a Foreign
Subsidiary.
Drawdown Date. The date on which any Loan is made or is to
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be made, and the date on which any Loan is converted or continued in accordance
with 4.1(a).
EBITDA. With respect to any particular fiscal period, EBITDA shall mean
the amount equal to (a) Consolidated Operating Profit (or Loss) for such period,
plus (b) in each case without duplication, and to the extent deducted in
calculating Consolidated Operating Profit (or Loss) for such period, (i)
depreciation and amortization of the Company and its Subsidiaries, (ii) other
non-cash charges of the Company and its Subsidiaries, and (iii) extraordinary
losses of the Company and its Subsidiaries, and minus (c) to the extent included
in Consolidated Operating Profit (or Loss) for such period, extraordinary gains
of the Company and its Subsidiaries for such period, all determined in
accordance with GAAP.
Effective Date. The date on which all of the conditions set forth in 12
hereof have been satisfied, and all "Loans" under and as defined in the Existing
Credit Agreement are converted into Loans hereunder.
Employee Benefit Plan. Any employee benefit plan within the meaning of 3(3)
of ERISA maintained or contributed to by the Company or any ERISA Affiliate,
other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See 8.23.
EPA. See 8.23.
Equity Issuance. The sale or issuance by the Company or any
of its Subsidiaries of any of its Capital Stock (other than to
the Company or any of its Subsidiaries).
ERISA. The Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
ERISA Affiliate. Any Person which is treated as a single employer with the
Company under 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of 4043 of ERISA and the regulations promulgated
thereunder.
Eurocurrency Interbank Market. Any lawful recognized market in which
deposits of Dollars are offered by international banking units of United States
banking institutions and by foreign
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banking institutions to each other and in which eurocurrency funding operations
are customarily conducted.
Eurocurrency Offered Rate. With respect to the Interest Period of any
Eurocurrency Rate Loan, the annual rate of interest determined by the Agent at
or about 10:00 A.M. (Boston time) (or as soon thereafter as practicable) two (2)
Business Days preceding the first day of such Interest Period, as being the
average of the rates of interest per annum at which deposits in the currency of
such Eurocurrency Rate Loan are offered to each of the respective lending
offices of each of the Reference Banks by prime banks in the Eurocurrency
Interbank Market selected by such Reference Bank in its sole discretion acting
in good faith for such Interest Period, at the time of the determination and in
accordance with the usual practice in such market, for delivery on the first day
of such Interest Period in immediately available funds and having a maturity
equal to such Interest Period and for the number of days comprised therein, in
an amount equal (as nearly as may be) to such Reference Bank's Commitment
Percentage of such Eurocurrency Rate Loan.
Eurocurrency Rate. With respect to all Eurocurrency Rate Loans for any
Interest Period, the annual rate of interest, rounded to the nearest 1/100 of
1%, determined by the Agent for such Interest Period in accordance with the
following formula:
Eurocurrency Rate = Eurocurrency Offered Rate
1 - Eurocurrency Reserve Rate
Eurocurrency Rate Loan(s). Loan(s) denominated in Dollars bearing interest
calculated by reference to the Eurocurrency Rate.
Eurocurrency Reserve Rate. The rate in effect from time to time, expressed
as a decimal, at which the Banks would be required to maintain reserves under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor or similar regulation relating to such reserve requirements) against
"Eurocurrency Liabilities" (as that term is used in Regulation D), if such
liabilities were outstanding.
Existing Credit Agreement. See Preamble.
Event of Default. See 14.1.
Fee Letter. The fee letter, dated as of the Effective Date, by and between
the Company and the Agent, as the same may be amended and in effect from time to
time.
Page 16
Fees. Collectively, the Commitment Fee, Competitive Bid
fees, the Letter of Credit Fees, the Agent's Fee and the Closing
Fees.
Final Maturity Date. March 19, 2005.
Fitch. FitchRatings, or its successors.
Fleet. Fleet National Bank, in its capacity as a Bank hereunder.
Foreign Scheduled Facilities. See 8.26.
Foreign Sublimit. An amount which is available for Borrowings in
accordance with 8.22.1 equal to the aggregate amount of Indebtedness of the
Company consisting of guaranties of the Foreign Scheduled Facilities, as such
Foreign Sublimit may be amended from time to time with the consent of the
Company and the Agent.
Foreign Subsidiary. Any Subsidiary that conducts substantially all its
business (other than export sales) in countries other than the United States of
America and that is organized under the laws of a jurisdiction other than the
United States of America and the states thereof.
GAAP. (i) When used in 11 hereof, whether directly or indirectly through
reference to a capitalized term used therein, principles which are (A)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect for the fiscal period
ended on the Balance Sheet Date, and (B) to the extent consistent with such
principles, the accounting practice of the Company reflected in its financial
statements for the year ended on the Balance Sheet Date; and (ii) when used in
general, other than as provided above, principles which are (A) consistent with
the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors (or successor organizations), as in effect from time
to time and (B) consistently applied with past financial statements of the
Company adopting the same principles.
Governmental Authority. Any foreign, federal, state, regional, local,
municipal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof, or any court or arbitrator.
Guaranteed Pension Plan. Any employee pension benefit plan
Page 17
within the meaning of 3(2) of ERISA maintained or contributed to by the Company
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
Guaranty. The Second Amended and Restated Guaranty, dated as of the
Effective Date, as the same may be amended and in effect from time to time, made
by each Restricted Subsidiary in favor of the Banks and the Agent pursuant to
which each Restricted Subsidiary guarantees to the Banks and the Agent the
payment and performance of the Secured Obligations and in form and substance
reasonably satisfactory to the Agent.
Hasbro 2003 Notes. The Company's 7.95% Notes due 2003 issued pursuant to a
Senior Debt Indenture, dated as of March 15, 2000, between the Company and The
Bank of Nova Scotia Trust Company, as Trustee.
Hasbro Companies. Collectively, the Company, the Restricted
Subsidiaries and the Significant Subsidiaries.
Hasbro SA. See preamble.
Hasbro SA Loans. Syndicated Loans made or to be made by the
Banks to Hasbro SA pursuant to 2.1(a).
Hasbro SA Obligations. All Obligations of Hasbro SA with
respect to the Hasbro SA Loans.
Hasbro SA Sublimit. $75,000,000, as such amount may be
amended from time to time with the consent of the Company and the
Agent.
Hazardous Substances. See 8.23.
Hedging Agreement. Any foreign exchange contract, currency swap agreement,
currency or commodity agreement or other similar agreement or arrangement
designed to protect against the fluctuation in currency values.
Identified Brands. Collectively, the brand names Action
Man, Monopoly, Mr. Potato Head, Tonka, Lincoln Logs, Playskool,
Yahtzee, Clue and GI Xxx.
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
Page 18
(a) every obligation of such Person to repay money borrowed,
(b) every obligation of such Person for principal evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
(d) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding (i) trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not overdue or which
are being contested in good faith and (ii) earnout obligations in respect
of assets or businesses acquired prior to the Effective Date),
(e) every obligation of such Person under any
Capitalized Lease,
(f) every obligation of such Person under any
Synthetic Lease,
(g) all sales with recourse by such Person of (i) accounts or general
intangibles for money due or to become due, (ii) chattel paper, instruments
or documents creating or evidencing a right to payment of money or (iii)
other receivables (collectively "receivables"), whether pursuant to a
purchase facility or otherwise, other than in connection with the
disposition of the business operations of such Person relating thereto or a
disposition of defaulted receivables for collection and not as a financing
arrangement, and together with any obligation of such Person to pay any
discount, interest, fees, indemnities, penalties, recourse, expenses or
other amounts in connection therewith,
(h) Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent that such Person is
liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent that the terms of such
Indebtedness provide that such Person is not liable
Page 19
therefor and such terms are enforceable under applicable law,
(i) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guaranteeing or otherwise
acting as surety for, any obligation of a type described in any of clauses
(a) through (h) (the "primary obligation") of another Person (the "primary
obligor"), in any manner, whether directly or indirectly, and including,
without limitation, any such obligation of such Person (i) to purchase or
pay (or advance or supply funds for the purchase of) any security for the
payment of such primary obligation, (ii) to purchase property, securities
or services for the purpose of assuring the payment of such primary
obligation, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (w) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (x) any
Capitalized Lease shall be the discounted aggregate rental obligations under
such Capitalized Lease required to be capitalized on the balance sheet of the
lessee in accordance with GAAP, (y) any sale of receivables shall be the amount
of unrecovered capital or principal investment of the purchaser (other than the
Company or any of its wholly-owned Subsidiaries) thereof, excluding amounts
representative of yield or interest earned on such investment, and (z) any
Synthetic Lease shall be the stipulated loss value, termination value or other
equivalent amount.
Infogrames. Infogrames Entertainment S.A., a societe
anonyme organized under the laws of France.
Installment Amount. See 2.8.
Intercompany Indebtedness. The aggregate amount of all Indebtedness of any
of the Company or any Operating Subsidiary of the Company to any other of the
Company and its Operating Subsidiaries.
Interest Hedging Agreement. Any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate futures
contract, interest rate option agreement or other agreement or arrangement
(including without
Page 20
limitation any securities repurchase or borrowing arrangement) to which the
Company or any of its Subsidiaries is a party and intended to protect any of the
Company and its Subsidiaries against fluctuations in interest rates.
Interest Period. (a) With respect to each Base Rate Loan comprising the
same Borrowing, the period (i) commencing on the Drawdown Date of such
Borrowing, and (ii) ending thirty (30) days thereafter as determined in
accordance with the provisions of this Agreement;
(b) With respect to each Eurocurrency Rate Loan comprising the same
Borrowing, the period (i) commencing on the Drawdown Date of such Borrowing, and
(ii) ending one (1), two (2), three (3) or six (6) months thereafter as
determined in accordance with the provisions of this Agreement; and
(c) With respect to each Competitive Bid Loan comprising the same
Borrowing, the period (i) commencing on the date of such Borrowing and (ii)
ending from seven (7) through one hundred eighty (180) days thereafter as
determined in accordance with the provisions of this Agreement.
Inventory. With respect to the Company or any of the Restricted
Subsidiaries, finished goods, work in progress and raw materials and component
parts inventory and all "Inventory" as such term is defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts owned by such
Person.
Investment Grade Rating. A Rating that is at least "BBB-",
"Baa3" or "BBB-" by Fitch, Xxxxx'x or S&P, respectively.
Investment Grade Rating Event. The Company's receipt of a Rating that is
at least one level higher than the lowest Investment Grade Rating from at least
two Rating Agencies.
Investment Grade Rating Non-Event. The Company's receipt of a Rating that
is the lowest Investment Grade Rating or lower from at least two Rating
Agencies.
Investments. As to any Person, all expenditures made for the acquisition
of stock or Indebtedness of, or for loans, advances or capital contributions to,
any other Person, in each case to the extent the same would be recorded as an
investment on the balance sheet of the first Person under GAAP. In determining
the aggregate amount of Investments outstanding at any particular time: (a)
there shall be deducted in respect of each such Investment any amount received
as a return of capital (but only
Page 21
by repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (b) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise; and (c) there shall not be deducted from the
aggregate amount of Investments any decrease in the value thereof.
Invitation for Competitive Bid Quotes. See 2.5.1(c).
Letter of Credit. See 5.1.1.
Letter of Credit Application. See 5.1.1.
Letter of Credit Fee. See 5.6.
Letter of Credit Participation. See 5.1.4.
Lien. Any mortgage, deed of trust, security interest, pledge,
hypothecation, security assignment, attachment, deposit arrangement, lien
(statutory, judgment or otherwise), or other security agreement or similar
encumbrance or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any
Capitalized Lease, any Synthetic Lease, any financing lease involving
substantially the same economic effect as any of the foregoing and the filing of
any financing statement evidencing any of the foregoing under the Uniform
Commercial Code or comparable law of any jurisdiction).
Loan Documents. Collectively, this Agreement, the Notes,
the Letter of Credit Applications, the Letters of Credit, the
Security Documents, the Subordination Agreements, the Agent's Fee
Letter and the Fee Letter.
Loans. Collectively, the Syndicated Loans, the Competitive
Bid Loans and the Swing Line Loans.
Majority Banks. As of any date, the Banks whose aggregate Commitments
constitute more than fifty percent (50%) of the Total Commitment, provided, that
if at the time Majority Banks is being determined, the Total Commitment has been
terminated, the Majority Banks shall be the Banks holding more than fifty
percent (50%) of the aggregate outstanding principal amount of the Loans on such
date.
Margin. At any time of determination, an annual percentage
rate determined in accordance with the Pricing Grid.
Page 22
Material Adverse Effect. With respect to any event or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding):
(a) a material adverse effect on the business, properties, condition,
assets, operations or results of operations of the Hasbro Companies, taken
as a whole;
(b) a material adverse effect on the ability of the Company
individually or the Hasbro Companies taken as a whole, to perform its or
their respective Obligations (as the case may be) under the Loan Documents;
or
(c) any material impairment of (i) the validity, binding effect or
enforceability of this Agreement or any of the other Loan Documents, (ii)
the rights, remedies or benefits available to the Agent or any Bank under
the Loan Documents or (iii) the attachment, perfection or priority of any
Lien of the Agent on a material portion of the Collateral under the
Security Documents.
Material Asset Sale. Any Asset Sale not in the ordinary course of business
producing Net Cash Sale Proceeds in excess of $35,000,000, but excluding any
Specified Sale.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Moody's. Xxxxx'x Investors Service, or its successors.
Multiemployer Plan. Any multiemployer plan within the
meaning of 3(37) of ERISA maintained or contributed to by the
Company or any ERISA Affiliate.
Net Cash Sale Proceeds. The net cash proceeds received by a Person in
respect of any Asset Sale, less the sum of (a) all reasonable out-of-pocket
fees, commissions and other expenses actually incurred in connection with such
Asset Sale, (b) the amount of any transfer, documentary, income or other taxes
required to be paid by the Company or any of its Subsidiaries in connection with
such Asset Sale, (c) the aggregate amount of any Indebtedness (other than under
the Loan Documents) of the Company or any of its Subsidiaries permitted by this
Agreement that was secured by a Permitted Lien with respect to the assets
transferred and is required to be repaid in whole or in part
Page 23
(which repayment, in the case of any other revolving credit arrangement or
multiple advance arrangement, reduces the commitment thereunder) in connection
with such Asset Sale, (d) the amount of such proceeds attributable to (and
payable to) minority interests, (e) the amount of any reserve reasonably
maintained by the Company or any of its Subsidiaries with respect to
indemnification obligations owing pursuant to the definitive documentation
pursuant to which such Asset Sale is consummated (with any unused portion of
such reserve to constitute Net Cash Sale Proceeds on the date upon which the
indemnification obligations terminate or such reserve is reduced other than in
connection with a payment), and (f) appropriate amounts to be provided by the
Company or any of its Subsidiaries to be applied to satisfy any reasonable
expenses and liabilities associated with any such property or assets and
retained by the Company or any such Subsidiary after such Asset Sale.
Net Cash Equity Issuance Proceeds. With respect to any Equity Issuance,
the excess of the gross cash proceeds received by such Person for such Equity
Issuance after deduction of all reasonable transaction expenses (including,
without limitation, underwriting discounts and commissions) actually incurred in
connection with such Equity Issuance.
New Loans. See 4.1(e).
Note(s). Singly, any of, and collectively, all of the Syndicated Notes,
the Competitive Bid Notes and the Swing Line Note.
Notice of Competitive Bid Borrowing. See 2.4.1(f).
Obligations. All indebtedness, obligations and liabilities to the Banks
and the Agent, individually or collectively, arising or incurred under this
Agreement or any of the other Loan Documents, or in respect of Loans made and
any Notes or other instruments at any time evidencing any thereof, whether such
indebtedness, obligations, and liabilities exist on the date of this Agreement
or arise thereafter, or are direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise of the Company
and/or Hasbro SA, as the case may be, including, without limitation, the Hasbro
SA Obligations.
Operating Subsidiary. As at any particular date, any Subsidiary (other
than a Subsidiary engaged solely in the business of incurring Indebtedness) of
the Company actively
Page 24
engaged in the conduct of business.
Outstanding. With respect to the Loans, the unpaid principal thereof as of
any date of determination.
Participant. See 20.5.
Patent Agreements. Collectively, (a) the Amended and Restated Patent
Security Agreement (Registrations), dated as of the Effective Date, as the same
may be amended from time to time, by and among the Company, the Restricted
Subsidiaries and the Agent, in form and substance reasonably satisfactory to the
Agent, pertaining to U.S. patent registrations, and (b) the Amended and Restated
Patent Security Agreement (Applications), dated as of the Effective Date, as the
same may be amended from time to time, by and among the Company, the Restricted
Subsidiaries and the Agent, in form and substance reasonably satisfactory to the
Agent, pertaining to U.S. patent applications.
PBGC. The Pension Benefit Guaranty Corporation created by 4002 of ERISA
and any successor entity or entities having similar responsibilities.
Permitted Acquisition. Any acquisition permitted by 10.5.1(b).
Permitted Liens. Liens permitted by 10.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Pricing Grid. As set forth in the table below:
Rating (At Least
Two of Fitch, Margin for Margin for
Moody's or Base Rate Eurocurrency Commitment
Level Standard & Poors) Loans Rate Loans Fee Rate
I BB/Ba2/BB or 0.50% 1.75% 0.35%
lower
II BB+/Ba1/BB+ 0.25% 1.50% 0.30%
III BBB-/Baa3/BBB- 0.00% 1.25% 0.25%
IV BBB/Baa2/BBB 0.00% 1.00% 0.20%
V BBB+/Baa1/BBB+ or 0.00% 0.75% 0.15%
higher
Page 25
For purposes of the foregoing table:
(i) during any period in which the Secured Obligations are secured by the
Liens described in 6.1(a) and, to the extent applicable, 6.2(a), the
applicable Margin for Base Rate Loans in Levels I and II above and the
applicable Margin for Eurocurrency Rate Loans in Levels I through IV above
shall be 0.25% lower than the applicable rates set forth above.
(ii) if the rating system of any Rating Agency shall change, or if any
Rating Agency shall cease to be in the business of rating corporate debt
obligations, the Company and the Agent shall negotiate in good faith to
amend the foregoing table (which amendment shall require the consent of the
Majority Banks) to reflect such changed rating system or the unavailability
of ratings from such Rating Agency and, pending the effectiveness of any
such amendment, the Margin and the Commitment Fee Rate shall be determined
by reference to, and shall be based on, the higher of, each Rating of each
Rating Agency to which neither this clause (ii) nor clause (iv) below then
applies;
(iii)if the Ratings established by the Rating Agencies shall fall within
different Levels, the Margin and the Commitment Fee Rate shall be based on
the lower of the two highest Ratings;
(iv) if any Rating Agency shall not have a Rating in effect (other than by
reason of the circumstances referred to in clause (ii) above), then the
Margin and the Commitment Fee Rate shall be determined by reference to, and
shall be based on, the higher of, each Rating of each Rating Agency to
which neither clause (ii) above nor this clause (iv) then applies; and
(v) if any Rating Agency shall change its Rating (other than by reason of
the circumstances referred to in clause (ii) above), such change shall be
effective as of the date on which it is first announced by such Rating
Agency.
Each change in the Margin and the Commitment Fee Rate shall apply during
the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change.
Page 26
Rating. The rating issued from time to time (whether on a preliminary
basis or otherwise) by any Rating Agency or such other rating service or
services as the Company may designate from time to time with the consent of the
Majority Banks with respect to the Company's senior unsecured debt.
Rating Agencies. Collectively, Fitch, Xxxxx'x and S&P.
RCRA. See 8.23.
Record. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Lender
with respect to any Loan referred to in such Note.
Real Estate. All real property owned or leased (as lessee
or sublessee) by any of the Hasbro Companies.
Reemployment Period. See 2.8.
Reemployment Rate. See 2.8.
Reference Banks. Fleet, Bank of America, N.A., Citicorp USA, Inc., Mellon
Bank, N.A. and Commerzbank AG, New York Branch.
Reference Period. As of the end of any fiscal quarter, the period of four
(4) consecutive fiscal quarters of the Company and its Subsidiaries ending on
such date, or if any date of determination is not a fiscal quarter end date, the
period of four (4) consecutive fiscal quarters most recently ended (in each case
treated as a single accounting period).
Refinancing Indebtedness. With respect to the Company and its
Subsidiaries, Indebtedness which (a) refinances, refunds, replaces, renews,
repays, restates, substitutes or extends other Indebtedness of the Company or
any of its Subsidiaries, (b) has a maturity after the Final Maturity Date, and
(c) is not prohibited by 10.1 hereof.
Reimbursement Obligation. The Company's obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in 5.2.
Replacement Bank. See 4.1(f).
Replacement Date. See 4.1(f).
Restricted Payment. In relation to the Company and its
Page 27
Subsidiaries, any (a) Distribution, (b) payment or prepayment by the Company or
its Subsidiaries to the Company's or any Subsidiary's shareholders (or other
equity holders) in their capacity as such, in each case other than (i) to the
Company or any Subsidiary (or any payment or prepayment excluded from the
definition of the term "Distribution") and (ii) the acquisition of the Capital
Stock of any Subsidiary of the Company existing on the Effective Date from any
then existing minority holder thereof, (c) optional repayment, redemption or
repurchase of long term unsecured Indebtedness of the Company existing on the
Effective Date and having a maturity after the Final Maturity Date, (d)
repayment, redemption or repurchase of the Hasbro 2003 Notes, or (e) derivatives
or other transactions with any financial institution, commodities or stock
exchange or clearinghouse (a "Derivatives Counterparty") obligating the Company
or any Subsidiary to make payments to such Derivatives Counterparty as a result
of any change in market value of any Capital Stock of the Company or such
Subsidiary.
Restricted Subsidiaries. Collectively, (a) Wizards of the Coast, Inc., a
Washington corporation, (b) OddzOn, Inc., a Delaware corporation, and (c)
material Domestic Subsidiaries (i) created or acquired by the Company following
the Effective Date and (ii) designated as Restricted Subsidiaries by the Company
or the Agent in a written notice (it being understood that any Restricted
Subsidiary which merges with and into the Company such that the Company is the
survivor shall no longer constitute a Restricted Subsidiary following such
merger).
XXXX. See 8.23.
Secured Obligations. Collectively, (a) the Obligations, (b) other
Indebtedness of the Company consisting of guaranties of Indebtedness of Foreign
Subsidiaries owing to any Bank or Bank Affiliate under the Foreign Scheduled
Facilities, and (c) obligations of the Company or its Subsidiaries to the Banks
and the Agent (individually or collectively) arising under Interest Hedging
Agreements and Hedging Agreements.
Security Agreements. Collectively, the Company Security Agreement and the
Subsidiary Security Agreement.
Security Documents. The Guaranty, the Security Agreements, the Trademark
Agreement, the Patent Agreements, the Copyright Memorandum and all other
instruments and documents, including without limitation Uniform Commercial Code
financing statements, required to be executed or delivered pursuant to any
Security Document.
Page 28
Significant Subsidiary. (a) Any Subsidiary of the Company, organized under
the laws of the United States or any State of the United States or the District
of Columbia, which, either alone or together with the Subsidiaries of such
Subsidiary, meets either of the following conditions:
(i) the investments of the Company and its Subsidiaries in, or their
proportionate share (based on their equity interests) of the book value of
the total assets (after intercompany eliminations) of, the Subsidiary in
question exceed 10% of the book value of the total assets of the Company
and its Subsidiaries on a consolidated basis, or
(ii) the equity of the Company and its Subsidiaries in the revenues
of the Subsidiary in question exceeds 10% of the revenues from continuing
operations of the Company and its Subsidiaries on a consolidated basis for
the Company's most recent fiscal year; or
(b) Any other Subsidiary of the Company designated as a "Significant
Subsidiary" by the Company in a written notice to the Agent.
Specified Sale. Any disposition of Capital Stock of Infogrames by the
Company acquired in connection with the sale of the Company's interactive and
on-line businesses to Infogrames.
Standard & Poor's. Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies Inc., or its successors.
Subordinated Debt. Unsecured Indebtedness of any Operating Subsidiary that
is expressly subordinated and made junior to the payment and performance in full
of the Obligations (other than pursuant to the Subordination Agreements), and
evidenced as such by a written instrument containing subordination provisions in
form and substance reasonably satisfactory to the Majority Banks.
Subordination Agreement. The Second Amended and Restated Subordination
Agreement, dated as of the Effective Date, among the Company, the Significant
Subsidiaries and the Agent, substantially in the form of Exhibit F hereto; and
"Subordination Agreements" means the Subordination Agreement and any additional
subordination agreements executed and delivered to the Agent for the benefit of
the Banks pursuant to 9.14 hereof, in each case as amended and in effect from
time to time.
Page 29
Subsidiary. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
Subsidiary Security Agreement. The Second Amended and Restated Security
Agreement, dated as of the Effective Date, as the same may be amended from time
to time, among the Restricted Subsidiaries and the Agent, in form and substance
reasonably satisfactory to the Agent.
Swing Line Bank. Fleet.
Swing Line Loan. Any loan made by the Swing Line Bank pursuant to 3.1
hereof.
Swing Line Loan Maturity Date. See 3.2.
Swing Line Loan Request. See 3.2.
Swing Line Note. See 3.5.
Swing Line Note Record. A Record with respect to a Swing
Line Note.
Syndicated Loan(s). Singly, any of, and collectively, all of, the
revolving credit loans (including, without limitation, the Hasbro SA Loans) made
by the Banks in accordance with their respective Commitment Percentages to the
Company and Hasbro SA as contemplated by 2.1 hereof.
Syndicated Note(s). See 2.6.
Syndicated Note Record. A Record with respect to a Syndicated Note.
Synthetic Lease. Any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for U.S. income tax purposes.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time, which as of the Effective Date shall be equal to the
aggregate principal amount of $380,000,000.
Trademark Agreement. The Amended and Restated Trademark Security
Agreement, dated as of the Effective Date, as the same
Page 30
may be amended from time to time, by and among the Company, the Restricted
Subsidiaries and the Agent, in form and substance reasonably satisfactory to the
Agent.
Type. As to any Syndicated Loan, its nature as a Base Rate Loan or a
Eurocurrency Rate Loan.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Company does not reimburse the Agent and the Banks on the date
specified in, and in accordance with, 5.2.
Utilization. An amount equal to the sum of (i) the outstanding amount of
all Loans (after giving effect to all amounts requested), (ii) the Maximum
Drawing Amount, (iii) all Unpaid Reimbursement Obligations and (iv) the amount
by which the Foreign Sublimit exceeds the outstanding amount of Loans borrowed
to satisfy the Company's obligations under guaranties of the Foreign Scheduled
Facilities.
Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency (unless the happening of any such contingency is not
within the control of the Company).
Wholly Owned Subsidiary. Any Subsidiary of the Company for which all its
outstanding Voting Stock (other than any directors' qualifying shares and shares
required to be held by foreign nationals under applicable law) is held by the
Company or one or more Wholly Owned Subsidiaries.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such document
or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the singular.
(c) A reference to any law includes any amendment or modification to such
law.
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(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a consistent basis by the accounting entity
to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) Reference to a particular "" refers to that section of this Agreement
unless otherwise indicated.
(h) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
(i) Unless otherwise expressly indicated, in the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including," the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including."
(j) This Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are, however, cumulative and are to be
performed in accordance with the terms thereof.
(k) This Agreement and the other Loan Documents are the result of
negotiation among, and have been reviewed by counsel to, among others, the Agent
and the Company and are the product of discussions and negotiations among all
parties. Accordingly, this Agreement and the other Loan Documents are not
intended to be construed against the Agent or any of the Banks merely on account
of the Agent's or any Bank's involvement in the preparation of such documents.
2. THE SYNDICATED AND COMPETITIVE BID LOAN FACILITY.
2.1. Commitment to Lend Syndicated Loans.
(a) Subject to the terms and conditions set forth in this Agreement, each
of the Banks severally agrees to lend to the Company and/or Hasbro SA, and the
Company and/or Hasbro SA may borrow, repay, and reborrow from time to time
between the Effective Date and the Final Maturity Date upon notice by the
Company and/or Hasbro SA, as the case may be, to the Agent given
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in accordance with 2.4 hereof, such sums, in Dollars, as are requested by such
Person ("Syndicated Loans") up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment (as such Commitment has been deemed to be reduced by such Bank's
Commitment Percentage of outstanding Competitive Bid Loans) minus such Bank's
Commitment Percentage of the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations, provided that the Utilization shall not at any time
exceed the Total Commitment; and provided, further, that (in the case of any
such requested Syndicated Loan that is a Hasbro SA Loan) the outstanding
principal amount of the Hasbro SA Loans (after giving effect to all amounts
requested) shall not exceed the Hasbro SA Sublimit. The Syndicated Loans shall
be made pro rata in accordance with each Bank's Commitment Percentage. Each
request for Syndicated Loans hereunder shall constitute a representation by the
Company or Hasbro SA, as the case may be, that the applicable conditions set
forth in 12 and 13, in the case of the initial Syndicated Loans to be converted
into Syndicated Loans hereunder on the Effective Date, and 13, in the case of
all other Syndicated Loans, have been satisfied on the date of such request.
Each Base Rate Loan and Eurocurrency Rate Loan shall mature and become due and
payable on the last day of the Interest Period relating thereto and shall be
payable in the currency in which such Loan was made. Each Base Rate Loan shall
be denominated in Dollars. Each Eurocurrency Rate Loan shall be denominated in
Dollars.
(b) After any prepayment and at maturity of the Syndicated Loans pursuant
to 2.1(a) above, the Company and/or Hasbro SA, as applicable, shall be entitled
to reborrow any or all of the principal amount of such Syndicated Loan, subject
to all of the applicable conditions precedent set forth in 13. Each Bank's
Commitment shall terminate, all Syndicated Loans shall become finally due and
payable and the Company promises to pay or, solely in the case of Hasbro SA
Loans, Hasbro SA promises to pay, on the Final Maturity Date all Syndicated
Loans outstanding on the Final Maturity Date.
(c) The respective amount of each Bank's Commitment and its Commitment
Percentage shall be as set forth on Schedule 1 hereto, subject to reduction in
accordance with 2.3 and 2.11.
(d) Each Bank represents and warrants that it will use its best efforts to
ensure that the funding of its Loans is not made directly out of the assets of
any "employee benefit plan" or of any "separate account" in which any "employee
benefit plan" has any interest other than a "government plan" (each such term
being
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used herein as defined in Section 3 of ERISA).
2.2. Commitment Fee.
The Company agrees to pay to the Agent for the pro rata accounts of the
Banks in accordance with their respective Commitment Percentages a commitment
fee (the "Commitment Fee"), calculated at the applicable annual percentage rate
determined in accordance with the Pricing Grid, on the average daily amount
during each calendar quarter or portion thereof from the Effective Date to the
Final Maturity Date by which (a) (i) the Total Commitment minus (ii) the sum of
(A) the Maximum Drawing Amount and (B) all Unpaid Reimbursement Obligations
exceeds (b) the outstanding amount of Syndicated Loans during such calendar
quarter. The Commitment Fee shall be payable quarterly in arrears on the first
day of each calendar quarter for the immediately preceding calendar quarter
commencing on the first such date following the Effective Date, with a final
payment on the Final Maturity Date or any earlier date on which the Commitments
shall terminate.
2.3. Reduction of Total Commitment.
The Company shall have the right at any time and from time to time upon
five (5) Business Days written notice to the Agent to reduce by $10,000,000 or
an integral multiple thereof or terminate entirely the unborrowed portion of the
Total Commitment, whereupon the Commitments of the Banks shall be reduced pro
rata in accordance with their respective Commitment Percentages of the amount
specified in such notice or, as the case may be, terminated. Promptly after
receiving any notice of the Company delivered pursuant to this 2.3, the Agent
will notify the Banks of the substance thereof. Upon the effective date of any
such reduction or termination, the Company shall pay to the Agent for the
respective accounts of the Banks the full amount of the Commitment Fee then
accrued on the amount of the reduction. No reduction of the Commitments of the
Banks may be reinstated unless otherwise agreed to by the Company and each of
the Banks. Nothing contained in this 2.3 shall obligate any Bank in any way
whatsoever to reinstate all or any part of its Commitment after a reduction of
such Commitment hereunder. If at any time the outstanding amount of the Loans
exceeds the Total Commitment as a result of any reduction of the Total
Commitment pursuant to this 2.3, then the Company shall immediately pay the
amount of such excess to the Agent for the respective account of the Banks for
application to the Loans. Each payment of Loans shall be allocated among the
Banks, in proportion, as nearly as practicable to the respective unpaid
principal amount of each
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Bank's Syndicated Note or Competitive Bid Note, as applicable, with adjustments
to the extent practicable to equalize any prior payments or repayments not
exactly in proportion. In addition, the Total Commitment shall be reduced in
accordance with 2.11.
2.4. Requests for Syndicated Loans.
(a) The Company and/or Hasbro SA, as the case may be, shall give to the
Agent written notice in the form of Exhibit A-2 hereto (or telephonic notice
confirmed in a writing in the form of Exhibit A-2 hereto) of each Syndicated
Loan requested hereunder (a "Loan Request") not later than (a) with respect to
Base Rate Loans, 12 noon (Boston time) on the proposed Drawdown Date of such
Base Rate Loan and (b) with respect to Eurocurrency Rate Loans, 1:00 P.M.
(Boston time) on the third Business Day prior to the proposed Drawdown Date of
such Eurocurrency Rate Loan. The Agent shall promptly notify the Banks of the
contents of each such notice at the address or addresses for each Bank set forth
on Schedule 1 hereof.
(b) Each such notice delivered by the Company and/or Hasbro SA, as the case
may be, shall specify (i) the aggregate principal amount of Syndicated Loans
requested, stated in Dollars, (ii) the Type of Syndicated Loan requested, (iii)
the proposed Drawdown Date and duration of the proposed Interest Period(s)
applicable to any Base Rate Loans, or Eurocurrency Rate Loans and (iv) the
Company's and/or Hasbro SA's, as the case may be, account to which payment of
the proceeds of such Syndicated Loan is to be made. Each such notice (which
shall be irrevocable) shall obligate the Company and/or Hasbro SA to accept the
Syndicated Loans requested from the Banks on the proposed Drawdown Date
therefor.
(c) Each request for Types of Syndicated Loans made hereunder shall be in
a minimum aggregate amount of $5,000,000 or a greater integral multiple of
$1,000,000.
(d) Any Syndicated Loans requested by the Company and/or Hasbro SA
pursuant to this 2.4 shall be made available to such Person in accordance with
the provisions of 2.9 hereof.
2.5. Competitive Bid Loans.
2.5.1. Competitive Bid Borrowings.
(a) The Competitive Bid Option. In addition to the Syndicated
Loans permitted to be made hereunder pursuant to 2.1 hereof, the
Company may, pursuant to
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the terms of this 2.5, cause the Agent to request the Banks to make
offers to fund Competitive Bid Loans to the Company from time to time
prior to the Final Maturity Date. The Banks may, but shall have no
obligation to, make such offers and the Company may, but shall have no
obligation to, accept such offers in the manner set forth in this 2.5.
Notwithstanding any other provision herein to the contrary, at no time
shall the Utilization exceed the Total Commitment;
(b) Competitive Bid Quote Request. When the Company wishes to
request offers to make Competitive Bid Loans under this 2.5, it shall
transmit to the Agent by telephone, telex, cable or facsimile (in each
case confirmed in writing by the Company) a Competitive Bid Quote
Request substantially in the form of Exhibit B-2 hereto (a
"Competitive Bid Quote Request") so as to be received no later than
11:00 a.m. (Boston time) on the first Business Day prior to the
requested Drawdown Date, specifying (i) the requested Drawdown Date
(which must be a Business Day) and the amount of such Competitive Bid
Loan (which must be a minimum of $5,000,000 or any greater integral
multiple of $1,000,000 and may not exceed the Total Commitment, and
(ii) the Interest Period of such Competitive Bid Loan, subject to the
provisions of the definition of Interest Period, and be accompanied by
a Competitive Bid fee of $750 payable to the Agent with respect to
each Competitive Bid Quote Request. The Company may request offers to
make Competitive Bid Loans for no more than one (1) amount and three
(3) Interest Periods in a single Competitive Bid Quote Request. No new
Competitive Bid Quote Request shall be given until the Company has
notified the Agent of its acceptance or non-acceptance of the
Competitive Bid Quotes relating to any outstanding Competitive Bid
Quote Request.
(c) Invitation for Competitive Bid Quotes. Subsequent to timely
receipt of a Competitive Bid Quote Request, the Agent shall send to
the Banks by facsimile an Invitation for Competitive Bid Quotes as
promptly as possible but not later than 3:00 p.m. (Boston time) on the
first Business Day prior to the requested Drawdown Date, substantially
in the form of Exhibit B-3 hereto (an "Invitation for Competitive Bid
Quotes"), which shall constitute an invitation by the Company to each
Bank to submit Competitive Bid Quotes offering to make Competitive Bid
Loans to which such Competitive Bid
Page 36
Quote Request relates in accordance with this 2.5. If, after receipt
by the Agent of a Competitive Bid Quote Request from the Company in
accordance with subsection (b) of this 2.5.1, the Agent or any Bank
shall be unable to complete any procedure of the auction process
described in subsections (d) through (f) (inclusive) of this 2.5.1 due
to the inability of such Person to transmit or receive communications
through the means specified therein, such Person may rely on
telephonic notice for the transmission or receipt of such
communications. In any case where such Person shall rely on telephone
transmission or receipt, any communication made by telephone shall, as
soon as possible thereafter, be followed by written confirmation
thereof.
(d) Submission and Contents of Competitive Bid Quotes.
(i) Each Bank may, but shall be under no obligation to,
submit a Competitive Bid Quote containing an offer or offers to
make Competitive Bid Loans to the Company in response to any
Invitation for Competitive Bid Quotes. Each Competitive Bid Quote
must comply with the requirements of this subsection (d) and must
be submitted to the Agent by facsimile not later than 10:00 a.m.
(Boston time) on the requested Drawdown Date, provided, that
Competitive Bid Quotes may be made by the Agent in its capacity
as a Bank only if it notifies the Company of the terms of its
Competitive Bid Quote no later than 9:45 a.m. (Boston time) on
the requested Drawdown Date. Subject to the provisions of 12 and
13 hereof, any Competitive Bid Quote so made shall be irrevocable
except with the written consent of the Agent given on the
instructions of the Company.
(ii) Each Competitive Bid Quote shall be in substantially
the form of Exhibit B-4 hereto and shall in any case specify:
(A) the requested Drawdown Date and
Interest Periods;
(B) the principal amount of the Competitive Bid Loan
for which each such offer is being made, which principal
amount
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(w) may be greater than the Commitment of the quoting Bank
but may not exceed the Total Commitment, (x) must be
$5,000,000 or a larger multiple of $1,000,000, (y) may not
exceed the aggregate principal amount of Competitive Bid
Loans for which offers were requested, and (z) may be
subject to an aggregate limitation as to the principal
amount of Competitive Bid Loans for which offers being made
by such quoting Bank may be accepted;
(C) the rate of interest per annum (rounded to the
nearest 1/1000th of 1%) (the "Competitive Bid Rate") offered
for each such Competitive Bid Loan, and
(D) the identity of the quoting Bank.
A Competitive Bid Quote may include up to five (5) separate offers by
the quoting Bank with respect to each Interest Period specified in the
related Invitation for Competitive Bid Quotes.
(iii) Any Competitive Bid Quote shall be
disregarded if it:
(A) is not substantially in the form of Exhibit B-4 hereto
or does not specify all of the information required by subsection
(d)(ii);
(B) contains qualifying, conditional or similar language
(except that it may, in the case of a quote relating to more than
one Interest Period, contain the condition described in
subsection (d)(ii)(B));
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bid Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Company. Not later than 10:15 a.m. (Boston time) on
the requested Drawdown Date, the Agent shall notify the Company of the
terms of (i) all Competitive Bid Quotes submitted by the Banks in
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accordance with the preceding subsection (d) and (ii) of any
Competitive Bid Quote that amends, modifies or is otherwise
inconsistent with a previous Competitive Bid Quote submitted by such
Bank with respect to the same Competitive Bid Quote Request. Any such
subsequent Competitive Bid Quote shall be disregarded by the Agent
unless such subsequent Competitive Bid Quote is submitted solely to
correct a manifest error in such former Competitive Bid Quote. The
Agent's notice to the Company shall specify (A) the aggregate
principal amount of Competitive Bid Loans for which offers have been
received for each Interest Period specified in the related Competitive
Bid Quote Request, (B) the respective principal amounts and
Competitive Bid Rates so offered, and the identity of the respective
Banks submitting such offers, and (C) if applicable, limitations on
the aggregate principal amount of Competitive Bid Loans for which
offers in any single Competitive Bid Quote may be accepted.
(f) Acceptance and Notice by Company and Agent. Not later than
10:45 a.m. (Boston time) on the requested Drawdown Date, the Company
shall notify the Agent of the Company's acceptance or non-acceptance
of the offers of which it was notified pursuant to the preceding
subsection (e) in a notice, transmitted to the Agent by telephone,
telex, cable or facsimile (in each case confirmed in writing by the
Company), in substantially the form of Exhibit B-5 hereto (a "Notice
of Competitive Bid Borrowing"). Such notice shall specify the
aggregate principal amount of offers for each Interest Period that are
accepted. The Company may accept any Competitive Bid Quote in whole or
in part; provided that:
(i) the aggregate principal amount of each Competitive Bid
Loan may not exceed the applicable amount set forth in the
related Competitive Bid Quote Request,
(ii) the aggregate principal amount of each Competitive Bid
Loan must be $5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Competitive Bid Rates, and
Page 39
(iv) no offer may be accepted that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
The Agent shall promptly notify each Bank which submitted a
Competitive Bid Quote of the acceptance or non-acceptance thereof. The
Agent will promptly notify each Bank which submitted a Competitive Bid
Quote and each other Bank which so requests the following information
from the Agent of (a) the aggregate principal amount of, and (b) the
range of Competitive Bid Rates of the accepted Competitive Bid Loans
for each requested Interest Period.
(g) Allocation by Agent; Usage of Commitments. If offers are
made by two (2) or more Banks with the same Competitive Bid Rates, for
a greater aggregate principal amount than the amount in respect of
which offers are accepted for the related Interest Period, the
principal amount of Competitive Bid Loans in respect of which such
offers are accepted shall be allocated by the Agent among such Banks
as nearly as possible (in such multiples, not less than $100,000 as
the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. If any such Bank has indicated a
minimum acceptable Competitive Bid Loan in its Competitive Bid
Request, and under the procedures of this subsection (g), the Agent
would have allocated to it an amount less than such minimum, such
Competitive Bid Quote will instead be deemed to have been withdrawn.
Determination by the Agent of the amounts of Competitive Bid Loans and
the allocation thereof shall be conclusive in the absence of manifest
error.
(h) Funding of Competitive Bid Loans. If, on or prior to the
Drawdown Date of any Competitive Bid Loan, the Total Commitment has
not terminated in full and if, on such Drawdown Date, the applicable
conditions of 12 and 13 hereof are satisfied, the Bank or Banks whose
offers the Company has accepted will fund each Competitive Bid Loan so
accepted. Such Bank or Banks will make such Competitive Bid Loans, by
crediting the Agent for further credit to the Company's specified
account, in immediately available funds not later than 1:00 p.m.
(Boston time) on such Drawdown Date.
Page 40
2.5.2. Repayment of Competitive Bid Loans.
The principal of each Competitive Bid Loan shall become absolutely due
and payable by the Company on the last day of the Interest Period relating
thereto, and the Company hereby absolutely and unconditionally promises to
pay to the Agent for the account of the relevant Banks on the last day of
the Interest Period relating thereto the principal amount of all such
Competitive Bid Loans, plus interest thereon at the applicable Competitive
Bid Rate. The Competitive Bid Loans shall bear interest at the rate per
annum specified in the applicable Competitive Bid Quotes. Interest on each
Competitive Bid Loan shall be payable (a) on the last day of the applicable
Interest Period, and if any such Interest Period is longer than ninety (90)
days, also on the last day of each ninety (90) day period following the
commencement of such Interest Period, and (b) on the Final Maturity Date
for each Competitive Bid Loan. Subject to the terms of this Agreement, the
Company may make Competitive Bid Quote Requests with respect to new
Borrowings of any amounts so repaid prior to the Final Maturity Date.
Except after an acceleration pursuant to 14.1 hereof, no principal amount
with respect to any Competitive Bid Loan may be repaid other than on the
last day of the Interest Period relating thereto unless otherwise agreed to
in writing by the Company and the funding Bank.
2.6. The Notes.
(a) The Syndicated Loans shall be evidenced by separate promissory notes of
the Company and Hasbro SA in substantially the form of Exhibit A-1 hereto (the
"Syndicated Notes"), dated as of the date hereof (or such other date as a Bank
may become a party hereto pursuant to 20) with appropriate insertions; one
Syndicated Note being payable to the order of each Bank in a principal amount
equal to (i) in the case of the Company, such Bank's Commitment representing the
obligation of the Company to pay to such Bank such amount and (ii) in the case
of Hasbro SA, an amount equal to such Bank's Commitment Percentage of the Hasbro
SA Sublimit representing the obligation of Hasbro SA to pay to such Bank such
amount, or in each case, if less, the aggregate unpaid principal amount of all
Syndicated Loans made by such Bank to such Person hereunder, plus interest
accrued thereon as set forth below. Each of the Company and Hasbro SA hereby
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of each Syndicated Loan to such Person made by such Bank, an appropriate
notation on such Bank's Syndicated Note Record reflecting the unpaid principal
amount of all Syndicated
Page 41
Loans made by such Bank to such Person, and such Bank shall make or cause to be
made, at or about the time of receipt of any payment of principal on the
Syndicated Note of such Bank, an appropriate notation on such Syndicated Note
Record reflecting such payment. The aggregate unpaid amount of Syndicated Loans
made by such Bank to the Company and Hasbro SA set forth on such Bank's
Syndicated Note Records shall be rebuttably presumptive evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's Syndicated
Note Records shall not limit or otherwise affect the obligations of the Company
or Hasbro SA hereunder or under the Syndicated Note of such Person to make
payments of principal of or interest on such Syndicated Note when due.
(b) Competitive Bid Notes. The Competitive Bid Loans shall be evidenced by
separate promissory notes of the Company in substantially the form of Exhibit
B-1 hereto (the "Competitive Bid Notes"), dated as of the date hereof (or such
other date as a Bank may become a party hereto pursuant to 20 hereof) with
appropriate insertions; one Competitive Bid Note being payable to the order of
each Bank in a principal amount equal to the Total Commitment and representing
the obligation of the Company to pay to such Bank the aggregate unpaid principal
amount of all Competitive Bid Loans made by such Bank hereunder, as set forth in
2.5 hereof, plus interest accrued thereon as set forth below. The Company hereby
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of each Competitive Bid Loan to the Company made by such Bank, an
appropriate notation on the Competitive Bid Note Record of such Bank reflecting
the unpaid principal amount of all Competitive Bid Loans made by such Bank, and
such Bank shall make or cause to be made, at or about the time of receipt of any
payment of principal on the Competitive Bid Note of such Bank, an appropriate
notation on the Competitive Bid Note Record reflecting such payment. The
aggregate unpaid amount of Competitive Bid Loans made by such Bank set forth on
the Competitive Bid Note Record shall be rebuttably presumptive evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Competitive Bid
Note Record shall not limit or otherwise affect the obligations of the Company
hereunder or under the Competitive Bid Note to make payments of principal of or
interest on the Competitive Bid Note when due.
2.7. Interest on Loans.
(a) Except as provided in 4.3 hereof, Base Rate Loans
Page 42
outstanding from time to time shall bear interest during the Interest Period
relating thereto at the annual percentage rate equal to the sum of (i) the Base
Rate in effect from time to time and (ii) the applicable Margin in effect during
such Interest Period. Interest on Base Rate Loans shall be payable in Dollars
and in accordance with 4.1(a) hereof.
(b) Except as provided in 4.3 hereof, Eurocurrency Rate Loans outstanding
from time to time shall bear interest during the Interest Period relating
thereto at the annual percentage rate equal to the sum of (i) the Eurocurrency
Rate and (ii) the applicable Margin in effect during such Interest Period.
Interest on the Eurocurrency Rate Loans shall be payable in Dollars and in
accordance with 4.1(a) hereof.
(c) Except as provided in 4.3 hereof, each Competitive Bid Loan
outstanding from time to time shall bear interest at the rate per annum
specified in the applicable Competitive Bid Quote with respect to such
Competitive Bid Loan. Interest on Competitive Bid Loans shall be payable in
Dollars and in accordance with 4.1(a) hereof.
2.8. Prepayments.
The Company and/or Hasbro SA shall repay Base Rate Loans or Eurocurrency
Rate Loans made to the Company and/or Hasbro SA hereunder on the last day of the
Interest Period relating thereto. As provided in 2.5.2, the Company shall repay
Competitive Bid Loans made to the Company hereunder on the last day of the
Interest Period relating thereto. The Company and/or Hasbro SA shall also have
the right at any time to prepay Syndicated Loans consisting of Base Rate Loans,
as a whole or in part, without premium or penalty; provided that the Company
and/or Hasbro SA shall provide written, telegraphic or telephonic notice to the
Agent not later than 11:00 a.m. (Boston time) on the proposed date of prepayment
stating the aggregate principal amount of such prepayment. Each partial
prepayment of any Syndicated Loan pursuant to this 2.8 shall be in a minimum
aggregate principal amount of $5,000,000 or some greater integral multiple of
$1,000,000, or, if less, the aggregate outstanding principal amount of the
Syndicated Loans. Subject to the conditions of 2.1 hereof, amounts so prepaid
may be reborrowed. In addition, the Company and/or Hasbro SA may, upon three (3)
Business Days' written, telegraphic or telephonic notice to the Agent stating
the proposed date and the aggregate principal amount of such prepayments, prepay
all, but not less than all, of the Syndicated Loans constituting Eurocurrency
Rate Loans subject to a particular Interest Period on a date other than the last
day
Page 43
of the Interest Period relating thereto; provided, that upon any such
prepayment, and except as set forth in 4.1(f) hereof, the Company and/or Hasbro
SA shall pay to the Agent, for the respective accounts of the Banks on a pro
rata basis, a sum which shall be determined by the Agent (to the extent that the
Agent is able to make such determination), which determination shall be
conclusive in the absence of manifest error, in the following manner after each
such payment:
(a) First, the Agent shall determine the amount (if any) (the
"Installment Amount") by which (i) the total amount of interest which would
have otherwise accrued hereunder on each installment of principal so
prepaid during the period beginning on the date of such payment and ending
on the last day of the Interest Period relating thereto (the "Reemployment
Period") exceeds (ii) the total amount of interest which would accrue,
during the Reemployment Period, at the annual rate of interest determined
by the Agent (the "Reemployment Rate") as being the prevailing rate per
annum bid at or about the time of such payment for the purchase of deposits
of Dollars from prime banks in the Eurocurrency Interbank Market selected
by the Agent in its sole discretion (such Reemployment Rate to be the rate
payable on an amount equal (as nearly as may be) to the Eurocurrency Rate
Loans so prepaid and to have a maturity (as nearly as may be) equal to the
Reemployment Period);
(b) Second, each Installment Amount shall be treated as payable on
the last day of the Interest Period relating to the Eurocurrency Rate Loans
prepaid; and
(c) Third, the amount to be paid shall be the present value of the
Installment Amount determined by discounting the amount thereof from the
date on which the Installment Amount is to be treated as payable, at the
same annual interest rate as the Reemployment Rate designated as aforesaid
by the Agent.
Each prepayment made pursuant to this 2.8 shall be accompanied by the payment of
accrued interest on the principal prepaid to the date of prepayment.
2.9. Funds for Loans.
(a) Each Bank will, upon receiving notice from the Agent of any request by
the Company and/or Hasbro SA, as the case may be, for Syndicated Loans pursuant
to 2.4, become and be obligated to make available to the Agent, on the proposed
Drawdown Date of
Page 44
each Syndicated Loan, not later than (a) 2:30 P.M. (Boston time) for Base Rate
Loans with respect to which the Agent sent notice to the Banks pursuant to 2.4
hereof no earlier than the proposed Drawdown Date of such Loan, and (b) 11:00
A.M. (Boston time) with respect to Eurocurrency Rate Loans and all other Base
Rate Loans, in funds immediately available for credit to the Company's and/or
Hasbro SA's, as the case may be, account, an aggregate amount, equal to such
Bank's Commitment Percentage of the Syndicated Loan requested at the place
specified in the notice delivered by the Company and/or Hasbro SA, as the case
may be, pursuant to 2.4. Upon satisfaction of the conditions set forth in 12 and
13, as applicable, the Agent will cause the aggregate amount of such funds
actually received by the Agent from the Banks to be credited to the Company's
and/or Hasbro SA's, as the case may be, account as soon as practicable on the
date of such receipt. The failure or refusal of any Bank to make available to
the Agent at the aforesaid time on any Drawdown Date the amount of the
Syndicated Loan to be made by such Bank thereon shall not relieve the other
Banks from their several obligations hereunder to make their respective
Commitment Percentages of any requested Syndicated Loans.
(b) The Agent may, unless notified to the contrary by any Bank prior to a
Drawdown Date, assume that such Bank has made available to the Agent on such
Drawdown Date the amount of such Bank's Commitment Percentage of the Syndicated
Loans (or in the case of Competitive Bid Loans, the amount of such Bank's
accepted offers of Competitive Bid Loans, if any) to be made on such Drawdown
Date, and the Agent may (but it shall not be required to), in reliance upon such
assumption, make available to the Company and/or Hasbro SA, as the case may be,
a corresponding amount. If any Bank makes available to the Agent such amount on
a date after such Drawdown Date, such Bank shall pay to the Agent on demand an
amount equal to the product of (i) the average computed for the period referred
to in clause (iii) below, of the weighted average interest rate paid by the
Agent for federal funds acquired by the Agent during each day included in such
period, times (ii) the amount of such Bank's Commitment Percentage of such Loans
(or accepted offers of Competitive Bid Loans, as applicable), times (iii) a
fraction, the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of such Bank's
Loans shall become immediately available to the Agent, and the denominator of
which is 365. A statement of the Agent submitted to such Bank with respect to
any amounts owing under this paragraph shall be prima facie evidence of the
amount due and owing to the Agent by such Bank. If the amount of such Bank's
Loans is not made available to the Agent by such Bank within
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three (3) Business Days following such Drawdown Date, the Agent shall be
entitled to recover such amount from the Company and/or Hasbro SA, as the case
may be, on demand, with interest thereon at the rate per annum applicable to the
Loans made on such Drawdown Date.
2.10. Mandatory Repayments.
(a) In no event later than (i) seven (7) days after receipt or (ii) in the
case of net cash proceeds received from Casualty Events not committed or
reinvested as provided in clause (D) below or Net Cash Sale Proceeds from
Material Asset Sales permitted to be applied as provided in clause (II) below
and not so applied, the 181st day following receipt, by any of the Hasbro
Companies of:
(A) Net Cash Sale Proceeds from Material Asset Sales;
(B) if an Event of Default has occurred and is continuing, Net Cash
Equity Issuance Proceeds from Equity Issuances by any of the Restricted
Subsidiaries and Significant Subsidiaries;
(C) net cash proceeds received by (A) the Company in connection with
its issuance of any long term unsecured Indebtedness having a maturity
after the Final Maturity Date (other than purchase money Indebtedness and
Refinancing Indebtedness) or (B) any Operating Subsidiary of the Company in
connection with its issuance of any Indebtedness permitted by 10.1(c); and
(D) if an Event of Default has occurred and is continuing, net cash
proceeds received from Casualty Events by any of the Hasbro Companies which
have not been committed (as evidenced by a binding written contract) by
such Person prior to or within one hundred eighty (180) days of receipt of
such proceeds to the repair or replacement of the property so damaged,
destroyed or taken, or, if so committed, such repair or replacement of the
property so damaged, destroyed or taken shall have not commenced prior to
or within one hundred eighty (180) days of receipt of such proceeds
pursuant to such binding written contract,
the Company shall pay or (solely in the case of Hasbro SA Loans) shall cause
Hasbro SA to pay to the Agent for the respective accounts of the Banks an amount
equal to (x) (1) fifty percent (50%) of such Net Cash Sale Proceeds from
Material Asset Sales, plus any additional portion of such Net Cash Sale Proceeds
to the
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extent and when required by clause (II) of the next sentence, and (2) one
hundred percent (100%) of such net cash proceeds from Equity Issuances,
issuances of Indebtedness or Casualty Events, or (y) if less, (1) the then
outstanding principal amount of the Loans and the Unpaid Reimbursement
Obligations and (2) if an Event of Default has occurred and is continuing, the
Maximum Drawing Amount of Letters of Credit then outstanding to be held by the
Agent as cash collateral to secure all Reimbursement Obligations, to be applied
in the manner set forth in 2.11. Notwithstanding the foregoing,
(I) no such payment shall be required unless, until and only to the
extent that such Material Asset Sales, Equity Issuances, issuances of
Indebtedness or Casualty Events result in net cash proceeds that otherwise
would be required to be so applied equal to (x) $5,000,000 or more in any
period of thirty (30) consecutive days or (y) $15,000,000 in any fiscal
year of the Company, and
(II) all or any portion of the fifty percent (50%) of the Net Cash
Sale Proceeds from any Material Asset Sale remaining after the initial
application of such Net Cash Sale Proceeds in accordance with the preceding
sentence of this 2.10(a) may be applied to repay, redeem or repurchase any
other Indebtedness within one hundred eighty (180) days of receipt of such
proceeds, and if any portion of such remaining amount of such Net Cash Sale
Proceeds is not so applied, an amount equal to such portion shall be
required to be applied to make payment under this 2.10 on the 181st day
following receipt of such Net Cash Sale Proceeds.
(b) If at any time the Utilization exceeds the Total Commitment, then the
Company shall immediately pay or (solely in the case of Hasbro SA Loans) shall
cause Hasbro SA to pay the amount of such excess to the Agent for the respective
account of the Banks to be applied in the manner set forth in 2.11.
(c) If at any time the outstanding amount of the Loans borrowed to satisfy
the Company's obligations under guaranties of the Foreign Scheduled Facilities
exceeds the Foreign Sublimit, then the Company shall immediately pay the amount
of such excess to the Agent for the respective account of the Banks to be
applied in the manner set forth in 2.11.
(d) Hasbro SA shall have no liability to prepay the Company Loans pursuant
to this 2.10.
2.11. Application of Payments; Commitment Reduction.
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All payments made pursuant to 2.10 shall be applied to reduce the
outstanding principal amount of the Loans and Unpaid Reimbursement Obligations
by such amount pro rata based on the then outstanding principal amount of the
Loans and Unpaid Reimbursement Obligations. Such mandatory repayments shall be
allocated among the Banks in proportion, as nearly as practicable, to the
respective outstanding amounts of each Bank's Note, with adjustments to the
extent practicable to equalize any prior prepayments not exactly in proportion.
Amounts repaid pursuant to 2.10(a)(A) or 2.10(a)(C) may not be reborrowed.
The Total Commitment shall be reduced by an amount equal to the amount so repaid
pursuant to 2.10(a)(A) or 2.10(a)(C). No reduction of the Total Commitment made
pursuant to this 2.11 may be reinstated.
3. THE SWING LINE.
3.1. The Swing Line Loans.
Subject to the terms and conditions hereinafter set forth, upon notice by
the Company made to the Swing Line Bank in accordance with 3.2 hereof, the Swing
Line Bank agrees to lend to the Company Swing Line Loans on any Business Day
prior to the Final Maturity Date in an aggregate principal amount not to exceed
$25,000,000 (the "Maximum Swing Line Loan Amount"). Each Swing Line Loan shall
be in a minimum amount equal to $1,000,000 or an integral multiple thereof.
Notwithstanding any other provisions of this Agreement and in addition to the
limit set forth above, at no time shall the Utilization exceed the Total
Commitment; provided, however, subject to the limitations set forth in this 3.1
from time to time the sum of the aggregate outstanding Swing Line Loans plus all
outstanding Syndicated Loans made by the Swing Line Bank may exceed the Swing
Line Bank's Commitment Percentage of the Total Commitment then in effect.
3.2. Notice of Borrowing.
When the Company desires the Swing Line Bank to make a Swing Line Loan, the
Company shall send to the Agent and the Swing Line Bank written notice in the
form of Exhibit C hereto (or telephonic notice confirmed in a writing in the
form of Exhibit C hereto) of each Swing Line Loan requested hereunder (a "Swing
Line Loan Request") not later than 1:00 p.m. (Boston time) on the proposed
Drawdown Date of any Swing Line Loan. Each such Swing Line Loan Request shall
set forth the principal amount of the
Page 48
proposed Swing Line Loan and the date on which the proposed Swing Line Loan
would mature (the "Swing Line Loan Maturity Date") which shall in no event be
later than the Final Maturity Date. Each Swing Line Loan Request shall be
irrevocable and binding on the Company and shall obligate the Company to borrow
the Swing Line Loan from the Swing Line Bank on the proposed Drawdown Date
thereof. Upon satisfaction of the applicable conditions set forth in this
Agreement, on the proposed Drawdown Date the Swing Line Bank shall make the
Swing Line Loan available to the Company no later than 3:00 p.m. (Boston time)
on the proposed Drawdown Date by crediting the amount of the Swing Line Loan to
the account(s) of the Company specified in the Swing Line Loan Request; provided
that the Swing Line Bank shall not advance any Swing Line Loans after it has
received notice from any Bank that a Default or Event of Default has occurred
and stating that no new Swing Line Loans are to be made until such Default or
Event of Default has been cured or waived in accordance with the provisions of
this Agreement. The Swing Line Bank shall not be obligated to make any Swing
Line Loans at any time when any Bank is a Delinquent Bank unless the Swing Line
Bank has entered into arrangements reasonably satisfactory to it to eliminate
the Swing Line Bank's risk with respect to such Delinquent Bank, which may
include cash collateralizing such Delinquent Bank's Commitment Percentage of the
outstanding Swing Line Loans and any such additional Swing Line Loans to be
made.
3.3. Interest on Swing Line Loans.
Each Swing Line Loan shall be a Base Rate Loan and, except as otherwise
provided in 4.3 hereof, shall bear interest from the Drawdown Date thereof until
repaid in full at the rate per annum equal to the Base Rate plus the Margin with
respect to Base Rate Loans, which shall be paid on each Interest Payment Date
for Base Rate Loans.
3.4. Repayment of Swing Line Loans.
The Company shall repay each outstanding Swing Line Loan on or prior to the
Swing Line Loan Maturity Date. Upon notice by the Swing Line Bank on any
Business Day, each of the Banks hereby agrees to make Syndicated Loans
constituting Base Rate Loans to the Company having outstanding Swing Line Loans,
on the next succeeding Business Day following such notice, in an amount equal to
such Bank's Commitment Percentage of the aggregate amount of all Swing Line
Loans outstanding to the Company. The proceeds thereof shall be applied directly
to the Swing Line Bank to repay the Swing Line Bank for such outstanding Swing
Line Loans. Each Bank hereby absolutely, unconditionally and irrevocably agrees
to
Page 49
make such Syndicated Loans upon one (1) Business Day's notice as set forth
above, notwithstanding (a) that the amount of such Syndicated Loan may not
comply with the applicable minimums set forth herein, (b) the failure of the
Company to meet the conditions set forth in 12 or 13 hereof, (c) the occurrence
or continuance of a Default or an Event of Default hereunder, (d) the date of
such Syndicated Loan, and (e) the Total Commitment in effect at such time. In
the event that it is impracticable for such Syndicated Loan to be made for any
reason on the date otherwise required above, then each Bank hereby agrees that
it shall forthwith purchase (as of the date such Syndicated Loan would have been
made, but adjusted for any payments received from the Company on or after such
date and prior to such purchase) from the Swing Line Bank, and the Swing Line
Bank shall sell to each Bank, such participations in the Swing Line Loans
(including all accrued and unpaid interest thereon) outstanding as shall be
necessary to cause the Bank to share in such Swing Line Loans pro rata based on
their respective Commitment Percentages (without regard to any termination of
the Total Commitment hereunder) by making available to the Swing Line Bank an
amount equal to such Bank's participation in the Swing Line Loans; provided that
(x) all interest payable on the Swing Line Loans shall be for the account of the
Swing Line Bank as a funding and administrative fee until the date as of which
the respective participation is purchased, and (y) at the time any purchase of
such participation is actually made, the purchasing Bank shall be required to
pay the Swing Line Bank interest on the principal amount of the participation so
purchased for each day from and including the date such Syndicated Loan would
otherwise have been made until the date of payment for such participation at the
rate of interest in effect applicable to Base Rate Loans during such period.
3.5. The Swing Line Note.
The obligation of the Company to repay the Swing Line Loans made pursuant
to this Agreement and to pay interest thereon as set forth in this Agreement
shall be evidenced by a promissory note of the Company with appropriate
insertions substantially in the form of Exhibit D attached hereto (the "Swing
Line Note"), dated the Effective Date and payable to the order of the Swing Line
Bank in a principal amount stated to be the lesser of (a) the Maximum Swing Line
Loan Amount, or (b) the aggregate principal amount of Swing Line Loans at any
time advanced by the Swing Line Bank and outstanding thereunder. The Company
irrevocably authorizes the Swing Line Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Swing Line Loan or at the time of
receipt of any payment of principal on the
Page 50
Swing Line Note, an appropriate notation on the Swing Line Note Record
reflecting the making of such Swing Line Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Swing Line Loans set
forth on such Swing Line Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to the Swing Line Bank, but the
failure to record, or any error in so recording, any such amount on such Swing
Line Note Record shall not limit or otherwise affect the actual amount of the
obligations of the Company hereunder or under the Swing Line Note to make
payments of principal of or interest on the Swing Line Note when due.
4. INTEREST; PAYMENTS AND COMPUTATIONS.
4.1. Interest; Costs and Expenses.
(a) Elections. At the option of the Company and/or Hasbro SA, so long as no
Default or Event of Default has occurred and is then continuing, the Company
and/or Hasbro SA may elect from time to time to have a portion of the principal
amount of the Syndicated Loans to the Company and/or Hasbro SA outstanding from
time to time bear interest during any particular Interest Period calculated by
reference to the Base Rate or the Eurocurrency Rate, provided that any portion
of the Syndicated Loans selected to bear interest by reference to the Base Rate
or the Eurocurrency Rate shall be in an amount not less than $5,000,000 or some
greater integral multiple of $1,000,000 with respect to any single Interest
Period. Any election by the Company and/or Hasbro SA to have interest calculated
by reference to the Base Rate or the Eurocurrency Rate shall be made by notice
(which shall be irrevocable) to the Agent as provided in 2.4. If in any such
notice, the Company and/or Hasbro SA does not specify whether any Eurocurrency
Rate Loans are requested, the Company and/or Hasbro SA shall be deemed to have
elected that the requested Syndicated Loans bear interest at the Base Rate and
be denominated in Dollars. Any election of a Eurocurrency Rate shall lapse at
the end of the expiring Interest Period unless extended by a further election
notice as provided in 2.4 hereof. If, on or prior to the last day of any
Interest Period for Base Rate Loans or Eurocurrency Rate Loans, the Company
and/or Hasbro SA (x) fails to deliver a further election notice with respect to
such Loans pursuant to 2.4 hereof and this 4.1(a), and (y) fails to repay all or
any part of such Loans as provided in 4.4 hereof, then such Syndicated Loans
shall be deemed to be Base Rate Loans in accordance with the terms set forth in
4.4(b) hereof. Each Base Rate Loan or Eurocurrency Rate Loan shall bear interest
during each Interest Period relating thereto at the rate set forth in 2.7 or 4.3
hereof, as the case may be. Interest
Page 51
on each Base Rate Loan or Eurocurrency Rate Loan shall be payable (i) on the
last day of the Interest Period relating thereto or (ii) if the Interest Period
is longer than ninety (90) days, on the last day of each 90-day period following
the commencement of such Interest Period and on the last day of such Interest
Period.
(b) Notices, etc. as to Eurocurrency Rate. Promptly after the commencement
of any Interest Period for any Syndicated Loan, the Agent shall notify the
Company and (with respect to any Hasbro SA Loan) Hasbro SA and each of the Banks
of (A) the applicable interest rate determined by the Agent hereunder with
respect to any Eurocurrency Rate Loan, (B) each date on which interest is
payable hereunder, and (C) the date on which the Interest Period with respect to
such Syndicated Loan shall end; provided, however, that the obligations of the
Company and/or Hasbro SA to pay to each Bank principal and interest as herein
provided shall not be subject to or in any way conditional upon the giving of
any such notice by the Agent. Each such notice shall, absent manifest error, be
binding upon each Bank and the Company and/or Hasbro SA.
(c) Substitution of Base Rate. Notwithstanding any other provision of this
Agreement, if (i) the introduction of, any change in, or any change in the
interpretation of, any law or regulation applicable to any Bank (the "Affected
Bank") shall make it unlawful, or any central bank or other Governmental
Authority having jurisdiction thereof shall assert that it is unlawful, or in
the reasonable judgment of such Bank, impracticable, for such Bank to perform
its obligations in respect of any Loans bearing interest based on the
Eurocurrency Rate or (ii) if any Affected Bank shall reasonably determine with
respect to Loans bearing interest based on the Eurocurrency Rate that (A) by
reason of circumstances affecting any Eurocurrency Interbank Market, adequate
and reasonable methods do not exist for ascertaining the Eurocurrency Rate which
would otherwise be applicable during any Interest Period, or (B) deposits of
Dollars in the relevant amount for the relevant Interest Period are not
available to such Bank in any Eurocurrency Interbank Market, or (C) the
Eurocurrency Rate does not or will not accurately reflect the cost to such Bank
of obtaining or maintaining the applicable Loans bearing interest based on the
Eurocurrency Rate during any Interest Period, then any such Affected Bank shall
promptly give telephonic, telex or cable notice of such determination to the
Company and (with respect to any Hasbro SA Loan) Hasbro SA (which notice shall
be conclusive and binding upon the Company absent manifest error), the Agent and
the other Banks. Upon such notification by any Affected Bank, (x) the obligation
of such Affected Bank to make Loans bearing interest based on the
Page 52
Eurocurrency Rate shall be suspended until such circumstances no longer exist,
(y) any new Loans made by such Affected Bank on or after the date of such
notification, which Loans would otherwise bear interest at the suspended rate
shall be deemed to be Loans bearing interest by reference to the Base Rate and
shall be denominated in Dollars, as necessary, until such suspension is no
longer in effect, and (z) so long as it is not unlawful for the Affected Bank to
continue carrying Outstanding Loans bearing interest at the suspended rate,
Outstanding Loans of such Affected Bank bearing interest based on the
Eurocurrency Rate shall continue to bear interest at the applicable rate based
on the Eurocurrency Rate until the end of the applicable Interest Period. If it
is unlawful for any Affected Bank to continue carrying any Outstanding Loans
bearing interest at the suspended rate, such Affected Bank shall so notify the
Company and (with respect to any Hasbro SA Loan) Hasbro SA and the Agent and any
such Outstanding Loans shall be automatically converted to Base Rate Loans at
the end of the Interest Period which is current when such notice is given.
Notwithstanding any provision of this 4.1(c) to the contrary, during any period
in which a suspension is in effect pursuant to this 4.1(c), the Company and/or
Hasbro SA may notify the Agent and any Affected Bank to which such suspension
applies that (I) the Company and/or Hasbro SA shall repay, in accordance with
the provisions of 4.1(f) hereof, any and all Loans made by such Affected Bank to
the Company and/or Hasbro SA, and (II) with respect to any new Loans to be made
by the Banks hereunder, the Company and/or Hasbro SA shall not borrow from such
Affected Bank and the Commitment of such Affected Bank shall be terminated.
(d) Additional Costs and Expenses; Reserve Requirements. Anything herein to
the contrary notwithstanding, if any present or future applicable law (which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank by
any central bank or other fiscal, monetary or other Governmental Authority,
whether or not having the force of law) shall
(i) subject such Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature not now in effect, with respect to
the Bank's commitment to make Loans bearing interest based on the
Eurocurrency Rate or the Bank's Loans bearing interest based on the
Eurocurrency Rate; or
Page 53
(ii) materially change the basis of taxation of payments to such Bank
on the principal of, interest on or any other amounts payable in respect of
the Loans bearing interest based on the Eurocurrency Rate as such
(excluding changes in taxes measured by or imposed on the net income, or on
the capital or net worth of such Bank; provided, however, nothing in this
parenthetical shall be deemed to limit the rights of the Banks or the
obligations of the Company and/or Hasbro SA pursuant to 4.1(e)); or
(iii) impose or increase or render applicable any liquidity, capital,
special deposit or reserve or similar requirements (whether or not having
the force of law) not now in effect, against assets held by, or deposits in
or for the account of, or loans by an office of such Bank with respect to
such Bank's commitment to make Loans bearing interest based on the
Eurocurrency Rate or such Bank's Loans bearing interest based on the
Eurocurrency Rate; or
(iv) impose on such Bank any other condition or requirement not now in
effect, with respect to such Bank's commitment to make Loans bearing
interest based on the Eurocurrency Rate or such Bank's Loans bearing
interest based on the Eurocurrency Rate or any class of loans of which the
Loans bearing interest based on the Eurocurrency Rate forms a part, and the
result of any of the foregoing is (x) to increase the cost to such Bank
attributable to the making, funding or maintaining of Loans bearing
interest based on the Eurocurrency Rate or its commitment therefor, (y) to
reduce the amount of principal, interest, commitment fees or other amounts
payable in respect of Loans bearing interest based on the Eurocurrency Rate
to such Bank hereunder or its commitment therefor, or (z) to require such
Bank to make any payment or to forego any interest or other sum payable in
respect of Loans bearing interest based on the Eurocurrency Rate hereunder
or its commitment therefor, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any
sum receivable or deemed received by such Bank from the Company and/or
Hasbro SA hereunder;
then, and in each such case, the Company and (with respect to any Hasbro SA
Loan) Hasbro SA will, upon demand by such Bank made by written notice to the
Company and/or Hasbro SA from time to time as often as the occasion therefor may
arise, pay to such Bank, within ten (10) days after receipt of notice of such
demand, such additional amounts as will be sufficient, in the good faith
Page 54
opinion of such Bank, to compensate the Bank for such additional costs,
reduction, payment or foregone interest or other sum in respect of Loans bearing
interest based on the Eurocurrency Rate; provided, however, that the Company
and/or Hasbro SA shall be required to pay only such additional costs or other
amounts which are incurred by such Bank (A) from and after the date of such
notice, with respect to Loans outstanding during Interest Periods commencing
after the date on which the Company and (with respect to any Hasbro SA Loan)
Hasbro SA receives such notice, (B) with respect to Loans outstanding on the
date of such notice provided that (x) not less than 90 days remain in the
applicable Interest Period for such Loans and (y) such costs are assessed only
for the period commencing on the date of such notice to the Company and (with
respect to any Hasbro SA Loan) Hasbro SA, and (iii) from and after the date of
such notice to the extent that the incurrence of such additional costs or
amounts is unrelated to Outstanding Loans and is not otherwise covered by
clauses (A) or (B) of this paragraph. Subject to the provisions of the preceding
sentence, a claim by any Bank for all or any part of any additional amount
required to be paid by the Company and/or Hasbro SA pursuant to this 4.1(d) may
be made before and/or after the end of the Interest Period to which such claim
relates or during the Interest Period in which such claim has arisen and before
and/or after any repayment or prepayment of any Eurocurrency Rate Loans owed
hereunder to which such claim relates. A certificate signed by an officer of
such Bank, setting forth the amount of such loss, expense or liability required
to be paid by the Company and/or Hasbro SA to such Bank, and the computations
made by such Bank to determine such additional amount, shall be submitted by the
Bank to the Company and/or Hasbro SA in connection with each demand made at any
time by such Bank upon the Company and/or Hasbro SA hereunder, and shall, save
for manifest or other obvious error, constitute conclusive evidence of the
additional amount required to be paid by the Company and/or Hasbro SA to such
Bank upon each such demand.
(e) Increased Capital Requirements. If any present or future, or any change
in any present or future, law or any governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) or the
interpretation or administration thereof by a Governmental Authority with
appropriate jurisdiction affects the amount of capital required or expected to
be maintained by any of the Banks or any corporation controlling any of the
Banks and such Bank determines that any of the foregoing imposes or increases a
requirement by such Bank to allocate capital resources to such Bank's credit
facility established hereunder or any loans made pursuant hereto,
Page 55
which would have the effect of reducing the return on such Bank's capital to a
level below that which such Bank could have achieved (assuming full utilization
of the Bank's capital) but for such increased capital requirements, then such
Bank may notify the Company and Hasbro SA (with a copy to the Agent) of such
fact. To the extent that the costs of such increased capital requirements are
not reflected in the Base Rate, the Eurocurrency Rate or the Competitive Bid
Rate, the Company, Hasbro SA and such Bank shall thereafter attempt to negotiate
in good faith an adjustment to the compensation payable hereunder with respect
to such Bank's Commitment and, in the case of any Loans made by such Bank after
the date of the Company's and Hasbro SA's receipt of such notice ("New Loans"),
all such New Loans, which adjustment will adequately compensate the Bank in
light of these circumstances. If the Company, Hasbro SA and such Bank are unable
to agree to such adjustment within thirty (30) days of the day on which the
Company and Hasbro SA receive such notice, then effective from the date on which
the Company and Hasbro SA have received such notice (but not earlier than the
effective day of such requirement or retroactive to any date prior to the date
on which the Company and Hasbro SA have received such notice), the fees payable
hereunder with respect to any New Loans made by, or the Commitment of, such Bank
shall increase by an amount which will, in such Bank's reasonable determination,
provide adequate compensation. Such Bank shall allocate such cost increases
among its customers in good faith and on an equitable basis.
(f) Replacement of Banks. Notwithstanding any other provision of this
Agreement, in the event that (i) the obligation of any Bank to make Eurocurrency
Rate Loans is suspended pursuant to 4.1(c) hereof, or (ii) any Bank makes demand
upon the Company and/or Hasbro SA pursuant to 4.1(d) hereof for the payment of
additional costs or other amounts, or (iii) any Bank makes demand upon the
Company and/or Hasbro SA pursuant to 4.1(e) hereof for an adjustment to the
compensation payable to such Bank by the Company and/or Hasbro SA hereunder,
then, in each such case, the Company and/or Hasbro SA in its discretion may (A)
send written notice to such Bank and the Agent advising such Bank that, subject
to the provisions of this 4.1(f), its Commitment hereunder shall be terminated
on a date determined by the Company and/or Hasbro SA (the "Replacement Date"),
which Replacement Date shall be no earlier than the date on which such Bank and
the Agent have received such notice from the Company and/or Hasbro SA, and
commencing on the Replacement Date, the Commitment of such Bank hereunder shall
be terminated and no Commitment Fee shall be payable by the Company and/or
Hasbro SA to such Bank with respect to such Commitment, and (B) replace such
Bank with another Bank or other commercial banking institution (the
Page 56
"Replacement Bank") which has been selected by the Company and/or Hasbro SA and
approved by the Majority Banks, which approval shall not be unreasonably
withheld, provided that the Company and/or Hasbro SA, the Banks and the Agent
agree that (w) on or prior to the Replacement Date, the Company and/or Hasbro SA
shall have paid all principal, interest, fees and other amounts owing by the
Company and/or Hasbro SA hereunder, accruing up to and including the Replacement
Date, to the Bank being replaced on such Replacement Date, (x) as of the
Replacement Date, the Replacement Bank will take over the entire Commitment of
the Bank being replaced, (y) on or prior to the Drawdown Date first following
the Replacement Date, the Company and/or Hasbro SA, the Agent, the Banks (other
than the Bank being replaced) and the Replacement Bank shall make such
arrangements by way of new Syndicated Loans, purchases or refundings of existing
Syndicated Loans or otherwise as will result thereafter in the outstanding and
unpaid Syndicated Loans of each Bank being equal, as near as may practically be,
to such Bank's Commitment Percentage of all of the outstanding and unpaid
Syndicated Loans made to the Company, and (z) the Agent shall be entitled to
receive prior to the Replacement Date from the Company and/or Hasbro SA and the
Replacement Bank such supplemental agreements, documents, certificates and legal
opinions in connection with the replacement of such Bank as the Agent and the
other Banks may reasonably request to give effect to the foregoing provisions of
this 4.1(f).
(g) Change of Lending Office. If a Bank changes its applicable lending
office (other than pursuant to paragraph (h) below) and the effect of the
change, as of the date of the change, would be to cause the Company and/or
Hasbro SA to become obligated to pay any additional amount under this 4.1 or
under 4.7, the Company and/or Hasbro SA shall not be obligated to pay such
additional amount.
(h) Mitigation. If a condition or an event occurs which would, or would
upon the passage of time or giving of notice, result in the payment of any
additional amount to any Bank by the Company and/or Hasbro SA pursuant to this
4.1 or under 4.7, such Bank shall take such steps as may reasonably be available
to it and acceptable to the Company and/or Hasbro SA to mitigate the effects of
such condition or event (which may include efforts to rebook the Loans held by
such Bank at another lending office, or through another branch or an affiliate,
of such Bank); provided that such Bank shall not be required to take any step
that, in its reasonable judgment, would be disadvantageous to its business or
operations or would require it to incur any additional cost or expense unless
the Company agrees to reimburse such Bank for such
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cost or expense.
4.2. Concerning Interest Periods.
No Interest Period for Loans may be selected by the Company and/or Hasbro
SA if such Interest Period ends after the Final Maturity Date. If any Interest
Period would otherwise end on a day which is not a Business Day for Base Rate,
Eurocurrency Rate or Competitive Bid Rate purposes, as applicable, that Interest
Period, shall end on the Business Day next preceding or next succeeding such day
determined by the Agent in accordance with 4.4(c). Any Interest Period relating
to any Eurocurrency Rate Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month.
4.3. Interest on Overdue Amounts.
Overdue principal and (to the extent permitted by applicable law) interest
on the Loans and all other overdue amounts payable hereunder shall bear interest
payable on demand at a rate per annum equal to two percent (2%) above the rate
otherwise in effect with respect to Base Rate Loans, whether or not any
Eurocurrency Rate or Competitive Bid Rate would otherwise have been applicable
thereto, until such amount shall be paid in full (whether before or after
judgment).
4.4. Payments.
(a) All payments of principal of and interest on Loans made by the Company
or Hasbro SA, any Fees and any other amounts due hereunder shall be made by the
Company or Hasbro SA to the Agent, at or prior to 11:00 A.M., Boston time, on
any payment date, in Dollars and in immediately available funds at the Agent's
Office without setoff, counterclaim or deduction of any kind. The Agent shall be
entitled to debit any account of the Company or (with respect to payments in
connection with Hasbro SA Loans) Hasbro SA with the Agent in the amount of each
such payment when due in order to effect timely payment thereof. Upon receipt by
the Agent of any such payment, the Agent shall promptly send by wire transfer,
in immediately available like funds, to each Bank, to an individual or an
account designated by such Bank, such Bank's pro rata share of such payment.
(b) If any Bank makes a Syndicated Loan to the Company or Hasbro SA on a
day on which such Person is to repay all or any part of any Outstanding
Syndicated Loan made to such Person, such
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Bank shall, to the extent necessary, apply the proceeds of the requested
Syndicated Loan to make such repayment, and only an amount equal to (i) the
excess, if any, of the amount being repaid over the amount being borrowed shall
be remitted by such Person to the Agent for the account of such Bank as provided
in 2.8 and (ii) the excess, if any, of the amount being borrowed over the amount
being repaid shall be remitted by such Bank to the Agent for the account of such
Person. If the Company and/or Hasbro SA fails to repay all or any part of any
Outstanding Syndicated Loan denominated in Dollars on the last day of the
applicable Interest Period therefor, and if the Company and/or Hasbro SA fails
to deliver an election notice with respect to such unpaid portion of the
Outstanding Syndicated Loan in accordance with the provisions of 2.4 and 4.1(a)
hereof, then, subject to satisfaction of the conditions precedent set forth in
13 hereof, the Company and/or Hasbro SA shall be deemed to have requested that
the unpaid portion of the Outstanding Syndicated Loan constitute a new Borrowing
as a Base Rate Loan. Nothing contained in this 4.4(b) shall obligate the Banks
in any way to make any Loans to the Company and/or Hasbro SA at any time from
and after the Final Maturity Date.
(c) Whenever a payment hereunder or under the Notes becomes due on a day
which is not a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and interest shall accrue during such
extension (and shall not be considered overdue during such extension), provided,
however, that if such extension would cause payment of interest on or principal
of Eurocurrency Rate Loans to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.
4.5. Computations.
All computations of interest on the Loans shall be based on (a) with
respect to Eurocurrency Rate Loans and Competitive Bid Loans, a 360-day year,
and (b) with respect to Base Rate Loans, a 365-day year, and paid for the actual
number of days elapsed.
4.6. Interest Limitation.
Notwithstanding any other term of this Agreement or any Note or any other
document referred to herein or therein, the maximum amount of interest, together
with any other amounts or charges which may constitute interest under applicable
law, which may be charged to or collected from any Person liable hereunder or
under any Note by the Banks shall be absolutely limited to, and shall in no
event exceed, the maximum amount of interest which could
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lawfully be charged or collected under applicable law (including, to the extent
applicable, the provisions of Section 5197 of the Revised Statutes of the United
States of America, as amended, 12 U.S.C. Section 85, as amended), so that the
maximum of all amounts constituting interest under applicable law, howsoever
computed, shall never exceed as to any Person liable therefor such lawful
maximum, and any term of this Agreement or any Note or any other document
referred to herein or therein which could be construed as providing for interest
in excess of such lawful maximum shall be and hereby is made expressly subject
to and modified by the provisions of this paragraph.
4.7. Indemnification.
In the event that the Company and/or Hasbro SA shall at any time (a) repay
or prepay (other than in accordance with the provisions of 2.8 hereof) any
principal of any Eurocurrency Rate Loans or Competitive Bid Loans on a date
other than the last day of the Interest Period with respect thereto, whether by
reason of acceleration following an Event of Default or otherwise, or (b) for
any reason fail to borrow any Loan with respect to which the Company gave a
notice of borrowing pursuant to 2.4 or 4.1(a) hereof at an interest rate based
on the Eurocurrency Rate or a Notice of Competitive Bid Borrowing pursuant to
2.5.1(f) or prepay a Loan as to which notice of prepayment has been given, the
Company and/or Hasbro SA shall indemnify the Banks against all losses, costs or
expenses incurred by the Banks in respect of the Company's payment, prepayment
or failure to borrow, on the date of such payment or failure to borrow. Such
losses, costs or expenses shall include, but not be limited to (i) any costs
incurred by the Banks in carrying funds which were to have been borrowed by the
Company and/or Hasbro SA or in carrying funds to cover the amount of any overdue
principal of or overdue interest on any Loan, (ii) any interest payable by the
Banks to Banks of the funds borrowed by the Banks in order to carry the funds
referred to in the immediately preceding sub-clause (i), and (iii) any losses
(including losses of anticipated interest which would otherwise have been
required to be paid hereunder through the end of such then existing or, as the
case may be, commencing Interest Period) incurred by the Banks in liquidating or
re- employing funds acquired from third parties to effect or maintain all or any
part of the Loans, provided that to the extent that the reemployment formula set
forth in 2.8 hereof is capable of being employed to compute such losses, the
Agent shall employ such reemployment formula to compute such losses. Any losses,
costs or expenses payable by the Company to the Banks pursuant to this 4.7 shall
be without duplication of any amounts paid by the Company and/or Hasbro SA
pursuant to 2.8, 4.1 or 4.3 hereof.
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4.8. Banks' Obligations Several.
The Banks' obligations hereunder shall be several and not joint, and no
Bank's obligations to lend shall be affected by any other Bank's failure to make
any Loan hereunder.
5. LETTERS OF CREDIT.
5.1. Letter of Credit Commitments.
5.1.1. Commitment to Issue Letters of Credit.
Subject to the terms and conditions hereof and the execution and
delivery by the Company of a letter of credit application on the Agent's
customary form (a "Letter of Credit Application"), the Agent on behalf of
the Banks and in reliance upon the agreement of the Banks set forth in
5.1.4 and upon the representations and warranties of the Company contained
herein, agrees, in its individual capacity, to issue, extend and renew for
the account of the Company one or more standby or documentary letters of
credit (individually, a "Letter of Credit"), in such form as may be
requested from time to time by the Company and agreed to by the Agent;
provided, however, that, after giving effect to such request, (a) the sum
of the aggregate Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not exceed $15,000,000 at any one time (or such other
amount as may be agreed from time to time by the Company and the Agent and
notified to the Banks) and (b) the Utilization shall not exceed the Total
Commitment. Notwithstanding the foregoing, the Agent shall have no
obligation to issue any Letter of Credit to support or secure any
Indebtedness of the Company or any of its Subsidiaries to the extent that
such Indebtedness was incurred prior to the proposed issuance date of such
Letter of Credit, unless in any such case the Company demonstrates to the
reasonable satisfaction of the Agent that (x) such prior incurred
Indebtedness was then fully secured by a prior perfected and unavoidable
security interest in collateral provided by the Company or such Subsidiary
to the proposed beneficiary of such Letter of Credit or (y) such prior
incurred Indebtedness was then secured or supported by a letter of credit
issued for the account of the Company or such Subsidiary.
5.1.2. Letter of Credit Applications.
Each Letter of Credit Application shall be completed to
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the reasonable satisfaction of the Agent. In the event that any provision
of any Letter of Credit Application shall be inconsistent with any
provision of this Agreement, then the provisions of this Agreement shall,
to the extent of any such inconsistency, govern.
5.1.3. Terms of Letters of Credit.
Each Letter of Credit issued, extended or renewed hereunder shall,
among other things, (a) provide for the payment of sight drafts for honor
thereunder when presented in accordance with the terms thereof and when
accompanied by the documents described therein, and (b) have an expiry date
no later than the date which is fourteen (14) days (or, if the Letter of
Credit is confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty- five (45) days) prior to the Final Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be subject (to
the extent consistent with this Agreement) to the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by
the Agent in the ordinary course of its business as a letter of credit
issuer and in effect at the time of issuance of such Letter of Credit (the
"Uniform Customs") or, if agreed to by the Company, the International
Standby Practices (ISP98), International Chamber of Commerce Publication
No. 590, or any successor code of standby letter of credit practices among
banks adopted by the Agent in the ordinary course of its business as a
standby letter of credit issuer and in effect at the time of issuance of
such Letter of Credit.
5.1.4. Reimbursement Obligations of Banks.
Each Bank severally agrees that it shall be absolutely liable, without
regard to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each draft
paid by the Agent under each Letter of Credit to the extent that such
amount is not reimbursed by the Company pursuant to 5.2 (such agreement for
a Bank being called herein the "Letter of Credit Participation" of such
Bank).
5.1.5. Participations of Banks.
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Each such payment made by a Bank shall be treated as the purchase by
such Bank of a participating interest in the Company's Reimbursement
Obligation under 5.2 in an amount equal to such payment. Each Bank shall
share in accordance with its participating interest in any interest which
accrues pursuant to 5.2.
5.2. Reimbursement Obligation of the Company.
In order to induce the Agent to issue, extend and renew each Letter of
Credit and the Banks to participate therein, the Company hereby agrees to
reimburse or pay to the Agent, for the account of the Agent or (as the case may
be) the Banks, with respect to each Letter of Credit issued, extended or renewed
by the Agent hereunder,
(a) except as otherwise expressly provided in 5.2(b) and (c), on each
date that any draft presented under such Letter of Credit is honored by the
Agent after the Agent determines that the documents (including any draft)
delivered in connection with such presentment are in conformity with such
Letter of Credit, or the Agent otherwise makes a payment with respect
thereto, (i) the amount paid by the Agent under or with respect to such
Letter of Credit, and (ii) the amount of any taxes, fees, charges or other
costs and expenses whatsoever reasonably incurred by the Agent or any Bank
in connection with any payment made by the Agent or any Bank under, or with
respect to, such Letter of Credit, other than as a result of the Agent's or
any such Bank's gross negligence or willful misconduct,
(b) upon the reduction (but not termination) of the Total Commitment
to an amount less than the Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement Obligations,
and
(c) upon the termination of the Total Commitment, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with 14, an amount equal to the then Maximum Drawing Amount on
all outstanding Letters of Credit, which amount shall be held by the Agent
for the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's
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Office in immediately available funds. Interest on any and all amounts remaining
unpaid by the Company under this 5.2 at any time from the date such amounts
become due and payable (whether as stated in this 5.2, by acceleration or
otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in 4.3 for overdue
principal on the Syndicated Loans.
5.3. Letter of Credit Payments.
If any draft shall be presented or other demand for payment shall be made
under any Letter of Credit, the Agent shall notify the Company of the date and
amount of the draft presented or demand for payment and of the date and time
when it expects to pay such draft or honor such demand for payment. If the
Company fails to reimburse the Agent as provided in 5.2 on or before the date
that such draft is paid or other payment is made by the Agent, the Agent may at
any time thereafter notify the Banks of the amount of any such Unpaid
Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on the Business
Day next following the receipt of such notice, each Bank shall make available to
the Agent, at the Agent's Office, in immediately available funds, such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, together with an
amount equal to the product of (a) the average, computed for the period referred
to in clause (c) below, of the weighted average interest rate paid by the Agent
for federal funds acquired by the Agent during each day included in such period,
times (b) the amount equal to such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, times (c) a fraction, the numerator of which is the
number of days that elapse from and including the date the Agent paid the draft
presented for honor or otherwise made payment to the date on which such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation shall become
immediately available to the Agent, and the denominator of which is 360. The
responsibility of the Agent in respect of a presentment of any Letter of Credit
to the Company and the Banks shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity with such Letter of Credit, provided
that this 5.3 shall not relieve the Agent of any liability resulting from the
gross negligence or willful misconduct of the Agent, or otherwise affect any
defense or other right the Company may have as a result of any such gross
negligence or willful misconduct.
5.4. Obligations Absolute.
The Company's obligations under this 5 shall be absolute
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and unconditional under any and all circumstances and irrespective of the
occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Company
may have or have had against the Agent, any Bank or any beneficiary of a Letter
of Credit. The Company further agrees with the Agent and the Banks that the
Agent and the Banks shall not be responsible for, and the Company's
Reimbursement Obligations under 5.2 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among the Company, the
beneficiary of any Letter of Credit or any financing institution or other party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Company against the beneficiary of any Letter of Credit or any
such transferee. The Agent and the Banks shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit.
The Company agrees that any action taken or omitted by the Agent or any Bank
under or in connection with each Letter of Credit and the related drafts and
documents, if done in good faith, shall be binding upon the Company and shall
not result in any liability on the part of the Agent or any Bank to the Company.
Notwithstanding the foregoing, nothing in this 5.4 shall relieve the Agent or
any Bank of any liability resulting from the gross negligence or willful
misconduct of the Agent or such Bank, or otherwise affect any defense or other
right that the Company may have as a result of any such gross negligence or
willful misconduct.
5.5. Reliance by Issuer.
To the extent not inconsistent with 5.4, the Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Letter of Credit, draft,
writing, resolution, notice, consent, certificate, affidavit, letter, telegram,
telecopy, telex or facsimile message, statement, order or other document
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action under this
Agreement unless it shall first have received such advice or concurrence of the
Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
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continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon the Banks and all
future holders of the Syndicated Notes or of Letter of Credit Participations.
Notwithstanding the foregoing, nothing in this 5.5 shall relieve the Agent of
any liability resulting from the gross negligence or willful misconduct of the
Agent, or otherwise affect any defense or other right that the Company may have
as a result of any such gross negligence or willful misconduct.
5.6. Letter of Credit Fee.
The Company shall pay to the Agent, for the accounts of the Banks in
accordance with their respective Commitment Percentages, a letter of credit fee
(a "Letter of Credit Fee") with respect to each Letter of Credit, computed for
the period from and including the date of issuance, extension or renewal of such
Letter of Credit to the expiry date of such Letter of Credit, at a rate per
annum equal to (a) in respect of any standby Letter of Credit, the applicable
Margin per annum with respect to Eurocurrency Rate Loans on the aggregate face
amount of standby Letters of Credit outstanding and (b) in respect of any
documentary Letter of Credit, fifty percent (50%) of the applicable Margin per
annum with respect to Eurocurrency Rate Loans on the aggregate face amount of
documentary Letters of Credit outstanding. Such Letter of Credit Fee shall be
payable (i) in respect of standby Letters of Credit, periodically in arrears on
the last Business Day of each March, June, September and December occurring
after the date of issuance, extension or renewal of each such standby Letter of
Credit and on the Final Maturity Date, and (ii) in respect of documentary
Letters of Credit, periodically in arrears on the last Business Day of each
March, June, September and December occurring after the date of issuance,
extension or renewal of each such documentary Letter of Credit and on the Final
Maturity Date. In addition, the Company shall, on the date of issuance,
extension or renewal of any Letter of Credit, pay to the Agent a fronting fee
for the account of the Agent equal to one-tenth of one percent (0.10%) per annum
of the face amount of each such standby or documentary Letter of Credit. In
respect of each Letter of Credit, the Company shall also pay to the Agent for
the Agent's own account, at such other time or times as such charges are
customarily made by the Agent, the Agent's customary issuance, amendment,
negotiation or document examination and other administrative fees as in effect
from time to time.
6. COLLATERAL SECURITY AND GUARANTIES.
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6.1. Security of Company.
The Secured Obligations shall be secured by a perfected first priority
security interest (subject only to Permitted Liens entitled to priority under
applicable law) in all of the following, whether now owned or hereafter
acquired, including all books and records and other recorded data in each case
relating to the following: (a) "Accounts", "Chattel paper" and "Instruments" of
the Company, in each case as such terms are defined in the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts, and Inventory of the
Company, and (b) the Company's U.S. trademarks (and U.S. applications and U.S.
registrations thereof (except for "intent to use" applications for trademark
registrations filed pursuant to Section 1(b) of the Xxxxxx Act, unless and until
an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of
the Xxxxxx Act has been filed)), U.S. copyrights (and U.S. applications and U.S.
registrations thereof) and U.S. patents and U.S. patent applications, in each
case relating exclusively to the Identified Brands (but with respect to the
Playskool brand, only U.S. trademarks (and U.S. applications and U.S.
registrations thereof) and U.S. copyrights (and U.S. applications and U.S.
registrations thereof), in each case that did not arise from particular
products, shall be included in the Collateral), in each case pursuant to the
terms of and as and to the extent provided in the Security Documents to which
the Company is a party.
6.2. Guaranties and Security of Restricted Subsidiaries.
The Secured Obligations shall also be guaranteed pursuant to the terms of
the Guaranty. The obligations of each of the Restricted Subsidiaries under the
Guaranty shall be in turn secured by a perfected first priority security
interest (subject only to Permitted Liens entitled to priority under applicable
law) in all of the following, whether now owned or hereafter acquired, including
all books and records and other recorded data in each case relating to the
following: (a) "Accounts", "Chattel paper" and "Instruments" of each such
Restricted Subsidiary, in each case as such terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, and Inventory
of each such Restricted Subsidiary, and (b) such Restricted Subsidiary's U.S.
trademarks (and U.S. applications and U.S. registrations thereof (except for
"intent to use" applications for trademark registrations filed pursuant to
Section 1(b) of the Xxxxxx Act, unless and until an Amendment to Allege Use or a
Statement of Use under Sections 1(c) and 1(d) of the Xxxxxx Act has been
filed)), U.S. copyrights (and U.S.
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applications and U.S. registrations thereof) and U.S. patents and U.S. patent
applications, in each case relating exclusively to the Identified Brands (but
with respect to the Playskool brand, only U.S. trademarks (and U.S. applications
and U.S. registrations thereof) and U.S. copyrights (and U.S. applications and
U.S. registrations thereof), in each case that did not arise from particular
products, shall be included in the Collateral), in each case pursuant to the
terms of and as and to the extent provided in the Security Documents to which
such Restricted Subsidiary is a party.
6.3. Release of Collateral.
(a) The parties hereto acknowledge and agree that the Agent, on behalf of
the Banks and the Agent, shall release its Liens on the Collateral (other than
the Collateral described in 6.1(b) and 6.2(b)) at such time as each of the
following conditions is satisfied:
(i) for each of the first, second and fourth fiscal quarters in the
fiscal year of the Company most recently ended, the ratio of Consolidated
Total Funded Debt at the end of such fiscal quarter to EBITDA for the
Reference Period then ended shall be less than or equal to 2.50:1:00, and
for the third fiscal quarter of such year, the ratio of Consolidated Total
Funded Debt to EBITDA of the Reference Period shall be less than or equal
to 2.75:1:00, in each case as demonstrated in the financial statements
delivered to the Banks in accordance with 9.5(a);
(ii) the ratio of EBITDA for the Reference Period ending with the
fiscal year most recently ended to Consolidated Total Interest Expense for
such Reference Period shall be greater than or equal to 6.00:1.00; and
(iii) no Default or Event of Default shall have
occurred and be continuing.
(b) The parties hereto acknowledge and agree that the Agent, on behalf of
the Banks and the Agent, shall release its Liens on the Collateral described in
6.1(b) and 6.2(b) at such time as each of the following conditions is satisfied:
(i) as of the end of any fiscal year of the Company, the ratio of
Consolidated Total Funded Debt at the end of such fiscal year to EBITDA for
the Reference Period then ended shall be less than or equal to 2.75:1.00,
as demonstrated in the financial statements delivered to the
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Banks in accordance with 9.5(a); and
(ii) no Default or Event of Default shall have occurred
and be continuing.
(c) Without limiting the foregoing, in the event that any part of the
Collateral is sold or otherwise disposed of in connection with a sale,
disposition or other transaction permitted hereunder, the Liens on such
Collateral granted pursuant to any Security Document shall be automatically
released and the Agent shall execute and deliver to the Company or the relevant
Restricted Subsidiary, as the case may be, all releases or other documents
(including without limitation, Uniform Commercial Code termination statements),
and take all other actions necessary or reasonably desirable for the release of
such Liens.
6.4. Limitation of Security.
Notwithstanding anything to the contrary contained in this 6 or in any of
the Security Documents, no Lien shall be granted on any shares of stock of any
Subsidiary of the Company or any evidences of indebtedness of any Subsidiary of
the Company.
7. FEES.
7.1. Closing Fees.
The Company agrees to pay to the Agent for the account of each Bank on the
Effective Date the closing fees (the "Closing Fees") in the amounts and on the
terms and conditions set forth in the Fee Letter.
7.2. Agent's Fee.
The Company shall pay to the Agent for the Agent's own account an Agent's
fee (the "Agent's Fee") in the amounts and on the terms and conditions set forth
in the Agent's Fee Letter.
8. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Banks that:
8.1. Corporate Existence.
(a) Each of the Hasbro Companies and Hasbro SA (i) is a
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corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, (ii) has all requisite corporate
power to own its property and conduct its business as now conducted and as
presently contemplated, and (iii) is in good standing as a foreign corporation
and is duly authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified would not
have a Material Adverse Effect.
(b) Each of the Hasbro Companies and Hasbro SA has adequate corporate power
and authority and has full legal right to enter into each of the Loan Documents
to which it is or is to become a party, to perform, observe and comply with all
of its agreements and obligations under each of such documents, and, with
respect to the Company, to make all of the borrowings contemplated by this
Agreement.
8.2. Corporate Authority, etc.
The execution, delivery and performance by each of the Hasbro Companies and
Hasbro SA of each of the Loan Documents to which it is a party, the performance
by each of the Hasbro Companies and Hasbro SA of all of its agreements and
obligations under each of such documents, and the making by the Company of all
of the borrowings contemplated by this Agreement, have been duly authorized by
all necessary corporate action on the part of each of the Hasbro Companies and
Hasbro SA and their respective shareholders and do not and will not (i)
contravene any provision of any of their charter or by-laws (each as from time
to time in effect), (ii) conflict with, or result in a breach of any material
term, condition or provision of, or constitute a default under or result in the
creation of any Lien upon any of the property of any of the Hasbro Companies and
Hasbro SA under any agreement, trust deed, indenture, mortgage or other
instrument to which any of the Hasbro Companies and Hasbro SA is or may become a
party or by which any of the Hasbro Companies and Hasbro SA or any of the
property of any of the Hasbro Companies and Hasbro SA is or may become bound or
affected, the consequences of which would have a Material Adverse Effect, (iii)
violate or contravene any provision of any law, regulation, order, ruling or
interpretation thereunder or any decree, order or judgment of any court or
governmental or regulatory authority, bureau, agency or official (all as from
time to time in effect and applicable to any of the Hasbro Companies and/or
Hasbro SA), except where such violation or contravention would not have a
Material Adverse Effect, (iv) require any waivers, consents or approvals by any
of the creditors of any of the Hasbro Companies and Hasbro SA which have not
been obtained, (v) require any consents or approvals by
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any shareholders of any of the Hasbro Companies and/or Hasbro SA (except such as
will be duly obtained on or prior to the Effective Date and will be in full
force and effect on and as of the Effective Date), or (vi) require obtaining any
approval, consent, order, authorization or license by, or giving notice to, or
taking any other action with respect to, any governmental or regulatory
authority or agency under any provision of any applicable law that have not been
obtained, given or taken (other than any filings of this Agreement and the other
Loan Documents with the Securities and Exchange Commission required to be made
after the date hereof ("SEC Filings") and any filings in connection with the
Security Documents), except where the failure to do so would not result in a
Material Adverse Effect.
8.3. Binding Effect of Documents, etc.
Each of the Hasbro Companies and Hasbro SA has duly executed and delivered
each of the Loan Documents to which it is a party and each of such documents is
in full force and effect with respect to such Person. The agreements and
obligations of each of the Hasbro Companies and Hasbro SA contained in each of
the Loan Documents to which it is a party constitute its legal, valid and
binding obligations enforceable against it in accordance with their respective
terms except as enforceability is limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent that the
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.
8.4. Governmental Approvals.
The execution, delivery and performance by the Company and any of its
Subsidiaries of this Agreement and the other Loan Documents to which the Company
or any of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained or made, and except for SEC Filings and filings in connection with the
Security Documents.
8.5. No Event of Default, etc.
No Default or Event of Default has occurred and is continuing.
8.6. Chief Executive Offices.
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Until the Agent receives notice of a change, the chief executive offices of
the Company and the offices where substantially all of the material financial
records and books of account of the Company are kept, are located in Pawtucket
and/or East Providence, Rhode Island.
8.7. Title to Properties; Leases.
Except as indicated on Schedule 8.7 hereto, the Company and its
Subsidiaries own all of the assets reflected in the consolidated balance sheet
of the Company and its Subsidiaries as at the Balance Sheet Date or acquired
since that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no Liens except
Permitted Liens.
8.8. Financial Statements and Projections.
8.8.1. Fiscal Year.
Each of the Hasbro Companies has a fiscal year ending on the last
Sunday in December of each calendar year, subject to adjustment pursuant to
9.13.
8.8.2. Financial Statements.
There has been furnished to the Banks (a) a consolidated balance sheet
of the Company and its Subsidiaries as at December 31, 2000, a consolidated
statement of earnings, and a consolidated statement of cash flows for the
fiscal year then ended, audited by KPMG LLP, the Company's independent
certified public accountants, and (b) an unaudited condensed consolidated
balance sheet of the Company and its Subsidiaries as at the Balance Sheet
Date and an unaudited condensed consolidated statement of earnings for the
fiscal year then ended. Each such balance sheet and statement of earnings
has been prepared in accordance with GAAP and fairly presents the financial
condition of the Company as at the close of business on the date thereof
and the results of operations for the fiscal period then ended.
8.8.3. Projections.
The Company's projections of the annual operating budgets of the
Company and its Subsidiaries on a consolidated basis, balance sheets and
cash flow statements
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for the 2002 to 2004 fiscal years have been delivered to each Bank. To the
knowledge of the Company or any of its Subsidiaries as of the Effective
Date, no facts exist that (individually or in the aggregate) would result
in any material change in any of such projections. The projections are
based upon estimates and assumptions believed to be reasonable by the
management of the Company at the time of preparation thereof and reflect
estimates of the Company and its Subsidiaries of the results of operations
and other information projected therein believed to be reasonable by the
management of the Company at the time of preparation thereof.
8.9. No Material Changes, Etc.
Since the Balance Sheet Date, there has been no event or occurrence which
has had a Material Adverse Effect. Since the Balance Sheet Date, the Company has
not made any Restricted Payment except as permitted by 10.4 hereof.
8.10. Franchises, Patents, Copyrights, Etc.
Each of the Hasbro Companies possesses all material franchises, patents,
copyrights, trademarks, permits, service marks, trade names, domain names,
licenses and permits, and rights in respect of the foregoing, adequate for the
conduct of its business substantially as now conducted, without any known
conflict or conflicts with any rights of others which would, individually or in
the aggregate, have a Material Adverse Effect.
8.11. Litigation.
Except as set forth on Schedule 8.11 hereto and except as required to be
disclosed pursuant to 9.6, there are no actions, suits, proceedings or
investigations of any kind pending or threatened against any of the Hasbro
Companies before any court, tribunal or administrative agency or board which
would reasonably be expected to be adversely determined and, if adversely
determined, either in any case or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
8.12. No Materially Adverse Contracts, Etc.
None of the Hasbro Companies is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation which has
or is expected in the future to have a Material Adverse Effect. None of the
Hasbro Companies is a party to any contract or agreement which has or is
expected,
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in the judgment of the Company's officers, to have any Material Adverse Effect.
8.13. Compliance With Other Instruments, Laws, Etc.
None of the Hasbro Companies is in violation of any provision of its
charter documents, by-laws, or, to the best of the Company's knowledge, any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, or any statute, license,
rule or regulation, in any of the foregoing cases in a manner which would result
in a Material Adverse Effect.
8.14. Taxes.
Each of the Hasbro Companies has filed all federal, state and other income
and all other tax returns, reports and declarations due and required by any
jurisdiction to which any of them is subject. Each of the Hasbro Companies has
paid, or has made reasonable provision for payment of, all material taxes (if
any) which have or may become due and payable pursuant to any of the said
returns or pursuant to any matters raised by audits or for other reasons known
to the Company, except for taxes the amount, applicability, or validity of which
are currently being contested by it in good faith by appropriate proceedings and
with respect to which the Company has set aside on its books, in accordance with
GAAP, reserves reasonably deemed by it to be adequate with respect thereto.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know no basis for
any such claim, except for taxes the amount, applicability, or validity of which
are currently being contested by it in good faith by appropriate proceedings and
with respect to which the Company has set aside on its books, in accordance with
GAAP, reserves reasonably deemed by it to be adequate with respect thereto.
8.15. Absence of Financing Statements, Etc.
Except with respect to Permitted Liens, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry, or other public office,
which purports to cover, affect or give notice of any present or possible future
Lien on any assets or property of the Company or any of its Subsidiaries (other
than Foreign Subsidiaries) or rights thereunder.
Page 74
8.16. Perfection of Security Interest.
All filings, assignments, pledges and deposits of documents or instruments
have been made and all other actions have been taken (or provision therefor
shall have been made to the reasonable satisfaction of the Agent) that are
legally permitted and are necessary or advisable, under applicable law, to
establish and perfect the Agent's security interest in the Collateral, in each
case pursuant to the terms of the Security Documents. Except for Permitted
Liens, or as permitted by the Security Documents, the Collateral and the Agent's
rights with respect to the Collateral are not subject to any material setoff,
claims, withholdings or other defenses other than reconciliations with customers
and vendors in the ordinary course of business. The Company or a Restricted
Subsidiary, as the case may be, is the owner of the Collateral free from any
Lien except for Permitted Liens.
8.17. Indebtedness.
None of the Operating Subsidiaries of the Company has any Indebtedness
other than Indebtedness of the kind expressly permitted by the provisions
contained in 10.1 of this Agreement. As of the Balance Sheet Date, all
Indebtedness of the Company and its Subsidiaries that is required by GAAP to be
shown on the consolidated balance sheet of the Company and its Subsidiaries
described in 8.8.2(b) hereof is shown on such consolidated balance sheet.
8.18. True Copies of Charter and Other Documents.
The Hasbro Companies and Hasbro SA has furnished or caused to be furnished
to each of the Banks true and complete copies of (a) all of the charter and
other incorporation documents of each of the Hasbro Companies and Hasbro SA
(together with any and all amendments thereto), and (b) the by-laws of each of
the Hasbro Companies and Hasbro SA (together with any and all amendments
thereto).
8.19. Employee Benefit Plans.
8.19.1. In General.
Except as would not reasonably be expected to have a Material Adverse
Effect, each Employee Benefit Plan and each Guaranteed Pension Plan has
been maintained and operated in compliance in all material respects with
the provisions of ERISA and all Applicable Pension Legislation and, to the
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extent applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions and the bonding of
fiduciaries and other persons handling plan funds as required by 412 of
ERISA. The Company has heretofore delivered to the Agent the most recently
completed annual report, Form 5500, with all required attachments, and
actuarial statement required to be submitted under 103(d) of ERISA, with
respect to each Guaranteed Pension Plan.
8.19.2. Terminability of Welfare Plans.
Except for severance payment arrangements and except as disclosed in
(i) the financial statements of the Company and its Subsidiaries described
in 8.8.2 or delivered pursuant to 9.5 or (ii) the periodic and other
reports of the Company filed from time to time with the Securities and
Exchange Commission, no Employee Benefit Plan, which is an employee welfare
benefit plan within the meaning of 3(1) or 3(2)(B) of ERISA, provides
benefit coverage subsequent to termination of employment, except as
required by Title I, Part 6 of ERISA or the applicable state insurance
laws.
8.19.3. Guaranteed Pension Plans.
Each contribution required to be made to a Guaranteed Pension Plan,
whether required to be made to avoid the incurrence of an accumulated
funding deficiency, the notice or lien provisions of 302(f) of ERISA, or
otherwise, has been timely made. No waiver of an accumulated funding
deficiency or extension of amortization periods has been received with
respect to any Guaranteed Pension Plan, and neither the Company nor any
ERISA Affiliate is obligated to or has posted security in connection with
an amendment to a Guaranteed Pension Plan pursuant to 307 of ERISA or
401(a)(29) of the Code. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by the
Company or any ERISA Affiliate with respect to any Guaranteed Pension Plan
and there has not been any ERISA Reportable Event (other than an ERISA
Reportable Event as to which the requirement of thirty (30) days notice has
been waived), or any other event or condition which presents a material
risk of termination of any Guaranteed Pension Plan by the PBGC. As of the
Effective Date, based on the latest valuation of each Guaranteed Pension
Plan (which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for
that
Page 76
valuation, the aggregate benefit liabilities of all such Guaranteed Pension
Plans within the meaning of 4001 of ERISA did not exceed the aggregate
value of the assets of all such Guaranteed Pension Plans, disregarding for
this purpose the benefit liabilities and assets of any Guaranteed Pension
Plan with assets in excess of benefit liabilities.
8.19.4. Multiemployer Plans.
Neither the Company nor any ERISA Affiliate has incurred any material
liability that remains outstanding (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan under 4201 of ERISA or as a result of a sale of
assets described in 4204 of ERISA. Neither the Company nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in
reorganization or insolvent under and within the meaning of 4241 or 4245 of
ERISA or is at risk of entering reorganization or becoming insolvent, or
that any Multiemployer Plan intends to terminate or has been terminated
under 4041A of ERISA.
8.20. Holding Company and Investment Company Acts.
Neither the Company nor any of its Subsidiaries is a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
8.21. Certain Transactions.
To the best of the Company's knowledge, and except as disclosed in the
Company's Forms 10-K or proxy statements (or would be so disclosed but for the
fact that the filing thereof is not yet due), each as filed with the Securities
and Exchange Commission, none of the officers, directors, or employees of any of
the Hasbro Companies is presently a party to any transaction (other than
arms-length transactions pursuant to which any of the Hasbro Companies makes
payments in the ordinary course of business upon terms no less favorable than
the such Person could obtain from third parties,) with the Company or any of its
Subsidiaries (other than (i) for services as employees, officers and directors,
or (ii) for all related transactions with any one Person, transactions involving
an aggregate amount not in excess
page 77
of $60,000 at any one time), including, without limitation, any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
8.22. Use of Proceeds.
8.22.1. General.
The proceeds of the Loans shall be used for working capital and
general corporate purposes; provided, however, that Borrowings made under
the Foreign Sublimit may be used solely to satisfy the Company's
obligations pursuant to guaranties of Foreign Scheduled Facilities. The
Company will obtain Letters of Credit solely for working capital and
general corporate purposes.
8.22.2. Regulations U and X.
No portion of any Loan is to be used, and no portion of any Letter of
Credit is to be obtained, for the purpose of purchasing or carrying any
"margin security" or "margin stock" as such terms are used in Regulations U
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.
Parts 221 and 224.
8.23. Environmental Compliance.
The Company has taken all necessary steps to investigate the past and
present condition and usage of the Real Estate and the operations conducted
thereon and, based upon such diligent investigation, has determined that, except
as set forth on Schedule 8.23 hereto or except as would not reasonably be
expected to have a Material Adverse Effect:
(a) none of the Company, its Subsidiaries or any operator of the Real
Estate or any operations thereon is in violation, or alleged violation, of
any judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under
the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act
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of 1986 ("XXXX"), the Federal Clean Water Act, the Federal Clean Air Act,
the Toxic Substances Control Act, or any state, local or foreign law,
statute, regulation, ordinance, order or decree relating to health, safety
or the environment (hereinafter "Environmental Laws");
(b) neither the Company nor any of its Subsidiaries has received
notice within the last five (5) years from any third party including,
without limitation, any Governmental Authority, (i) that any one of them
has been identified by the United States Environmental Protection Agency
("EPA") as a potentially responsible party under CERCLA with respect to a
site listed on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X;
(ii) that any hazardous waste, as defined by 42 U.S.C. 6903(5), any
hazardous substances as defined by 42 U.S.C. 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. 9601(33) and any toxic substances, oil
or hazardous materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at which a
Governmental Authority has conducted or has ordered that any Company or any
of its Subsidiaries conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (iii) that it is or
shall be a named party to any claim, action, cause of action, complaint, or
legal or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the release of Hazardous
Substances; and
(c) none of the Company and its Subsidiaries is required under any
applicable Environmental Law to perform Hazardous Substances site
assessments, or to remove or remediate Hazardous Substances, or to give
notice to any Governmental Authority or record or deliver to other Persons
an environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby.
8.24. Subsidiaries.
As of December 30, 2000, the Company had no active Subsidiaries that are
not listed in Exhibit 21 to the Form 10-K of the Company for the fiscal year
ended December 30, 2000, as filed with the Securities and Exchange Commission, a
copy of such Exhibit 21 is attached hereto as Schedule 8.24, except for certain
inactive or immaterial Subsidiaries that would not, if
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taken as a whole, constitute a Significant Subsidiary. During the period between
December 31, 2000 and the Effective Date, the Company has had no Significant
Subsidiaries other than (a) Hasbro International, Inc. and Tiger Electronics,
Ltd., each a Delaware corporation, and (b) Wizards of the Coast, Inc., a
Washington corporation.
8.25. Disclosure.
No representation or warranty made by any of the Hasbro Companies and
Hasbro SA in this Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to the Agent or the Banks by or on
behalf of the any of the Hasbro Companies and Hasbro SA in connection with any
of the transactions contemplated by any of the Loan Documents contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein not misleading in light of the
circumstances in which they are made. Except as disclosed herein or otherwise
disclosed in writing to the Agent and the Banks, there is no fact known to the
Company which has a Material Adverse Effect, or which is reasonably likely in
the future to have a Material Adverse Effect, exclusive of effects resulting
from changes in general economic conditions, legal standards or regulatory
conditions.
8.26. Indebtedness of Foreign Subsidiaries.
All Indebtedness of Foreign Subsidiaries (other than Indebtedness of Hasbro
SA hereunder) that has been guaranteed by the Company and is owing to any Bank
or Bank Affiliate has been incurred under the facilities described on Schedule
8.26 hereto (the "Foreign Scheduled Facilities"), as such Schedule 8.26 may be
updated from time to time by the Company by delivering a copy of such updated
Schedule 8.26 to the Agent and each Bank, provided that (a) no revision to
Schedule 8.26 that purports to increase the aggregate amount of the Foreign
Scheduled Facilities shall be effective without the prior written consent of the
Agent (not to be unreasonably withheld) and (b) no revision to Schedule 8.26
that purports to decrease or eliminate a Foreign Scheduled Facility shall be
effective without the consent (not to be unreasonably withheld) of the creditor
under such Foreign Scheduled Facility (if such creditor is a Bank or Bank
Affiliate).
8.27. Bank Accounts.
Schedule 8.27 sets forth the account numbers and location of all bank
accounts of the Company or any of its Subsidiaries
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included in the Collateral or otherwise into which proceeds of the Collateral
are paid as of the Effective Date.
9. AFFIRMATIVE COVENANTS OF THE COMPANY.
The Company covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
9.1. Punctual Payment.
The Company and/or Hasbro SA will duly and punctually pay or cause to be
paid the principal and interest on the Loans, all Reimbursement Obligations, all
Fees and all other amounts provided for in this Agreement and the other Loan
Documents to which the Company or any of its Subsidiaries is a party, all in
accordance with the terms of this Agreement and such other Loan Documents.
9.2. Use of Loan Proceeds.
The Company and/or Hasbro SA shall use the proceeds of the Loans and obtain
Letters of Credit solely for the purposes set forth in 8.22.
9.3. Maintenance of Office.
(a) The Company will maintain its chief executive offices in Pawtucket
and/or East Providence, Rhode Island, or at such other place or places in the
United States of America as the Company shall designate upon written notice to
the Agent, where notices, presentations and demands to or upon the Company in
respect of the Loan Documents may be given or made.
(b) Hasbro SA will maintain its chief executive offices at Xxxxx xx
Xxxxxxxx 0, 0000 Xxxxxxxx, Xxxxxxxxxxx, or at such other place or places as
Hasbro SA shall designate upon written notice to the Agent, where notices,
presentations and demands to or upon Hasbro SA in respect of the Loan Documents
may be given or made.
9.4. Records and Accounts.
The Company will (a) keep, and cause each of its Subsidiaries to keep, true
and accurate records and books of account in which full, true and correct
entries will be made in accordance with GAAP or, in the case of Foreign
Subsidiaries,
Page 81
statutory reporting principles, (b) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves, and (c) at all times engage KPMG LLP or other
independent certified public accountants reasonably satisfactory to the Agent as
the independent certified public accountants of the Company and will not permit
more than thirty (30) days to elapse between the cessation of such firm's (or
any successor firm's) engagement as the independent certified public accountants
of the Company and the appointment in such capacity of a successor firm as shall
be reasonably satisfactory to the Agent.
9.5. Financial Statements, Certificates and Information.
The Company will deliver to each of the Banks:
(a) as soon as practicable, but, in any event not later than one
hundred (100) days after the end of each fiscal year of the Company, the
consolidated and consolidating balance sheet of the Company and its
Subsidiaries as at the end of such year, and the related consolidated and
consolidating statement of earnings and the consolidated statement of cash
flows, with each setting forth in comparative form the figures for the
previous fiscal year and all such consolidated statements to be in
reasonable detail, prepared in accordance with GAAP, and certified without
qualification (except as to changes in GAAP with which such accountants
concur) and without an expression of uncertainty as to the ability of the
Company or any of its Subsidiaries to continue as going concerns by KPMG
LLP or by other independent certified public accountants reasonably
satisfactory to the Agent, together with a written statement from such
accountants to the effect that they have read a copy of this Agreement, and
that, in making the examination necessary to said certification, they have
obtained no knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then existing Default or
Event of Default they shall disclose in such statement any such Default or
Event of Default; provided that such accountants shall not be liable to the
Banks for failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than sixty (60)
days after the end of each of the first three (3) fiscal quarters of each
fiscal year of the
Page 82
Company, copies of the unaudited consolidated and consolidating balance
sheet of the Company and its Subsidiaries, each as at the end of such
quarter, and the related consolidated and consolidating statement of
earnings and the consolidated statement of cash flows for the portion of
the Company's fiscal year then elapsed, all in reasonable detail and
prepared in accordance with GAAP, together with a certificate of any
Authorized Financial Officer of the Company that, subject to changes
resulting from audit and year-end adjustments, the information contained in
such financial statements fairly presents the financial condition and
results of operations of the Company and its Subsidiaries for the periods
covered;
(c) simultaneously with the delivery of the financial statements
referred to in (a) and (b) above, a statement, in the form attached hereto
as Exhibit E (a "Compliance Certificate"), certified by any Authorized
Financial Officer of the Company that the Company is in compliance with the
covenants contained in 9, 10 and 11 as of the end of the applicable period
and setting forth in reasonable detail computations evidencing such
compliance with the financial covenants set forth in 11 and (if applicable)
reconciliations to reflect changes in GAAP since the Balance Sheet Date;
(d) contemporaneously with the filing or mailing thereof, copies of
all other financial statements and reports as the Company shall send to any
holders of Indebtedness of the Company or the stockholders of the Company,
and copies of all regular and periodic reports which the Company may be
required to file with the Securities and Exchange Commission or any similar
or corresponding federal or state governmental commission, department or
agency substituted therefor;
(e) (i) within fifteen (15) Business Days after the end of each of the
first three fiscal quarters of each year, a net accounts receivable aging
report with respect to the "Accounts" (as such term is defined in the
Uniform Commercial Code as in effect in The Commonwealth of Massachusetts)
of the Company and the Restricted Subsidiaries which are included in the
Collateral, (ii) within fifteen (15) Business Days after the end of the
fourth fiscal quarter of each year, a gross accounts receivable aging
report with respect to the "Accounts" (as such term is defined in the
Uniform Commercial Code as in effect in The Commonwealth of Massachusetts)
of the Company
Page 83
and the Restricted Subsidiaries which are included in the Collateral, and
(iii) within thirty (30) Business Days after the end of the fourth fiscal
quarter of each year, a net accounts receivable aging report with respect
to the "Accounts" (as such term is defined in the Uniform Commercial Code
as in effect in The Commonwealth of Massachusetts) of the Company and the
Restricted Subsidiaries which are included in the Collateral;
(f) (i) within fifteen (15) Business Days after the end of the first
three fiscal quarters of each year, an inventory designation report in form
and substance reasonably satisfactory to the Agent, and (ii) within thirty
(30) Business Days after the end of the fourth fiscal quarter of each year,
an inventory designation report in form and substance reasonably
satisfactory to the Agent;
(g) within fifteen (15) Business Days after the end of each fiscal
quarter, a report as to the Foreign Scheduled Facilities and outstandings
thereunder by facility and in form and substance reasonably satisfactory to
the Agent;
(h) as soon as practicable, but in any event not later than sixty (60)
days after the end of each fiscal year, the budget of the Company for the
next fiscal year, and from time to time upon the reasonable request of the
Agent, projections of the Company and its Subsidiaries updating those
projections delivered to the Banks and referred to in 8.8.3 or, if
applicable, updating any later such projections delivered in response to
this 9.5(h); and
(i) from time to time such other financial data and information as the
Agent or any Bank may reasonably request.
9.6. Notices.
9.6.1. Defaults.
The Company will promptly notify the Agent and each of the Banks in
writing of the occurrence of any Default or Event of Default, together with
a reasonably detailed description thereof, and the actions the Company
proposes to take with respect thereto. If (i) any Person shall give any
notice or take any other action in respect of a claimed default (whether or
not constituting an Event of Default) under this Agreement or any other
note, evidence of indebtedness, indenture or other obligation to which or
with respect to which the Company or any of its Subsidiaries is a
Page 84
party or obligor, whether as principal, guarantor, surety or otherwise, and
(ii) the aggregate amount of all of the indebtedness of the Company and its
Subsidiaries in respect of such claimed defaults shall exceed $15,000,000
at any one time, the Company shall forthwith give written notice thereof to
the Agent and each of the Banks, describing the notice or action and the
nature of the claimed default.
9.6.2. Environmental Events.
The Company will promptly give notice to the Agent and each of the
Banks (a) of any violation of any Environmental Law that the Company or any
of its Subsidiaries reports in writing or is reportable by such Person in
writing (or for which any written report supplemental to any oral report is
made) to any Governmental Authority that would reasonably be expected to
have a Material Adverse Effect and (b) upon becoming aware thereof, of any
inquiry, proceeding, investigation, or other action, including a notice
from any agency of potential environmental liability, of any Governmental
Authority that would reasonably be expected to have a Material Adverse
Effect.
9.6.3. Notification of Claim against Collateral.
The Company will, immediately upon becoming aware thereof, notify the
Agent and each of the Banks in writing of any material setoff, claims,
withholdings or other defenses to which any of the Collateral, or the
Agent's rights with respect to the Collateral, are subject, except for any
thereof permitted by the Security Documents or any Permitted Liens, and
other than reconciliations with customers and vendors in the ordinary
course of business.
9.6.4. Notices Concerning Inventory Collateral.
The Company shall provide to the Agent prompt notice of any physical
count of the Company's or any of the Restricted Subsidiaries' Inventory,
together with a copy of the results thereof certified by the Company or
such Restricted Subsidiary.
9.6.5. Notice of Litigation and Judgments.
The Company will, and will cause each of its Subsidiaries to, give
notice to the Agent and each of the Banks in writing within fifteen (15)
days of becoming aware of any litigation or proceedings threatened in
writing or
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any pending litigation and proceedings affecting the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries is or
becomes a party involving an uninsured claim against the Company or any of
its Subsidiaries that could reasonably be expected to have a Material
Adverse Effect and stating the nature and status of such litigation or
proceedings. The Company will, and will cause each of its Subsidiaries to,
give notice to the Agent and each of the Banks, in writing, in form and
detail reasonably satisfactory to the Agent, within ten (10) days of any
judgment, final or otherwise, against the Company or any of its
Subsidiaries in an amount not covered by insurance in excess of
$15,000,000.
9.7. Corporate Existence; Maintenance of Properties.
The Company will, and will cause each of the other Hasbro Companies and
Hasbro SA to, maintain its legal existence and good standing under the laws of
its jurisdiction of incorporation, maintain its qualification to do business in
each state in which the failure to do so would have a Material Adverse Effect,
and maintain all of its rights and franchises reasonably necessary to the
conduct of its business. The Company will cause all of its properties and those
of the other Hasbro Companies used or useful in the conduct of its business or
the business of the Hasbro Companies to be maintained and kept in good
condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and will cause each of the Hasbro Companies to continue to engage primarily in
the businesses now conducted by them and in related businesses; provided,
however, that, subject to the provisions of 10.5.2 hereof, nothing in this 9.7
shall prevent any Asset Sale permitted by 10.5.2 hereof, or prevent the Company
from discontinuing the operation and maintenance of any of its properties, or
those of its Subsidiaries, or from dissolving or liquidating any Subsidiary or
from consolidating or merging any Subsidiary with or into another Subsidiary or
with and into the Company, if such discontinuance, dissolution or liquidation,
consolidation or merger is, in the judgment of the Company, desirable in the
conduct of the business of the Company and its Subsidiaries on a consolidated
basis and does not in the aggregate have a Material Adverse Effect.
9.8. Insurance.
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The Company will maintain, and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurance companies, funds or
underwriters, or by reasonable self- insurance, insurance of the kinds, covering
the risks and in the relative proportionate amounts usually carried by
reasonable and prudent companies conducting businesses similar to that of the
Company and otherwise in accordance with the terms of the Security Documents to
which such Person is a party.
9.9. Taxes.
The Company will, and will cause each of the other Hasbro Companies to,
duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies, which if unpaid might by law become a lien or
charge upon any of its property; provided, however, that any such tax,
assessment, charge, levy or claim need not be paid if either (a) the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Company or such Subsidiary shall have set aside on its
books, in accordance with GAAP, adequate reserves with respect thereto or (b)
such taxes, assessments and other governmental charges in the aggregate are not
material to the business or assets of the Company and its Subsidiaries on a
consolidated basis; and provided, further, that the Company and such Subsidiary
will pay or arrange for the bonding of all such taxes, assessments, charges,
levies or claims forthwith upon the commencement of proceedings to foreclose any
lien which may have attached as security therefor.
9.10. Access.
The Company will, and will cause each of the other Hasbro Companies to, (a)
permit the Agent, by its representatives and agents, to inspect any of the
properties, including, without limitation, corporate books, computer files and
tapes and financial records of each of the Hasbro Companies, to examine and make
copies of the books of accounts and other financial records of each of the
Hasbro Companies at such reasonable times and intervals as the Agent may
determine, and (b) permit each of the Banks to discuss the affairs, finances and
accounts of each of the Hasbro Companies with, and to be advised as to the same
by, their respective officers at such reasonable times and intervals as the
Banks may designate. The Banks and the Agent agree that
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they will treat in confidence all financial information with respect to the
Company and its Subsidiaries and all information obtained during such inspection
or discussion or pursuant to 9.5 which has not become public without violation
hereof, and will not, without the consent of the Company, disclose such
information to any third party or any trust or investment employee or trust or
investment officer of any Bank, and, if any representative or agent of the Banks
or the Agent shall not be an employee of one of the Banks or the Agent or any
affiliate of the Banks or the Agent, such designee shall be reputable and of
recognized standing and shall agree in writing to treat in confidence the
information obtained during any such inspection and, without the prior written
consent of the Company, not to disclose such information to any third party or
make use of such information for personal gain. Notwithstanding the foregoing,
the Company hereby authorizes the Agent and each of the Banks to disclose
information obtained pursuant to this Agreement to banks or other financial
institutions who are participants or potential participants in or assignees of
the Loans made or to be made hereunder (provided, that prior to any such
disclosure to any such participant, potential participant or assignee, such
Person shall have agreed to be bound by the provisions of this 9.10 and 22
pursuant to a confidentiality agreement substantially in the form of Exhibit H
hereto and provided to the Company), and where required by applicable law or
required or requested by governmental or regulatory authorities.
9.11. Compliance with Laws, Contracts, Licenses, and Permits.
The Company will, and will cause each of the other Hasbro Companies to,
comply with (i) all applicable laws and regulations wherever its business is
conducted, including, without limitation, Environmental Laws, except where the
failure to comply is not reasonably likely to have a Material Adverse Effect,
(ii) the provisions of its charter documents and by-laws, (iii) all agreements
and instruments by which it or any of its properties may be bound except where
the failure to comply is not reasonably likely to have a Material Adverse
Effect, and (iv) all applicable decrees, orders, and judgments, except where the
failure to comply is not reasonably likely to have a Material Adverse Effect. If
at any time while any Loan, Note, Unpaid Reimbursement Obligation or Letter of
Credit is outstanding or any Bank has any obligation to make Loans hereunder or
the Agent has any obligations to issue, extend or renew any Letters of Credit,
any authorization, consent, approval, permit or license from any officer, agency
or instrumentality of any government shall become necessary or required in order
that the Company may
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fulfill any of its obligations hereunder, the Company will promptly take or
cause to be taken all reasonable steps within the power of the Company to obtain
such authorization, consent, approval, permit or license and furnish the Banks
with evidence thereof.
9.12. Employee Benefit Plans.
The Company will (a) promptly upon filing the same with the Department of
Labor or Internal Revenue Service upon request of the Agent, furnish to the
Agent a copy of the most recent actuarial statement required to be submitted
under 103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (b) promptly upon
receipt or dispatch, furnish to the Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under 302, 4041, 4042, 4043,
4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under
4041A, 4202, 4219, 4242, or 4245 of ERISA.
9.13. Fiscal Year.
The Company will have a fiscal year which ends on the last Sunday in
December of each calendar year. The Company may change its fiscal year upon (a)
sixty (60) days prior written notice to the Agent and the Banks and (b) in the
case of a change in fiscal year where the new fiscal year end is not within
forty-five (45) days of the fiscal year end specified in the first sentence of
this 9.13, receipt by the Company of the prior written consent of the Majority
Banks, which consent shall not be unreasonably withheld, provided that the
granting of such consent by the Majority Banks shall be conditioned upon the
Company's entering into such appropriate amendments to this Agreement, and
delivering therewith such supplemental documents, agreements, certificates,
accounting reports, and legal opinions, as may be reasonably requested by the
Majority Banks in order to reflect the impact of such change in fiscal year on
the terms hereof.
9.14. Additional Significant Subsidiaries and Restricted Subsidiaries.
Within thirty (30) days after the formation or acquisition by the Company
or its Subsidiaries of any Person which is not designated in this Agreement as a
Hasbro Company and otherwise meets the conditions set forth in the definition of
"Significant Subsidiary" herein for constituting a Significant Subsidiary or
meets the conditions set forth in the definition of "Restricted Subsidiary"
herein for constituting a Restricted Subsidiary, such
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Person will be deemed to be a Hasbro Company under this Agreement and the
Company will cause such Person to observe all the obligations and be bound by
all the limitations set forth in this Agreement with respect to Hasbro
Companies, including, without limitation, if such Subsidiary is a Significant
Subsidiary, requiring the execution and delivery of a Subordination Agreement in
the form of, mutatis mutandis, Exhibit F hereto; and if such Subsidiary is a
Restricted Subsidiary, requiring the execution and delivery of a joinder
agreement, in form and substance reasonably satisfactory to the Agent, to the
Guaranty and the Subsidiary Security Agreement, together with other documents,
certificates and instruments (including Perfection Certificates and UCC
financing statements) required to be delivered pursuant to such Security
Documents and otherwise as may be reasonably requested by the Agent. Once any
Person has been so designated as a Hasbro Company hereunder, such Person shall
continue to be a Hasbro Company hereunder until the earlier of (i) the date on
which such Person ceases to be a Subsidiary of the Company in accordance with
the terms of 10.5.2 hereof or the last sentence of 9.6 hereof, and (ii) the date
on which such Person shall have performed in full its obligations under the Loan
Documents and the Loan Documents to which such Person is a party have ceased to
be in force and effect.
9.15. Ratings.
Promptly upon the Company receiving notice of the issuance of any Rating or
the change in any existing Rating, the Company shall give written notice of such
Rating and of the resultant Rating to the Agent. The Agent promptly shall
furnish copies of each of such notices to the Banks.
9.16. Agency Account Agreements.
The Company shall maintain, and shall cause Wizards of the Coast, Inc. and
OddzOn, Inc. to maintain, the lock box account maintained by such Person with
Bank of America, N.A. as of the date hereof, provided, however, if the Company,
Wizards of the Coast, Inc. or OddzOn, Inc. terminates such lock box account
pursuant to 10.13 or otherwise instructs account debtors or other obligors to
remit payments to an account other than such lock box account, the Company,
Wizards of the Coast, Inc. or OddzOn, Inc., as the case may be, shall have
established new cash management arrangements on terms reasonably satisfactory to
the Agent with financial institutions which have executed agency account
agreements in form and substance reasonably satisfactory to the Agent.
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9.17. Further Assurances.
The Company and (solely with respect to the Hasbro SA Loans) Hasbro SA will
cooperate with the Banks and execute such further instruments and documents as
the Banks shall reasonably request to carry out to their reasonable satisfaction
the transactions contemplated by this Agreement and the other Loan Documents.
10. CERTAIN NEGATIVE COVENANTS OF THE COMPANY.
The Company covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
10.1. Restrictions on Indebtedness.
The Company will not permit any Operating Subsidiary of the Company to
create, incur, assume, guarantee or be or remain liable with respect to,
contingently or otherwise, any Indebtedness other than:
(a) Intercompany Indebtedness of Operating Subsidiaries of the
Company;
(b) Indebtedness of Foreign Subsidiaries, provided that the aggregate
amount of such Indebtedness guaranteed by the Company and outstanding at
any time shall not exceed the sum of (i) the Foreign Sublimit and (ii)
$25,000,000;
(c) Subordinated Debt or other long term unsecured Indebtedness having
a maturity at least one (1) year after the Final Maturity Date and
providing for no payments of principal prior to the Final Maturity Date;
provided that, in the case of the incurrence of additional Subordinated
Debt or other long term unsecured Indebtedness by such Subsidiary after the
Effective Date, (i) the Company applies the net cash proceeds of such
additional Subordinated Debt or other long term unsecured Indebtedness in
accordance with 2.10(a)(iii) and (ii) no Default or Event of Default has
occurred and is continuing at the time of the incurrence of such additional
Indebtedness or would result after giving effect thereto;
(d) Indebtedness incurred in connection with the acquisition after the
date hereof of any real or personal property by such Operating Subsidiary
or under any
Page 91
Capitalized Lease, provided that the aggregate principal amount of such
Indebtedness of the Operating Subsidiaries shall not exceed the aggregate
amount of $10,000,000 at any one time;
(e) Indebtedness to the Banks and the Agent arising under any of the
Loan Documents;
(f) sales of receivables in connection with asset dispositions
permitted under 10.5.2;
(g) other Indebtedness existing on the date hereof and described on
Schedule 10.1 hereto;
(h) Indebtedness in respect of Interest Hedging Agreements in an
aggregate amount not to exceed, in the case of Interest Hedging Agreements
to which neither the Agent nor any Bank is a party, $75,000,000 outstanding
at any time; and
(i) other Indebtedness in an aggregate principal amount not to exceed
$25,000,000 outstanding at any time.
10.2. Restrictions on Liens.
The Company will not, and will not permit any Subsidiary (other than any
Foreign Subsidiary) to, (a) create or incur or suffer to be created or incurred
or to exist any Lien upon any of its property or assets of any character whether
now owned or hereafter acquired, or upon the income or profits therefrom; (b)
transfer any of such property or assets or the income or profits therefrom for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to payment of its general creditors; (c)
acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security agreement,
device or arrangement; or (d) sell, assign, pledge or otherwise transfer any
"receivables" as defined in clause (g) of the definition of the term
"Indebtedness," with or without recourse (except the conversion or exchange of
accounts receivable into or for notes receivable in connection with the
compromise or collection thereof, or as otherwise permitted by 10.5.2); provided
that the Company or any of its Subsidiaries may create or incur or suffer to be
created or incurred or to exist:
(i) Liens to secure taxes, assessments and other government charges or
claims for labor, material or
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supplies, but only to the extent that and so long as the payment thereof
shall not at the time be required to be made in accordance with 9.9 hereof;
(ii) deposits or pledges made in connection with, or to secure payment
of, worker's compensation, unemployment insurance, old age pensions or
other social security or insurance-related obligations, or to secure the
performance of bids, tenders, contracts (other than those relating to
borrowed money) or leases (other than Capitalized Leases), or to secure
statutory obligations or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds or obligations required in the ordinary
course of business;
(iii) Liens in respect of judgments or awards that have been in force
for less than the applicable appeal period so long as execution is not
levied thereunder or in respect of which the Company or the appropriate
Subsidiary of the Company shall at the time in good faith be prosecuting an
appeal or a proceeding for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(iv) Liens of carriers, warehousemen, mechanics and materialmen, and
other like Liens arising in the ordinary course of business, in existence
less than one hundred twenty (120) days from the date of creation thereof
in respect of obligations not overdue or being contested in good faith by
appropriate proceedings, with respect to which obligations the Company has
set aside on its books reserves in accordance with GAAP;
(v) encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under
leases to which the Company or a Subsidiary of the Company is a party, and
other minor Liens, none of which in the opinion of the Company interferes
materially with the use of the property affected in the ordinary conduct of
the business of the Company and its Subsidiaries, which defects do not
individually or in the aggregate have a material adverse effect on the
business of the Hasbro Companies, considered as a whole;
(vi) Liens consisting of purchase money security interests in or
purchase money mortgages on real or personal
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property acquired after the date hereof to secure purchase money
Indebtedness incurred in connection with the acquisition of such property
or Capitalized Leases, which Liens cover only the real or personal property
so acquired or leased provided that the aggregate amount of Indebtedness
secured by such Liens and Capitalized Leases does not exceed $50,000,000
outstanding at any time;
(vii) Liens existing on the date hereof and listed on Schedule 10.2
hereto;
(viii) Liens securing the Secured Obligations in favor of the Agent
for the benefit of the Banks and the Agent;
(ix) Liens on the property or assets of a Person which becomes a
Subsidiary of the Company after the date hereof securing Indebtedness of
such Subsidiary permitted under 10.1 provided that (i) such Liens existed
at the time such Person became such a Subsidiary and were not created in
anticipation thereof and (ii) any such Lien is not spread to cover any
property or assets of such Person after the time such person becomes a
Subsidiary;
(x) Liens existing on assets or properties at the time of the
acquisition thereof by the Company or any Subsidiary of the Company which
were not created in anticipation of the acquisition thereof by the Company
or such Subsidiary, and which do not materially interfere with the use,
occupancy, operation and maintenance of the property or assets subject
thereto or extend to or cover any assets or property of the Company or such
Subsidiary other than the assets or property being acquired or secure any
Indebtedness not permitted under 10.1;
(xi) any encumbrance or restriction (including, without limitation,
put and call agreements and transfer restrictions, but not pledges) with
respect to the Capital Stock of any joint venture or similar arrangement
created pursuant to the joint venture or similar agreements with respect to
such joint venture or similar arrangement;
(xii) a Lien on the shares of Capital Stock of Infogrames and other
related rights and interests to secure the Company's obligations under a
collar or other hedging agreement between the Company and a third party
reasonably satisfactory to the Agent to hedge against fluctuations in the
price of such shares, provided that such agreement is on
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terms and conditions reasonably satisfactory to the Agent;
(xiii) Liens on assets of any Foreign Subsidiary securing Indebtedness
of any Foreign Subsidiary permitted by 10.1(b) or 10.1(i);
(xiv) Liens on assets (other than the Collateral) to secure
obligations in respect of Interest Hedging Agreements not to exceed, in the
case of Interest Hedging Agreements to which neither the Agent nor any Bank
is a party, $75,000,000 in aggregate amount at any time outstanding; and
(xv) other Liens on assets (other than the Collateral) which secure
obligations not exceeding $25,000,000 in aggregate amount at any time
outstanding.
10.3. Restrictions on Investments.
The Company will not, and will not permit any of its Subsidiaries to, make
or permit to exist or to remain outstanding any Investment except Investments
in:
(a) securities with maturities of one (1) year or less from the date
of acquisition issued or fully guaranteed or insured by the United States
Government or any agency thereof;
(b) certificates of deposit and time deposits, bankers acceptances and
overnight bank deposits of any Bank or of any commercial bank having
capital and surplus in excess of $500,000,000;
(c) repurchase obligations of any Bank or of any commercial bank
having capital and surplus in excess of $500,000,000, having a term of not
more than 30 days with respect to securities issued or fully guaranteed or
insured by the United States Government or any agency or instrumentality
thereof;
(d) commercial paper of a domestic issuer rated at least "A2" or the
equivalent thereof by Standard & Poor's or any successor rating agency or
"P-2" or the equivalent thereof by Xxxxx'x or any successor rating agency
(or if at such time neither is issuing ratings, then a comparable rating of
such other nationally recognized rating agency as shall be approved by the
Agent in its reasonable judgment)
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(e) securities with maturities of one (1) year or less from the date
of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case
may be) are rated at least "A" by Standard & Poor's or any successor rating
agency or "A" by Xxxxx'x or any successor rating agency (or if at such time
neither is issuing ratings, then a comparable rating of such other
nationally recognized rating agency as shall be approved by the Agent in
its reasonable judgment);
(f) securities with maturities of one (1) year or less from the date
of acquisition backed by standby letters of credit issued by any Bank or
any commercial bank having capital and surplus in excess of $500,000,000;
(g) shares of money market funds that are subject to the risk limiting
conditions of Rule 2a-7 or any successor rule of the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended;
(h) investments similar to any of the foregoing denominated in Dollars
or foreign currencies approved by the board of directors or Treasurer of
the Company, and in each case provided in clauses (a), (b) and (d) above,
maturing within twelve (12) months after the date of acquisition;
(i) Investments existing on the date hereof;
(j) Investments arising from payments under (i) the Guaranty, (ii)
guaranties of the Indebtedness of a Foreign Subsidiary permitted by
10.1(b), or (iii) the guaranty set forth in 27 of this Agreement;
(k) Investments received as proceeds of asset dispositions permitted
by 10.5.2;
(l) Investments consisting of loans and advances to officers,
directors and employees for moving, entertainment, travel and other similar
expenses and other Investments in connection with the relocation of
employees in the ordinary course of business;
(m) Investments by the Company or a Subsidiary of the Company in
Subsidiaries formed for the purpose of
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consummating Permitted Acquisitions or acquired in connection with
Permitted Acquisitions;
(n) Investments in the Company or any Subsidiary of the Company,
provided that neither the Company nor any Restricted Subsidiary shall make
any Investment in any Foreign Subsidiary unless (i) such Investment is in
the ordinary course of business or is necessary in the reasonable judgment
of management of the Company for the operation of the business of any
Foreign Subsidiary or Foreign Subsidiaries or (ii) after giving effect to
such Investment, all such Investments in Foreign Subsidiaries made pursuant
to this subclause (ii) do not exceed $100,000,000 outstanding at such time;
(o) Investments permitted by 10.5;
(p) Investments in the nature of pledges, deposits or other Liens (i)
with respect to leases or utilities provided to third parties in the
ordinary course of business or (ii) otherwise described under 10.2;
(q) Investments representing evidences of Indebtedness, securities or
other property received from another Person in connection with any
bankruptcy or proceeding or other reorganization of such other Person or as
a result of foreclosure, perfection or enforcement of any Lien or exchange
for evidences of Indebtedness, securities or other property of such other
Person;
(r) Investments constituting Capital Expenditures to the extent
permitted by 11.4;
(s) Investments under any forward contract, futures contract, swap,
option or other financing agreement or arrangement (including, without
limitation, caps, floors, collars and similar agreements), the value of
which is dependent upon interest rates, currency exchange rates,
commodities or other indices, to the extent permitted by 10.14;
(t) Investments consisting of loans and advances to officers,
directors or employees relating to indemnification or reimbursement of any
officers, directors or employees in respect of liabilities relating to
their serving in any such capacity; and
(u) other Investments in an aggregate amount not to
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exceed $30,000,000 at any one time outstanding.
10.4. Restricted Payments.
The Company will not make any Restricted Payment; provided, however, so
long as no Default or Event of Default then exists or would result from such
payment, the Company may:
(a) declare or pay dividends on or in respect of any shares of any
class of Capital Stock of the Company in any fiscal year in an aggregate
amount not to exceed the greater of the annual amount paid at the current
quarterly rate of three cents ($0.03) per share by the Company and 25% of
Consolidated Net Earnings for the prior fiscal year;
(b) (i) for the period prior to December 1, 2002, repay, redeem or
repurchase up to $50,000,000 aggregate principal amount of the Hasbro 2003
Notes, and (ii) for the period from December 1, 2002 to the maturity date
of the Hasbro 2003 Notes, repay, redeem or repurchase all or any portion of
the Hasbro 2003 Notes, provided that, in the case of this clause (ii), (A)
no such repayment, redemption or repurchase may be made with the proceeds
of the Loans and (B) immediately prior to and after giving effect to such
repayment, redemption or repurchase, the Outstanding amount of the Company
Loans equals $0;
(c) repay, redeem or repurchase the remaining outstanding portion of
the Hasbro 2003 Notes on or after the maturity date thereof, provided,
however, in no event may such repayment, redemption or repurchase be made
using proceeds of the Loans in an amount greater than $100,000,000;
(d) repay, redeem or repurchase any Indebtedness with (i) any proceeds
of any Refinancing Indebtedness or (ii) subject to 2.10(II), no more than
fifty percent (50%) of the Net Cash Sale Proceeds of any Material Asset
Sale; and
(e) make other Restricted Payments in any fiscal year in an aggregate
amount not to exceed $15,000,000.
10.5. Merger, Consolidation and Disposition of Assets.
10.5.1. Mergers and Acquisitions.
The Company will not, and will not permit any of its Subsidiaries to,
become a party to any merger, amalgamation
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or consolidation, or agree to or effect any acquisition of at least a
majority of the assets or Capital Stock of any Person, or any business unit
or product line thereof (other than the acquisition of assets in the
ordinary course of business consistent with past practices) except:
(a) the merger or consolidation of one (1) or more of the
Subsidiaries of the Company with and into the Company, or the merger
or consolidation of two (2) or more Subsidiaries of the Company;
provided that if any of the parties to such merger or consolidation is
a Restricted Subsidiary, the survivor of such merger or consolidation
shall be a Restricted Subsidiary or the Company; or
(b) the acquisition of stock or other securities of, or any
assets of, any Person, provided that:
(i) no Default or Event of Default has occurred and is
continuing or would result from such acquisition;
(ii) not less than five (5) Business Days prior to the
consummation of such proposed acquisition, the Company shall have
delivered to the Agent a Compliance Certificate demonstrating pro
forma compliance with the financial covenants set forth in 11
hereof; and
(iii) the aggregate purchase price for all such acquisitions
shall not exceed (A) $25,000,000 for the period from the
Effective Date through the first anniversary of the Effective
Date, (B) $35,000,000 for the period from the day immediately
following the first anniversary of the Effective Date through the
second anniversary of the Effective Date and (C) $50,000,000 for
the period from the day immediately following the second
anniversary of the Effective Date through the Final Maturity Date
(and any portion of any amount not utilized in any such period
shall be carried over to increase the amount permitted in any
subsequent period); provided that, (1)(x) the limitations set
forth in clauses (A), (B) and (C) above shall not apply to any
such acquisition consummated after the occurrence of an
Investment Grade Rating Event and prior to the subsequent
occurrence, if any, of a Investment Grade Rating
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Non-Event (an "Investment Grade Acquisition"), (y) the aggregate
purchase price for all Investment Grade Acquisitions consummated
in any period described in clause (A), (B) or (C) above shall not
exceed $100,000,000 for such period (and any portion of any
amount not utilized in any such period shall be carried over to
increase the amount permitted in any subsequent period), and (z)
in the event of any such subsequent occurrence of any Investment
Grade Rating Non-Event, the limitations set forth in clauses (A),
(B) and (C) above shall apply to any such acquisition consummated
after such occurrence and prior to the subsequent occurrence of
an Investment Grade Rating Event, and (2) any earnout payments in
respect of assets or business acquired prior to the Effective
Date shall not be included in the calculation of any amount
described in this clause (iii); or
(c) the acquisition of Capital Stock of any Subsidiary of the
Company existing on the Effective Date from any then existing minority
holder thereof.
10.5.2. Disposition of Assets.
The Company will not, and will not permit any of its Subsidiaries to,
become a party to or agree to or effect any disposition or swap of assets,
other than (a) the sale of inventory, (b) the licensing of intellectual
property, (c) the disposition of obsolete or other assets not necessary for
the operation of the Company's or such Subsidiary's business, in each case
in the ordinary course of business, (d) Asset Sales provided that in the
case of such Asset Sale, (i) no Default or Event of Default has occurred
and is continuing or would result from such Asset Sale and, (ii) to the
extent required thereunder, the Net Cash Sale Proceeds are applied to the
Loans as set forth in 2.10(a)(i); (e) the sale or discount by any Foreign
Subsidiary with or without recourse of accounts receivable or notes
receivable arising in the ordinary course of business, or the conversion or
exchange of accounts receivable into or for notes receivable in connection
with the compromise or collection thereof, (f) disposition of assets by the
Company to any of its Restricted Subsidiaries or by any Subsidiary to the
Company or any of its Restricted Subsidiaries, or by any Foreign Subsidiary
to the Company or any Subsidiary, (g) the abandonment, sale or other
disposition of intellectual
Page 100
property that, in the reasonable judgment of the Company, is no longer
economically practicable to maintain or useful in the conduct of the
business of the Hasbro Companies taken as a whole, (h) any sale or
disposition of any claim as a creditor in a bankruptcy or similar
proceeding in the ordinary course of business, and (i) any Specified Sale.
Nothing in this 10.5.2 shall prevent the Company from discontinuing the
operation and maintenance of any of its properties, or those of its
Subsidiaries, or from dissolving or liquidating any Subsidiary or from
consolidating or merging any Subsidiary with or into another Subsidiary or
with and into the Company, if such discontinuance, dissolution or
liquidation, consolidation or merger is, in the judgment of the Company,
desirable in the conduct of the business of the Company and its
Subsidiaries on a consolidated basis and does not in the aggregate have a
Material Adverse Effect.
10.6. Sale and Leaseback.
The Company will not, and will not permit any of its Subsidiaries (other
than a Foreign Subsidiary) to, enter into any arrangement, directly or
indirectly, whereby the Company or any Subsidiary of the Company shall sell or
transfer any property owned by it in order then or thereafter to lease such
property or lease other property that the Company or any Subsidiary of the
Company intends to use for substantially the same purpose as the property being
sold or transferred, except in connection with any Asset Sale permitted under
10.5.2.
10.7. Compliance with Environmental Laws.
Except as would not reasonably be expected to result in a Material Adverse
Effect, the Company will not, and will not permit any of its Subsidiaries to,
(a) use any of the Real Estate or any portion thereof for the handling,
processing, storage or disposal of Hazardous Substances except to the extent
required by its day-to-day operations and in all instances in compliance with
applicable Environmental Laws, (b) cause or permit to be located on any of the
Real Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (c) generate any Hazardous Substances on any of the Real
Estate except to the extent required by its day-to-day operations and in all
instances in compliance with applicable Environmental Laws, (d) conduct any
activity at any Real Estate or use any Real Estate in any manner so as to cause
a release (i.e. releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping)
Page 101
or threatened release of Hazardous Substances on, upon or into the Real Estate
or (e) otherwise conduct any activity at any Real Estate or use any Real Estate
in any manner that would violate any Environmental Law or bring such Real Estate
in violation of any Environmental Law.
10.8. Subordinated Debt.
The Company will not permit any Operating Subsidiary to amend, supplement
or otherwise modify (a) the subordination terms of any of the Subordinated Debt
or (b) any other terms of any of the Subordinated Debt, the effect of which
would be to shorten maturity or average weighted life, increase pricing or
amount, make covenants or default provisions more restrictive, add covenants or
default provisions, or otherwise make such Subordinated Debt materially more
burdensome to the such Operating Subsidiary or in any manner be materially
adverse to the interests of the Banks and the Agent, or prepay, redeem or
repurchase any of the Subordinated Debt or send any irrevocable notice of
prepayment, redemption or repurchase to holders of any Subordinated Debt.
10.9. Employee Benefit Plans.
Neither the Company nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of 406
of ERISA or 4975 of the Code which could result in a material liability for
the Company or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in 302 of ERISA, whether or
not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Company or any of its Subsidiaries pursuant to 302(f) or 4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to 307 of ERISA or 401(a)(29) of the Code;
Page 102
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of 4001 of ERISA) of all Guaranteed
Pension Plans exceeding the value of the aggregate assets of such Plans by
more than $15,000,000 at any time, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in excess of
benefit liabilities; or
(f) permit or take any action which would contravene any Applicable
Pension Legislation in the United States, except as such action would not
be reasonably likely to result in a Material Adverse Effect.
10.10. Business Activities.
The Company will not, and will not permit any of its Subsidiaries to,
engage directly or indirectly (whether through Subsidiaries or otherwise) in any
type of business other than the businesses conducted by them on the Effective
Date and in related businesses.
10.11. Transactions with Affiliates.
The Company will not, and will not permit any of its Subsidiaries to,
engage in any material transaction with any Affiliate that is not the Company or
a Restricted Subsidiary (other than in connection with services as employees,
officers and directors), including any material contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any such Affiliate or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any such Affiliate has
a substantial interest or is an officer, director, trustee or partner, on terms
materially more favorable to such Person than would have been obtainable on an
arm's-length basis in the ordinary course of business excluding (a) any
transaction with an Affiliate controlled by the Company entered into in the
ordinary course of business, (b) Restricted Payments that otherwise comply with
this Agreement and (c) any transaction relating to the issuance of any class of
Capital Stock of the Company.
10.12. Restrictions on Negative Pledges.
The Company will not, nor will it permit any of its Subsidiaries to, except
for those existing agreements set forth and described on Schedule 10.12, enter
into or permit to exist any arrangement or agreement (excluding this Agreement,
and the
Page 103
Loan Documents and except any industrial revenue or development bonds,
agreements governing any purchase money liens, acquisition agreements or
Capitalized Leases or operating leases entered into in the ordinary course of
business otherwise permitted hereby (in which case any prohibition or limitation
shall only be effective against the assets that are, or are to be, financed,
acquired or leased thereby)) which directly or indirectly prohibits the Company
or any of its Subsidiaries from creating, assuming or incurring any Lien in
favor of the Banks or the Agent upon its properties, revenues or assets or those
of any of its Subsidiaries whether now owned or hereafter acquired.
10.13. Cash Management.
The Company will not, and will not permit Wizards of the Coast, Inc. or
OddzOn, Inc. to, (a) terminate such Person's existing lock box account
arrangements with Bank of America, N.A., or (b) instruct account debtors or
other obligors to remit payments to an account other than the lock box account
referenced in clause (a) above, in each case without providing at least thirty
(30) days prior written notice to the Agent.
10.14. Hedging Agreements.
The Company will not, and will not permit any of its Subsidiaries to, enter
into any Hedging Agreements, other than in the ordinary course of business and
not for purposes of speculation.
11. FINANCIAL COVENANTS.
The Company covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
11.1. Minimum EBITDA.
The Company will not permit EBITDA for any Reference Period ending with the
fiscal quarter referenced in the table below to be less than the amount set
forth in the table below opposite such fiscal quarter in such table:
Fiscal Quarter Ending: EBITDA
First Quarter 2002 $355,000,000
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Second Quarter 2002 $360,000,000
Third Quarter 2002 $330,000,000
Fourth Quarter 2002 $325,000,000
First Quarter 2003 $340,000,000
Second Quarter 2003 $345,000,000
Third Quarter 2003 $360,000,000
Fourth Quarter 2003 $400,000,000
First Quarter 2004 $425,000,000
Second Quarter 2004 $425,000,000
Third Quarter 2004 $425,000,000
Fourth Quarter 2004 $425,000,000
11.2. Total Funded Debt to EBITDA.
The Company will not permit the ratio of Consolidated Total Funded Debt at
the end of any fiscal quarter set forth in the table set forth below to EBITDA
for the Reference Period then ended to exceed the ratio set forth opposite such
fiscal quarter set forth in table below:
Fiscal Quarter Ending: Ratio
First Quarter 2002 3.10:1.00
Second Quarter 2002 3.60:1.00
Third Quarter 2002 4.40:1.00
Fourth Quarter 2002 3.50:1.00
First Quarter 2003 2.75:1.00
Second Quarter 2003 3.15:1.00
Third Quarter 2003 3.60:1.00
Fourth Quarter 2003 2.00:1.00
First Quarter 2004 2.00:1.00
Second Quarter 2004 2.25:1.00
Third Quarter 2004 2.75:1.00
Fourth Quarter 2004 2.00:1.00
11.3. Minimum Interest Coverage Ratio.
The Company will not permit, for any Reference Period ending with the
fiscal quarter referenced in the table below, the ratio of (a) EBITDA for such
period to (b) Consolidated Total Interest Expense for such period to be less
than the ratio set forth in the table below opposite such fiscal quarter in such
table:
Fiscal Quarter Ending: Ratio
First Quarter 2002 3.65:1.00
Page 000
Xxxxxx Xxxxxxx 0000 3.90:1.00
Third Quarter 2002 3.90:1.00
Fourth Quarter 2002 4.00:1.00
First Quarter 2003 4.60:1.00
Second Quarter 2003 5.10:1.00
Third Quarter 2003 5.85:1.00
Fourth Quarter 2003 7.00:1.00
First Quarter 2004 7.50:1.00
Second Quarter 2004 7.50:1.00
Third Quarter 2004 7.50:1.00
Fourth Quarter 2004 7.50:1.00
11.4. Capital Expenditures.
During any fiscal year referenced in the table set forth below, the Company
will not, and will not allow any of its Subsidiaries to, make Capital
Expenditures that exceed the aggregate amount set forth in the table below
opposite such period in such table:
Fiscal Year Ending: Amount
December 2002 $90,000,000
December 2003 $100,000,000
December 2004 $110,000,000
12. CONDITIONS TO EFFECTIVENESS.
The obligations of the Banks to convert the outstanding Syndicated Loans
under the Existing Credit Agreement to Syndicated Loans hereunder and to make
the initial Syndicated Loans, the Swing Line Bank to make the initial Swing Line
Loans and of the Agent to issue any initial Letters of Credit shall be subject
to the satisfaction of the following conditions precedent on or prior to March
30, 2002:
12.1. Loan Documents, etc.
(a) Each of the Loan Documents shall have been duly and properly
authorized, executed and delivered by the respective party or parties thereto
and shall be in full force and effect on and as of the Effective Date. The Agent
(i) shall have accepted delivery in Boston, Massachusetts of each of the duly
executed Loan Documents from each of the other parties thereto, and (ii) shall
have duly and properly executed each of the Loan Documents, to which it is a
party, in Boston, Massachusetts.
Page 106
(b) Executed original counterparts of each of the Loan Documents (other
than the Notes) shall have been furnished to each Bank or the Agent in
sufficient copies for each Bank and an executed copy of the Notes for each Bank
shall have been delivered to such Bank.
12.2. Performance, etc.
Each of the Hasbro Companies and Hasbro SA shall have duly and properly
performed, complied with and observed each of the covenants, agreements and
obligations to be performed, complied with or observed by it on or prior to such
date contained in the Loan Documents. No event shall have occurred on or prior
to the Effective Date and be continuing on such Effective Date, and no condition
shall exist on such Effective Date, which constitutes a Default or an Event of
Default.
12.3. Certified Copies of Charter Documents.
Each Bank or the Agent (in sufficient copies for each Bank) shall have
received from each of the Hasbro Companies and Hasbro SA a copy, each of which
shall have been certified by a duly authorized officer of such Person to be true
and complete on and as of the Effective Date, of each of (a) the charter or
other incorporation documents of such Person in effect on such date of
certification, and (b) the by-laws or equivalent governing document of such
Person as in effect on such date.
12.4. Proof of Corporate Action.
The Agent shall have received from each of the Hasbro Companies and Hasbro
SA copies for each Bank, certified by a duly authorized officer of such Person
to be true and complete on and as of the Effective Date, of the records of all
corporate action taken by such Person to authorize (a) its execution and
delivery of each of the Loan Documents to which it is or is to become a party,
(b) its performance of all of its agreements and obligations under each of the
Loan Documents, and (c) in the case of the Company and Hasbro SA, the borrowings
contemplated by this Agreement.
12.5. Incumbency Certificates.
The Agent shall have received from each of the Hasbro Companies and Hasbro
SA copies for each Bank of an original incumbency certificate, dated as of the
Effective Date signed by a duly authorized officer of such Person and giving the
name and bearing a specimen signature of certain individuals who shall be
Page 107
authorized: (i) to sign, in the name and on behalf of such Person, each of the
Loan Documents to which it is or is to become a party; and (ii) to give notices
to make application for the Loans and Letters of Credit and to take other action
on behalf of such Person under the Loan Documents.
12.6. Proceedings and Documents.
All corporate, governmental and other proceedings in connection with the
transactions contemplated by the Loan Documents, and all instruments and
documents incidental thereto, shall be in form and substance reasonably
satisfactory to the Agent and the Agent shall have received all such counterpart
originals or certified or other copies of all such instruments and documents as
the Agent shall have reasonably requested.
12.7. Validity of Liens.
The Security Documents shall be effective to create in favor of the Agent,
for the benefit of the Agent and the Banks, a legal, valid and enforceable first
priority (except for Permitted Liens entitled to priority under applicable law)
security interest in and Lien upon the Collateral, as and to the extent provided
therein. All filings, recordings, deliveries of instruments and other actions
necessary or desirable in the reasonable opinion of the Agent to protect and
preserve such security interests shall have been duly effected or arrangements
to effect the same shall have been made reasonably satisfactory to the Agent.
The Agent shall have received evidence thereof in form and substance
satisfactory to the Agent.
12.8. Certificates of Insurance.
The Agent shall have received certificates of insurance from an independent
insurance broker dated as of the Effective Date or such earlier date as may be
reasonably satisfactory to the Agent, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of the Security Agreements.
12.9. Agency Account Agreements.
The Agent shall have received amended agency account agreements, in form
and substance reasonably satisfactory to the Agent, executed by Bank of America,
N.A. and the Company or Wizards of the Coast, Inc., concerning the Agent's
security interest in the lock box accounts maintained by the Company and Wizards
of the Coast, Inc., therewith.
Page 108
12.10. Legal Opinions.
Each of the Banks and the Agent shall have received a favorable legal
opinion addressed to the Banks and the Agent, dated as of the Effective Date, in
form and substance reasonably satisfactory to the Banks and the Agent, from (a)
Xxxxx Xxxxxx, Esq., Senior Vice President and General Counsel of the Company,
and (b) Debevoise & Xxxxxxxx, special counsel to the Company.
12.11. Payment of Fees.
The Company shall have paid to the Banks or the Agent, as appropriate, the
Closing Fees and the Agent's Fee pursuant to 7.1 and 7.2, respectively.
12.12. Legality of Transactions.
No change in applicable law shall have occurred as a consequence of which
it shall have become and continue to be unlawful (a) for any Bank to perform any
of its agreements or obligations under any of the Loan Documents to which it is
a party on the Effective Date or (b) for the Company to perform any of its
material agreements or obligations under any of the Loan Documents to which it
is a party on the Effective Date.
13. CONDITIONS TO LOANS.
13.1. Conditions to Loans to the Company.
The obligations of the Banks to make any Syndicated Loan, the Swing Line
Bank to make any Swing Line Loan, and of the Agent to issue, extend or renew any
Letter of Credit, in each case to or for the account of the Company and whether
on or after the Effective Date, shall also be subject to the satisfaction of the
following conditions precedent:
13.1.1. Legality of Transactions.
With respect to any such obligation of any Bank, it shall not be
unlawful (a) for such Bank to perform any of its agreements or obligations
under any of the Loan Documents to which such Bank is a party on the
Drawdown Date of such Loans, or (b) for any of the Hasbro Companies to
perform any of its material agreements or obligations under any of the Loan
Documents to which it is a party on such date.
Page 109
13.1.2. Representations and Warranties.
Each of the representations and warranties made by or on behalf of the
Company and its Subsidiaries to the Banks in this Agreement or any other
Loan Document (other than representations and warranties made by Hasbro SA
to the Banks in this Agreement or any other Loan Document) shall be true
and correct in all material respects when made and shall for all purposes
of this Agreement, be deemed to be repeated on and as of the date of the
Company's notice of borrowing for such Loan on and as of the Drawdown Date
of such Loan, or the issuance, extension or renewal of such Letter of
Credit, and shall be true and correct in all material respects on and as of
each of such dates, except, in each case, as affected by the consummation
of the transactions contemplated by the Loan Documents or to the extent
representations and warranties expressly referring to an earlier date shall
relate to such earlier date.
13.1.3. Performance, etc.
Each of the Hasbro Companies shall have duly and properly performed,
complied with and observed in all material respects each of its covenants,
agreements and obligations contained in 9 and 10 hereof, and shall have
duly and properly performed, complied with and observed in all material
respects its covenants, agreements, and obligations in all other articles
of this Agreement and any of the other Loan Documents to which it is a
party or by which it is bound on the Drawdown Date for such Loan or the
date of the issuance, extension or renewal of such Letter of Credit. No
event shall have occurred on or prior to such date and be continuing on
such date, and no condition shall exist on such date, which constitutes a
Default or an Event of Default.
13.1.4. Proceedings and Documents.
All corporate, governmental and other proceedings in connection with
the transactions contemplated by the Loan Documents and all instruments and
documents incidental thereto shall be in form and substance reasonably
satisfactory to the Agent and the Agent shall have received all such
counterpart originals or certified or other copies of all such instruments
and documents as the Agent shall have reasonably requested.
13.1.5. Loan Documents.
Page 110
Each of the Loan Documents required by 9.14 hereof shall have been
duly and properly authorized, executed and delivered by the respective
party or parties thereto and shall be in full force and effect on and as of
such date.
13.2. Conditions to Loans to Hasbro SA.
The obligations of the Banks to make any Hasbro SA Loan after the Effective
Date shall be subject to the satisfaction of the following conditions precedent:
13.2.1. Legality of Transactions.
With respect to any such obligation of any Bank, it shall not be
unlawful (a) for such Bank to perform any of its agreements or obligations
under any of the Loan Documents to which such Bank is a party on the
Drawdown Date of such Loans, or (b) for Hasbro SA or any of the Hasbro
Companies to perform any of its material agreements or obligations under
any of the Loan Documents to which it is a party on such date.
13.2.2. Representations and Warranties.
Each of the representations and warranties made by or on behalf of the
Company and its Subsidiaries (including Hasbro SA) to the Banks in this
Agreement or any other Loan Document shall be true and correct in all
material respects when made and shall for all purposes of this Agreement,
be deemed to be repeated on and as of the date of Hasbro SA's notice of
borrowing for such Loan on and as of the Drawdown Date of such Loan, and
shall be true and correct in all material respects on and as of each of
such dates, except, in each case, as affected by the consummation of the
transactions contemplated by the Loan Documents or to the extent
representations and warranties expressly referring to an earlier date shall
relate to such earlier date.
13.2.3. Performance, etc.
Hasbro SA and each of the Hasbro Companies shall have duly and
properly performed, complied with and observed in all material respects
each of its respective covenants, agreements and obligations contained in 9
and 10 hereof, and shall have duly and properly performed, complied with
and observed in all material respects its covenants, agreements, and
obligations in all other articles of this
Page 111
Agreement and any of the other Loan Documents to which it is a party or by
which it is bound on the Drawdown Date for such Loan. No event shall have
occurred on or prior to such date and be continuing on such date, and no
condition shall exist on such date, which constitutes a Default or an Event
of Default.
13.2.4. Proceedings and Documents.
All corporate, governmental and other proceedings in connection with
the transactions contemplated by the Loan Documents and all instruments and
documents incidental thereto shall be in form and substance reasonably
satisfactory to the Agent and the Agent shall have received all such
counterpart originals or certified or other copies of all such instruments
and documents as the Agent shall have reasonably requested.
13.2.5. Loan Documents.
Each of the Loan Documents required by 9.14 hereof shall have been
duly and properly authorized, executed and delivered by the respective
party or parties thereto and shall be in full force and effect on and as of
such date.
13.2.6. No Defaults.
None of the following events shall have occurred and be continuing:
(a) Hasbro SA shall fail to pay at maturity, or within any
applicable period of grace, any Indebtedness for borrowed money or
credit received or in respect of any Capitalized Leases or in respect
of any guaranties by Hasbro SA of any such Indebtedness of another
Person, or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing
or securing Indebtedness for borrowed money or credit received or in
respect of any Capitalized Leases for such period of time as would
permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof, or to rescind the purchase of any
such obligations, and the aggregate amount of all of such Indebtedness
for borrowed money or credit received or in respect of any Capitalized
Leases of Hasbro SA or in respect of any guaranties by
Page 112
Hasbro SA of any such Indebtedness of another Person in respect of
which any one or more of such defaults or failures shall at any time
be continuing under any one or more of such agreements shall exceed
$25,000,000 at any one time;
(b) Hasbro SA makes an assignment for the benefit of creditors,
or admits in writing its inability to pay or generally fails to pay
its debts as they mature or become due, or petitions or applies for
the appointment of a trustee or other custodian, liquidator or
receiver of Hasbro SA or of any substantial part of the assets of
Hasbro SA, or commences any case or other proceeding relating to
Hasbro SA under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction now or hereafter in effect, or takes
any action to authorize or in furtherance of any of the foregoing, or
if any such petition or application is filed or any such case or other
proceeding is commenced against Hasbro SA and Hasbro SA indicates its
approval thereof, consent thereto or acquiescence therein or such
petition or application shall not have been dismissed within
forty-five (45) days following the filing thereof;
(c) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating Hasbro SA bankrupt
or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of
Hasbro SA in an involuntary case under federal bankruptcy laws as now
or hereafter constituted; or
(d) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive,
any final judgment against Hasbro SA which, with other outstanding
final judgments, undischarged, unsatisfied and unstayed, against
Hasbro SA exceeds in the aggregate $25,000,000.
14. EVENTS OF DEFAULT; ACCELERATION.
14.1. Remedies Upon Default.
If any of the following events ("Events of Default" or, if the giving of
notice or the lapse of time or both is required,
Page 113
then, prior to such notice and/or lapse of time, "Defaults") shall occur:
(a) if the Company shall fail to pay any principal of the Company
Loans, or the Company and Hasbro SA shall each fail to pay any principal of
the Hasbro SA Loans, when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment;
(b) if the Company shall fail to pay any interest on the Company Loans
or the Unpaid Reimbursement Obligations, any Fees hereunder, or other sums
due hereunder, or the Company and Hasbro SA shall each fail to pay interest
on the Hasbro SA Loans, in each case within three (3) Business Days after
the date on which the same shall become due and payable whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(c) if (i) the Company shall fail to comply with any of its covenants
contained in 9.2, 9.5, 9.6, the first sentence of 9.7, 9.13, 9.14, 10 or
11, or (ii) Hasbro SA shall fail to comply with its covenant contained in
9.2;
(d) if (i) the Company shall fail to comply with any of its covenants
contained in 9.10 or 9.17, or (ii) Hasbro SA shall fail to comply with its
covenant in 9.17, and in each case such failure shall continue for a period
of ten (10) days;
(e) if any of the Hasbro Companies and/or Hasbro SA shall fail to
perform any term, covenant or agreement contained in any of the Loan
Documents (other than those specified in subsections (a), (b), (c) and (d)
above) for twenty (20) days after written notice of such failure has been
given to the Company by the Agent;
(f) if any representation or warranty of any of the Hasbro Companies
and/or Hasbro SA in any of the Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Agreement shall
prove to have been false in any material respect upon the date when made or
deemed to have been made or repeated;
(g) if any of the Hasbro Companies shall fail to pay at maturity, or
within any applicable period of grace, any Indebtedness for borrowed money
or credit received or in
Page 114
respect of any Capitalized Leases or in respect of any guaranties by such
Hasbro Company of any such Indebtedness of another Person, or fail to
observe or perform any material term, covenant or agreement contained in
any agreement by which it is bound, evidencing or securing Indebtedness for
borrowed money or credit received or in respect of any Capitalized Leases
for such period of time as would permit (assuming the giving of appropriate
notice if required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof, or to rescind the
purchase of any such obligations, and the aggregate amount of all of such
Indebtedness for borrowed money or credit received or in respect of any
Capitalized Leases of the Hasbro Companies or in respect of any guaranties
by any Hasbro Company of any such Indebtedness of another Person in respect
of which any one or more of such defaults or failures shall at any time be
continuing under any one or more of such agreements shall exceed
$25,000,000 at any one time;
(h) if any of the Hasbro Companies makes an assignment for the benefit
of creditors, or admits in writing its inability to pay or generally fails
to pay its debts as they mature or become due, or petitions or applies for
the appointment of a trustee or other custodian, liquidator or receiver of
any of the Hasbro Companies or of any substantial part of the assets of any
of the Hasbro Companies, or commences any case or other proceeding relating
to any of the Hasbro Companies under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
or similar law of any jurisdiction now or hereafter in effect, or takes any
action to authorize or in furtherance of any of the foregoing, or if any
such petition or application is filed or any such case or other proceeding
is commenced against any of the Hasbro Companies and the such Person
indicates its approval thereof, consent thereto or acquiescence therein or
such petition or application shall not have been dismissed within
forty-five (45) days following the filing thereof;
(i) if a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of the Hasbro
Companies bankrupt or insolvent, or approving a petition in any such case
or other proceeding, or a decree or order for relief is entered in respect
of any of the Hasbro Companies in an involuntary case under federal
bankruptcy laws as now or hereafter
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constituted;
(j) if there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any
final judgment against any of the Hasbro Companies which, with other
outstanding final judgments undischarged, unsatisfied and unstayed against
the Hasbro Companies exceeds in the aggregate $25,000,000;
(k) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt, the
Subordinated Debt shall be repaid, redeemed or repurchased in whole or in
part or an offer to repay, redeem or repurchase the Subordinated Debt in
whole or in part shall have been made;
(l) (i) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's Liens in a material portion of the
Collateral shall cease to be perfected (other than by the Agent's failure
to file Uniform Commercial Code financing statements delivered by the
Company or any Restricted Subsidiary, as applicable, or to make any
required filings delivered by the Company or any Restricted Subsidiary with
the United States Patent and Trademark Office or the United States
Copyright Office or to continue such Uniform Commercial Code financing
statements or filings with the United States Patent and Trademark Office or
United States Copyright Office in accordance with applicable law), or shall
cease to have the priority contemplated by the Security Documents, in each
case otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks in
accordance with 23, or (ii) any action at law, suit or in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by any of the Hasbro Companies and/or Hasbro SA party
thereto, or (iii) any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination
that, or issue a judgment, order, decree or ruling to the effect that ,any
one or more of the Loan Documents is illegal, invalid or unenforceable in
accordance with the terms thereof and such judgment, order, decree or
ruling shall continue in full force and effect for a period of thirty (30)
days;
(m) there shall occur any loss, theft, destruction of, or material
damage to the Inventory included in the Collateral resulting in an
uninsured loss in excess of
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$20,000,000 during any one policy period, or any strike, lockout, labor
dispute, embargo, condemnation, act of God or public enemy, or other
casualty, which in any such case causes, for more than fifteen (15)
consecutive days, the cessation or substantial curtailment of revenue
producing activities at any facility of the Company or any of its
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a Material Adverse Effect;
(n) the Company or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
aggregate amount exceeding $15,000,000, or the Company or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of ERISA by
a Multiemployer Plan requiring aggregate annual payments exceeding
$5,000,000, or any of the following occurs with respect to a Guaranteed
Pension Plan: (i) an ERISA Reportable Event, or a failure to make a
required installment or other payment (within the meaning of 302(f)(1) of
ERISA), provided that such event (A) would be expected to result in
liability of the Company or any of its Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $15,000,000 and
(B) would constitute grounds for the termination of such Guaranteed Pension
Plan by the PBGC, for the appointment by the appropriate United States
District Court of a trustee to administer such Guaranteed Pension Plan or
for the imposition of a lien in favor of such Guaranteed Pension Plan; or
(ii) the appointment by a United States District Court of a trustee to
administer such Guaranteed Pension Plan; or (iii) the institution by the
PBGC of proceedings to terminate such Guaranteed Pension Plan;
(o) a Change of Control shall occur; or
(p) Hasbro SA shall no longer qualify as a Wholly Owned Subsidiary;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Company declare all amounts owing with respect to this Agreement and the
Notes and the other Loan Documents and all Reimbursement Obligations to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company and Hasbro SA; provided that in the event
of any Event of Default
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specified in 14.1(h) or 14.1(i) hereof, all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank.
14.2. Termination of Commitments.
If any one or more of the Events of Default specified in 14.1(h) or 14.1(i)
shall occur, any unused portion of the credit hereunder shall forthwith
terminate and each of the Banks shall be relieved of all further obligations to
make Loans to the Company and/or Hasbro SA and the Agent shall be relieved of
all further obligations to issue, extend or renew Letters of Credit. If any
other Event of Default shall have occurred and be continuing, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Company and
Hasbro SA, terminate the unused portion of the credit hereunder, and upon such
notice being given such unused portion of the credit hereunder shall terminate
immediately and each of the Banks shall be relieved of all further obligations
to make Loans and the Agent shall be relieved of all further obligations to
issue, extend or renew Letters of Credit. No termination of the credit hereunder
shall relieve the Company or any of its Subsidiaries of any of the Obligations.
14.3. Remedies.
In case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the Banks shall have accelerated the maturity of
the Loans pursuant to 14.1, each Bank, if owed any amount with respect to the
Loans or the Reimbursement Obligations, may, with the consent of the Majority
Banks but not otherwise, proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations to such
Bank are evidenced, including as permitted by applicable law the obtaining of
the ex parte appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of such Bank. No remedy herein conferred upon any
Bank or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
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14.4. Certain Rights of Cure.
(a) Any Default or Event of Default may be waived as provided by 23 hereof
and any Default or Event of Default so waived shall be deemed to have been cured
and not to be continuing, and upon such waiver the Company, Hasbro SA and each
of the Banks shall be restored to their respective positions prior to the
existence of the Default or Event or Default, whether or not acceleration of the
maturity of the Loans shall have occurred pursuant to this 14. The Commitments,
if terminated pursuant to this 14 by reason of any Event of Default so waived,
shall be reinstated. In the event that the Commitments, once terminated, are so
reinstated, the Commitment Fee shall be payable as though no termination had
occurred. No such waiver shall extend to or affect any subsequent or other
Default or Event of Default or impair any rights consequent thereon.
(b) Notwithstanding any other provision of this Agreement to the contrary,
if a Default or Event of Default shall occur at any time when no Loans shall be
outstanding and all other Obligations shall have been paid in full, the Company
may give notice to the Agent and the Banks (i) of the occurrence or continuance
of such Default or Event of Default, (ii) of the Company's request to terminate
the Commitments in their entirety pursuant to 2.2 hereof, and (iii) subject to
compliance by the Company with the provisions of 2.2 hereof and this 14.4(b), of
the Company's request that the Default or Event of Default be deemed not to have
occurred, and upon termination of the Commitments and payment by the Company
and/or Hasbro SA of all Fees and other sums payable by the Company and/or Hasbro
SA hereunder, the Company, Hasbro SA, the Agent, and the Banks shall be deemed
to have agreed, by mutual consent, that no Default or Event of Default shall
have occurred hereunder.
14.5. Distribution of Collateral Proceeds.
In the event that, following the occurrence or during the continuance of
any Default or Event of Default, the Agent or any Bank, as the case may be,
receives any monies in connection with the enforcement of any the Security
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in
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connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the
rights, remedies, powers and privileges of the Agent under this Agreement
or any of the other Loan Documents or in respect of the Collateral or in
support of any provision of adequate indemnity to the Agent against any
taxes or Liens which by law shall have, or may have, priority over the
rights of the Agent to such monies;
(b) Second, to all other Secured Obligations (other than obligations
of the Company and its Subsidiaries to any of the Banks and/or the Agent
with respect to any Interest Hedging Agreements and Hedging Agreements) in
such order or preference among types of Secured Obligations as the Majority
Banks may determine; provided, however, that (i) distributions shall be
made (A) pari passu among Secured Obligations with respect to the Agent's
Fee and all other Secured Obligations and (B) with respect to each type of
Secured Obligation owing to the Banks, such as interest, principal, fees
and expenses, among the Banks pro rata, based on the then outstanding
amount of Secured Obligations (and on the assumption that Secured
Obligations consisting of guaranties are equal to the amount of the
outstanding obligations guaranteed), and (ii) the Agent may in its
discretion make proper allowance to take into account any Secured
Obligations not then due and payable;
(c) Third, to obligations of the Company and its Subsidiaries to any
of the Banks and/or the Agent with respect to any Interest Hedging
Agreements and Hedging Agreements;
(d) Fourth, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Secured Obligations, to the payment of any obligations required to be paid
pursuant to 9-615(a)(3) of the Uniform Commercial Code of The Commonwealth
of Massachusetts; and
(e) Fifth, the excess, if any, shall be returned to the Company or to
such other Persons as are entitled thereto.
14.6. Judgment Currency.
If, for the purpose of obtaining judgment in any court or obtaining an
order enforcing a judgment, it becomes necessary to convert any amount due under
this Credit Agreement in Dollars or
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in any other currency (hereinafter in this 14.6 called the "first currency")
into any other currency (hereinafter in this 14.6 called the "second currency"),
then the conversion shall be made at the Agent's spot rate of exchange for
buying the first currency with the second currency prevailing at the Agent's
close of business on the Business Day next preceding the day on which the
judgment is given or (as the case may be) the order is made. Any payment made to
the Agent or any Bank pursuant to this Credit Agreement in the second currency
shall constitute a discharge of the obligations of Hasbro and/or Hasbro SA, as
the case may be, to pay to the Agent and the Banks any amount originally due to
the Agent and the Banks in the first currency under this Credit Agreement only
to the extent of the amount of the first currency which the Agent and each of
the Banks is able, on the date of the receipt by it of such payment in any
second currency, to purchase, in accordance with the Agent's and such Bank's
normal banking procedures, with the amount of such second currency so received.
If the amount of the first currency falls short of the amount originally due
from either the Company or Hasbro SA to the Agent and the Banks in the first
currency under this Credit Agreement, such Person hereby agrees that it will
indemnify the Agent and each of the Banks against and save the Agent and each of
the Banks harmless from any shortfall so arising. This indemnity shall
constitute an obligation of the Company or Hasbro SA, as the case may be,
separate and independent from the other obligations contained in this Credit
Agreement, shall give rise to a separate and independent cause of action and
shall continue in full force and effect notwithstanding any judgment or order
for a liquidated sum or sums in respect of amounts due to the Agent or any Bank
under this Credit Agreement or under any such judgment or order. The covenant
contained in this 14.6 shall survive the payment in full of all of the other
obligations of the Company or Hasbro SA, as the case may be, under this Credit
Agreement.
15. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of an
Event of Default, (i) any deposits or other sums credited by or due from any of
the Banks to the Company and any securities or other property of the Company in
the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Company to such Bank and (ii) any deposits or other
sums credited by or due from any of the Banks to Hasbro SA and any securities or
other property of Hasbro SA in the possession of such Bank may be
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applied to or set off by such Bank against the payment of the Hasbro SA
Obligations and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of Hasbro
SA to such Bank. ANY AND ALL RIGHTS TO REQUIRE ANY BANK TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE COMPANY OR HASBRO SA, AS THE CASE MAY BE, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Banks agree with each
other Bank that (a) if an amount to be set off is to be applied to Indebtedness
of the Company or Hasbro SA, as the case may be, to such Bank, other than
Indebtedness evidenced by the Notes held by such Bank or constituting
Reimbursement Obligations owed to such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Notes held by such Bank or constituting Reimbursement Obligations owed to such
Bank, and (b) if such Bank shall receive from the Company or Hasbro SA, as the
case may be, whether by voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim evidenced by the Notes held
by, or constituting Reimbursement Obligations owed to, such Bank by proceedings
against the Company and/or Hasbro SA at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by, or Reimbursement Obligations owed to, such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to the
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by it or Reimbursement Obligations owed it, its
proportionate payment as contemplated by this Agreement; provided that if all or
any part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
16. THE AGENT.
16.1. Authorization.
(a) The Agent is authorized to take such action on behalf of each of the
Banks and to exercise all such powers as are hereunder and under any of the
other Loan Documents and any
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related documents delegated to the Agent, together with such powers as are
reasonably incident thereto, including the authority, without the necessity of
any notice to or further consent of the Banks, from time to time to take any
action with respect to any Collateral or the Security Documents which may be
necessary to perfect, maintain perfected or insure the priority of the security
interest in and liens upon the Collateral granted pursuant to the Security
Documents, provided that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that of an
independent contractor. The use of the term "Agent" is for convenience only and
is used to describe, as a form of convention, the independent contractual
relationship between the Agent and each of the Banks. Nothing contained in this
Agreement nor the other Loan Documents shall be construed to create an agency,
trust or other fiduciary relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise certain
rights and perform certain duties and responsibilities hereunder and under the
other Loan Documents, the Agent is nevertheless a "representative" of the Banks,
as that term is defined in Article 1 of the Uniform Commercial Code, for
purposes of actions for the benefit of the Banks and the Agent with respect to
all collateral security and guaranties contemplated by the Loan Documents. Such
actions include the designation of the Agent as "secured party", "mortgagee" or
the like on all financing statements and other documents and instruments,
whether recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
16.2. Employees and Agents.
The Agent may exercise its powers and execute its duties by or through
employees or agents and shall be entitled to take, and to rely on, advice of
counsel concerning all matters pertaining to its rights and duties under this
Agreement and the other Loan Documents. The Agent may utilize the services of
such Persons as the Agent in its sole discretion may reasonably determine, and
all reasonable fees and expenses of any such Persons shall be paid by the
Company.
16.3. No Liability.
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Neither the Agent nor any of its shareholders, directors, officers or
employees nor any other Person assisting them in their duties nor any agent or
employee thereof, shall be liable for any waiver, consent or approval given or
any action taken, or omitted to be taken, in good faith by it or them hereunder
or under any of the other Loan Documents, or in connection herewith or
therewith, or be responsible for the consequences of any oversight or error of
judgment whatsoever, except that the Agent or such other Person, as the case may
be, may be liable for losses due to its willful misconduct or gross negligence.
16.4. No Representations.
16.4.1. General.
The Agent shall not be responsible for the execution or validity
or enforceability of this Agreement, the Notes, the Letters of Credit,
any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the
Notes, or for the value of any such collateral security or for the
validity, enforceability or collectability of any such amounts owing
with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished to
it by or on behalf of the Company or any of its Subsidiaries, or be
bound to ascertain or inquire as to the performance or observance of
any of the terms, conditions, covenants or agreements herein or in any
instrument at any time constituting, or intended to constitute,
collateral security for the Notes or to inspect any of the properties,
books or records of the Company or any of its Subsidiaries. The Agent
shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by the Company and/or Hasbro SA or any holder
of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume
any liability to the Banks, with respect to the credit worthiness or
financial conditions of the Company or any of its Subsidiaries. Each
Bank acknowledges that it has, independently and without reliance upon
the Agent or any other Bank, and based upon such information and
documents as it has deemed
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appropriate, made its own credit analysis and decision to enter into
this Agreement.
16.4.2. Closing Documentation, etc.
For purposes of determining compliance with the conditions set
forth in 12, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted, or to be satisfied
with, each document and matter either sent, or made available, by the
Agent or the Arranger to such Bank for consent, approval, acceptance
or satisfaction, or required thereunder to be consented to or approved
by or acceptable or satisfactory to such Bank, unless an officer of
the Agent or the Arranger active upon the Company's account shall have
received notice from such Bank not less than five (5) days prior to
the Effective Date specifying such Bank's objection thereto and such
objection shall not have been withdrawn by notice to the Agent or the
Arranger to such effect on or prior to the Effective Date.
16.5. Indemnification.
Without limiting the obligations of the Company and/or Hasbro SA hereunder
or under any other Loan Document, the Banks agree to indemnify and hold harmless
the Agent and its affiliates, ratably in accordance with their respective
Commitment Percentages, for any and all liabilities, obligations, losses,
damages, penalties, claims, actions and suits (whether groundless or otherwise)
judgments, costs, expenses (including any expenses for which the Agent or such
affiliate has not been reimbursed by the Company and/or Hasbro SA as required by
18) or disbursements of any kind or nature whatsoever which may at any time
(including without limitation at any time following the payment of the Notes) be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of this Agreement or the Notes or any of the other Loan Documents or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no Bank
shall be liable for any of the foregoing to the extent they arise from the
Agent's gross negligence or willful misconduct. The agreements in this 16.5
shall survive the payment of the Notes and all other amounts payable hereunder.
16.6. Reimbursement.
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Without limiting the provisions of 16.5, the Banks and the Agent hereby
agree that the Agent shall not be obliged to make available to any Person any
sum which the Agent is expecting to receive for the account of that Person until
the Agent has determined that it has received that sum. The Agent may, however,
disburse funds prior to determining that the sums which the Agent expects to
receive have been finally and unconditionally paid to the Agent, if the Agent
wishes to do so. If and to the extent that the Agent does disburse funds and it
later becomes apparent that the Agent did not then receive a payment in an
amount equal to the sum paid out, then any Person to whom the Agent made the
funds available shall, on demand from the Agent:
(a) refund to the Agent the sum paid to that Person; and
(b) reimburse the Agent for the additional amount certified by the
Agent as being necessary to indemnify the Agent against any funding or
other cost, loss, expense or liability sustained or incurred by the Agent
as a result of paying out the sum before receiving it.
16.7. Non-Reliance on Agent and Other Banks.
Each Bank represents that it has, independently and without reliance on the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of the financial condition and
affairs of the Company and Hasbro SA and decision to enter into this Agreement
and the other Loan Documents and agrees that it will, independently and without
reliance upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action under this Agreement or
any other Loan Document. The Agent shall not be required to keep informed as to
the performance or observance by the Company and/or Hasbro SA of this Agreement
or any other Loan Document or any other document referred to or provided for
herein or therein or by any other Person of any agreement or to make inquiry of,
or to inspect the properties or books of, any Person. Except for notices,
reports and other documents and information expressly required to be furnished
to the Banks by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning any Person which may come into the possession of the Agent or any of
its affiliates. Each Bank shall have access to all documents
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relating to the Agent's performance of its duties hereunder, at such Bank's
request. Unless any Bank shall object promptly after receiving notice of any
action taken by the Agent hereunder, such Bank shall conclusively be presumed to
have approved the same.
16.8. Payments.
16.8.1. Payments to Agent.
A payment by the Company and/or Hasbro SA to the Agent hereunder or
any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Agent agrees promptly to distribute
to each Bank such Bank's pro rata share of payments received by the Agent
for the account of the Banks except as otherwise expressly provided herein
or in any of the other Loan Documents.
16.8.2. Distribution by Agent.
If in the opinion of the Agent the distribution of any amount received
by it in such capacity hereunder, under the Notes or under any of the other
Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the
Agent is to be repaid, each Person to whom any such distribution shall have
been made shall either repay to the Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such manner
and to such Persons as shall be determined by such court.
16.8.3. Delinquent Banks.
Notwithstanding anything to the contrary contained in this Agreement
or any of the other Loan Documents, any Bank that fails (a) to make
available to the Agent its pro rata share of any Loan or to purchase any
Letter of Credit Participation or (b) to comply with the provisions of 15
with respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time as
such delinquency is
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satisfied. A Delinquent Bank shall be deemed to have assigned any and all
payments due to it from the Company and/or Hasbro SA, whether on account of
outstanding Loans, Unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Loans and
Unpaid Reimbursement Obligations. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in proportion
to their respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations. A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of
the assigned payments to all outstanding Loans and Unpaid Reimbursement
Obligations of the nondelinquent Banks, the Banks' respective pro rata
shares of all outstanding Loans and Unpaid Reimbursement Obligations have
returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
16.9. Holders of Notes.
The Agent may deem and treat the payee of any Note or the purchaser of any
Letter of Credit Participation as the absolute owner thereof for all purposes
hereof until it shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee or transferee.
16.10. Agent as Bank.
In its individual capacity, Fleet shall have the same obligations and the
same rights, powers and privileges in respect to its Commitment and the Loans
made by it hereunder, and as the holder of any of the Notes and as the purchaser
of any Letter of Credit Participation, as it would have were it not also the
Agent.
16.11. Resignation or Removal of Agent.
The Agent may resign at any time by giving sixty (60) days prior written
notice thereof to the Banks and the Company. Upon any such resignation, the
Majority Banks, with the prior written consent of the Company (which consent
shall not be unreasonably withheld), shall have the right to appoint a successor
Agent; provided that no such consent of the Company shall be required if a
Default or Event of Default has occurred and is then continuing. If no successor
Agent shall have been so appointed by the Majority Banks and shall have accepted
such appointment
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within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a financial institution having a rating of not
less than A or its equivalent by Standard and Poor's. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent both as Agent and Swing Line Bank (including
without limitation the rights, powers, privileges and duties of the retiring
Agent with respect to such Agent's commitment to issue Letters of Credit
pursuant to 5), and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation, the provisions of
this Agreement shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent. In the
event of a material breach of its duties hereunder, the Agent may be removed by
the Banks for cause and the provisions of this 16.11 shall apply to the
appointment of a successor.
16.12. Notification of Defaults and Events of Default.
Each Bank hereby agrees that, upon learning of the existence of a Default
or an Event of Default, it shall promptly notify the Agent thereof. The Agent
hereby agrees that upon receipt of any notice under this 16.12 it shall promptly
notify the other Banks of the existence of such Default or Event of Default.
16.13. Duties in the Case of Enforcement.
In case one of more Events of Default have occurred and shall be
continuing, and whether or not acceleration of the Obligations shall have
occurred, the Agent shall, if (a) so requested by the Majority Banks and (b) the
Banks have provided to the Agent such additional indemnities and assurances
against expenses and liabilities as the Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the sale or other
disposition of all or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral. The Majority Banks may direct the Agent in writing as to the
method and the extent of any such sale or other disposition, the Banks hereby
agreeing to indemnify and hold the Agent, harmless from all liabilities incurred
in respect of all actions taken or omitted in accordance with such directions,
provided that the Agent need not comply with any such direction to the extent
that the Agent reasonably believes the Agent's compliance with such direction to
be unlawful or commercially
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unreasonable in any applicable jurisdiction.
17. EXPENSES.
The Company agrees to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's net income) on or with respect
to the transactions contemplated by this Agreement (the Company hereby agreeing
to indemnify the Agent and each Bank with respect thereto), (c) the reasonable
fees, expenses and disbursements of the Banks' Special Counsel or any local
counsel to the Agent incurred in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, any amendments, modifications, approvals, consents or
waivers hereto or hereunder, or the cancellation of any Loan Document upon
payment in full in cash of all of the Obligations or pursuant to any terms of
such Loan Document for providing for such cancellation, (d) the reasonable fees,
expenses and disbursements of the Agent or any of its affiliates incurred by the
Agent or such affiliate in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
including all reasonable collateral appraisal and examination charges, (e) all
reasonable out-of-pocket expenses (including without limitation reasonable out
of pocket attorneys' fees and costs, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges)
incurred by any Bank or the Agent in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against the Company or
any of its Subsidiaries, or the administration thereof after the occurrence and
during the continuance of a Default or Event of Default and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to any Bank's or the Agent's relationship with the Company or any of its
Subsidiaries relating to the Loan Documents or the transactions contemplated
thereby and (f) all reasonable fees, expenses and disbursements of the Agent
incurred in connection with Uniform Commercial Code searches, Uniform Commercial
Code filings, intellectual property searches or intellectual property filings.
The covenants contained in this 17 shall survive payment or satisfaction in full
of all other Obligations.
18. INDEMNIFICATION.
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The Company agrees to indemnify and hold harmless the Agent, the Banks and
each of their respective affiliates, directors, officers, employees and
representatives from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Agreement
or any of the other Loan Documents or the transactions contemplated hereby
including, without limitation, (a) any actual or proposed use by the Company or
any of its Subsidiaries of the proceeds of any of the Loans or Letters of
Credit, (b) the reversal or withdrawal of any provisional credits granted by the
Agent upon the transfer of funds from lock box, bank agency, concentration
accounts or otherwise under any cash management arrangements with the Company or
any Subsidiary or in connection with the provisional honoring of funds
transfers, checks or other items, (c) any actual or alleged infringement of any
patent, copyright, trademark, service xxxx or similar right of the Company or
any of its Subsidiaries comprised in the Collateral, (d) the Company or any of
its Subsidiaries entering into or performing this Agreement or any of the other
Loan Documents or (e) with respect to the Company and its Subsidiaries and their
respective properties and assets, the violation of any Environmental Law, the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding, but
excluding (i) in the case of the Agent or any affiliate, director, officer,
employee or representative thereof, claims arising solely as a result of the
gross negligence or willful misconduct of the Agent or any of its affiliates,
directors, officers, employees or representatives, (ii) in the case of any Bank
or any affiliate, director, officer, employee or representative thereof, claims
arising solely as a result of the gross negligence or willful misconduct of such
Bank or any of its affiliates, directors, officers, employees or
representatives, (iii) litigation commenced by the Company against any Bank or
the Agent which (A) seeks enforcement of the Company's rights hereunder or under
any of the Loan Documents and (B) is finally determined adversely to such Bank
or the Agent, to the extent of such adverse determination, and (iv) claims made
or legal proceedings commenced against the Agent or any Bank by any
securityholder or creditor thereof arising out of and based upon rights afforded
any such securityholder or creditor solely in its
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capacity as such. In litigation, or the preparation therefor, the Banks and the
Agent and its affiliates shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Company agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Company under this 18 are unenforceable for any reason, the
Company hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law. The
covenants contained in this 18 shall survive payment or satisfaction in full of
all other Obligations.
19. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Notes or in any documents or other papers delivered by or on behalf of the
Company and/or Hasbro SA pursuant hereto shall be deemed to have been relied
upon by the Banks, notwithstanding any investigation heretofore or hereafter
made by it, and shall survive the making by the Banks of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or
amount due under this Agreement or the Notes or any of the other Loan Documents
remains outstanding and unpaid or any Bank has any obligation to make any Loans
hereunder or the Agent has any obligation to issue, extend or renew any Letter
of Credit, and for such further time as may be otherwise be expressly specified
in this Agreement. All statements contained in any certificate or other paper
delivered to any Bank at any time by or on behalf of the Company and/or Hasbro
SA pursuant hereto or in connection with the transactions contemplated hereby
shall constitute representations and warranties by the Company and/or Hasbro SA
hereunder.
20. ASSIGNMENT AND PARTICIPATION.
20.1. Conditions to Assignment by Banks.
Except as provided herein, each Bank may assign to one or more commercial
banks, other financial institutions or other Persons, all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (a) each
of the Agent and, unless a Default or Event of Default shall have occurred and
be
Page 132
continuing, the Company shall have given its prior written consent to such
assignment, which consent, in the case of the Company and the Agent, will not be
unreasonably withheld; except that the consent of the Company or the Agent shall
not be required in connection with any assignment by a Bank to (i) an existing
Bank or (ii) a Bank Affiliate of such Bank, (b) each such assignment shall be of
a constant, and not a varying, percentage of all the assigning Bank's rights and
obligations under this Agreement, (c) each assignment (or, in the case of
assignments by a Bank to its Bank Affiliates, the aggregate holdings of such
Bank and its Bank Affiliates after giving effect to such assignments), shall be
in a minimum amount equal to $10,000,000 or a multiple of $5,000,000 in excess
thereof (or, if less, such Bank's entire Commitment), and (d) the parties to
such assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), an Assignment and Acceptance, substantially
in the form of Exhibit G hereto (an "Assignment and Acceptance"), together with
any Notes subject to such assignment. Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five (5) Business Days
after the execution thereof, (y) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Bank hereunder, and (z) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in 20.3, be released from its obligations under
this Agreement.
20.2. Certain Representations and Warranties; Limitations; Covenants.
By executing and delivering an Assignment and Acceptance, the parties to
the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or
mortgage,
Page 133
(b) the assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Company
and its Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by the
Company and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations of any of their obligations
under this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
referred to in 8.8 and 9.5 and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(e) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto;
(f) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Bank;
(g) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(h) such assignee acknowledges that it has made arrangements with the
assigning Bank satisfactory to such assignee with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit.
20.3. Register.
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The Agent shall maintain a copy of each Assignment and Acceptance delivered
to it and a register or similar list (the "Register") for the recordation of the
names and addresses of the Banks and the Commitment Percentage of, and principal
amount of the Syndicated Loans owing to and Letter of Credit Participations
purchased by, the Banks from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Company and Hasbro SA, the
Agent and the Banks may treat each Person whose name is recorded in the Register
as a Bank hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Company and Hasbro SA and the Banks at any
reasonable time and from time to time upon reasonable prior notice. Upon each
such recordation, the assigning Bank agrees to pay to the Agent a registration
fee in the sum of $3,500.
20.4. New Notes.
Upon its receipt of an Assignment and Acceptance executed by the parties to
such assignment, together with each Note subject to such assignment, the Agent
shall (i) record the information contained therein in the Register, and (ii)
give prompt notice thereof to the Company, Hasbro SA and the Banks (other than
the assigning Bank). Within five (5) Business Days after receipt of such notice,
the Company and, solely with respect to the Hasbro SA Loans, Hasbro SA, each at
its own expense, shall execute and deliver to the Agent, in exchange for each
surrendered Note, a new Note to the order of such Assignee in an amount equal to
the amount assumed by such Assignee pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained some portion of its obligations
hereunder, a new Note to the order of the assigning Bank in an amount equal to
the amount retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes. The surrendered
Notes shall be cancelled and returned to the Company.
20.5. Participations.
Each Bank may sell participations to one or more Banks or other entities in
all or a portion of such Bank's rights and obligations under this Agreement and
the other Loan Documents; provided that (a) each such participation shall be in
an amount of not less than $10,000,000, (b) any such sale or participation
Page 135
shall not affect the rights and duties of the selling Bank hereunder to the
Company or Hasbro SA and (c) the only rights granted to the participant pursuant
to such participation arrangements with respect to waivers, amendments or
modifications of the Loan Documents shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on any Loans, extend the term or increase the amount of the Commitment of
such Bank as it relates to such participant, reduce the amount of any Commitment
Fee or Letter of Credit Fees to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest (it being understood
that (i) any vote to rescind any acceleration made pursuant to 14.1 of amounts
owing with respect to the Loans and other Obligations and (ii) any modifications
of the provisions relating to amounts, timing or application or prepayments of
Loans and other Obligations shall not require the approval of such participant).
20.6. Assignee or Participant Affiliated with the Company.
If any assignee Bank is an Affiliate of the Company, then any such assignee
Bank shall have no right to vote as a Bank hereunder or under any of the other
Loan Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to 14.1 or 14.2, and the
determination of the Majority Banks shall for all purposes of this Agreement and
the other Loan Documents be made without regard to such assignee Bank's interest
in any of the Loans or Reimbursement Obligations. If any Bank sells a
participating interest in any of the Loans or Reimbursement Obligations to a
participant, and such participant is the Company or an Affiliate of the Company,
then such transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to 14.1
or 14.2 to the extent that such participation is beneficially owned by the
Company or any Affiliate of the Company, and the determination of the Majority
Banks shall for all purposes of this Agreement and the other Loan Documents be
made without regard to the interest of such transferor Bank in the Loans or
Reimbursement Obligations to the extent of such participation. The provisions of
this 20.6 shall not apply to an assignee Bank or participant which is also a
Bank on the Effective Date or to an assignee Bank or participant which has
disclosed to the other Banks that it is an
Page 136
Affiliate of the Company and which, following such disclosure, has been excepted
from the provisions of this 20.6 in a writing signed by the Majority Banks
determined without regard to the interest of such assignee Bank or transferor
Bank, to the extent of such participation, in Loans or Reimbursement
Obligations.
20.7. Miscellaneous Assignment Provisions.
Any assigning Bank shall retain its rights to be indemnified pursuant to 18
with respect to any claims or actions arising prior to the date of such
assignment. If any Reference Bank transfers all of its interest, rights and
obligations under this Agreement, the Agent shall, in consultation with the
Company, Hasbro SA and with the consent of the Company, Hasbro SA and the
Majority Banks, appoint another Bank to act as a Reference Bank hereunder.
Anything contained in this 20 to the contrary notwithstanding, any Bank may at
any time pledge or assign a security interest in all or any portion of its
interest and rights under this Agreement (including all or any portion of its
Notes) to secure obligations of such Bank, including any pledge or assignment to
secure obligations to (a) any of the twelve Federal Reserve Banks organized
under 4 of the Federal Reserve Act, 12 U.S.C. 341 and (b) with respect to any
Bank that is a fund that invests in bank loans, to any lender or any trustee
for, or any other representative of, holders of obligations owed or securities
issued by such fund as security for such obligations or securities or any
institutional custodian for such fund or for such lender. Any foreclosure or
similar action by any Person in respect of such pledge or assignment shall be
subject to the other provisions of this 20. No such pledge or the enforcement
thereof shall release the pledgor Bank from its obligations hereunder or under
any of the other Loan Documents, provide any voting rights hereunder to the
pledgee thereof, or affect any rights or obligations of the Company, Hasbro SA
or Agent hereunder.
20.8. Increased Costs.
No assignee, participant or other transferee of any Bank's rights shall be
entitled to receive any greater payment under 4.1 or 4.7 than such Bank would
have been entitled to receive with respect to the rights transferred, unless
such transfer is made with the Company's prior written consent.
20.9. Assignment by Company.
The Company and/or Hasbro SA shall not assign or transfer any of its rights
or obligations under any of the Loan Documents
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without the prior written consent of each of the Banks.
21. NOTICES, ETC.
Except as otherwise expressly provided in this Agreement, all notices and
other communications made or required to be given pursuant to this Agreement or
the Notes or any Letter of Credit Applications shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight courier, or sent by telegraph,
telecopy, facsimile or telex and confirmed by delivery via courier or postal
service, addressed as follows:
(a) (i) if to the Company, at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxx 00000-0000, Attention: Xxxxx X. X. Xxxxxxxxxx, Senior Vice President
and Chief Financial Officer, with a copy to the Company at 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxx 00000-0000, Attention: General Counsel, or
at such other address or addresses for notice as the Company shall last
have furnished in writing to the Person giving the notice and (ii) if to
Hasbro SA, at Xxxxx xx Xxxxxxxx 0, 0000 Xxxxxxxx, Xxxxxxxxxxx, with a copy
to the Company, at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxx 00000-0000,
Attention: Xxxxx X. X. Xxxxxxxxxx, Senior Vice President and Chief
Financial Officer, or at such other address or addresses for notice as the
Company and/or Hasbro SA shall last have furnished in writing to the Person
giving the notice;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, Attention: Xxxx X. X'Xxxxxxxx, Director, or such other address for
notice as the Agent shall last have furnished in writing to the Person
giving the notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule 1
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (a) if delivered by hand to a responsible officer of the
party to which it is directed, at the time of the receipt thereof by such
officer, (b) if sent by registered or certified first-class mail, postage
prepaid, when received by a responsible officer or employee of the party to
which it is directed, provided that such receipt may be evidenced by return
receipt signed by a responsible officer or employee of
Page 138
the party to which it is directed, and (c) if sent by telegraph, telecopy,
facsimile or telex, at the time of dispatch thereof, if in normal business hours
in the state where received or otherwise at the opening of business on the next
Business Day.
22. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
22.1. Confidentiality.
Each of the Banks and the Agent agrees, on behalf of itself and each of its
affiliates, directors, officers, employees and representatives, to use
reasonable precautions to keep confidential, in accordance with their customary
procedures for handling confidential information of the same nature and in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Company or any of its Subsidiaries pursuant to this
Agreement that is identified by such Person as being confidential at the time
the same is delivered to the Banks or the Agent, provided that nothing herein
shall limit the disclosure of any such information (a) after such information
shall have become public other than through a violation of this 22, or becomes
available to any of the Banks or the Agent on a nonconfidential basis from a
source other than the Company or any of its Subsidiaries without a duty of
confidentiality to the Company or such Subsidiary being violated, (b) to the
extent required by statute, rule, regulation or judicial process, (c) to counsel
for any of the Banks or the Agent so long as the relevant Bank or Agent informs
such counsel of the agreement under this 22.1 and such Bank assumes
responsibility for compliance by such counsel with such agreement, (d) to bank
examiners or any other regulatory authority having jurisdiction over any Bank or
the Agent, or to auditors or accountants, (e) to the Agent or any Bank, (f) in
connection with any litigation to which any one or more of the Banks or the
Agent is a party, or in connection with the enforcement of rights or remedies
hereunder or under any other Loan Document, (g) to a Bank Affiliate or a
Subsidiary or affiliate of the Agent so long as the relevant Bank or Agent
informs such Bank Affiliate, subsidiary or affiliate of the agreement under this
22.1 and such Bank or the Agent assumes responsibility for compliance by such
Person with such agreement, (h) to any actual or prospective assignee or
participant or any actual or prospective counterparty (or its advisors) to any
swap or derivative transactions referenced to credit or other risks or events
arising under this Agreement or any other Loan Document so long as such actual
or prospective assignee, participant or counterparty, as the case may be, agrees
to be bound by the provisions of this 22 pursuant to an agreement in
substantially
Page 139
the form of Exhibit I provided to the Company, or (i) with the consent of the
Company.
22.2. Prior Notification.
Unless specifically prohibited by applicable law or court order, each of
the Banks and the Agent shall, prior to disclosure thereof, notify the Company
of any request for disclosure of any such non-public information by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Bank by such
governmental agency) or pursuant to legal process and afford the Company the
opportunity to obtain a protective order or other appropriate remedy or
agreement to maintain confidentiality of the information.
22.3. Other.
In no event shall any Bank or the Agent be obligated or required to return
any materials furnished to it by the Company or any of its Subsidiaries. The
obligations of each Bank under this 22 shall supersede and replace the
obligations of such Bank under any confidentiality letter in respect of this
financing signed and delivered by such Bank to the Company prior to the date
hereof and shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Loans or Reimbursement Obligations
from any Bank.
23. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Agreement to be given
by the Banks may be given, and any term of this Agreement, the other Loan
Documents or any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Company or any of its
Subsidiaries of any terms of this Agreement, the other Loan Documents or such
other instrument or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Company and the
written consent of the Majority Banks. Notwithstanding the foregoing, no
amendment, modification or waiver shall:
(a) without the written consent of the Company and each Bank directly
affected thereby:
(i) reduce or forgive the principal amount of any Loans or
Reimbursement Obligations, or reduce the rate
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of interest on the Notes (subject to the provisions of clause (ii) of
the definition of "Pricing Grid") or the amount of the Commitment Fee
or Letter of Credit Fees;
(ii) increase the amount of such Bank's Commitment or extend the
expiration date of such Bank's Commitment;
(iii) postpone or extend the Final Maturity Date or any other
regularly scheduled dates for payments of principal of, or interest
on, the Loans or Reimbursement Obligations or any Fees or other
amounts payable to such Bank (it being understood that (A) any vote to
rescind any acceleration made pursuant to 14.1 of amounts owing with
respect to the Loans and other Obligations and (B) any modifications
of the provisions relating to prepayments of Loans and other
Obligations shall require only the approval of the Majority Banks);
and
(iv) other than pursuant to a transaction permitted by the terms
of this Agreement, release all or substantially all of the Collateral
or release any of the Restricted Subsidiaries from its guaranty
obligations under the Guaranty (excluding, if the Company or any
Restricted Subsidiary becomes a debtor under the federal Bankruptcy
Code, the release of "cash collateral", as defined in Section 363(a)
of the federal Bankruptcy Code pursuant to a cash collateral
stipulation with the debtor approved by the Majority Banks);
(b) without the written consent of all of the Banks, amend or waive
this 23 or the definition of Majority Banks; and
(c) without the written consent of the Agent, amend or waive 3 or 15,
the amount or time of payment of the Agent's Fee or any Letter of Credit
Fees payable for the Agent's account or any other provision applicable to
the Agent.
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Agent or any Bank in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Company shall entitle the Company to other or further notice
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or demand in similar or other circumstances.
24. PROVISIONS OF GENERAL APPLICATIONS.
24.1. Governing Law. (a)
THIS AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, EACH
OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SAID COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). EACH OF THE COMPANY AND HASBRO SA AGREES THAT ANY
SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL
COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE COMPANY OR
HASBRO SA, AS THE CASE MAY BE, BY MAIL AT THE ADDRESS SPECIFIED IN 21. EACH OF
THE COMPANY AND HASBRO SA HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT COURT.
(b) Hasbro SA hereby irrevocably and unconditionally appoints the Company
(in such capacity, the "Process Agent"), as its agent to receive on behalf of
Hasbro SA and its respective property service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding in any such court of the Commonwealth of Massachusetts or any federal
court sitting therein and agrees promptly to appoint a successor Process Agent.
In any such action or proceeding in such court of the Commonwealth of
Massachusetts or federal court sitting therein, such service may be made on
Hasbro SA by delivering a copy of such process to Hasbro SA in care of the
Process Agent at such Process Agent's address set forth in 21 and by depositing
a copy of such process in the mails by certified or registered air mail,
addressed to Hasbro SA at its address referred to in 21 (such service to be
effective upon such receipt by the Process Agent and the depositing of such
process in the mails as aforesaid). Hasbro SA hereby irrevocably and
unconditionally authorizes and directs such Process Agent to accept such service
on its behalf. As an alternate method of service, Hasbro SA also irrevocably and
unconditionally consents to the service of any and all process in any such
action or proceeding in such court of the Commonwealth of Massachusetts or any
federal court sitting therein by mailing of copies of such process to Hasbro SA
by certified or registered air mail at its address referred to in 21. Hasbro SA
hereby agrees that, to the
Page 142
fullest extent permitted by applicable law, a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
24.2. Headings.
The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.
24.3. Counterparts.
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought. Delivery by facsimile by any of the parties
hereto of an executed counterpart hereof or of any amendment or waiver hereto
shall be as effective as an original executed counterpart hereof or of such
amendment or waiver and shall be considered a representation that an original
executed counterpart hereof or such amendment or waiver, as the case may be,
will be delivered.
24.4. Entire Agreement, Etc.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated, except as provided in 17.12.
24.5. Waiver of Jury Trial.
EACH OF THE COMPANY AND HASBRO SA HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE AGENT OR ANY BANK RELATING TO
THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES
THAT IT WILL NOT
Page 143
SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. Except as prohibited by law, each of the
Company and Hasbro SA hereby waives any right it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
consequential or punitive damages or any damages other than, or in addition to,
actual damages. The Company and Hasbro SA (a) certify that no representative,
agent or attorney of any Bank or the Agent has represented, expressly or
otherwise, that such Bank or the Agent would not, in the event of litigation,
seek to enforce the foregoing waivers and (b) acknowledge that the Agent and the
Banks have been induced to enter into this Agreement, the other Loan Documents
to which it is a party by, among other things, the waivers and certifications
contained herein.
24.6. Severability.
The provisions of this Agreement are severable and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
25. TRANSITIONAL ARRANGEMENTS.
25.1. Existing Credit Agreement Superseded.
This Agreement shall on the Effective Date supersede the Existing Credit
Agreement in its entirety, except as provided in this 25. On the Effective Date,
the rights and obligations of the parties evidenced by the Existing Credit
Agreement shall be evidenced by the Agreement and other Loan Documents, the
"Syndicated Loans" as defined in the Existing Credit Agreement shall be
converted to Syndicated Loans hereunder, and all outstanding letters of credit
issued by Fleet for the account of the Company prior to the Effective Date
shall, for the purposes of this Credit Agreement, be Letters of Credit.
25.2. Return and Cancellation of Notes.
Upon receipt by any Bank of its Notes hereunder on the Effective Date, any
"Notes" of the Company held by such Bank pursuant to and as defined in the
Existing Credit Agreement shall be deemed to be no longer outstanding. As soon
as reasonably
Page 144
practicable after its receipt of its Notes hereunder on the Effective Date, each
Bank will promptly return to the Company, marked "Substituted" or "Cancelled",
as the case may be, any notes of the Company held by such Bank pursuant to the
Existing Credit Agreement.
25.3. Interest and Fees Under Superseded Agreement.
All interest and fees and expenses, if any, owing or accruing under or in
respect of the Existing Credit Agreement through the Effective Date shall be
calculated as of the Effective Date (prorated in the case of any fractional
periods), and shall be paid as of the Effective Date. Commencing on the
Effective Date, the Commitment Fee shall be payable by the Company to the Agent
for the account of the Banks in accordance with 2.2.
26. LIABILITY FOR THE OBLIGATIONS.
(a) Notwithstanding anything herein to the contrary, the Company covenants
and agrees that all Obligations with respect to all Loans, Reimbursement
Obligations and any other Obligations payable to the Agent or any of the Banks
shall constitute the obligations of the Company individually.
(b) Notwithstanding any other provision hereof or of any other Loan
Document, Hasbro SA shall have no liability for any Obligations other than the
Hasbro SA Obligations, or for any other liability or obligation of the Company.
27. GUARANTY.
27.1. Guaranty of Payment and Performance.
The Company hereby guarantees to the Banks and the Agent the full and
punctual payment when due (whether at stated maturity, by required pre-payment,
by acceleration or otherwise), as well as the performance, of all of the Hasbro
SA Obligations including all such which would become due but for the operation
of the automatic stay pursuant to 362(a) of the Federal Bankruptcy Code or
similar provisions of other applicable law and the operation of 502(b) and
506(b) of the Federal Bankruptcy Code or similar provisions of other applicable
law. This guaranty is an absolute, unconditional and continuing guaranty of the
full and punctual payment and performance of all of the Hasbro SA Obligations
and not of their collectibility only and is in no way conditioned upon any
requirement that the Agent or any Bank first attempt to collect any of the
Hasbro SA Obligations from Hasbro
Page 145
SA or resort to any collateral security or other means of obtaining payment.
Should Hasbro SA default in the payment or performance of any of the Hasbro SA
Obligations, the obligations of the Company hereunder with respect to the Hasbro
SA Obligations in default shall become immediately due and payable to the Agent,
for the benefit of the Banks and the Agent, without demand or notice of any
nature, all of which are expressly waived by the Company. Payments by the
Company hereunder may be required by the Agent on any number of occasions.
27.2. The Company's Agreement to Pay Enforcement Costs, etc.
The Company further agrees, as the principal obligor and not as a guarantor
only, to pay to the Agent, on demand, all reasonable costs and expenses
(including court costs and reasonable legal expenses) incurred or expended by
the Agent or any Bank in connection with the Hasbro SA Obligations, this
guaranty and the enforcement thereof.
27.3. Waivers by the Company; Banks' Freedom to Act.
The Company agrees that the Hasbro SA Obligations will be paid and
performed strictly in accordance with their respective terms, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or any Bank with respect
thereto. The Company waives promptness, diligences, presentment, demand,
protest, notice of acceptance, notice of any Hasbro SA Obligations incurred and
all other notices of any kind, all defenses which may be available by virtue of
any valuation, stay, moratorium law or other similar law now or hereafter in
effect, any right to require the marshalling of assets of the Company or any
other entity or other person primarily or secondarily liable with respect to any
of the Hasbro SA Obligations, and all suretyship defenses generally. Without
limiting the generality of the foregoing, the Company agrees to the provisions
of any instrument evidencing, securing or otherwise executed in connection with
any Hasbro SA Obligation and agrees that the obligations of the Company
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by any of the following to the same extent as if the Company at all
times had been the principal obligor on all Hasbro SA Obligations: (i) the
failure of the Agent or any Bank to assert any claim or demand or to enforce any
right or remedy against the Company or any other entity or other person
primarily or secondarily liable with respect to any of the Hasbro SA
Obligations; (ii) any extensions, compromise, refinancing, consolidation or
renewals of
Page 146
any Hasbro SA Obligation; (iii) any change in the time, place or manner of
payment of any of the Hasbro SA Obligations or any rescissions, waivers,
compromise, refinancing, consolidation, amendments or modifications of any of
the terms or provisions of this Credit Agreement, the Notes, the other Loan
Documents or any other agreement evidencing, securing or otherwise executed in
connection with any of the Hasbro SA Obligations; (iv) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Hasbro SA Obligation; (v) the adequacy of any rights which the
Agent or any Bank may have against any collateral security or other means of
obtaining repayment of any of the Hasbro SA Obligations; (vi) the impairment of
any collateral securing any of the Hasbro SA Obligations, including without
limitation the failure to perfect or preserve any rights which the Agent or any
Bank might have in such collateral security or the substitution, exchange,
surrender, release, loss or destruction of any such collateral security; or
(vii) any other act or omission which might in any manner or to any extent vary
the risk of the Company or otherwise operate as a release or discharge of the
Company (other than the irrevocable payment in cash of the relevant Hasbro SA
Obligation), all of which may be done without notice to the Company. To the
fullest extent permitted by law, the Company hereby expressly waives any and all
rights or defenses arising by reason of (A) any "one action" or
"anti-deficiency" law which would otherwise prevent the Agent or any Bank from
bringing any action, including any claim for a deficiency, or exercising any
other right or remedy (including any right of set-off), against the Company
before or after the Agent's or such Bank's commencement or completion of any
foreclosure action, whether judicially, by exercise of power of sale or
otherwise, or (B) any other law which in any other way would otherwise require
any election of remedies by the Agent or any Bank.
27.4. Unenforceability of Hasbro SA Obligations Against Hasbro SA.
If for any reason the Company or Hasbro SA has no legal existence or is
under no legal obligation to discharge any of the Hasbro SA Obligations, or if
any of the Hasbro SA Obligations have become irrecoverable from the Company or
Hasbro SA by reason of the Company's or Hasbro SA's insolvency, bankruptcy or
reorganization or by other operation of law or for any other reason, this
guaranty shall nevertheless be binding on the Company and not affected thereby
to the same extent as if the Company at all times had been the principal obligor
on all such Hasbro SA Obligations. In the event that acceleration of the time
for payment of any of the Hasbro SA Obligations is stayed
Page 147
upon the insolvency, bankruptcy or reorganization of the Company, or for any
other reason, all such amounts otherwise subject to acceleration under the terms
of this Credit Agreement, the Notes, the other Loan Documents or any other
agreement evidencing, securing or otherwise executed in connection with any of
the Hasbro SA Obligations shall be immediately due and payable by the Company.
27.5. Subrogation; Subordination.
27.5.1. Waiver of Rights Against Hasbro SA.
Until the final payment and performance in full of all of the Hasbro
SA Obligations, the Company shall not exercise any rights against Hasbro SA
arising as a result of payment by the Company hereunder, by way of
subrogation, reimbursement, restitution, contribution or otherwise; the
Company will not claim any setoff, recoupment or counterclaim against
Hasbro SA in respect of any liability of the Company to Hasbro SA; and the
Company waives any benefit of and any right to participate in any
collateral security which may be held by the Agent or any Bank as security
for the payment of any Hasbro SA Obligations.
27.5.2. Subordination.
The payment of any amounts due with respect to any indebtedness of
Hasbro SA now or hereafter owed to the Company is hereby subordinated to
the prior payment in full of all of the Hasbro SA Obligations. The Company
agrees that, after the occurrence of any default the payment or performance
of any of the Hasbro SA Obligations, the Company will not demand, xxx for
or otherwise attempt to collect any such indebtedness of the Hasbro SA to
the Company until all of the Hasbro SA Obligations shall have been paid in
full. If, notwithstanding the foregoing sentence, the Company shall
collect, enforce or receive any amounts in respect of such indebtedness,
such amounts shall be collected, enforced and received by the Company as
trustee for the Banks and the Agent and be paid over to the Agent, for the
benefit of the Banks and the Agent on account of the Hasbro SA Obligations
without affecting in any manner the liability of the Company under the
other provisions of this guaranty.
27.5.3. Provisions Supplemental.
The provisions of this 27.5 shall be supplemental to and not in
derogation of any rights and remedies of the
Page 148
Banks and the Agent or any affiliate of any Banks and the Agent under any
separate subordination agreement which such Bank and the Agent or such
affiliate may at any time and from time to time enter into with the
Company.
27.6. Termination; Reinstatement.
This guaranty shall remain in full force and effect so long as any Hasbro
SA Obligation is outstanding or any Bank has any obligation to make any Hasbro
SA Loans. This guaranty shall continue to be effective or be reinstated, if at
any time any payment made or value received with respect to any of the Hasbro SA
Obligations is rescinded or must otherwise be returned by the Agent or any Bank
upon the insolvency, bankruptcy or reorganization of the Company, or otherwise,
all as though such payment had not been made or value received.
27.7. Successors and Assigns.
This guaranty shall be binding upon the Company, its successors and
assigns, and shall inure to the benefit of and be enforceable by the Agent and
the Banks and its successors, transferees and assigns. Without limiting the
generality of the foregoing sentence, each Bank may assign or otherwise transfer
its rights and obligations under this Credit Agreement, the Notes and the other
Loan Documents to any other entity or other person, and such other entity or
other person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment or transfer, with all the rights in respect
thereof granted to such Bank herein, all in accordance with and to the extent
complying with and provided in 20 hereof.
27.8. Severability, etc.
It is the intention and agreement of the Company, the Agent and the Banks
that the obligations of the Company under this 27 shall be valid and enforceable
against the Company to the maximum extent permitted by applicable law.
Accordingly, if any provision of this 27 creating any obligation of the Company
in favor of the Agent and the Banks shall be declared to be invalid or
unenforceable in any respect or to any extent, it is the stated intention and
agreement of the Company, the Agent and the Banks that any balance of the
obligation created by such provision and all other obligations of the Company to
the Agent or any Bank created by other provisions of this 27 shall remain valid
and enforceable. Likewise, if by final order a court of competent jurisdiction
shall declare any sums which the Agent or any Bank may be otherwise entitled to
collect from the Company
Page 149
under this 27 to be in excess of those permitted under any law (including any
federal or state fraudulent conveyance or like statute or rule of law)
applicable to the Company's obligations under this 27, it is the stated
intention and agreement of the Company, the Agent and the Banks that all sums
not in excess of those permitted under such applicable law shall remain fully
collectible by the Agent or such Bank from the Company.
[remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as an
agreement under seal as of the date first set forth above.
HASBRO, INC.
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx Xxxxx
Senior Vice President and
Treasurer
HASBRO SA
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Director
FLEET NATIONAL BANK, individually
and as Agent
By: /s/ Xxxx X'Xxxxxxxx
Xxxx X'Xxxxxxxx
Director
CITICORP USA, INC.
By: /s/ Xxxx X. Xxxxxxx
Page 150
Xxxx X. Xxxxxxx
Managing Director
COMMERZBANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
By: /s/ Xxxxx Xxxxx
Xxxxx Xxxxx
Vice President
MELLON BANK, N.A.
By: /s/ J. Xxxx Xxxx
J. Xxxx Xxxx
Vice President
THE BANK OF NOVA SCOTIA
By: /s/ X. X. Xxxxxxx
X. X. Xxxxxxx
Authorized Signatory
BANK OF AMERICA, N.A.
By: /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Vice President
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Xxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx
Assistant Vice President
BNP PARIBAS
Page 151
By: /s/ Xxxxxxxxxxx Xxxxxxxx
Xxxxxxxxxxx Xxxxxxxx
Managing Director
By: /s/ Xxxxxx Xxxxxx du Xxxxxx
Xxxxxx Xxxxxx du Bocage
Managing Director
BARCLAYS BANK PLC
By: /s/ X. Xxxxx
X. Xxxxx
Relationship Director
SANPAOLO IMI S.P.A.
By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Perrsico
General Manager
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Vice President
Schedule 1
BANK, COMMITMENTS AND COMMITMENT PERCENTAGES
BANK COMMITMENT
COMMITMENT PERCENTAGE
Fleet National Bank
000 Xxxxxxx Xxxxxx $70,000,000 18.421052632%
Xxxxxx, XX 00000
Attn: Xxxx X'Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Page 152
Citicorp USA Inc.
000 Xxxxxxxxx Xxxxxx, 00xx $50,000,000 13.157894737%
Floor
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Commerzbank AG, New York
Branch $50,000,000 13.157894737%
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Mellon Bank, N.A.
0000 Xxxxxx Xxxxxx, 0xx Xxxxx $50,000,000 13.157894737%
Xxxxxxxxxxxx, XX 00000
Attn: J. Xxxx Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
BANK COMMITMENT
COMMITMENT PERCENTAGE
The Bank of Nova Scotia
Diversified Industries $40,000,000 10.000000000%
Xxx Xxxxxxx Xxxxx
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Tel #1: (000) 000-0000
Tel #2: (000) 000-0000
Fax: (617) 624 - 7607
Bank of America, N.A.
000 Xxxxx XxXxxxx $40,000,000 10.526315789%
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Page 153
Citizens Bank of
Massachusetts $25,000,000 6.578947368%
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
BNP Paribas
000 Xxxxxxx Xxxxxx $25,000,000 6.578947368%
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Xxxxxxxx Xxxx XXX
0xx xxxxx, 00 Xxxxxxx Xxxxxx, $15,000,000 3.947368421%
Xxxxxx XX0X 0XX, XX
Attn: Xxxx Xxxxx
Tel: x00 (0)00 0000 0000
Fax: x00 (0)000 000 0000
BANK COMMITMENT
COMMITMENT PERCENTAGE
SANPAOLO IMI S.p.A.
000 Xxxx Xxxxxx, 00xx Xxxxx $15,000,000 3.947368421%
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
TOTAL $380,000,000 100%
Schedule 8.7
TITLE TO PROPERTIES; LEASES
Company Asset
Hasbro Spain Manufacturing Building
Page 154
Hasbro Spain Selling Building
Schedule 8.11
LITIGATION
1. In May of 2001, the Office of Fair Trading in the United Kingdom (the
"OFT") advised Hasbro, Inc.'s U.K. subsidiary, Hasbro U.K. Ltd. ("Hasbro
U.K."), of an inquiry into allegedly anti-competitive pricing practices by
Hasbro U.K. with respect to certain wholesale distributors in the U.K. The
business covered by this inquiry represented less than 3% of Hasbro U.K.'s
total revenue for the relevant time period. In August of 2001, Hasbro, Inc.
received a further inquiry from the OFT seeking, among other things,
information relating to Hasbro U.K.'s trading arrangements with its direct
retail accounts, which represent the bulk of its business in the United
Kingdom. The Company is cooperating fully with the OFT in its inquiries. If
a fine is imposed pursuant to the OFT inquiry, the Company currently
estimates that the amount of the fine could range from approximately
$236,000 to approximately $38,300,000. Because of a number of factors,
including the relatively early stage of this inquiry, the lack of precedent
under the applicable U.K. statute, and the significant appeal rights
available to the Company in the event of an adverse determination by the
OFT, there is no amount within this range which is a better estimate than
any other amount in the range.
Schedule 8.23
ENVIRONMENTAL COMPLIANCE
Below are listed material matters as to which the Company does not possess
sufficient information to calculate future costs, if any, which it may incur:
1. Former Xxxxxx Brothers Plant. 000 Xxxxxx Xxxxxx, Xxxxx, XX. The Company
performed an investigation and remediation of this property (which was
former owned and operated by the Company) under the Massachusetts hazardous
materials statute, M.G.L. Ch. 21E. That statute allows remediation of
certain property to industrial rather than residential standards provided
that an activity and use limitation is recorded with the deed. This has
been done. In each such case, however, the Massachusetts Department of
Environmental Protection ("DEP") is required to perform an audit. If
appropriate, DEP may order additional work
Page 155
to be done. As yet, DEP has not audited the site.
2. Acme Solvents Reclaiming, Inc., Rockford, IL. In 2000, one potentially
responsible party ("PRP") under the federal superfund statute, 42 U.S.C.
9601 et seq., asserted general claims against other PRPs, including the
Company, based upon their status as PRPs at an operationally related site.
Illinois EPA has asserted claims for approximately $100,000 in past costs
at this newly- identified site. Future costs, if any, have not been
determined. The Company's share of liability at the new site has been
assessed by the PRP Group at 1.875 percent.
3. Volney Landfill Superfund Site, Oswego, NY. In 1998, the Company settled
its liability with respect to operable unit one ("OU-1") of the cleanup at
this Site for less than $15,000, including claims for Natural Resource
Damages by EPA, based on a total cleanup cost for OU-1 of approximately $7
million. Costs for the OU-2 remedy have not yet been determined.
4. Xxxxxxx Xxxxxxxx Xxxxxxxxx Xxxx, Xxxx Xxxxxxx, XX. Kenner has not been
officially named as a PRP at this Site. However, the PRP group requested
Kenner to participate in 1998 and Kenner declined. As yet, there has been
no further communication from EPA or the PRP group. Total costs of cleanup
at the Site are unknown.
In addition to the foregoing, the Company and/or its subsidiaries have over
the course of the past 15 years been identified as PRPs or otherwise been
involved in the investigation and/or cleanup of other state and federal
superfund sites. The company has no reason to believe that either individually
or in the aggregate its involvement in these other matters will have a Material
Adverse Effect.
Schedule 8.24
Exhibit 21(2000 10-K)
HASBRO, INC. AND SUBSIDIARIES
Subsidiaries of the Registrant (a)
Name Under Which Subsidiary State or
Other Jurisdiction of
Does Business
Incorporation or Organization
---------------------------
---------------------------
Hasbro International, Inc.
Page 156
Delaware
Hasbro France S.A. France
Hasbro Deutschland GmbH
Germany
Hasbro Italy S.r.l.
Italy
Hasbro Latin America Inc.
Delaware
Hasbro Argentina S.A.
Argentina
Hasbro Chile LTDA
Chile
Hasbro Latin America, L.P.
Delaware
Hasbro S.A.
Switzerland
Hasbro Holdings S.A.
Hasbro Canada Corporation / Corporation
Hasbro Canada Canada
Hasbro Asia-Pacific Marketing Ltd.
Hong Kong
Tiger Electronics Far East Services, Limited
Hong Kong
Hasbro de Mexico X.xx X.X.xx C.V.
Mexico
Hasbro (Schweiz) AG
Switzerland
Hasbro U.K. Limited
United Kingdom
Tiger Electronics UK Limited
United Kingdom
Group Grosvenor plc. United
Kingdom
MB International B.V.
The Netherlands
Hasbro B.V.
The Netherlands
Hasbro Hellas Industrial & Commercial
Company S.A. Greece
Hasbro Toys & Games Holdings, S.L.
Spain
MB Espana, S.A.
Spain
Hasbro Iberia SL Spain
S.A. Hasbro N.V.
Belgium
Hasbro InterToy Eqitim Araclari Sanayi Ve
Ticaret A.S. Turkey
Page 157
Hasbro Far East LTD
Hong Kong
Tiger Electronics Far East, Limited
Hong Kong
WowWee Limited
Hong Kong
Hasbro Australia Limited
Australia
Hasbro New Zealand
New Zealand
Hasbro Ireland Limited
Ireland
Palmyra Holdings Pte Ltd.
Singapore
Hasbro Managerial Services, Inc.
Rhode Island
Larami Limited
Delaware
OddzOn, Inc.
Delaware
Wizards of the Coast, Inc. Washington
(a) Inactive subsidiaries and subsidiaries with minimal operations
have been omitted. Such subsidiaries, if taken as a whole, would not
constitute a significant subsidiary.
Schedule 8.26
HASBRO INC.
FOREIGN SCHEDULED FACILITIES
As of March 3, 2002 (F/X Rates as of March 3, 2002)
in USDs (000s)
Utilized
Facility
Facility Facility @ March 3,
Affiliate Country Bank Currency Line 2002
Hasbro Chile Chile Fleet (BkB) CLP 4,500 2,170
Limitada
Hasbro SA Head Fleet (BkB) USD 10,000 0
Page 158
Office London
Hasbro UK Limited United Fleet (BkB) GBP 5,500 0
Kingdom London
Hasbro Peru SA Peru Fleet (BkB) PES 2,000 2,005
Hasbro SA, HAPM, Hong Fleet (BkB) USD 11,000 6,346
Hasbro Far East, Kong Hong Kong
Tiger Electronics
Far East Svcs Ltd
(SA), and Wow Wee
Fleet (BkB) 33,000 10,521
Total
Hasbro UK Limited United Barclays GBP 4,600 2,831
Kingdom
Hasbro UK Limited United Barclays GBP 558 142
(Lease) Kingdom
Grosvenor United Barclays GBP 1,102 0
Kingdom
Barclays Total 6,260 2,973
Hasbro Argentina SA Argentin Citibank ARP 2,000 0
a
Hasbro Chile Chile Citibank CLP 10,000 7,117
Limitada
Hasbro SA Head Citibank USD 25,000 3,544
Office
Hasbro Magyarorszag Hungary Citibank USD 3,600 0
Kft
Hasbro BV Netherla Citibank NLG 200 139
nds
Hasbro Poland Spzoo Poland Citibank USD 3,000 90
Hasbro Taiwan Taiwan Citibank TWD 2,000 521
Intertoy Egitim Turkey Citibank USD 4,500 4,471
Araglari Sanayi Ve
Page 159
Ticaret AS 50,300 15,882
Hasbro Deutschland Germany Commerzbank DEM 700 594
Gmbh
Commerzbank 700 594
Total
Hasbro Italy Italy San Paolo IMI ITL 1,781 0
San Paolo IMI 1,781 0
Total
Hasbro Argentina SA Argentina Scotia Bank ARP 1,999 0
Scotia Bank 1,999 0
Total
Grand Total 94,040 29,970
Schedule 8.27
BANK ACCOUNTS
Bank Name Location Account Name Account
Number
Bank of America Dallas, TX Hasbro Lockbox 3751202484
Bank of America Dallas, TX Oddzon Lockbox 3751279909
Bank of America Seattle, WA Wizards of the Coast 68625011
Lockbox
Schedule 10.1
EXISTING INDEBTEDNESS
Amounts shown for external short-term facilities are the maximum that
Page 160
may be outstanding from time to time.
Amounts shown
are in US
Dollars or
their US Dollar
equivalents.
Company/Borrower Counterparty Type/Description Amount Maturity
Date
Hasbro Belgium CBC External Short-Term
Facility 3,308,000
Hasbro Chile Banco de External Short-Term
Santander Facility 1,740,000
Hasbro Chile Security External Short-Term
Facility 1,362,000
Hasbro Chile Bank Xxxx External Short-Term
Facility 787,000
Hasbro Far Prior Owners of Notes Payable Various
East* Grosvenor 11,641,000
Hasbro France Credit Lyonnais External Short-Term
Facility 2,694,000
Hasbro France Societe External Short-Term
Generale Facility 5,303,000
Hasbro Greece National Bank External Short-Term
of Greece Facility 1,297,000
Hasbro Hong HSBC External Short-Term
Kong* Facility 5,513,000
Hasbro Ireland Allied Irish External Short-Term
Bank Facility 281,000
Hasbro Israel * Bank Leumi External Short-Term
Facility 2,000,000
Hasbro Israel * First Int'l External Short-Term
Bank of Israel Facility 1,000,000
Hasbro Italy Banca External Short-Term
Page 161
Commerciale Facility 2,281,000
Italia
Hasbro Italy Cariplo External Short-Term
Facility 2,277,000
Hasbro Italy Banca External Short-Term
Commerciale Facility 9,127,000
Industria
Hasbro Peru Banco Xxxxx External Short-Term
Sudamericano Facility 1,000,000
Hasbro Portugal Banco Bilbao External Short-Term
Vizcaya Facility 220,000
Hasbro SA * UBS External Short-Term
Facility 1,801,000
Hasbro Spain Bankinter Capitalized Leases 10/01/20
Manufacturing 9,842,000 14
Hasbro Spain Bancaja External Short-Term
Manufacturing Facility 2,125,000
Hasbro Spain Banco Bilbao External Short-Term
Manufacturing Vizcaya Facility 2,125,000
Hasbro Spain Banco de External Short-Term
Manufacturing Santander Facility 531,000
Hasbro Spain Bankinter External Short-Term
Manufacturing Facility 1,593,000
Hasbro Spain Bankinter Capitalized Leases 10/01/20
Selling 6,740,000 14
The amount of Indebtedness listed next to each external short-term
facility listed above is the maximum principal amount permitted to be
outstanding from time to time under such facility, and the amount
thereof incurred under such revolving facility from time to time is
deemed to be Indebtedness incurred in compliance with section 10.1(g) of
the Credit Agreement to which this Schedule 10.1 is attached.
Page 162
Schedule 10.2
EXISTING LIENS
Property Description Exposure
Patent Lease Patent Lease with Fleet Capital
Leasing $246,518
In addition, Liens pursuant to or under (a) the Contribution Agreement
entered on December 6, 2000, by and among the Company, Hasbro U.K. Limited,
Hasbro Internet Holdings, Inc. and Infogrames Entertainment SA ("Infogrames")
and (b) the Warrant Agreement entered into between the Company and Infogrames on
January 26, 2001, in each case relating to the Capital Stock of Infogrames.
Schedule 10.12
The two indentures covering the Company's aggregate $899,873,000 principal
amount of registered long-term debt provide, with certain exceptions and subject
to a basket equal to the greater of 10% of consolidated net tangible assets (as
defined in the indentures) or $100,000,000, that neither the Company nor any
subsidiary may create, incur, assume or guarantee any Secured Debt without
equally and ratably securing the outstanding securities under the indentures. In
both indentures, Secured Debt is defined as follows:
"Secured Debt" means indebtedness for money borrowed by the Company or
its Subsidiaries (other than indebtedness owed by a Subsidiary to the
Company, by a Subsidiary to another Subsidiary or by the Company to a
Subsidiary), which in any case is secured, whether by operation of law
or otherwise, by a mortgage, security interest, pledge, lien or other
encumbrance on Principal Property or on any shares of stock or
evidences of indebtedness of a Subsidiary. If any amount of such
indebtedness described in the parenthetical in the preceding sentence
and held by the Company or a Subsidiary is transferred in any manner
to any Person other than the Company or a Subsidiary, such amount
shall be deemed to be Secured Debt issued on
Page 163
the date of transfer.
In both indentures, "Principal Property" is defined as follows:
"Principal Property" means any real property, any manufacturing plant,
warehouse, office building or other physical facility or other like
depreciable physical asset of the Company or of any Subsidiary whether
owned on the date hereof or hereafter acquired having a net book value
at the time of determination in excess of the greater of 5% of
Consolidated Net Tangible Assets or $50 million, other than, in each
case, any of the same which in the good faith opinion of the Board of
Directors is not of material importance to the total business
conducted by the Company and its Subsidiaries, as a whole.
Exhibit A-1
FORM OF [[SECOND]* AMENDED AND RESTATED]*/ SYNDICATED NOTE
$______________________ as of ____________ ___, 200__
[FOR VALUE RECEIVED, the undersigned, HASBRO, INC., a Rhode Island
corporation (hereinafter, together with its successors in title and assigns,
called the "Company"), hereby absolutely and unconditionally promises to pay to
the order of [INSERT NAME OF BANK] (hereinafter together with its successors in
title and permitted assigns, called the "Bank") at the times and in accordance
with the terms and conditions specified in the Credit Agreement (as defined
below) but in no event later than the Final Maturity Date (as defined in the
Credit Agreement), the principal sum of [INSERT COMMITMENT AMOUNT]
($____________), or if less, the aggregate unpaid principal amount of all
Syndicated Loans made by the Bank to the Company pursuant to the Second Amended
and Restated
Revolving Credit Agreement (as the same may be amended, restated,
modified or supplemented and in effect from time to time, the "Credit
Agreement"), dated as of March 19, 2002, by and among the Company, Hasbro SA,
the Bank and certain other lending institutions listed on Schedule 1 thereto and
Fleet National Bank, as agent (the "Agent") for the Bank and such other
Page 164
lending institutions. All capitalized terms used herein which are defined in the
Credit Agreement shall have the same meanings herein as therein.]1/
[FOR VALUE RECEIVED, the undersigned, HASBRO SA, a corporation organized
under the laws of Switzerland (hereinafter, together with its successors in
title and assigns, called "Hasbro SA"), hereby absolutely and unconditionally
promises to pay to the order of [INSERT NAME OF BANK] (hereinafter together with
its successors in title and permitted assigns, called the "Bank") at the times
and in accordance with the terms and conditions specified in the Credit
Agreement (as defined below) but in no event later than the Final Maturity Date
(as defined in the Credit Agreement), the principal sum of [INSERT AMOUNT EQUAL
TO BANK'S COMMITMENT PERCENTAGE OF HASBRO SA SUBLIMIT] ($____________), or if
less, the aggregate unpaid principal amount of all Syndicated Loans made by the
Bank to Hasbro SA pursuant to the Second Amended and Restated
Revolving Credit
Agreement (as the same may be amended, restated, modified or supplemented and in
effect from time to time, the "Credit Agreement"), dated as of March 19, 2002,
by and among Hasbro SA, Hasbro, Inc., the Bank and certain other lending
institutions listed on Schedule 1 thereto and Fleet National Bank, as agent (the
"Agent") for the Bank and such other lending institutions. All capitalized terms
used herein which are defined in the Credit Agreement shall have the same
meanings herein as therein.]2/
[This [Second]* Amended and Restated Syndicated Note (this "Note")
constitutes the amendment and restatement in its entirety of the Amended and
Restated Syndicated Note, dated as of ___________ __ 20__, issued by [the
Company]1/[Hasbro SA]2/ to the Bank in the original principal amount of
$__________________ (the "Original Note"), and is in substitution therefor and
an amendment and replacement thereof. Nothing herein shall be construed to
constitute payment of the Original Note or to release or terminate any guaranty
or lien, mortgage, pledge or other security entered in favor of the Bank.]*
This Note evidences borrowings under and has been issued by [the
Company]1/[Hasbro SA]2/ in accordance with the terms of the Credit Agreement.
The Bank and any holder hereof are entitled to the benefits of the Credit
Agreement, and may enforce the agreement of [the Company]1/[Hasbro SA]2/
contained therein, including without limitation [the Company's]1/[Hasbro SA's]2/
promise to pay interest on the Outstanding Syndicated Loans until paid in full
at the rates per annum set forth in or established pursuant to the Credit
Agreement. Such interest shall be payable on such dates as are determined from
time to time pursuant to the
Page 165
Credit Agreement and shall be calculated as therein provided.
The Bank shall, and is hereby irrevocably authorized by [the
Company]1/[Hasbro SA]2/ to, endorse on the schedule attached to this Note or a
continuation of such schedule attached hereto and made a part hereof, an
appropriate notation evidencing advances and repayments of principal of this
Note, provided that failure by the Bank to make any such notation shall not
affect any of [the Company's]1/[Hasbro SA's]2/ obligations in respect of this
Note.
[The Company]1/[Hasbro SA]2/ has the right in certain circumstances to
prepay the principal of this Note on the terms and conditions specified in the
Credit Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.
[The Company]1/[Hasbro SA]2/ and every endorser and guarantor of this Note
or the obligation represented hereby waive presentment, demand, notice, protest
and all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, assent to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
This Note and the obligations of [the Company]1/[Hasbro SA]2/ hereunder
shall be governed by, and interpreted and determined in accordance with, the
laws of the Commonwealth of Massachusetts (excluding the laws applicable to
conflicts or choice of law). This Note is a sealed instrument under the laws of
the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, [the Company]1/[Hasbro SA]2/ has caused this Note to be
signed in its corporate name and its corporate seal to be impressed hereon by
its duly authorized officer as of the day and in the year first above written.
[HASBRO, INC.
Page 166
By:
---------------------------
Name:
Title:]1/
[HASBRO SA
By:
---------------------------
Name:
Title:]2/
Amount
of
Interest Principal Balance
of
Amount Rate Paid or Principal Notation
of
Date Loan Election Prepaid Unpaid Made By
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Exhibit A-2
FORM OF SYNDICATED LOAN REQUEST
______________, ___, 20__
Fleet National Bank, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: Syndicated Loan Request
Page 168
Ladies and Gentlemen:
Reference is hereby made to that certain Second Amended and Restated
Revolving Credit Agreement, dated as of March 19, 2002 (as the same may be
amended and in effect from time to time, the "Credit Agreement"), by and among
Hasbro, Inc. (the "Company"), Hasbro SA ("Hasbro SA"), Fleet National Bank and
the other lending institutions listed on Schedule 1 thereto (collectively, the
"Banks") and Fleet National Bank, as agent (the "Agent") for the Banks.
Capitalized terms which are used herein without definition and which are defined
in the Credit Agreement shall have the same meanings herein as in the Credit
Agreement.
Pursuant to 2.4 of the Credit Agreement, we hereby request that a
Syndicated Loan consisting of [a Base Rate Loan in the principal amount of
$______________ ][ a Eurocurrency Rate Loan in the principal amount of
$_______________ with an Interest Period of _______________] be made on
__________ __, 20___. We understand that this request is irrevocable and binding
on us and obligates us to accept the requested Syndicated Loan on such date.
We hereby represent and warrant that all of the conditions applicable to
such Syndicated Loan set forth in 13 of the Credit Agreement have been satisfied
on the date of this request.
We hereby certify that the borrowing requested hereby is in accordance with
2.1(a) of the Credit Agreement.
Very truly yours,
[HASBRO, INC.
By:
Name:
Title:] /3/
[HASBRO SA
By:
Name:
Title: ]4/
Exhibit B-1
FORM OF
[[SECOND]*/ AMENDED AND RESTATED]* COMPETITIVE BID NOTE
Page 169
$ as of ________________ ___, 200__
FOR VALUE RECEIVED, the undersigned HASBRO, INC., a Rhode Island
corporation (hereinafter, together with its successors in title and assigns,
called the "Company"), hereby absolutely and unconditionally promises to pay to
the order of [INSERT NAME OF BANK] (the "Bank") at the times and in accordance
with the terms and conditions specified in the Credit Agreement (as defined
below) but in no event later than the Final Maturity Date, the principal amount
of _____________________ DOLLARS ($ ) or, if less, the aggregate unpaid
principal amount of Competitive Bid Loans advanced by the Bank to the Company
pursuant to the Second Amended and Restated
Revolving Credit Agreement, dated as
of March 19, 2002 (as the same may be amended, restated, modified or
supplemented and in effect from time to time, the "Credit Agreement"), by and
among the Company, Hasbro SA, the Bank, the other lending institutions which are
or may become parties to the Credit Agreement and Fleet National Bank, as Agent.
The Company also promises to pay to the order of the Bank interest on the
principal balance hereof through and including the date on which such principal
amount is paid in full, at the times and at the rates provided in the Credit
Agreement. All capitalized terms used in this Second Amended and Restated
Competitive Bid Note (this "Note") and not otherwise defined herein shall have
the same meanings herein as in the Credit Agreement.
[This Note constitutes the amendment and restatement in its entirety of the
[Amended and Restated]* Competitive Bid Note, dated as of ___________ __, 20__,
issued by the Company to the Bank in the original principal amount of
$__________________ (the "Original Note"), and is in substitution therefor and
an amendment and replacement thereof. Nothing herein shall be construed to
constitute payment of the Original Note or to release or terminate any guaranty
or lien, mortgage, pledge or other security entered in favor of the Bank.]*
This Note evidences borrowings under and has been issued by the Company in
accordance with the terms of the Credit Agreement. The Bank and any holder
hereof are entitled to the benefits of the Credit Agreement, and may enforce the
agreements of the Company contained therein, including without limitation the
Company's promise to repay each Competitive Bid Loan advanced hereunder on the
last day of the applicable Interest Period with respect thereto.
Page 170
The Bank shall, and is hereby irrevocably authorized by the Company to,
endorse on the schedule attached to this Note or a continuation of such schedule
attached hereto and made a part hereof, an appropriate notation evidencing
advances and repayments of principal of this Note, provided that failure by the
Bank to make any such notations shall not affect any of the Company's
obligations in respect of this Note.
The Company has the right in certain circumstances and the obligation in
certain other circumstances to prepay the whole or part of the principal of this
Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.
The Company and every endorser and guarantor of this Note or the obligation
represented hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, assent to any extension or postponement of
the time of payment or any other indulgence, to any substitution, exchange or
release of collateral and to the addition or release of any other party or
person primarily or secondarily liable.
This Note and the obligations of the Company hereunder shall be governed
by, and interpreted and determined in accordance with, the laws of the
Commonwealth of Massachusetts (excluding the laws applicable to conflicts or
choice of law). This Note is a sealed instrument under the laws of the
Commonwealth of Massachusetts.
[Remainder of page intentionally left blank] IN WITNESS WHEREOF, the
Company has caused this Note to be signed in its corporate name by its duly
authorized officer as of the day and year first above written.
HASBRO, INC.
Page 171
By:
----------------------
Name:
Title:
Amount
of
Interest Principal Balance
of
Amount Rate Paid or Principal Notation
of
Date Loan Election Prepaid Unpaid Made By
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Exhibit B-2
FORM OF COMPETITIVE BID QUOTE REQUEST
[INSERT DATE]
To: Fleet National Bank, as Agent (the "Agent")
From: Hasbro, Inc. (the "Company")
Re: Second Amended and Restated Revolving Credit Agreement (as
amended and in effect from time to time, the "Credit Agreement"),
dated as of March 19, 2002, among the Company, Hasbro SA, the Banks
party thereto
Page 173
and the Agent
We hereby give notice pursuant to 2.5.1(b) of the Credit Agreement that we
request Competitive Bid Quotes for the following proposed Competitive Bid
Loan(s):
Date of Borrowing:
Principal Amount* Interest Period** Maturity
Date***
$
Such Competitive Bid Quotes should offer a Competitive Bid Rate.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
HASBRO, INC.
By:
---------------------------
-
Name:
Title:
---------------------
* Amount must be $5,000,000 minimum, or a greater integral
multiple of $1,000,000.
** Up to one hundred eighty (180) days; a maximum of three (3)
Interest Periods may be selected in one Competitive Bid
Quote Request.
*** Last day of Interest Period.
Exhibit B-3
FORM OF INVITATION FOR COMPETITIVE BID QUOTE
To: [Name of Bank]
Re: Invitation for Competitive Bid Quotes to Hasbro, Inc. (the Company")
Pursuant to 2.5.1(c) of the Second Amended and Restated Revolving Credit
Agreement, dated as of March 19, 2002 (as
Page 174
amended and in effect from time to time, the "Credit Agreement"), among the
Company, Hasbro SA, the Banks party thereto and Fleet National Bank, as Agent,
we are pleased on behalf of the Company to invite you to submit Competitive Bid
Quotes to the Company for the following proposed Competitive Bid Loan(s):
Date of Borrowing:
Principal Amount Interest Period(s)*
Maturity Date**
$
Such Competitive Bid Quotes should offer a Competitive Bid Rate.
Please respond to this invitation by no later than 10:00 a.m. (Boston time)
on the requested Drawdown Date to the attention of [ ] at
facsimile number [ ].
Capitalized terms used herein shall have the same meanings assigned to such
terms in the Credit Agreement.
FLEET NATIONAL BANK, as Agent
By:
--------------------------------
-
Authorized Officer
--------------------
* Up to three (3) Interest Periods may be specified.
** Last day of Interest Period.
Exhibit B-4
FORM OF COMPETITIVE BID QUOTE
Fleet National Bank, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: [Insert Name]
Re: Competitive Bid Quote to Hasbro, Inc. (the "Company")
Page 175
In response to your invitation on behalf of the Company, dated __________
___, 20__ we hereby make the following Competitive Bid Quote on the following
terms:
1. ______________________________________________________Quoting
Bank:_______________________________________________________
2. Person to contact at Quoting
Bank:______________________________________
3. Date of
Borrowing:___________________________________________________ *
4. We hereby offer to make Competitive Bid Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Competitive Bid
Amount** Period(s)***
Rate(s)****
$
$
5. Aggregate Principal Amount $
____________________
* As specified in the related Invitation for Competitive Bid
Quotes.
** Principal amount bid for each Interest Period (a) may not
exceed the lesser of (i) the Total Commitment and (ii) the
Maximum Availability in effect from time to time during the
applicable Interest Period and (b) may not exceed the
aggregate principal amount of Competitive Bid Loans for
which offers were requested. Bids must be made for
$5,000,000 or any larger multiple of $1,000,000.
*** Up to one hundred eighty (180) days, as specified in the
related Invitation for Competitive Bid Quotes.
**** Specify rate of interest per annum (each rounded to the
nearest 1/1000th of 1%) for each applicable Interest Period.
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Second Amended and
Restated Revolving Credit Agreement, dated as of March 19, 2002, as amended and
in effect from time to time, among the Company, Hasbro SA, the Banks party
thereto and Fleet National Bank, as Agent, irrevocably obligates us to make the
Competitive Bid Loan(s) for which any offer(s) are accepted in whole or in part
by the Company.
Page 176
Very truly yours,
[NAME OF BANK]
Dated:
---------------------------
By:
--------------------------------
Authorized Officer
Exhibit B-5
FORM OF NOTICE OF COMPETITIVE BID BORROWING
Fleet National Bank, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: [Insert Name]
Re: Second Amended and Restated Revolving Credit Agreement (as amended
and in effect from time to time, the "Credit Agreement"), dated as of
March 19, 2002, among the Company, Hasbro SA, the Banks party thereto
and the Agent
We hereby give notice pursuant to 2.5.1(f) of the Credit Agreement of our
acceptance of the following Competitive Bid Quote(s):
1. Bank:_______________________________________________________
2. Date of
Borrowing:__________________________________________________ *
3. In the following principal amounts, for the following
Interest Periods and at the following rates:
Principal Interest Competitive Bid
Amount Period(s) Rate(s)**
$
$
[Repeat for each Bank as necessary]
____________________
Page 177
* As specified in the related Invitation for Competitive Bid
Quotes.
** Specify rate of interest per annum (each rounded to the
nearest 1/1000th of 1%) for each applicable Interest Period.
4. The Aggregate Principal Amount for each Interest Period is:
Interest Aggregate
Period Principal Amount
$
$
5. We hereby certify (a) that the borrowing accepted hereby is in accordance
with 2.5.1 of the Credit Agreement and (b) that each of the representations
and warranties contained in the Credit Agreement or in any other Loan
Document made by or on behalf of the Company and its Subsidiaries to the
Banks delivered pursuant to or in connection with the Credit Agreement was
true and correct in all material respects as of the date as of which it was
made and is true and correct in all material respects at and as of the date
hereof (except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and changes occurring in
the ordinary course of business that singly or in the aggregate are not
materially adverse, and to the extent that such representations and
warranties related expressly to an earlier date) and (c) that no Default or
Event of Default has occurred and is continuing.
Very truly yours,
HASBRO, INC.
Dated:____________________________
By:___________________________
Name:
Title:
Exhibit C
FORM OF SWING LINE LOAN REQUEST
Page 178
HASBRO, INC.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
_____________ __, 20__
Fleet National Bank, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. X'Xxxxxxxx, Director
Re: Swing Line Loan Request
Ladies and Gentlemen:
Please refer to that certain Second Amended and Restated Revolving Credit
Agreement, dated as of March 19, 2002 (the "Credit Agreement"), by and among
Hasbro, Inc. (the "Company"), Hasbro SA, Fleet National Bank and the lending
institutions party thereto (collectively, the "Banks") and Fleet National Bank,
as agent for the Banks (the "Agent"). Capitalized terms defined in the Credit
Agreement and used in this letter without definition shall have for purposes of
this letter the meanings assigned to them in the Credit Agreement.
Pursuant to 3.2 of the Credit Agreement, we hereby request that a Swing
Line Loan be made to the Company consisting of a Base Rate Loan in the principal
amount of $__________ on __________ __, 20__ with a maturity date of _______ __,
20__. We understand that this request is irrevocable and binding on us and
obligates us to accept the requested Swing Line Loan on such date.
Very truly yours,
HASBRO, INC.
By:
-------------------------------
Name:
Title:
Page 179
Exhibit D
FORM OF AMENDED AND RESTATED SWING LINE NOTE
$____________ as of _______________ ___, 200__
FOR VALUE RECEIVED, the undersigned HASBRO, INC., a Rhode Island
corporation (hereinafter, together with its successors in title and assigns,
called the "Company"), hereby absolutely and unconditionally promises to pay to
the order of FLEET NATIONAL BANK (hereinafter, together with its successors in
title and permitted assigns, called the "Swing Line Bank") at the times and in
accordance with the terms and conditions specified in the Credit Agreement (as
defined below) but in no event later than the Swing Line Loan Maturity Date (as
defined in the Credit Agreement), the principal sum of [INSERT AMOUNT]
($______________), or if less, the aggregate unpaid principal amount of all
Swing Line Loans made by the Swing Line Bank to the Company pursuant to the
Second Amended and Restated Revolving Credit Agreement (as the same may be
amended, restated, modified or supplemented and in effect from time to time, the
"Credit Agreement"), dated as of March 19, 2002, by and among the Company,
Hasbro SA, the Swing Line Bank and certain other lending institutions listed on
Schedule 1 thereto and Fleet National Bank, as agent (the "Agent") for the Bank
and such other lending institutions. All capitalized terms used herein which are
defined in the Credit Agreement shall have the same meanings herein as therein.
This Amended and Restated Swing Line Note (this "Note") constitutes the
amendment and restatement in its entirety of the Swing Line Note, dated as of
_________ __, 20__, issued by the Company to the Swing Line Bank in the original
principal amount of $__________________ (the "Original Swing Line Note"), and is
in substitution therefor and an amendment and replacement thereof. Nothing
herein shall be construed to constitute payment of the Original Swing Line Note
or to release or terminate any guaranty or lien, mortgage, pledge or other
security entered in favor of the Swing Line Bank.
This Note evidences borrowings under and has been issued by the Company in
accordance with the terms of the Credit Agreement. The Swing Line Bank and any
holder hereof are entitled to the benefits of the Credit Agreement, and may
enforce the agreement of the Company contained therein, including without
limitation the Company's promise to pay interest on the Outstanding Swing Line
Loans until paid in full at the rates per annum set forth in or established
pursuant to the Credit Agreement. Such interest shall be payable on such dates
as are determined from time to
Page 180
time pursuant to the Credit Agreement and shall be calculated as therein
provided.
The Swing Line Bank shall, and is hereby irrevocably authorized by the
Company to, endorse on the schedule attached to this Note or a continuation of
such schedule attached hereto and made a part hereof, an appropriate notation
evidencing advances and repayments of principal of this Note, provided that
failure by the Swing Line Bank to make any such notation shall not affect any of
the Company's obligations in respect of this Note.
The Company has the right in certain circumstances to prepay the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.
The Company and every endorser and guarantor of this Note or the obligation
represented hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, assent to any extension or postponement of
the time of payment or any other indulgence, to any substitution, exchange or
release of collateral and to the addition or release of any other party or
person primarily or secondarily liable.
This Note and the obligations of the Company hereunder shall be governed
by, and interpreted and determined in accordance with, the laws of the
Commonwealth of Massachusetts (excluding the laws applicable to conflicts or
choice of law). This Note is a sealed instrument under the laws of the
Commonwealth of Massachusetts.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
corporate name and its corporate seal to be impressed hereon by its duly
authorized officer as of the day and in the year first above written.
Page 181
HASBRO, INC.
By:
-------------------------------
Name:
Title:
Amount of Amount of Balance of
Swing Line Principal Principal Notation
Paid
Date Loan or Prepaid Unpaid Made By:
Exhibit E
FORM OF COMPLIANCE CERTIFICATE
HASBRO, INC.
Page 182
____________ __, 200_
Fleet National Bank, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Revolving Credit
Agreement (the "Credit Agreement"), dated as of March 19, 2002, by and among
Hasbro, Inc. (the "Company"), Hasbro SA, Fleet National Bank and the lending
institutions party thereto (collectively, the "Banks"), and Fleet National Bank,
as agent for the Banks (the "Agent"). Capitalized terms used herein without
definition shall have the respective meanings set forth in the Credit Agreement.
Pursuant to 9.5(c) of the Credit Agreement, the Company and the undersigned
officer of the company (who has reviewed the Loan Documents) hereby certify that
(a) the information furnished in the attached Compliance Certificate Worksheet
was true and correct as of the last day of the fiscal quarter next preceding the
date of this certificate, (b) as of the date hereof, no Default or Event of
Default under the Credit Agreement has occurred, (c) the financial statements
delivered herewith were prepared in accordance with GAAP, and (d) except as
specified in the attached schedule, if any, the representations and warranties
set forth in 8 of the Credit Agreement are true and correct in all material
respects as of the date hereof except to the extent such representations and
warranties expressly relate to an earlier date, provided, however, that the
representations and warranties set forth in 8 of the Credit Agreement shall be
deemed to be made with respect to the financial statements of the Company most
recently delivered to the Agent and the Banks pursuant to 9.5 of the Credit
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate on this
_____ day of ________________, 200_.
HASBRO, INC.
By:
-------------------------
Name:
Title:
Page 183
COMPLIANCE CERTIFICATE WORKSHEET
As of ___________ __, 20__
Section Calculation
11.1 Minimum EBITDA
For the Reference Period ended on ______ __, 20__
A. EBITDA
(Sum of Item A(1) plus Items A(2), A(3) and A(4) minus Item
A(5)): $
(1) Consolidated Operating Profit (or Loss) consolidated operating profit
(or loss) identified as such on the Company's income statement for
such period determined in accordance with GAAP: $
(2) depreciation and amortization for such period, to the extent
deducted in calculating Item A(1), determined in accordance with GAAP: $
(3) non-cash charges for such period, to the extent deducted in
calculating Item A(1), determined in accordance with GAAP: $
(4) extraordinary losses for such period, to the extent deducted in
calculating Item A(1), determined in accordance with GAAP: $
(5) extraordinary gains for such period, to the extent included in
calculating Item A(1), determined in accordance with GAAP: $
B. Minimum EBITDA permitted under the Credit Agreement
(For any Reference Period ending with the fiscal quarter referenced in
the table set forth below, not to be less than the amount set forth
opposite such fiscal quarter in such table)
Fiscal Quarter Ending: EBITDA
Page 184
First Quarter 2002 $355,000,000
Second Quarter 2002 $360,000,000
Third Quarter 2002 $330,000,000
Fourth Quarter 2002 $325,000,000
First Quarter 2003 $340,000,000
Second Quarter 2003 $345,000,000
Third Quarter 2003 $360,000,000
Fourth Quarter 2003 $400,000,000
First Quarter 2004 $425,000,000
Second Quarter 2004 $425,000,000
Third Quarter 2004 $425,000,000
Fourth Quarter 2004 $425,000,000
11.2 Consolidated Total Funded Debt to EBITDA For the fiscal quarter ended
______ __, 20__
A.Consolidated Total Funded Debt (Sum of Item A(1) plus Item A(2) plus Item A(3)
plus Item A(4) minus (if positive) Item A(7)) $
(1) Indebtedness for borrowed money or the obtaining of credit (including
the face amount of letters of credit outstanding): $
(2) Indebtedness in respect of the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business): $
(3) Indebtedness in respect of Capitalized Leases and Synthetic Leases: $
(4) Indebtedness of the type referred to in Items A(1), A(2) and A(3) above
which are guaranteed by the Company or any of its Subsidiaries: $
(5) Consolidated Cash: $
(6) Item A(5) minus $25,000,000: $
(7) Item A(6) multiplied by 0.50: $
B. EBITDA for the Reference Period then ended
(as set forth in Item 11.1(A)): $
C. Ratio of Item A to Item B:
Page 185
_____:_____
(For any fiscal quarter referenced in the table set forth
below, not to exceed the ratio set forth opposite such
fiscal
quarter in such table)
Fiscal Quarter Ending: Ratio
First Quarter 2002 3.10:1.00
Second Quarter 2002 3.60:1.00
Third Quarter 2002 4.40:1.00
Fourth Quarter 2002 3.50:1.00
First Quarter 2003 2.75:1.00
Second Quarter 2003 3.15:1.00
Third Quarter 2003 3.60:1.00
Fourth Quarter 2003 2.00:1.00
First Quarter 2004 2.00:1.00
Second Quarter 2004 2.25:1.00
Third Quarter 2004 2.75:1.00
Fourth Quarter 2004 2.00:1.00
11.3 Interest Coverage Ratio For the Reference Period ended on ______ __, 20__
A. EBITDA for the Reference Period then ended
(as set forth in Item 11.1(A)): $
B. Consolidated Total Interest Expense for such period: $
C. Ratio of Item A to Item B: :
(For any Reference Period ending with any fiscal quarter referenced in the
table below, not to be less than the ratio set forth opposite such fiscal
quarter in such table)
Fiscal Quarter Ending: Ratio
First Quarter 2002 3.65:1.00
Second Quarter 2002 3.90:1.00
Third Quarter 2002 3.90:1.00
Fourth Quarter 2002 4.00:1.00
First Quarter 2003 4.60:1.00
Second Quarter 2003 5.10:1.00
Third Quarter 2003 5.85:1.00
Page 000
Xxxxxx Xxxxxxx 2003 7.00:1.00
First Quarter 2004 7.50:1.00
Second Quarter 2004 7.50:1.00
Third Quarter 2004 7.50:1.00
Fourth Quarter 2004 7.50:1.00
11.4 Capital Expenditures
For the fiscal year ended on December __, 20__
A. Capital Expenditures made during such period: $
B. Maximum amount of Capital Expenditures permitted
under the Credit Agreement
(For any fiscal year referenced in the table below, not to exceed the
aggregate amount set forth in the table below opposite such year in such table)
Fiscal Year Ending: Amount
December 2002 $ 90,000,000
December 2003 $100,000,000
December 2004 $110,000,000
Exhibit F
FORM OF
SECOND AMENDED AND RESTATED SUBORDINATION AGREEMENT
This SECOND AMENDED AND RESTATED SUBORDINATION AGREEMENT, dated as of March
19, 2002 (as amended and in effect from time to time, this "Subordination
Agreement"), is by and among (a) HASBRO, INC., a Rhode Island corporation having
its principal place of business at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxx
00000 (the "Company"), (b) HASBRO INTERNATIONAL, INC., a Delaware corporation
having its principal place of business at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxx 00000 ("HII"), (c) WIZARDS OF THE COAST, INC., a Washington corporation
having its principal place of business at 0000 Xxxx Xxx XX, Xxxxxx, Xxxxxxxxxx
00000 ("Wizards", and together with HII, the "Significant Subsidiaries") and (d)
FLEET NATIONAL BANK, a
Page 187
national banking association having an office at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, as agent for (in such capacity, the "Agent") the Banks (as
such term is hereinafter defined directly or by reference).
WHEREAS, the Company is the direct or indirect legal and beneficial owner
of all the issued and outstanding shares of each class of the capital stock of
each of the Significant Subsidiaries;
WHEREAS, the Significant Subsidiaries are members of a group of related
corporations, the success of any one of which is dependent in part on the
success of the other members of such group;
WHEREAS, the Company, Hasbro SA, the Agent, and the Banks are entering into
a Second Amended and Restated Revolving Credit Agreement, dated as of March 19,
2002 (as amended and in effect from time to time, the "Credit Agreement") which
amends and restates the Amended and Restated Revolving Credit Agreement, dated
as of February 16, 2001 (as amended and in effect from time to time, the
"Existing Credit Agreement") in its entirety;
WHEREAS, in connection with the Existing Credit Agreement, the Company, the
Significant Subsidiaries and the Agent, for the benefit of the Banks and the
Agent, entered into an Amended and Restated Subordination Agreement, dated as of
February 16, 2001 (as amended, supplemented or otherwise modified from time to
time, the "Existing Subordination Agreement");
WHEREAS, it is a condition precedent to the amendment and restatement of
the Existing Credit Agreement and to the Banks' making any loans or otherwise
extending credit to the Company under the Credit Agreement that the Company and
each of the Significant Subsidiaries execute and deliver to the Agent, for the
benefit of the Banks and the Agent, an amended and restated subordination
agreement substantially in the form hereof;
WHEREAS, the Significant Subsidiaries will receive substantial direct and
indirect benefit from the loans and extension of credit by the Banks and the
Agent to the Company pursuant to the Credit Agreement (which benefits are hereby
acknowledged); and
WHEREAS, the Company and each of the Significant Subsidiaries wish to amend
and restate the Existing Subordination Agreement as provided herein;
Page 188
NOW THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. All capitalized terms used herein without definitions shall have both
the respective meanings provided therefor in the Credit Agreement.
2. The Company and each of the Significant Subsidiaries covenant and agree
with the Agent that all of the Subordinated Indebtedness (as hereinafter
defined) of the Company to the Significant Subsidiaries is hereby expressly
subordinated and made junior, to the extent and in the manner hereinafter set
forth in this Subordination Agreement, in right of payment to the prior payment
in full of all the Obligations. Until all the Obligations shall have been paid
in full and the Total Commitment shall have been terminated, (a) the Company
shall not, directly or indirectly, make any payment of principal or interest on
account of or transfer any collateral for any part of any and all indebtedness
of the Company to each of the Significant Subsidiaries, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising (referred to herein as the "Subordinated Indebtedness"),
whether evidenced by negotiable or non-negotiable instruments, securities or
other writings, book entries or otherwise, provided that prior to the occurrence
of an Event of Default, the Company may make payments of principal and interest
on account of the Subordinated Indebtedness, (b) upon the occurrence, and during
the continuance of, an Event of Default, none of the Significant Subsidiaries
shall demand or accept from the Company or any other Person any payment or
collateral in respect of the Subordinated Indebtedness, nor cancel, set off or
otherwise discharge any part of the Subordinated Indebtedness, and (c) neither
the Significant Subsidiaries nor the Company shall otherwise take or permit any
action prejudicial to or inconsistent with the terms of this agreement.
3. If an Event of Default shall have occurred and be continuing, the Agent
may, by notice to the Company and the Significant Subsidiaries, demand that all
payments made thereafter by the Company in respect of the Subordinated
Indebtedness be made to the Agent for the benefit of the Banks in payment of the
Obligations. Upon receipt of such notice from the Agent, the Company shall make
all such payments in respect of the Subordinated Indebtedness directly to the
Agent for application to the Obligations. Each of the Significant Subsidiaries
agrees to subordinate any subrogation claims it may have in respect of
Page 189
any such payments until the Obligations shall have been paid in full.
4. None of the Significant Subsidiaries will commence or join with any
other creditor or creditors of the Company in commencing any bankruptcy,
reorganization or insolvency proceedings against the Company. At any meeting of
creditors of the Company or, in the event of any proceeding, voluntary or
involuntary, for the distribution, division or application of all or part of the
assets or business of the Company or the proceeds thereof, whether such
proceeding be for the liquidation, reorganization, dissolution or winding up of
the Company or its business, a receivership, insolvency or bankruptcy
proceeding, an assignment for the benefit of creditors or a proceeding by or
against the Company for relief under any bankruptcy, reorganization or
insolvency law or any law relating to the relief of debtors, readjustment of
indebtedness, reorganization, arrangement, composition or extension or
otherwise, if all Obligations have not been paid in full at the time, the Agent
is hereby irrevocably authorized at any such meeting or in any such proceeding:
(a) To enforce claims comprising Subordinated Indebtedness either in its
own name or the name of any of the Significant Subsidiaries, by proof
of debt, proof of claim, suit or otherwise;
(b) To collect any assets of the Company distributed, divided or applied
by way of dividend or payment, or any such securities issued, on
account of the Subordinated Indebtedness and apply the same, or the
proceeds of any realization upon the same that the Agent in its
discretion elects to effect, to the Obligations until all the
Obligations shall have been paid in full, rendering any surplus to the
applicable Significant Subsidiary;
(c) To vote claims comprising the Subordinated Indebtedness, to accept or
reject any plan of partial or complete liquidation, reorganization,
arrangement, composition or extension; and
(d) To take generally any action in connection with any such meeting or
proceeding which any of the Significant Subsidiaries in their roles as
creditors might otherwise take.
5. Except as provided in 2 hereof, should any payment on
Page 190
account of or any collateral for any part of the Subordinated Indebtedness be
received by any of the Significant Subsidiaries, such payment or collateral
shall be delivered forthwith to the Agent by such Significant Subsidiaries for
application to the Obligations, in the form received except for the addition of
any endorsement or assignment which may have been omitted. Until so delivered
any such payment or collateral shall be held by such Significant Subsidiary in
trust for the Agent and shall not be commingled with other funds or property of
such Significant Subsidiary.
6. No part of the Subordinated Indebtedness is evidenced by any instrument,
security or other writing (other than open- account indebtedness entries on the
books of the Company or the Significant Subsidiaries) a copy of which has not
previously been or is not concurrently being delivered to the Agent and the
Banks; the Significant Subsidiaries are the lawful owners of the Subordinated
Indebtedness and no part thereof has been assigned to or subjected to any
security interest in favor of anyone. Until all the Obligations have been paid
in full, the Company shall not issue any instrument, security or other writing
evidencing any part of the Subordinated Indebtedness except at the request of
and in the manner requested by the Agent; and none of the Significant
Subsidiaries shall assign or subordinate any of the Subordinated Indebtedness
except to or in favor of the Agent or upon terms satisfactory in form and
substance to the Agent and the Banks.
7. The Agent is hereby authorized to demand specific performance of this
agreement, whether or not the Company shall have complied with the provisions
hereof applicable to it, at any time when any of the Significant Subsidiaries
shall have failed to comply with any provision hereof applicable to it. Each of
the Significant Subsidiaries hereby irrevocably waives any defense based on the
adequacy of a remedy at law which might be asserted as a bar to the remedy of
specific performance hereof in any action brought therefor by the Agent. Each of
the Significant Subsidiaries further waives presentment, notice and protest in
connection with all negotiable instruments evidencing the Obligations or the
Subordinated Indebtedness to which it may be a party, notice of the acceptance
of this agreement by the Agent, notice of any loan made, extension granted or
other action taken in reliance hereon and all demands and notices of every kind
(except as expressly provided in the Credit Agreement) in connection with this
Subordination Agreement, the Obligations or the Subordinated Indebtedness;
assent to any renewal, extension or postponement of the time of payment of the
Obligations or any other indulgence with respect thereto, to any substitution,
Page 191
exchange or release of collateral therefor and to the addition or release of any
person primarily or secondarily liable thereon; and agree to the provisions of
any instrument, security or other writing evidencing the Obligations.
8. The Significant Subsidiaries shall do, make, execute and deliver all
such additional and further acts, things, deeds, assurances and instruments as
the Agent may reasonably require more completely to vest in and assure to the
Agent its rights hereunder or in any of the Subordinated Indebtedness.
9. The Company and the Significant Subsidiaries shall pay to the Agent on
demand any and all expenses, including reasonable counsel fees, incurred or paid
by the Agent in protecting, preserving or enforcing its rights hereunder. After
deducting all of said expenses, the residue of any proceeds of collection or
sale of any negotiable or non-negotiable instruments, securities or other
writings evidencing any of the Subordinated Indebtedness shall be applied to the
payment of the Obligations ratably among the Banks and the Agent and, while
giving effect to such ratable applications, proper allowance being made for
interest on Obligations not then due, and any excess shall be returned to the
applicable Significant Subsidiary.
10. If any warranty herein contained shall prove to have been materially
false when made or in the event of a breach by the Company or any Significant
Subsidiary in the performance of any of the terms hereof, the Agent may, at its
option, declare that an Event of Default has occurred pursuant to and in
accordance with the terms of 14 of the Credit Agreement (taking into account any
applicable grace period provided for therein), whereupon the Agent and the Banks
shall have all of the rights and remedies provided for herein and in the other
Loan Documents.
11. The Company and each of the Significant Subsidiaries hereby acknowledge
the agency provisions set forth in 16 of the Credit Agreement and the authority
of the Agent thereunder to act for the Banks with respect to this Subordination
Agreement as provided in each such 16.
12. The rights granted to the Agent hereunder are solely for the protection
of the Agent and the Banks and nothing herein contained shall impose on the
Agent any duties with respect to any property of the Company or any Significant
Subsidiary received hereunder beyond reasonable care in its custody and
preservation while in the Agent's possession. The Agent shall have no duty to
preserve rights against prior parties in any instrument or chattel paper
received hereunder.
Page 192
13. All rights and interests of the Agent and the Banks hereunder, and all
agreements and obligations of the Significant Subsidiaries and the Company under
this Subordination Agreement, shall remain in full force and effect irrespective
of:
(i) any lack of validity or enforceability of the Credit Agreement, the
Notes or any other agreement or instrument relating thereto:
(ii) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit Agreement or
the Notes, including, without limitation, any increase in the
Obligations resulting from the extension of additional credit to the
Company or any of its subsidiaries or otherwise;
(iii) any taking, exchange, release or nonperfection of any other
collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the
Obligations;
(iv) any manner of application of collateral, or proceeds thereof, to all
or any of the Obligations, or any manner of sale or other disposition
of any collateral for all or any of the Obligations or any other
assets of the Company or any of its subsidiaries; and
(v) any other circumstances (other than payment in full of the Obligations
and the termination of the Total Commitment) which might otherwise
constitute a defense available to, or a discharge of, the Company or a
subordinated creditor.
This Subordination Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned by the Agent or any Bank
upon the insolvency, bankruptcy or reorganization of the Company or otherwise,
all as though such payment has not been made.
14. The Significant Subsidiaries and the Company each hereby represent and
warrant as follows:
(a) The Subordinated Indebtedness now outstanding has been duly
authorized, issued and delivered by the Company
Page 193
and constitutes the legal, valid and binding obligations of the
Company enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium,
marshalling or other laws relating to or affecting the enforcement
generally of creditors' rights and remedies (including such as may
deny giving effect to waivers of debtors' rights). There exists no
default in respect of any such Subordinated Indebtedness.
(b) The Significant Subsidiaries are the legal and beneficial owners of
the Subordinated Indebtedness now outstanding, free and clear of any
lien, security interest, option or other charge or encumbrance (other
than Permitted Liens).
(c) There are no conditions precedent to the effectiveness of this
Subordination Agreement that have not been satisfied or waived.
15. All notices and other communications provided for hereunder shall be in
writing (including telecopier, telegrahic, telex or cable communication) and
mailed, telecopied, telegraphed, telexed, cabled or delivered, if to HII or
Wizards, c/o the Company at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxx 00000
and if to the Company, the Agent or any Bank, at its address specified in the
Credit Agreement; or as to each party, at such other address as shall be
designated by such party in a written notice to each other party. All such
notices and other communications shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when, respectively, deposited in the mails,
telecopied, delivered to the telegraph company, confirmed by telex answerback or
delivered to the cable company.
16. This Subordination Agreement is intended to take effect as a sealed
instrument, shall be binding upon the Company and each of the Significant
Subsidiaries and their respective successors and assigns, shall inure to the
benefit of the Agent and the Banks, their successors and assigns and shall be
construed in accordance with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Subordination
Agreement to be duly executed as of this ______________ day of March, 2002.
(Corporate Seal) HASBRO, INC.
Page 194
By:
Name:
Title:
HASBRO INTERNATIONAL, INC.
By:
Name:
Title:
WIZARDS OF THE COAST, INC.
By:
------------------------------
Name:
Title:
FLEET NATIONAL BANK, as Agent
By:
Name:
Title:
Exhibit G
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Second Amended and Restated Revolving Credit
Agreement, dated as of March 19, 2002 (as from time to time amended and in
effect, the "Credit Agreement"), by and among (a) Hasbro, Inc., a Rhode Island
corporation (the "Company") and Hasbro SA, a corporation organized under the
laws of Switzerland and wholly owned subsidiary of the Company ("Hasbro SA") (b)
Fleet National Bank, a national banking association and the other lending
institutions listed on Schedule 1 thereto (collectively, the "Banks"), and (c)
Fleet National
Page 195
Bank, as agent for the Banks (in such capacity, the "Agent"). Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Credit Agreement.
_________________ (the "Assignor") and _______________ (the
"Assignee") hereby agree as follows:
1. Assignment.
Subject to the terms and conditions of this Assignment and Acceptance, the
Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes without recourse to the Assignor, a $_____________
interest in and to the rights, benefits, indemnities and obligations of the
Assignor under the Credit Agreement equal to ____________% in respect of the
Total Commitment immediately prior to the Effective Date (as hereinafter
defined).
2. Assignor's Representations.
The Assignor (i) represents and warrants that (a) it is legally authorized
to enter into this Assignment and Acceptance, (b) as of the date hereof, its
Commitment is $_________________, its Commitment Percentage is ____________%,
the aggregate outstanding principal balance of its Syndicated Loans equals
$_______________, the aggregate amount of its Letter of Credit Participations
equals $______________, the aggregate outstanding principal balance of its
Competitive Bid Loans equals $_______________, and the aggregate amount of its
participations in respect of Swing Line Loans equals $___________________and (c)
immediately after giving effect to all assignments which have not yet become
effective, the Assignor's Commitment Percentage will be sufficient to give
effect to this Assignment and Acceptance, (ii) makes no representation or
warranty, express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant thereto or the attachment, perfection or priority of any
security interest or mortgage, other than that it is the legal and beneficial
owner of the interest being assigned by it hereunder free and clear of any claim
or encumbrance; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company, Hasbro SA
or any of its Subsidiaries or any other Person primarily or secondarily liable
in respect of any of the Obligations, or the
Page 196
performance or observance by the Company, Hasbro SA or any of its Subsidiaries
or any other Person primarily or secondarily liable in respect of any of the
Obligations of any of its obligations under the Credit Agreement or any of the
other Loan Documents or any other instrument or document delivered or executed
pursuant thereto; and (iv) attaches hereto the Syndicated Notes and Competitive
Bid Notes delivered to it under the Credit Agreement.
The Assignor requests that the Company and Hasbro SA exchange the
Assignor's Syndicated Notes for new Syndicated Notes and, in the case of the
Company, Competitive Bid Notes payable to the Assignor and the Assignee as
follows:
Notes Amount of Amount of Amount of
Payable to Syndicated Syndicated Competitive
the Order Note (the Note (Hasbro Bid Note
of: Company) SA)
Assignor $___________ $___________ $___________
-- -- ----
Assignee $___________ $___________ $___________
-- -- ----
3. Assignee's Representations.
The Assignee (i) represents and warrants that (a) it is duly and legally
authorized to enter into this Assignment and Acceptance, (b) the execution,
delivery and performance of this Assignment and Acceptance do not conflict with
any provision of law or of the charter or by-laws of the Assignee, or of any
agreement binding on the Assignee, (c) all acts, conditions and things required
to be done and performed and to have occurred prior to the execution, delivery
and performance of this Assignment and Acceptance, and to render the same the
legal, valid and binding obligation of the Assignee, enforceable against it in
accordance with its terms, have been done and performed and have occurred in due
and strict compliance with all applicable laws; (ii) confirms that it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to 8.8 and 9.5 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (iii) agrees
that it will, independently and without reliance upon the Assignor, the Agent or
any other Bank and based on such documents and information as
Page 197
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement and the other Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and (v) agrees that it will perform in accordance
with their terms all the obligations which by the terms of the Credit Agreement
are required to be performed by it as a Bank.
4. Effective Date.
The effective date for this Assignment and Acceptance shall be ___________
__, _____ (the "Effective Date"). Following the execution of this Assignment and
Acceptance, and, if required by the Credit Agreement, the consent of the Company
and Hasbro SA hereto having been obtained, each party hereto shall deliver its
duly executed counterpart hereof to the Agent for acceptance by the Agent and
recording in the Register by the Agent. Schedule 1 to the Credit Agreement shall
thereupon be replaced as of the Effective Date by the Schedule 1 annexed hereto.
5. Rights Under Credit Agreement.
Upon such acceptance and recording, from and after the Effective Date, (i)
the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Bank thereunder, and (ii) the Assignor shall, with respect to that portion of
its interest under the Credit Agreement assigned hereunder, relinquish its
rights and be released from its obligations under the Credit Agreement;
provided, however, that the Assignor shall retain its rights to be indemnified
pursuant to 4.7 and 18 of the Credit Agreement with respect to any claims or
actions arising prior to the Effective Date.
6. Payments.
Upon such acceptance of this Assignment and Acceptance by the Agent and
such recording, from and after the Effective Date, the Agent shall make all
payments in respect of the rights and interests assigned hereby (including
payments of principal, interest, fees and other amounts) to the Assignee. The
Assignor and the Assignee shall make any appropriate adjustments in payments for
periods prior to the Effective Date by the Agent or with respect to the making
of this assignment directly between themselves.
Page 198
7. Governing Law.
THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICT OF LAWS).
8. Counterparts.
This Assignment and Acceptance may be executed in any number of
counterparts which shall together constitute but one and the same agreement.
[Remainder of page intentional left blank]
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.
[ASSIGNOR]
By:
Name:
Title:
[ASSIGNEE]
By:
Name:
Title:
CONSENTED TO:
FLEET NATIONAL BANK, as Agent
By:
Name:
Title:
HASBRO, INC.
Page 199
By:
Name:
Title:
HASBRO SA
By:
Name:
Title:*/
Exhibit H
FORM OF CONFIDENTIALITY AGREEMENT
[__________, 200__]
[Name and Address of Bank to
Provide Confidential Information
to Third Party]
Re: Hasbro, Inc.
Ladies and Gentlemen:
Reference is hereby made to the Second Amended and Restated Revolving
Credit Agreement, dated as of March 19, 2002 (as amended and in effect from time
to time, the "Credit Agreement"), by and among Hasbro, Inc., a Rhode Island
corporation (the "Company"), Hasbro SA, a corporation organized under the laws
of Switzerland and wholly owned subsidiary of the Company ("Hasbro SA"), Fleet
National Bank, a national banking association and the other lending institutions
listed on Schedule 1 thereto (collectively, the "Banks"), and Fleet National
Bank, as agent for the Banks (in such capacity, the "Agent"). Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Credit Agreement.
Pursuant to and in accordance with 9.10 and 22 of the Credit Agreement, the
undersigned (the "Transaction Party"), in connection with [DESCRIBE NATURE OF
TRANSACTION], hereby covenants and agrees, on behalf of itself and each of its
affiliates, directors, officers, employees and representatives, to use
reasonable precautions to keep confidential, in accordance
Page 200
with its customary procedures for handling confidential information of the same
nature and in accordance with safe and sound banking practices, any non-public
information supplied to it by the Company or any of its Subsidiaries or any of
the Banks that has been designated as confidential at the time such information
was provided to such Bank, provided that nothing herein shall limit the
disclosure of any such information:
(a) after such information shall have become public other than through a
violation of 22 of the Credit Agreement, or becomes available to the
Transaction Party on a nonconfidential basis from a source other than
the Company or any of its Subsidiaries without a duty of
confidentiality to the Company or such Subsidiary being violated;
(b) to the extent required by statute, rule, regulation or judicial
process;
(c) to counsel for the Transaction Party so long as the Transaction Party
informs its counsel of the agreement under 22 of the Credit Agreement
and the Transaction Party assumes responsibility for compliance by its
counsel with such agreement;
(d) to bank examiners or any other regulatory authority having
jurisdiction over the Transaction Party, or to auditors or
accountants;
(e) to the Agent or any Bank;
(f) in connection with any litigation to which the any one of the Banks,
the Agent or the Transaction Party is a party, or in connection with
the enforcement of rights or remedies hereunder or under any other
Loan Document;
(g) to a subsidiary or affiliate of the Transaction Party so long as the
Transaction Party informs the affiliate or subsidiary of the agreement
under 22 of the Credit Agreement and the Transaction Party assumes
responsibility for compliance by such Person with such agreement;
(h) to any actual or prospective assignee or participant or any actual or
prospective counterparty (or its advisors) to any swap or derivative
transactions referenced to credit or other risks or events arising
under the Credit Agreement or any other Loan
Page 201
Document so long as such actual or prospective assignee, participant
or counterparty, as the case may be, agrees to execute and deliver an
agreement in substantially the same form hereof; or
(i) with the consent of the Company;
and provided further that, unless specifically prohibited by applicable law
or court order, prior to any such disclosure, the Transaction Party shall notify
the Company of any request for disclosure of such information by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of the Transaction
Party by such governmental agency) or pursuant to legal process and afford the
Company the opportunity to obtain a protective order or other appropriate remedy
or agreement to maintain confidentiality of such information.
This letter shall constitute a sealed instrument under and be governed by
the law of the Commonwealth of Massachusetts and is binding upon the successors
and assigns of the Transaction Party. Please indicate your acceptance of the
above by signing and returning an executed copy of this letter to [INSERT NAME
OF BANK TO PROVIDE THE CONFIDENTIAL INFORMATION].
Sincerely,
[NAME OF TRANSACTION PARTY]
By:
--------------------------------
Name:
Title:
Accepted and Acknowledged:
[NAME OF BANK TO PROVIDE
CONFIDENTIAL INFORMATION]
By:
------------------------
Name:
Title:
Page 202
*/ Bracketed text to be inserted if Note is a replacement of
a prior note.
1/ Bracketed text to be inserted if Note is to be issued by
Hasbro, Inc.
2/ Bracketed text to be inserted if Note is to be issued by
Hasbro SA.
3/ Insert if the Company is making the loan request.
4/ Insert if Hasbro SA is making the loan request.
*/Bracketed text to be inserted if Note is a replacement of
a prior note.
*/ Signatures of the Company and Hasbro SA are required only
if no Default or Event of Default shall have occurred and be
continuing.
Page 203
