Exhibit 4(d)
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF
NOVEMBER 14, 2003
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..............................................22
2. THE SYNDICATED AND COMPETITIVE BID LOAN FACILITY...............................23
2.1. Commitment to Lend Syndicated Loans..................................23
2.2. Commitment Fee.......................................................24
2.3. Reduction of Total Commitment........................................24
2.4. Requests for Syndicated Loans........................................25
2.5. Competitive Bid Loans................................................25
2.5.1. Competitive Bid Borrowings.................................25
2.5.2. Repayment of Competitive Bid Loans.........................30
2.6. The Notes............................................................30
2.7. Interest on Loans....................................................31
2.8. Prepayments..........................................................32
2.9. Funds for Loans......................................................33
2.10. Mandatory Repayments................................................34
2.11. Application of Payments; Commitment Reduction.......................35
2.12. Optional Currency...................................................35
2.12.1. Request for Optional Currency..............................35
2.12.2. Funding....................................................36
3. THE SWING LINE.................................................................36
3.1. The Swing Line Loans.................................................37
3.2. Notice of Borrowing..................................................37
3.3. Interest on Swing Line Loans.........................................37
3.4. Repayment of Swing Line Loans........................................38
3.5. The Swing Line Note..................................................38
4. INTEREST; PAYMENTS AND COMPUTATIONS............................................39
4.1. Interest; Costs and Expenses.........................................39
4.2. Concerning Interest Periods..........................................44
4.3. Interest on Overdue Amounts..........................................44
4.4. Payments.............................................................44
4.5. Computations.........................................................45
4.6. Interest Limitation..................................................45
4.7. Indemnification......................................................45
4.8. Banks' Obligations Several...........................................46
4.9. Currency Matters.....................................................46
4.9.1. Currency of Account........................................46
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4.9.2. Currency Fluctuations......................................47
4.9.3. Exchange Rate..............................................47
4.9.4. Denominations..............................................47
4.10. New Currency.........................................................47
4.11. No Offset, etc.......................................................48
4.12. Forms...............................................................48
5. LETTERS OF CREDIT..............................................................50
5.1. Letter of Credit Commitments.........................................50
5.1.1. Commitment to Issue Letters of Credit......................50
5.1.2. Letter of Credit Applications..............................50
5.1.3. Terms of Letters of Credit.................................51
5.1.4. Reimbursement Obligations of Banks.........................51
5.1.5. Participations of Banks....................................51
5.2. Reimbursement Obligation of the Company..............................51
5.3. Letter of Credit Payments............................................52
5.4. Obligations Absolute.................................................53
5.5. Reliance by Issuer...................................................53
5.6. Letter of Credit Fee.................................................54
6. COLLATERAL SECURITY AND GUARANTIES.............................................54
6.1. Release of Collateral................................................54
6.2. Security of Company..................................................54
6.3. Guaranties and Security of Restricted Subsidiaries...................55
6.4. Limitation of Security...............................................56
7. FEES...........................................................................56
7.1. Closing Fees.........................................................56
7.2. Agent's Fee..........................................................56
8. REPRESENTATIONS AND WARRANTIES.................................................56
8.1. Corporate Existence..................................................56
8.2. Corporate Authority, etc.............................................57
8.3. Binding Effect of Documents, etc.....................................57
8.4. Governmental Approvals...............................................57
8.5. No Event of Default,etc..............................................58
8.6. Chief Executive Offices..............................................58
8.7. Title to Properties;Leases...........................................58
8.8. Financial Statements and Projections.................................58
8.8.1. Fiscal Year...................................................58
8.8.2. Financial Statements..........................................58
8.8.3. Projections..................................................58
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8.9. No Material Changes, Etc.............................................58
8.10. Franchises, Patents, Copyrights, Etc................................59
8.11. Litigation..........................................................59
8.12. No Materially Adverse Contracts, Etc................................59
8.13. Compliance With Other Instruments, Laws, Etc........................59
8.14. Taxes...............................................................59
8.15. Absence of Financing Statements, Etc................................59
8.16. Indebtedness........................................................60
8.17. True Copies of Charter and Other Documents..........................60
8.18. Employee Benefit Plans..............................................60
8.18.1. In General.................................................60
8.18.2. Terminability of Welfare Plans.............................60
8.18.3. Guaranteed Pension Plans...................................60
8.18.4. Multiemployer Plans........................................61
8.19. Holding Company and Investment Company Acts.........................61
8.20. Certain Transactions................................................61
8.21. Use of Proceeds.....................................................61
8.21.1. General....................................................61
8.21.2. Regulations U and X........................................62
8.22. Environmental Compliance............................................62
8.23. Subsidiaries........................................................63
8.24. Disclosure..........................................................63
8.25. Foreign Assets Control Regulations, Etc.............................63
9. AFFIRMATIVE COVENANTS OF THE COMPANY...........................................63
9.1. Punctual Payment.....................................................63
9.2. Use of Loan Proceeds.................................................63
9.3. Maintenance of Office................................................63
9.4. Records and Accounts.................................................64
9.5. Financial Statements, Certificates and Information...................64
9.6. Notices..............................................................65
9.6.1. Defaults...................................................65
9.6.2. Environmental Events.......................................66
9.6.3. Notification of Claim against Collateral...................66
9.6.4. Notices Concerning Inventory Collateral........ ...........66
9.6.5. Notice of Litigation and Judgments..... ...................66
9.7. Corporate Existence; Maintenance of Properties.......................66
9.8. Insurance............................................................67
9.9. Taxes................................................................67
9.10. Access..............................................................67
9.11. Compliance with Laws, Contracts, Licenses, and Permits..............68
9.12. Employee Benefit Plans..............................................68
9.13. Fiscal Year.........................................................69
9.14. Additional Significant Subsidiaries and Restricted Subsidiaries.....69
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9.15. Ratings.............................................................69
9.16. Further Assurances..................................................69
10. CERTAIN NEGATIVE COVENANTS OF THE COMPANY.....................................70
10.1. Restrictions on Indebtedness........................................70
10.2. Restrictions on Liens...............................................71
10.3. Restrictions on Investments.........................................73
10.4. Restricted Payments.................................................75
10.5. Merger, Consolidation and Disposition of Assets.....................76
10.5.1. Mergers and Acquisitions...................................76
10.5.2. Disposition of Assets......................................77
10.6. Sale and Leaseback..................................................78
10.7. Compliance with Environmental Laws..................................78
10.8. Subordinated Debt...................................................78
10.9. Employee Benefit Plans..............................................78
10.10. Business Activities.................................................79
10.11. Transactions with Affiliates........................................79
10.12. Restrictions on Negative Pledges....................................79
10.13. Hedging Agreements..................................................80
11. FINANCIAL COVENANTS...........................................................80
11.1. Minimum EBITDA......................................................80
11.2. Total Funded Debt to EBITDA.........................................80
11.3. Minimum Interest Coverage Ratio.....................................81
11.4. Capital Expenditures................................................81
12. CONDITIONS TO EFFECTIVENESS...................................................81
12.1. Loan Documents, etc.................................................81
12.2. Performance, etc....................................................82
12.3. Certified Copies of Charter Documents...............................82
12.4. Proof of Corporate Action...........................................82
12.5. Incumbency Certificates.............................................82
12.6. Proceedings and Documents...........................................82
12.7. Certificates of Insurance...........................................83
12.8. Payment of Fees.....................................................83
12.9. Legality of Transactions............................................83
12.10. Legal Opinion.......................................................83
13. CONDITIONS TO LOANS...........................................................83
13.1. Conditions to Loans to the Company..................................83
13.1.1. Legality of Transactions...................................83
13.1.2. Representations and Warranties.............................83
13.1.3. Performance, etc...........................................84
13.1.4. Proceedings and Documents..................................84
13.1.5. Loan Documents.............................................84
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13.2. Conditions to Loans to Hasbro SA....................................84
13.2.1. Legality of Transactions...................................84
13.2.2. Representations andWarranties..............................84
13.2.3. Performance, etc...........................................84
13.2.4. Proceedings and Documents..................................85
13.2.5. Loan Documents.............................................85
13.2.6. No Defaults................................................85
14. EVENTS OF DEFAULT; ACCELERATION...............................................86
14.1. Remedies Upon Default...............................................86
14.2. Termination of Commitments..........................................89
14.3. Remedies............................................................89
14.4. Certain Rights of Cure..............................................90
14.5. Distribution of Collateral Proceeds.................................90
14.6. Judgment Currency...................................................91
15. SETOFF........................................................................93
16. THE AGENT.....................................................................93
16.1. Authorization.......................................................93
16.2. Employees and Agents................................................94
16.3. No Liability........................................................94
16.4. No Representations..................................................94
16.4.1. General....................................................94
16.4.2. Closing Documentation, etc.................................95
16.5. Indemnification.....................................................95
16.6. Reimbursement.......................................................96
16.7. Non-Reliance on Agent and Other Banks...............................96
16.8. Payments............................................................96
16.8.1. Payments to Agent..........................................96
16.8.2. Distribution by Agent......................................96
16.8.3. Delinquent Banks...........................................97
16.9. Holders of Notes....................................................97
16.10. Agent as Bank......................................................97
16.11. Resignation or Removal ofAgent.....................................97
16.12. Notification of Defaults and Events of Default.....................98
16.13. Duties in the Case of Enforcement..................................98
16.14. Agent May File Proofs of Claim.....................................98
17. EXPENSES......................................................................99
18. INDEMNIFICATION...............................................................100
19. SURVIVAL OF COVENANTS, ETC....................................................101
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20. ASSIGNMENT AND PARTICIPATION..................................................101
20.1. Conditions to Assignment by Banks...................................101
20.2. Certain Representations and Warranties; Limitations; Covenants......102
20.3. Register............................................................103
20.4. New Notes...........................................................103
20.5. Participations......................................................103
20.6. Assignee or Participant Affiliated with the Company.................104
20.7. Miscellaneous Assignment Provisions.................................104
20.8. Increased Costs.....................................................104
20.9. Assignment by Company...............................................105
21. NOTICES, ETC..................................................................105
22. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.................................106
22.1. Confidentiality.....................................................106
22.2. Prior Notification..................................................106
22.3. Other...............................................................106
23. CONSENTS, AMENDMENTS, WAIVERS, ETC............................................107
24. PROVISIONS OF GENERAL APPLICATIONS............................................108
24.1. Governing Law.......................................................108
24.2. Headings............................................................109
24.3. Counterparts........................................................109
24.4. Entire Agreement, Etc...............................................109
24.5. Waiver of Jury Trial................................................109
24.6. Severability........................................................109
25. TRANSITIONAL ARRANGEMENTS.....................................................110
25.1. Existing Credit Agreement Superseded................................110
25.2. Return and Cancellation of Notes....................................110
25.3. Interest and Fees Under Superseded Agreement........................110
26. LIABILITY FOR THE OBLIGATIONS.................................................110
27. GUARANTY......................................................................110
27.1. Guaranty of Payment and Performance.................................110
27.2. The Company's Agreement to Pay Enforcement Costs, etc...............111
27.3. Waivers by the Company; Banks' Freedom to Act.......................111
27.4. Unenforceability of Hasbro SA Obligations Against Hasbro SA.........112
27.5. Subrogation; Subordination..........................................112
27.5.1. Waiver of Rights Against Hasbro SA.........................112
27.5.2. Subordination..............................................112
27.5.3. Provisions Supplemental....................................113
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27.6. Termination; Reinstatement..........................................113
27.7. Successors and Assigns..............................................113
27.8. Severability, etc...................................................113
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SCHEDULES AND EXHIBITS
Schedule 1 Banks, Commitments and Commitment Percentages
Schedule 2 Indicative Terms of Permitted Receivables Transactions
Schedule 8.7 Title to Properties; Leases
Schedule 8.11 Litigation
Schedule 8.22 Environmental Compliance
Schedule 8.23 Subsidiaries
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
Exhibit I Form of Company Security Agreement
Exhibit J Form of Subsidiary Security Agreement
Exhibit K Form of Trademark Agreement
Exhibit L Form of Patent Agreements
Exhibit M Form of Memorandum of Grant of Security Interest in Copyrights
Page 8
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT, is dated as of
November 14, 2003, 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 Second Amended and Restated
Revolving
Credit Agreement, dated as of March 19, 2002 (as amended and in effect from time
to time, the "Existing Credit Agreement"), by and among the Company, Hasbro SA,
the Banks, the Agent, and certain other parties thereto, 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
thissection 1.1 or elsewhere in the provisions of this Agreement referred to
below:
Accounts. As defined in the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts from time to time; and, with respect to the
Company and its Domestic Subsidiaries, all such Accounts of such Persons,
whether now existing or existing in the future, including, without limitation,
(a) all accounts receivable of such Person, including, without limitation, all
accounts created by or arising from all of such Person's sales of goods or
rendition of services made under any of its trade names, or through any of its
divisions, (b) all unpaid rights of such Person (including rescission, replevin,
reclamation and stopping in transit) relating to the foregoing or arising
therefrom, (c) all rights to any goods represented by any of the foregoing,
including, without limitation, returned or repossessed goods, (d) all reserves
and credit balances held by such Person with respect to any such accounts
Page 9
receivable of any purchaser of goods or services or other Person obligated to
make payment to the Company or any of its Subsidiaries (other than any
Receivables Subsidiaries and the Foreign Subsidiaries) in respect of a purchase
of such goods or services, (e) all letters of credit, guarantees or collateral
for any of the foregoing and (f) all insurance policies or rights relating to
any of the foregoing.
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 section 4.1(c).
Agent. Fleet, acting as agent for the Banks, and each other Person
appointed as the successor Agent in accordance with section 16.11.
Agent's Fee. See section 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.
Agent's Special Counsel. Xxxxxxx XxXxxxxxx LLP, or such other counsel as
the Agent may approve.
Agreement. This Third Amended and Restated
Revolving Credit Agreement,
including the Exhibits and Schedules hereto, as originally executed, or if this
Third 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 in 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 section 20.
Assignment and Acceptance. See section 20.1.
Atari. A societe anonyme organized under the laws of France, formerly known
as Infogrames Entertainment S.A.
Page 10
Attributable Debt. At any time, the amount of obligations outstanding at
such time under the legal documents entered into as part of a Permitted
Receivables Securitization Facility on any date of determination that would be
characterized as principal if such Permitted Receivables Securitization Facility
were structured as a secured lending transaction rather than as a purchase, less
(i) any escrowed or pledged cash proceeds which effectively secure, or are
required to be maintained as reserves by the applicable Receivables Subsidiary
for, the Indebtedness of the Company and its Subsidiaries in respect of, or the
obligations of the Company and its Subsidiaries under, such Permitted
Receivables Securitization Facility, (ii) reasonable attorneys' fees,
accountants' fees, brokerage consultant and other customary fees, underwriting
commissions and other reasonable fees and expenses actually incurred in
connection with such Permitted Receivables Securitization Facility and (iii) any
taxes paid or reasonably estimated to be payable as a result thereof.
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
section 9.5 hereof; and "Authorized Financial Officer" means any one of the
Authorized Financial Officers.
Balance Sheet Date. June 29, 2003.
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, section 20.
Base Rate. With respect to Loans denominated in Dollars, (a) the rate
(rounded to the nearest 1/100 of 1%) equal to the higher of (i) 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 (ii) 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
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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; and
(b) with respect to Loans denominated in any Optional Currency, the daily rate
(rounded to the nearest 1/100 of 1%) determined to be the average rate charged
to borrowers of similar quality as the Borrower of Loans denominated in such
Optional Currency as reasonably determined by the Agent.
Base Rate Loan(s). Loan(s) bearing interest calculated by reference to the
Base Rate.
Borrowing. A borrowing hereunder by the Company and/or Hasbro SA consisting
of a Loan to the Company and/or Hasbro SA by the Banks or the Swing Line Bank.
Business Day. Any day (a) on which banking institutions in Boston,
Massachusetts and New York City, New York are open for the conduct of normal
banking business, (b) if such day involves Eurocurrency Rate Loans denominated
in Dollars, 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, and (c) if such day involves Loans denominated in any
Optional Currency, a day on which dealings in the relevant Optional Currency and
exchange can be carried on in the relevant Eurocurrency Interbank Market and in
the principal financial center of the country in which such currency is legal
tender.
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 section 8.22.
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.
Page 12
Code. The Internal Revenue Code of 1986, as amended.
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 section 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 Security Agreement between the Company and
the Agent, substantially in the form of Exhibit I hereto to be entered into to
the extent required by section 6.2.
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 and/or
Hasbro SA under the auction bidding procedure described in section 2.5.
Competitive Bid Notes. See section 2.6.
Competitive Bid Note Record. A Record with respect to a Competitive Bid
Note.
Competitive Bid Quote. An offer by a Bank to make a Competitive Bid Loan in
accordance with section 2.5 hereof.
Competitive Bid Quote Request. See section 2.5.1(b).
Competitive Bid Rate. See section 2.5.1(d)(ii)(C).
Compliance Certificate. See section 9.5(c).
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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 plus
(c) the Attributable Debt. In determining under clause (a) of this definition
the Indebtedness of the Company and its Subsidiaries under or in respect of any
Permitted Receivables Securitization Facility or under clause (c) of this
definition the Attributable Debt in respect of any Permitted Receivables
Securitization Facility, such Indebtedness or amount shall be reduced by any
escrowed or pledged cash proceeds which effectively secure such Indebtedness or
the obligations of the Company or any such Subsidiary under such Permitted
Receivables Securitization Facility.
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 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 Memorandum of Grant of Security Interest in
Copyrights by and among the Company, the Restricted Subsidiaries and the Agent,
in substantially the form of Exhibit M hereto to be entered into to the extent
required by section 6.2.
Page 14
Credit Insurance Provider. A Person party to a Credit Insurance Provider
Agreement.
Credit Insurance Provider Agreement. An agreement entered into by and among
the Company, the Subsidiaries of the Company named therein and the Credit
Insurance Provider, pursuant to which the Company and certain of its
Subsidiaries agree to sell, assign, pledge and transfer to the Credit Insurance
Provider certain accounts receivable under the terms and conditions of the
Credit Insurance Provider Agreement.
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 section 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.
Dollar Equivalent. On any particular date, with respect to any amount
denominated in Dollars, such amount in Dollars, and with respect to any amount
denominated in currency other than Dollars, the amount (as reasonably
ascertained by the Agent which determination shall be conclusive absent manifest
error) of Dollars which could be purchased by the Agent (in accordance with its
normal banking practices) in the London foreign currency deposit market with
such amount of such currency at the Exchange Rate on such date.
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 be made, and the
date on which any Loan is converted or continued in accordance with section
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
Page 15
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
section 12 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
section 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 section 8.22.
EPA. See section 8.22.
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 section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of section 4043 of ERISA and the regulations
promulgated thereunder.
Euro or EUR. The euro referred to in the Council Regulation (EC) No.
1103/97 dated 17 June 1997 passed by the Council of the European Union, or, if
different, the then lawful currency of the member states of the European Union
that participate in the third stage of the Economic and Monetary Union.
Eurocurrency Interbank Market. Any lawful recognized market in which
deposits of Dollars or the relevant Optional Currencies, as applicable, are
offered by international banking units of United States banking institutions and
by foreign banking institutions to each other and in which foreign currency and
exchange operations or eurocurrency funding operations are customarily
conducted.
Eurocurrency Offered Rate. With respect to the Interest Period of any
Eurocurrency Rate Loan denominated in Dollars, the annual rate of interest equal
to the rate at which Dollar deposits for such Interest Period are offered based
on information presented on Page 3750 of the Dow Xxxxx Market Service (formerly
known as the Telerate Service) as of 11:00 A.M. (London time) (or as soon
thereafter as practicable) two (2) Business Days preceding the first day of such
Interest Period.
Eurocurrency Rate. With respect to amounts denominated in any Optional
Currency, the International Eurocurrency Rate. With respect to all Eurocurrency
Page 16
Rate Loans denominated in Dollars 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 or in any
Optional Currency 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.
Event of Default. See section 14.1.
Exchange Rate. With respect to any Optional Currency, at any date of
determination thereof, the spot rate of exchange in London that appears on the
display page applicable to such Optional Currency on the Reuters System (or such
other page as may replace such page on such service for the purpose of
displaying the spot rate of exchange in London) for the conversion of such
Optional Currency into Dollars at 4:00 P.M. (London time) on such date;
provided, however, that if there shall at any time no longer exist such a page
on such service, the Exchange Rate shall be determined by reference to another
similar rate publishing service reasonably selected by the Agent.
Existing Credit Agreement. See Preamble.
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.
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 18, 2007.
Fitch. FitchRatings, or its successors.
Fleet. Fleet National Bank, in its capacity as a Bank hereunder.
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 section 11, 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
Page 17
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.
GBP. British Pounds Sterling.
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 within the
meaning of section 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 Third 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 Companies. Collectively, the Company, the Restricted Subsidiaries
and the Significant Subsidiaries.
Hasbro SA. See preamble.
Hasbro SA Loans. Any Loans made or to be made by the Banks to Hasbro SA.
Hasbro SA Obligations. All Obligations of Hasbro SA with respect to the
Hasbro SA Loans.
Hazardous Substances. See section 8.22.
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, (ii) earnout obligations in respect of
assets or businesses acquired prior to the Effective Date and (iii)
obligations to repurchase any Xxxxx Warrant under the Warrant Amendment
Agreement,
(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 (for the avoidance of doubt, it being
understood that sales pursuant to Section 10.5.2(j) or (k) are not
"Indebtedness" under this clause (g) or otherwise),
(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 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
Page 19
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.
Installment Amount. See section 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.
International Eurocurrency Rate. For any Interest Period with respect to a
Eurocurrency Rate Loan denominated in any Optional Currency, the rate of
interest equal to (a) the applicable British Bankers' Association Interest
Settlement Rate for deposits in the applicable Optional Currency appearing on
Reuters Screen FRBD or the applicable Reuters Screen for such Optional Currency
as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of
such Interest Period in the approximate amount of the relevant Eurocurrency Rate
Loan, and having a maturity equal to such Interest Period, provided, however,
(i) if Reuters Screen FRBD or the applicable Reuters Screen for such Optional
Currency is not available to the Agent, as the case may be, for any reason, the
applicable International Eurocurrency Rate for the relevant Interest Period
shall instead be the applicable British Bankers' Association Interest Settlement
Rate for deposits in the applicable Optional Currency as reported by any other
generally recognized financial information service as of 11:00 a.m. (London
time) 2 (two) Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period, and (ii) if no such British
Bankers' Association Interest Settlement Rate is available, the applicable
International Eurocurrency Rate for the relevant Interest Period shall be the
rate at which the Agent offers to place deposits in the applicable Optional
Currency with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of the relevant Eurocurrency Rate
Loan and having a maturity equal to such Interest Period, divided by (b) a
number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
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 limitation any securities repurchase or borrowing arrangement) to which
Page 20
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; provided that, proceeds of Inventory shall not include any Receivables
sold, transferred, contributed or pledged to or financed by a Receivables
Subsidiary.
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 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 section 2.5.1(c).
Page 21
LC Exposure. At any time, the sum of (a) the aggregate Maximum Drawing
Amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all Unpaid Reimbursement Obligations at such time. The LC Exposure of
any Bank at any time shall be its Commitment Percentage of the total LC Exposure
at such time.
Letter of Credit. See section 5.1.1.
Letter of Credit Application. See section 5.1.1.
Letter of Credit Fee. See section 5.6.
Letter of Credit Participation. See section 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 (if and as
applicable), 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.
Xxxxx Warrants. Collectively, (a) the Warrant to Purchase Shares of Common
Stock, dated October 30, 1998, issued to Xxxxx Licensing Ltd. for the purchase
of 3,600,000 shares of the common stock of the Company at the exercise price of
$23.33 per share, (b) the Warrant to Purchase Shares of Common Stock, dated
October 30, 1998, issued to Lucasfilm Ltd. for the purchase of 2,400,000 shares
of the common stock of the Company at the exercise price of $23.33 per share,
(c) the Warrant to Purchase Shares of Common Stock, dated October 14, 1997,
issued to Xxxxx Licensing Ltd. for the purchase of 5,850,000 shares of the
common stock of the Company at the exercise price of $18.67 per share and (d)
the Warrant to Purchase Shares of Common Stock, dated October 14, 1997, issued
to Lucasfilm Ltd. for the purchase of 3,900,000 shares of the common stock of
the Company at the exercise price of $18.67 per share.
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 (if such Security Documents shall have been entered into
and remain in full force and effect pursuant to section 6.2).
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
Asset Sale permitted under sections 10.5.2(j) or (k) hereof and 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 section
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 (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
Page 23
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 section 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 section 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 or a
Receivables Subsidiary or other Subsidiary formed in connection with any
Permitted Receivables Securitization Facility) of the Company actively engaged
in the conduct of business.
Optional Currency. Each of the following types of currency: Euros and GBP.
Outstanding. With respect to the Loans, the unpaid principal thereof as of
any date of determination.
Participant. See section 20.5.
Patent Agreements. Collectively, (a) the Patent Security Agreement
(Registrations) by and among the Company, the Restricted Subsidiaries and the
Agent, in substantially the form of Exhibit L hereto, pertaining to U.S. patent
registrations, to be entered into to the extent required by section 6.2, and (b)
the Patent Security Agreement (Applications), by and among the Company, the
Restricted Subsidiaries and the Agent, in substantially the form of Exhibit L
hereto, pertaining to U.S. patent applications, to be entered into to the extent
required by section 6.2.
PBGC. The Pension Benefit Guaranty Corporation created by section 4002 of
ERISA and any successor entity or entities having similar responsibilities.
Page 24
Permitted Acquisition. Any acquisition permitted by section 10.5.1(b).
Permitted Liens. Liens permitted by section 10.2.
Permitted Receivables Securitization Facility. Any transaction or series of
related transactions providing for the financing of any Receivables; provided
that any such transaction shall be consummated on terms that include terms
substantially as described on Schedule 2 or as the Majority Banks may otherwise
consent, such consent not to be unreasonably withheld.
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 MARGIN FOR
FITCH, XXXXX'X OR MARGIN FOR EUROCURRENCY COMMITMENT
LEVEL STANDARD & POOR'S) BASE RATE LOANS RATE LOANS FEE RATE
------------------------------------------------------------------------------------------
I BB-/Ba3/BB- or lower 0.75% 2.00% 0.40%
------------------------------------------------------------------------------------------
II BB/Ba2/BB 0.50% 1.75% 0.35%
------------------------------------------------------------------------------------------
III BB+/Ba1/BB+ 0.25% 1.50% 0.30%
------------------------------------------------------------------------------------------
IV BBB-/Baa3/BBB- 0.00% 1.25% 0.25%
------------------------------------------------------------------------------------------
V BBB/Baa2/BBB 0.00% 1.00% 0.20%
------------------------------------------------------------------------------------------
VI BBB+/Baa1/BBB+ or 0.00% 0.75% 0.15%
higher
------------------------------------------------------------------------------------------
For purposes of the foregoing table:
(i) during any period in which the Obligations are secured by the Liens
described in section 6.2, so long as no Event of Default has
occurred or is continuing, the applicable Margin for Base Rate Loans
in Levels I, II and III above and the applicable Margin for
Eurocurrency Rate Loans in Levels I through VI above shall be 0.25%
lower than the applicable rates set forth above but not less than
zero.
(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
Page 25
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.
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 section 8.22.
Record. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
Receivables. All Accounts and accounts receivable of the Company or any of
its Subsidiaries, including, without limitation, any Accounts and accounts
receivable constituting or evidenced by chattel paper, instruments or general
intangibles, and all proceeds thereof and rights (contractual and other) and
collateral for such Accounts and accounts receivable. Notwithstanding the
foregoing, Receivables shall not include any rights or interests in intellectual
property of the Company or any of its Subsidiaries.
Receivables Subsidiary. Any special purpose, bankruptcy-remote corporation,
limited liability company, trust or other entity established and majority owned
by the Company that purchases, receives contributions of, or receives financing
secured by, Receivables generated by the Company or any of its Subsidiaries.
Page 26
Real Estate. All real property owned or leased (as lessee or sublessee) by
any of the Hasbro Companies.
Reemployment Period. See section 2.8.
Reemployment Rate. See section 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 section 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 section 5.2.
Replacement Bank. See section 4.1(f).
Replacement Date. See section 4.1(f).
Restricted Payment. In relation to the Company and its 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,
or (d) 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 (other than any Receivables Subsidiary) (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).
Page 27
XXXX. See section 8.22.
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, and (c) obligations of the
Company or its Subsidiaries to the Banks or any Bank Affiliate and the Agent
(individually or collectively) arising under Interest Hedging Agreements and
Hedging Agreements, but in each case, only to the extent that, and for so long
as, the provisions of section 6.2 require the Company and its Subsidiaries to
grant security interests in the assets described in section 6.2.
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.
Significant Subsidiary. (a) Any Subsidiary of the Company (other than any
Receivables Subsidiary), 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 Atari by the Company
acquired in connection with the sale of the Company's interactive and on-line
businesses to Atari.
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
Page 28
evidenced as such by a written instrument containing subordination provisions in
form and substance reasonably satisfactory to the Majority Banks.
Subordination Agreement. The Third 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 section 9.14 hereof, in each case as amended and in effect
from time to time.
Subsidiary. Any corporation, limited liability company, 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 Security Agreement among the Restricted
Subsidiaries and the Agent, in substantially the form of Exhibit J hereto, to be
entered into to the extent required by section 6.2.
Swing Line Bank. Fleet.
Swing Line Loan. Any loan made by the Swing Line Bank pursuant to section
3.1 hereof.
Swing Line Loan Maturity Date. See section 3.2.
Swing Line Loan Request. See section 3.2.
Swing Line Note. See section 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 made by the Banks in accordance with their respective Commitment
Percentages to the Company and Hasbro SA as contemplated by section 2.1 hereof.
Syndicated Note(s). See section 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 $350,000,000.
Page 29
Trademark Agreement. The Trademark Security Agreement among the Company,
the Restricted Subsidiaries and the Agent, in substantially the form of Exhibit
K hereto, to be entered into to the extent required by section 6.2.
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, section 5.2.
Utilization. An amount equal to the Dollar Equivalent of the sum of (i) the
outstanding amount of all Loans (after giving effect to all amounts requested),
(ii) the Maximum Drawing Amount and (iii) all Unpaid Reimbursement Obligations.
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).
Warrant Amendment Agreement. The Warrant Amendment Agreement, dated January
30, 2003 by and among the Company, Xxxxx Licensing Ltd. and Lucasfilm Ltd.
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.
(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.
Page 30
(g) Reference to a particular "section " 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 in accordance with section 2.4 hereof, such sums in
Dollars and/or, at the Company's and/or Hasbro SA's option from time to time,
subject to section 2.12 hereof, in an Optional Currency 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. 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 sections 12 and
13, in the case of the initial Syndicated Loans to be converted into Syndicated
Loans hereunder on the Effective Date, and section 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.
Page 31
(b) After any prepayment and at maturity of the Syndicated Loans pursuant
to section 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 section 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 section 2.3 and section 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 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 section 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
section 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 section 2.3,
Page 32
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 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 (i)
automatically, pursuant to this section 2.3, effective March 31, 2005, in the
amount of $50,000,000, (ii) automatically, pursuant to this section 2.3,
effective November 30, 2005, in the additional amount of $50,000,000, and (iii)
in accordance with section 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 (i) with respect to Base Rate Loans, 12 noon (Boston time) on the
proposed Drawdown Date (except in the case of Hasbro SA Loans, which written
notice shall be by 8:00 A.M. (Boston time) on the proposed Drawdown Date) of
such Base Rate Loan and (ii) 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, provided, that any notice requesting a Syndicated
Loan be made in an Optional Currency must comply with the requirements of
section 2.12. 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, or subject to section 2.12, an Optional Currency,
(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 (other than requests in Optional Currencies, which shall be in the
amounts prescribed in section 2.12).
(d) Any Syndicated Loans requested by the Company and/or Hasbro SA pursuant
to this section 2.4 shall be made available to such Person in accordance with
the provisions of section 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 section 2.1 hereof,
the Company or, solely in the case of Hasbro SA Loans, Hasbro SA may,
pursuant to the terms of this section 2.5, cause the Agent to request
the Banks to make offers to fund Competitive Bid Loans to the Company
Page 33
or, solely in the case of Hasbro SA Loans, Hasbro SA 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 or, solely in the case
of Hasbro SA Loans, Hasbro SA may, but shall have no obligation to,
accept such offers in the manner set forth in this section 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 or, solely in
the case of Hasbro SA Loans, Hasbro SA wishes to request offers to
make Competitive Bid Loans under this section 2.5, it shall transmit
to the Agent by telephone, telex, cable or facsimile (in each case
confirmed in writing by the Company or, solely in the case of Hasbro
SA Loans, Hasbro SA) 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 (except in the case of Hasbro SA Loans, which request
shall be received not later than the second 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 or, solely in the case
of Hasbro SA Loans, Hasbro SA 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 or, solely in the
case of Hasbro SA Loans, Hasbro SA 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 or,
solely in the case of Hasbro SA Loans, Hasbro SA to each Bank to
submit Competitive Bid Quotes offering to make Competitive Bid Loans
to which such Competitive Bid Quote Request relates in accordance with
this section 2.5. If, after receipt by the Agent of a Competitive Bid
Quote Request from the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA in accordance with subsection (b) of this section
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 section 2.5.1 due to the inability of such Person
to transmit or receive communications through the means specified
Page 34
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 or, solely in the case
of Hasbro SA Loans, Hasbro SA 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 (except in the case
of Hasbro SA Loans, which Competitive Bid Quote must be submitted
not later than the day prior to the 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 or, solely in
the case of Hasbro SA Loans, Hasbro SA of the terms of its
Competitive Bid Quote no later than 9:45 a.m. (Boston time) on
the requested Drawdown Date (except in the case of Hasbro SA
Loans, which notice shall be made not later than the day prior to
the requested Drawdown Date). Subject to the provisions of
sections 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 or, solely in the case
of Hasbro SA Loans, Hasbro SA.
(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 (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.
Page 35
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 or Hasbro SA. Not later than 10:15
a.m. (Boston time) on the requested Drawdown Date (except in the
case of Hasbro SA Loans, which notice shall be on the day prior
to the requested Drawdown Date), the Agent shall notify the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA of
the terms of (i) all Competitive Bid Quotes submitted by the
Banks in 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 or,
solely in the case of Hasbro SA Loans, Hasbro SA 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 or Hasbro SA and Agent.
Not later than 10:45 a.m. (Boston time) on the requested Drawdown
Date (except in the case of Hasbro SA Loans, which notice shall
be on the day prior to the requested Drawdown Date), the Company
or, solely in the case of Hasbro SA Loans, Hasbro SA shall notify
the Agent of the Company's or, solely in the case of Hasbro SA
Loans, Hasbro SA's acceptance or non-acceptance of the offers of
which it was notified pursuant to the preceding subsection (e) in
Page 36
a notice, transmitted to the Agent by telephone, telex, cable or
facsimile (in each case confirmed in writing by the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA), 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 or, solely in the case of Hasbro
SA Loans, Hasbro SA 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
(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. 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 sections 12 and 13 hereof are satisfied,
the Bank or Banks whose offers the Company or, solely in the case
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of Hasbro SA Loans, Hasbro SA 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 or, solely in the case of Hasbro SA
Loans, Hasbro SA's, specified account, in immediately available
funds not later than 1:00 p.m. (Boston time) on such Drawdown
Date.
2.5.2. REPAYMENT OF COMPETITIVE BID LOANS. The principal of
each Competitive Bid Loan shall become absolutely due and payable by
the Company or, solely in the case of Hasbro SA Loans, Hasbro SA on the
last day of the Interest Period relating thereto, and the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA 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 or, solely in the case of Hasbro SA Loans,
Hasbro SA 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 section 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 or, solely in the
case of Hasbro SA Loans, Hasbro SA and the funding Bank.
Notwithstanding the foregoing, Hasbro SA shall have no liability to
repay any Competitive Bid Loans requested by the Company.
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 section 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, such Bank's Commitment 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 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
Page 38
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 or, solely in the case of Hasbro SA
Loans, Hasbro SA 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 section 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 or, solely in the case of Hasbro SA Loans, Hasbro SA to pay to
such Bank the aggregate unpaid principal amount of all Competitive Bid Loans
made by such Bank hereunder, as set forth in section 2.5 hereof, 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 Competitive Bid Loan to the Company or, solely in the case of
Hasbro SA Loans, Hasbro SA 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 or Hasbro SA 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 section 4.3 hereof, Base 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 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 or in
the applicable Optional Currency in which the underlying Loan was made, as the
case may be, and in accordance with section 4.1(a) hereof.
(b) Except as provided in section 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 or
in the applicable Optional Currency in which the underlying Loan was made, as
the case may be, and in accordance with section 4.1(a) hereof.
(c) Except as provided in section 4.3 hereof, each Competitive Bid Loan
outstanding from time to time shall bear interest at the rate per annum
Page 39
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 section 4.1(a) hereof.
2.8. PREPAYMENTS. The Company or, solely in the case of Hasbro SA Loans,
Hasbro SA shall repay Base Rate Loans or Eurocurrency Rate Loans made to the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA hereunder on the
last day of the Interest Period relating thereto. As provided in section 2.5.2,
the Company or, solely in the case of Hasbro SA Loans, Hasbro SA shall repay
Competitive Bid Loans made to the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA hereunder on the last day of the Interest Period relating
thereto. The Company or, solely in the case of Hasbro SA Loans, 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 or, solely in the case of Hasbro SA Loans, 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 section 2.8 shall be in a minimum aggregate principal amount of
$5,000,000 or some greater integral multiple of $1,000,000 (or the Dollar
Equivalent thereof in an Optional Currency), or, if less, the aggregate
outstanding principal amount of the Syndicated Loans. Subject to the conditions
of section 2.1 hereof, amounts so prepaid may be reborrowed. In addition, the
Company or, solely in the case of Hasbro SA Loans, 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 of the Interest Period relating thereto; provided, that upon any such
prepayment, and except as set forth in section 4.1(f) hereof, the Company or,
solely in the case of Hasbro SA Loans, 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 or the relevant Optional Currency, as applicable, 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
Page 40
(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 section 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 or, solely in the case of Hasbro SA Loans,
Hasbro SA for Syndicated Loans pursuant to section 2.4, become and be obligated
to make available to the Agent, on the proposed Drawdown Date of 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 section 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 or,
solely in the case of Hasbro SA Loans, Hasbro SA's 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 or, solely in the
case of Hasbro SA Loans, Hasbro SA pursuant to section 2.4. Upon satisfaction of
the conditions set forth in sections 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 or, solely in the case of Hasbro SA Loans,
Hasbro SA's 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 or, solely in the case of Hasbro SA
Loans, Hasbro SA 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 (or, as to Loans denominated in an Optional Currency,
the rate of interest per annum at which overnight deposits in the applicable
Optional Currency, in an amount approximately equal to the amount with respect
to which such rate is being determined, would be offered for such day by the
Agent to major banks in the London interbank market), 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
Page 41
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 three (3) Business Days following such Drawdown Date,
the Agent shall be entitled to recover such amount from the Company or, solely
in the case of Hasbro SA Loans, Hasbro SA 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 section
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 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 section 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
Page 42
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 section 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 section
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 (as reduced
pursuant to section 2.3), 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 section 2.11.
(c) Hasbro SA shall have no liability to prepay any Loans to the Company
pursuant to this section 2.10.
2.11. APPLICATION OF PAYMENTS; COMMITMENT REDUCTION. All payments made
pursuant to section 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 section 2.10(a)(A) or section 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 section 2.10(a)(A) or section 2.10(a)(C). No
reduction of the Total Commitment made pursuant to this section 2.11 may be
reinstated.
2.12. OPTIONAL CURRENCY.
2.12.1. REQUEST FOR OPTIONAL CURRENCY. Subject to the limitations set
forth in section 2.1, the Company and/or Hasbro SA may, not later than
10:00 A.M. (Boston time) three (3) Business Days' prior to the proposed
Drawdown Date thereof, give notice to the Agent (an "OC Notice") requesting
that one or more Syndicated Loans be made as Eurocurrency Rate Loans in an
Optional Currency, provided that any Syndicated Loan proposed to be made
under this section 2.12 shall be in an amount not less than EUR5,000,000 or
GBP3,000,000, or a greater amount which is a multiple of the Optional
Currency equivalent of $1,000,000 in excess thereof in the requested
Optional Currency. Each OC Notice requesting a Syndicated Loan in an
Page 43
Optional Currency shall be by telephone, telex, telecopy or cable (in each
case confirmed in writing by the Company or, solely in the case of Hasbro
SA Loans, Hasbro SA,), specifying (a) the amount of the Syndicated Loan to
be made, (b) the requested date of the proposed borrowing, (c) the
requested Optional Currency in which the Syndicated Loan is to be made, (d)
the initial Interest Period for the Syndicated Loan to be borrowed, and (e)
the Company's or, solely in the case of Hasbro SA Loans, Hasbro SA's
account with the Agent to which payment of the proceeds of such Syndicated
Loan is to be made. Promptly upon receipt of any such notice, the Agent
shall notify each of the Banks thereof. If any Bank on or prior to the
second Business Day preceding the first day of any Interest Period for
which an OC Notice has been delivered requesting a Syndicated Loan in an
Optional Currency or on any funding date, reasonably determines (which
determination shall be conclusive absent manifest error) that the Optional
Currency is not freely transferable and convertible into Dollars or that it
will be impractical for such Bank to fund the Syndicated Loan in such
Optional Currency, then such Bank shall so notify the Agent, which
notification shall be given immediately by the Agent to the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA, and such Bank's portion
of the requested Syndicated Loan shall, in each case, notwithstanding any
contrary election by the Company or, solely in the case of Hasbro SA Loans,
Hasbro SA, or any other provisions hereof, be denominated in Dollars as a
Eurocurrency Rate Loan with the same Interest Period as selected by the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA for such
Revolving Credit Loan. The Company or, solely in the case of Hasbro SA
Loans, Hasbro SA may repay such portion of a Syndicated Loan denominated in
Dollars as a Eurocurrency Rate Loan at any time without premium or penalty,
subject to any other indemnity under section 4.7, provided that, any Bank
that has failed to provide the relevant Optional Currency shall not be
entitled to such indemnity in connection with such Loan. In the event that
such repayment results in Syndicated Loans outstanding that are not pro
rata in accordance with the Commitment Percentages, then all subsequent
principal repayments denominated in the Optional Currency which the
applicable Bank did not advance shall be made by the Company, or solely in
the case of Hasbro SA Loans, Hasbro SA to the Agent for the respective
accounts of such Banks other than such Bank on a pro rata basis until such
time as the Syndicated Loans are outstanding on a pro rata basis. Subject
to the foregoing and to the satisfaction of the terms and conditions of
sections 12 and 13, each Syndicated Loan requested to be made in an
Optional Currency will be made on the date specified therefor in the OC
Notice, in the currency requested in the OC Notice and, upon being so made,
will have the Interest Period requested in the OC Notice.
2.12.2. FUNDING. Each Bank may make any Eurocurrency Rate Loan
denominated in an Optional Currency by causing any of its domestic or
foreign branches or foreign affiliates to make such Eurocurrency Rate Loan
(whether or not such branch or affiliate is named as a lending office on
the signature pages hereof); provided that in such event the obligation of
the Company, or solely in the case of Hasbro SA Loans, Hasbro SA to repay
such Eurocurrency Rate Loan shall nevertheless be to such Bank and shall,
for all purposes of this Credit Agreement (including without limitation for
purposes of the definition of the term "Majority Banks") be deemed made by
such Bank, to the extent of such Eurocurrency Rate Loan.
Page 44
3. THE SWING LINE.
3.1. THE SWING LINE LOANS. Subject to the terms and conditions hereinafter
set forth, upon notice by the Company or, solely in the case of Hasbro SA Loans,
Hasbro SA made to the Swing Line Bank in accordance with section 3.2 hereof, the
Swing Line Bank agrees to lend to the Company or, solely in the case of Hasbro
SA Loans, Hasbro SA 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 section 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 or, solely in the case of Hasbro
SA Loans, Hasbro SA desires the Swing Line Bank to make a Swing Line Loan, the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA 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 (except in the case
of Hasbro SA Loans, which written notice shall be by 8:00 A.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 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 or, solely in the case of Hasbro SA Loans, Hasbro SA, and shall obligate
the Company or, solely in the case of Hasbro SA Loans, Hasbro SA 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 or, solely in the case of Hasbro SA Loans, Hasbro SA 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 or, solely in
the case of Hasbro SA Loans, Hasbro SA 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 section 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.
Page 45
3.4. REPAYMENT OF SWING LINE LOANS. The Company or, solely in the case of
Hasbro SA Loans, Hasbro SA 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 or, solely in the case of Hasbro SA
Loans, Hasbro SA 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 or, solely in the case of Hasbro SA Loans, Hasbro SA. 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 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 or, solely in the case of Hasbro SA
Loans, Hasbro SA to meet the conditions set forth in sections 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
or, solely in the case of Hasbro SA Loans, Hasbro SA 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.
Notwithstanding the foregoing, Hasbro SA shall have no liability to repay any
Swing Line Loans requested by the Company.
3.5. THE SWING LINE NOTE. The obligation of the Company or, solely in the
case of Hasbro SA Loans, Hasbro SA 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 separate promissory notes of the Company or, solely in the
case of Hasbro SA Loans, Hasbro SA with appropriate insertions substantially in
the form of Exhibit D attached hereto (the "Swing Line Notes"), 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. Each of the Company and Hasbro SA
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
Page 46
receipt of any payment of principal on the Swing Line Notes, 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 or, solely in the case of Hasbro
SA Loans, Hasbro SA hereunder or under the Swing Line Notes to make payments of
principal of or interest on the Swing Line Notes when due.
4. INTEREST; PAYMENTS AND COMPUTATIONS.
4.1. INTEREST; COSTS AND EXPENSES.
(a) Elections. At the option of the Company or, solely in the case of
Hasbro SA Loans, Hasbro SA, so long as no Default or Event of Default has
occurred and is then continuing, the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA may elect from time to time to have a portion of the principal
amount of the Syndicated Loans to the Company or, solely in the case of Hasbro
SA Loans, 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 or, solely in the case of Hasbro SA Loans, 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 section 2.4.
If in any such notice, the Company or, solely in the case of Hasbro SA Loans,
Hasbro SA does not specify whether any Eurocurrency Rate Loans are requested,
the Company or, solely in the case of Hasbro SA Loans, Hasbro SA shall be deemed
to have elected that the requested Syndicated Loans bear interest at the Base
Rate. 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
section 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 or, solely in the case
of Hasbro SA Loans, Hasbro SA (x) fails to deliver a further election notice
with respect to such Loans pursuant to section 2.4 hereof and this section
4.1(a), and (y) fails to repay all or any part of such Loans as provided in
section 4.4 hereof, then such Syndicated Loans shall be deemed to be Base Rate
Loans in accordance with the terms set forth in section 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 section 2.7 or section 4.3
hereof, as the case may be. Interest 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 or, solely in the case of Hasbro SA Loans, 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
Page 47
such Syndicated Loan shall end; provided, however, that the obligations of the
Company or, solely in the case of Hasbro SA Loans, 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 or,
solely in the case of Hasbro SA Loans, 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 or the relevant Optional Currency 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 or, solely in the case of Hasbro SA Loans,
Hasbro SA (which notice shall be conclusive and binding upon the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA 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
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, 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 or, solely in the case of Hasbro SA
Loans, 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 section 4.1(c) to the contrary, during any period in which a suspension is
in effect pursuant to this section 4.1(c), the Company or, solely in the case of
Hasbro SA Loans, Hasbro SA may notify the Agent and any Affected Bank to which
such suspension applies that (I) the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA shall repay, in accordance with the provisions of section
4.1(f) hereof, any and all Loans made by such Affected Bank to the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA, and (II) with respect to any
new Loans to be made by the Banks hereunder, the Company or, solely in the case
of Hasbro SA Loans, Hasbro SA shall not borrow from such Affected Bank and the
Commitment of such Affected Bank shall be terminated.
Page 48
(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; provided that this section 4.1(d)(i) shall apply only
with respect to such Loans, or commitments to make such Loans, as the case
may be, made to Hasbro SA; or
(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 that this section
4.1(d)(ii) shall apply only with respect to Loans made to Hasbro SA;
provided further that 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 (other
than in respect of taxes, which shall be governed solely by sections 4.11,
4.12 and 4.13; provided that the foregoing exclusion shall not apply with
respect to such Loans made by any Bank to Hasbro SA), 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
Page 49
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 or, solely in the case of Hasbro SA
Loans, 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 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 or, solely
in the case of Hasbro SA Loans, 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 or, solely in the case of
Hasbro SA Loans, 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 or, solely in the case of Hasbro SA Loans, 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 or, solely in the case
of Hasbro SA Loans, Hasbro SA pursuant to this section 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 or, solely in the case of Hasbro SA Loans, 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 or, solely in the case of
Hasbro SA Loans, Hasbro SA in connection with each demand made at any time by
such Bank upon the Company or, solely in the case of Hasbro SA Loans, 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
or, solely in the case of Hasbro SA Loans, 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, 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
Page 50
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 section 4.1(c) hereof, or (ii) any Bank
makes demand upon the Company and/or Hasbro SA pursuant to section 4.1(d) hereof
(or upon the Company pursuant to section 4.11) for the payment of additional
costs or other amounts, or (iii) any Bank makes demand upon the Company and/or
Hasbro SA pursuant to section 4.1(e) hereof for an adjustment to the
compensation payable to such Bank by the Company and/or Hasbro SA hereunder, or
(iv) any Bank is unable to fund a Loan in an Optional Currency, 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 section 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 "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
Page 51
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
section 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 section
4.1 or under section 4.7 (or to cause the Company to become obligated to pay any
additional amounts under section 4.11), 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
section 4.1 or under section 4.7 (or by the Company pursuant to section 4.11),
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 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 section 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 or the applicable Optional Currency
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, solely in the case of 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.
Page 52
(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 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 section 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 sections 2.4 and 4.1(a) hereof, then, subject to satisfaction of
the conditions precedent set forth in section 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 section 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 (other
than Eurocurrency Rate Loans and Competitive Bid Loans denominated in GBP), a
360-day year, and (b) with respect to Eurocurrency Rate Loans and Competitive
Bid Loans denominated in GBP, or 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 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
sections 2.8 or 2.12 hereof) any principal of any Eurocurrency Rate Loans or
Page 53
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 and/or Hasbro SA gave a notice of borrowing pursuant to
section 2.4 or section 4.1(a) hereof at an interest rate based on the
Eurocurrency Rate or a Notice of Competitive Bid Borrowing pursuant to section
2.5.1(f) or prepay a Loan as to which notice of prepayment has been given, the
Company or, solely in the case of Hasbro SA Loans, 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 section 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 section 4.7 shall be without duplication
of any amounts paid by the Company and/or Hasbro SA pursuant to section 2.8,
section 4.1 or section 4.3 hereof.
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.
4.9. CURRENCY MATTERS.
4.9.1. CURRENCY OF ACCOUNT. Dollars are the currency of account and
payment for each and every sum at any time due from the Company or, solely
in the case of Hasbro SA Loans, Hasbro SA hereunder in each case except as
expressly provided in this Credit Agreement; provided that:
(a) each repayment of a Loan, Unpaid Reimbursement Obligation or
a part thereof shall be made in the currency in which such Loan or
Unpaid Reimbursement Obligation is denominated at the time of that
repayment;
(b) each payment of interest shall be made in the currency in
which such principal or other sum in respect of which such interest is
payable, is denominated;
(c) each payment of Fees shall be in Dollars;
(d) each payment in respect of costs, expenses and indemnities
shall be made in the currency in which the same were incurred; and
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(e) any amount expressed to be payable in a currency other than
Dollars shall be paid in that other currency.
No payment to the Agent or any Bank (whether under any judgment
or court order or otherwise) shall discharge the obligation or
liability in respect of which it was made unless and until the Agent,
or such Bank shall have received payment in full in the currency in
which such obligation or liability was incurred as provided in this
section 4.9.1, and to the extent that the amount of any such payment
shall, on actual conversion into such currency, fall short of such
obligation or liability, actual or contingent, expressed in that
currency, the Company or, solely in the case of Hasbro SA Loans,
Hasbro SA agrees to indemnify and hold harmless the Agent or such
Bank, as the case may be, with respect to the amount of the shortfall.
4.9.2. CURRENCY FLUCTUATIONS. (a) Not later than 1:00 P.M. (Boston
time) on the last Business Day of each month with respect to Letters of
Credit and on the last day of each Interest Period with respect to Loans
(in each case, the "Calculation Date"), the Agent shall determine the
Dollar Equivalent as of such date of the LC Exposure or, as the case may
be, such Loan. Notwithstanding the foregoing, the Agent may determine such
Dollar Equivalent more frequently than on the Calculation Date, upon notice
made by the Agent to the Company and, solely in the case of Hasbro SA
Loans, Hasbro SA. The Dollar Equivalent so determined shall become
effective on the third Business Day immediately following such
determination (a "Reset Date") and shall remain effective until the next
succeeding Reset Date relating to LC Exposure or, as the case may be, such
Loan.
(b) If, on any Reset Date, the Dollar Equivalent of the sum of
the Outstanding Loans and the LC Exposure exceeds the Total
Commitment, then the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA shall repay or prepay the Loans in accordance with
this Credit Agreement in an aggregate principal amount such that,
after giving effect thereto, the sum of the Outstanding Loans and the
LC Exposure (expressed in Dollars) no longer exceeds the Total
Commitment (expressed in Dollars).
4.9.3. EXCHANGE RATE. For purposes of this Credit Agreement, the
amount in one currency which shall be equivalent on any particular date to
a specified amount in another currency shall be determined by reference to
the Exchange Rate.
4.9.4. DENOMINATIONS. In the event that any portion of the funds
available under the terms of this Credit Agreement is denominated in an
Optional Currency, the Dollar Equivalent of such portion of the funds shall
be calculated pursuant to section 4.9.3 above. The amount so determined
shall then be added to the outstanding amount denominated in Dollars for
the purpose of determining the remaining availability of funds under
sections 2.1, 2.5, 3 and 5 and any required repayments under section 4.9.2.
4.10. NEW CURRENCY. If, after the making of any Loan or the issuance,
renewal or extension of any Letter of Credit in any Optional Currency, currency
control or exchange regulations are imposed in the country which issues such
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Optional Currency, as application, with the result that different types of such
Optional Currency (the "New Currency") are introduced and the type of currency
in which the Loan or Letter of Credit was made (the "Original Currency") no
longer exists or the Company or, solely in the case of Hasbro SA Loans, Hasbro
SA is not able to make payment to the Agent for the account of the Banks or the
Agent in such Original Currency, then all payments to be made by the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA hereunder in such currency
shall be made to the Agent in such amount and such type of the New Currency as
shall be equivalent to the amount of such payment otherwise due hereunder in the
Original Currency. In addition, notwithstanding the foregoing provisions of this
section 4.10, if, after the making of any Loan or the issuance, renewal or
extension of any Letter of Credit in any Optional Currency, the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA are not able to make payment to
the Agent for the account of the Banks or the Agent in the type of currency in
which such Loan was made or, as the case may be, such Letter of Credit was
issued, extended or renewed because of the imposition of any such currency
control or exchange regulation, then such Loan or, as the case may be,
Reimbursement Obligation in respect of such Letter of Credit shall instead be
repaid when due in Dollars in a principal amount equal to the Dollar Equivalent
(as of the date of repayment) of such Loan or, as the case may be, Reimbursement
Obligation in respect of such Letter of Credit.
4.11. NO OFFSET, ETC. All payments after November 14, 2003 by the Company
hereunder and under any of the other Loan Documents shall be made without
recoupment, setoff or counterclaim and free and clear of and without deduction
for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein, excluding any taxes that would not have been
imposed but for a connection between any Bank or the Agent and the jurisdiction
or any political subdivision thereof imposing such tax (other than a connection
arising solely as a result of entering into any Loan Document or performing any
obligations, receiving any payments or enforcing any rights thereunder) unless
the Company is compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Company with respect to any amount payable
by it after November 14, 2003 hereunder or under any of the other Loan
Documents, the Company will pay to the Agent, for the account of the Banks or
(as the case may be) the Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Banks or the Agent to receive the
same net amount which the Banks or the Agent would have received on such due
date had no such obligation been imposed upon the Company; provided, however,
the Company shall not be required to pay any such additional amount to any Bank
or Agent that fails to comply with section 4.12. The Company will deliver
promptly to the Agent receipts for all taxes or other charges deducted from or
paid with respect to payments made by the Company hereunder or under such other
Loan Document.
4.12. FORMS. Each Bank and Agent that is not a U.S. Person as defined in
Section 7701(a)(30) of the Code for federal income tax purposes (a "Non-U.S.
Lender") hereby agrees that it shall, prior to the date of the first payment by
the Company hereunder to be made to such Bank or the Agent or for such Bank's or
the Agent's account, deliver to the Company and the Agent, as applicable, such
certificates, documents or other evidence, as and when required by the Code or
Page 56
Treasury Regulations issued pursuant thereto, including (a) in the case of a
Non-U.S. Bank that is a "bank" for purposes of Section 881(c)(3)(A) of the Code,
two (2) duly completed copies of Internal Revenue Service Form W-8BEN or Form
W-8ECI and any other certificate or statement of exemption required by Treasury
Regulations, or any subsequent versions thereof or successors thereto, properly
completed and duly executed by such Bank or the Agent establishing that with
respect to payments of principal, interest or fees hereunder it is (i) not
subject to United States federal withholding tax under the Code because such
payment is effectively connected with the conduct by such Bank or Agent of a
trade or business in the United States or (ii) totally exempt from United States
federal withholding tax under a provision of an applicable tax treaty and (b) in
the case of a Non-U.S. Bank that is not a "bank" for purposes of Section
881(c)(3)(A) of the Code, a certificate in form and substance reasonably
satisfactory to the Agent and the Company and to the effect that (i) such
Non-U.S. Bank is not a "bank" for purposes of Section 881(c)(3)(A) of the Code,
is not subject to regulatory or other legal requirements as a bank in any
jurisdiction, and has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any governmental authority,
any application made to a rating agency or qualification for any exemption from
any tax, securities law or other legal requirements, (ii) is not a ten (10)
percent shareholder for purposes of Section 881(c)(3)(B) of the Code and (iii)
is not a controlled foreign corporation receiving interest from a related person
for purposes of Section 881(c)(3)(C) of the Code, together with a properly
completed Internal Revenue Service Form W-8 or W-9, as applicable (or successor
forms). Each Bank or the Agent agrees that it shall, promptly upon a change of
its lending office or the selection of any additional lending office, to the
extent the forms previously delivered by it pursuant to this section are no
longer effective, and promptly upon the Company's and the Agent's reasonable
request after the occurrence of any other event (including the passage of time)
requiring the delivery of a Form W-8BEN, Form W-8ECI, Form W-8 or W-9 in
addition to or in replacement of the forms previously delivered, deliver to the
Company and the Agent a properly completed and executed Form W-8BEN, Form
W-8ECI, Form W-8 or W-9, as applicable (or any successor forms thereto). Each
assignee, participant or other transferee pursuant to section 20 shall, upon the
effectiveness of the related transfer, be required to provide all of the forms,
documentation or certifications required pursuant to this subsection, provided
that in the case of a participant such participant shall furnish all such
required forms, documentation or certifications to the Bank from which the
related participation shall have been purchased, and such Bank shall in turn
furnish all such required forms (including without limitation Internal Revenue
Service Form W-8IMY), documentation and certifications to the Company and the
Agent, together with such other forms, documentation or certifications as may be
necessary to establish a total exemption from deduction or withholding of U.S.
federal income taxes on payments hereunder or under any of the other Loan
Documents. In addition, each Bank and the Agent that is not a U.S. Person shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Bank or the Agent unless any change in treaty, law
or regulation has occurred both after November 14, 2003 and after the date on
which such Bank or the Agent becomes a party to this Agreement which renders all
such forms inapplicable or which would prevent such Bank or the Agent from duly
completing and delivering any such form with respect to it and such Bank or the
Agent so advises the Company.
4.13. REIMBURSEMENT OF REFUND. If the Agent or a Bank determines, in its
reasonable discretion, that it has received a refund of any tax with respect to
which the Company has paid additional amounts pursuant to section 4.11, it shall
Page 57
pay over such refund to the Company, net of all reasonable out-of-pocket
expenses of the Agent or a Bank and without interest (other than any interest
paid by the relevant jurisdiction or a political subdivision thereof); provided
that the Company, upon the request of the Agent or a Bank, agrees to repay the
amount paid over to the Company by the Agent or such Bank in the event the Agent
or such Bank is required to repay such refund to such jurisdiction or political
subdivision thereof.
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 section 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"), denominated in Dollars or an Optional Currency 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 Dollar Equivalent 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) 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 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
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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 section 5.2 (such agreement for a Bank being called herein the
"Letter of Credit Participation" of such Bank).
5.1.5. PARTICIPATIONS OF BANKS. 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 section 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 section 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 section 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
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accordance with section 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 Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Company under this section 5.2 at any time from the date such amounts become
due and payable (whether as stated in this section 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 section 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
section 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 (or, as to Letters of Credit
denominated in an Optional Currency, the rate of interest per annum at which
overnight deposits in the applicable Optional Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by the Agent to major banks in the
London interbank market), 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 section 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 section 5
shall be absolute 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
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Company's Reimbursement Obligations under section 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 section 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 section 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 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 section 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 or Hasbro SA 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
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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.
6.1. RELEASE OF COLLATERAL. The parties hereto acknowledge and agree that
the Agent, on behalf of the Banks and the Agent, hereby releases its Liens on
the Collateral under the Existing Credit Agreement and that each of the Security
Documents (as defined in the Existing Credit Agreement) are terminated and have
no further force or effect.
6.2. SECURITY OF COMPANY. The parties hereto acknowledge and agree that at
such time as either of the following events occurs:
(i) the ratio of Consolidated Total Funded Debt at the end of any
fiscal quarter to EBITDA for the Reference Period then ended shall be 2.25x or
higher (except with respect to the fiscal quarter ending September 26, 2004,
where such ratio shall be 2.50x or higher); or
(ii) the Company's Rating drops below BB or Ba3;
the Company shall, within sixty (60) Business Days of such event, cause the
Obligations to 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 then owned or thereafter acquired, including all
books and records and other recorded data in each case relating to the
following: (a) Inventory of the Company, and (b) the Company's U.S. trademarks
(and U.S. applications and U.S. registrations thereof owned by the Company in
its own name (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, no U.S. patents and U.S. patent applications, and only 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))
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 Company Security Agreement, the Trademark Agreement, the Patent
Agreements and the Copyright Memorandum to which the Company will become a party
pursuant to this section 6.2.
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Without limiting the foregoing, in the event that following the grant of
security interests under this section 6.2, any part of the Collateral is sold or
otherwise disposed of in connection with a sale, disposition or other
transaction permitted hereunder (other than any Asset Sale permitted under
sections 10.5.2(j) or (k) hereof) or any part of the Collateral is sold or
otherwise disposed of and paid for in connection with any Asset Sale permitted
under sections 10.5.2(j) or (k) hereof, 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.
Notwithstanding anything to the contrary contained in this section 6.2, in
the event that at any time following the grant of security interests under this
section 6.2, (i) the Company's Rating raises to or above BB or Ba3, or (ii) the
ratio of Consolidated Total Funded Debt at the end of each of two consecutive
fiscal quarters to EBITDA for each Reference Period then ended shall be less
than 2.25x, the Liens on the Collateral granted pursuant to this section 6.2
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 action necessary or reasonably
desirable for the release of such Liens.
6.3. GUARANTIES AND SECURITY OF RESTRICTED SUBSIDIARIES. The Obligations
shall also be guaranteed pursuant to the terms of the Guaranty. Within sixty
(60) Business Days following the occurrence of either of the events referred to
in section 6.2(i) or (ii), the Company shall cause the obligations of each of
the Restricted Subsidiaries under the Guaranty to 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 then
owned or thereafter acquired, including all books and records and other recorded
data in each case relating to the following: (a) Inventory of each such
Restricted Subsidiary, and (b) such Restricted Subsidiary's U.S. trademarks (and
U.S. applications and U.S. registrations thereof owned by such Restricted
Subsidiary in its own name (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, no U.S. patents and U.S. patent
applications, and only 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)) 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 Subsidiary Security Agreement,
the Trademark Agreement, the Patent Agreements and the Copyright Memorandum to
which such Restricted Subsidiary will become a party pursuant to section 6.2.
6.4. LIMITATION OF SECURITY. Notwithstanding anything to the contrary
contained in this section 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.
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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 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
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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 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. 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.
Page 65
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 section 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 29, 2002, 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 quarter 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 for the 2004 to 2007 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 section 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 section 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
Page 66
a Material Adverse Effect. None of the Hasbro Companies is a party to any
contract or agreement which has or is expected, 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.
8.16. 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 section 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 section 8.8.2(b) hereof is shown on such consolidated
balance sheet.
8.17. TRUE COPIES OF CHARTER AND OTHER DOCUMENTS. Each of 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).
Page 67
8.18. EMPLOYEE BENEFIT PLANS.
8.18.1. 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 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 section 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 section 103(d) of ERISA, with respect to each Guaranteed Pension
Plan.
8.18.2. 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 section 8.8.2 or delivered
pursuant to section 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 section 3(1) or section 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.
8.18.3. 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 section 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 section 307 of ERISA or section 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 valuation, the
aggregate benefit liabilities of all such Guaranteed Pension Plans within
the meaning of section 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.
8.18.4. 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 section
4201 of ERISA or as a result of a sale of assets described in section 4204
of ERISA. Neither the Company nor any ERISA Affiliate has been notified
Page 68
that any Multiemployer Plan is in reorganization or insolvent under and
within the meaning of section 4241 or section 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 section 4041A of
ERISA.
8.19. 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.
8.20. 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 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.
8.21. USE OF PROCEEDS.
8.21.1. GENERAL. The proceeds of the Loans shall be used for working
capital and general corporate purposes, including the refinancing of
indebtedness including the Existing Credit Agreement and to satisfy the
Company's obligations pursuant to guaranties of Indebtedness of Foreign
Subsidiaries. The Company will obtain Letters of Credit solely for working
capital and general corporate purposes.
8.21.2. 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.
8.22. 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 8.22 hereto or except as
would not reasonably be expected to have a Material Adverse Effect:
Page 69
(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 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. section 6903(5), any
hazardous substances as defined by 42 U.S.C. section 9601(14), any
pollutant or contaminant as defined by 42 U.S.C. section 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.
8.23. SUBSIDIARIES. As of December 29, 2002, 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 29, 2002, as filed with the Securities and
Exchange Commission, a copy of such Exhibit 21 is attached hereto as Schedule
8.23, except for certain inactive or immaterial Subsidiaries that would not, if
taken as a whole, constitute a Significant Subsidiary. During the period between
December 30, 2002 and the Effective Date, the Company has had no Significant
Subsidiaries other than (a) Hasbro International, Inc., a Delaware corporation,
and (b) Wizards of the Coast, Inc., a Washington corporation.
8.24. 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
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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.
8.25. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the Company nor any of its Subsidiaries is an entity on the
"Specially Designated Nationals and Blocked Persons" list maintained by the
Office of Foreign Assets Control of the United States Treasury Department.
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 section 8.21.
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, 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
Page 71
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 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 sections 9, 10 and 11 as of the end of the
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applicable period and setting forth in reasonable detail computations
evidencing such compliance with the financial covenants set forth in
section 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) while, and for so long as, the Obligations are secured as
provided in section 6.2, 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;
(f) 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 section 8.8.3 or, if
applicable, updating any later such projections delivered in response to
this section 9.5(f); and
(g) 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 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
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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. Following the grant
of any security interest in accordance with section 6.2, 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. Following the grant of
any security interest in accordance with section 6.2, 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 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,
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that, subject to the provisions of section 10.5.2 hereof, nothing in this
section 9.7 shall prevent any Asset Sale permitted by section 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. 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 (if any) to which such Person becomes and remains a party pursuant to
section 6.2 hereof.
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 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 section 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
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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 section 9.10 and section 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 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 section 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
sections 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in
respect of a Multiemployer Plan, under sections 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 section 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.
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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 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 if and to the extent required
under section 6.2, 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 in
accordance with section 6.2. 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 section 10.5.2 or the last
sentence of section 9.6, 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. 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;
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(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 section 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 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 section 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 or Bank Affiliate is a party,
$75,000,000 outstanding at any time;
(i) Indebtedness in connection with any Permitted Receivables
Securitization Facility; and
(j) 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
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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 section 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 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 section 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 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;
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(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 section 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 section 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 Atari 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 to hedge
against fluctuations in the price of such shares;
(xiii) Liens on assets of any Foreign Subsidiary securing Indebtedness
of any Foreign Subsidiary permitted by section 10.1(b) or section 10.1(j);
(xiv) Liens on assets 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 or Bank Affiliate is a
party, $75,000,000 in aggregate amount at any time outstanding;
(xv) Liens on any receivables and related assets subject to any Asset
Sale permitted under sections 10.5.2(j) hereof;
(xvi) Liens created pursuant to and in accordance with any Permitted
Receivables Securitization Facility; and
(xvii) other Liens on assets 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:
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(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)
(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;
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(j) Investments arising from payments under (i) the Guaranty, (ii)
guaranties of the Indebtedness of a Foreign Subsidiary permitted by section
10.1(b), or (iii) the guaranty set forth in section 27 of this Agreement;
(k) Investments received as proceeds of asset dispositions permitted
by section 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 (i) for the purpose of consummating Permitted
Acquisitions or acquired in connection with Permitted Acquisitions, or (ii)
in connection with any Permitted Receivables Securitization Facility;
(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 section 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 section 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 section 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 section 10.13;
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(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 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 quarterly 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 $50,000,000 per annum or 50%
of Consolidated Net Earnings for the prior fiscal year;
(b) repay, redeem or repurchase all or any portion of its long term
debt, provided that, immediately prior to and after giving effect to such
repayment, redemption or repurchase, (A) so long as the Company has
obligations to repurchase Xxxxx Warrants pursuant to the Warrant Amendment
Agreement, the sum of (x) the unused and available Commitment, (y) amounts
unused and available under the Permitted Receivables Securitization
Facility and (z) the total aggregate amount of the Company's domestic cash
on hand, is no less than $150,000,000; or (B) in the event that the Company
no longer has any obligations to repurchase the Xxxxx Warrants pursuant to
the Warrant Amendment Agreement, the sum of (x), (y) and (z) above shall be
no less than $50,000,000;
(c) redeem or repurchase any shares of any class of Capital Stock of
the Company, or enter into and perform its obligations under any derivative
agreements with the same economic effect as such redemption or repurchase
now or at a later date, provided that, after giving effect to such
redemption or repurchase, (A) the pro forma ratio of EBITDA for the
Reference Period ending immediately prior to such redemption or repurchase
to Consolidated Total Interest Expense for such period is no less than 10.0
: 1.00, and (B) the pro forma ratio of Consolidated Total Funded Debt for
the Reference Period ending immediately prior to such redemption or
repurchase to EBITDA for such period shall not exceed 1.75 : 1.00 (after
giving pro forma effect to such redemption or repurchase as if it occurred
on the first day of such period);
(d) repay, redeem or repurchase any Indebtedness with (i) any proceeds
of any Refinancing Indebtedness or (ii) subject to section 2.10(II), no
more than fifty percent (50%) of the Net Cash Sale Proceeds of any Material
Asset Sale;
(e) repurchase any Xxxxx Warrant as a result of the holder thereof
exercising its put option to sell such Xxxxx Warrant to the Company as
provided under the Warrant Amendment Agreement, up to an aggregate amount
not to exceed $100,000,000 in cash or $110,000,000 in Capital Stock of the
Company;
Page 83
(f) repurchase any Xxxxx Warrant as a result of the Company exercising
its call option to buy such Xxxxx Warrant from the holders as provided
under the Warrant Amendment Agreement, up to an aggregate amount not to
exceed (i) $200,000,000 in cash, provided that, after giving effect to such
repurchase, (A) the pro forma ratio of EBITDA for the Reference Period
ending immediately prior to such repurchase to Consolidated Total Interest
Expense for such period is no less than 10.0 : 1.00, and (B) the pro forma
ratio of Consolidated Total Funded Debt for the Reference Period ending
immediately prior to such repurchase to EBITDA for such period shall not
exceed 1.75 : 1.00 (after giving pro forma effect to such redemption or
repurchase as if it occurred on the first day of such period); or (ii)
$220,000,000 in Capital Stock of the Company; and
(g) 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 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
section 11 hereof; and
(iii) the aggregate purchase price for all such acquisitions
shall not exceed (A) $50,000,000 in any fiscal year (and any
portion of any amount not utilized in any fiscal year shall be
carried over to increase the amount permitted in any subsequent
fiscal year); provided that, (1)(x) the limitation set forth in
clause (A) 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 Non-Event (an "Investment Grade
Page 84
Acquisition"), (y) the aggregate purchase price for all
Investment Grade Acquisitions consummated in any fiscal year
shall not exceed $100,000,000 for such fiscal year (and any
portion of any amount not utilized in any fiscal year shall be
carried over to increase the amount permitted in subsequent
fiscal years), and (z) in the event of any such subsequent
occurrence of any Investment Grade Rating Non-Event, the
limitation set forth in clause (A) 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 section 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
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, (i) any Specified Sale, (j)
sales, assignments, pledges or transfers of receivables for a credit
enhancement purpose, pursuant to any Credit Insurance Provider Agreement;
provided, however, that any lien granted by the Company to such Credit
Insurance Provider under the Credit Insurance Provider Agreement shall
cover only such receivables, and (k) the sale, transfer, discount,
contribution, pledge or other disposition of Receivables and related assets
in connection with any Permitted Receivables Securitization Facility.
Nothing in this section 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.
Page 85
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 section 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) 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
section 406 of ERISA or section 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 section 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 section 302(f) or section
4068 of ERISA; or
Page 86
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to section 307 of ERISA or section 401(a)(29)
of the Code;
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of section 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 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, (c) any transaction relating to the issuance of any class
of Capital Stock of the Company and (d) any transaction entered into in
connection with a Permitted Receivables Securitization Facility.
10.12. RESTRICTIONS ON NEGATIVE PLEDGES. The Company will not, nor will it
permit any of its Subsidiaries (other than any Receivables Subsidiary, Foreign
Subsidiaries or Subsidiaries of any thereof) 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 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) and agreements in connection with any Permitted Receivables
Securitization Facility) 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.
Page 87
10.13. HEDGING AGREEMENTS. Other than in connection with any Permitted
Receivables Securitization Facility or in the ordinary course of business and
not for purposes of speculation, the Company will not, and will not permit any
of its Subsidiaries to, enter into any Hedging Agreements.
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
----------------------------------------------------------------------
Fourth Quarter 2003 $ 400,000,000
----------------------------------------------------------------------
First Quarter 2004 and Thereafter $ 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
----------------------------------------------------------------------
Fourth Quarter 2003 2.50:1.00
----------------------------------------------------------------------
First Quarter 2004 2.50:1.00
----------------------------------------------------------------------
Second Quarter 2004 2.50:1.00
----------------------------------------------------------------------
Third Quarter 2004 2.75:1.00
----------------------------------------------------------------------
Fourth Quarter 2004 and 2.50:1.00
Thereafter
----------------------------------------------------------------------
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:
Page 88
Fiscal Quarter Ending: Ratio
----------------------------------------------------------------------
Fourth Quarter 2003 and 7.50:1.00
Thereafter
----------------------------------------------------------------------
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 2003 $ 100,000,000
----------------------------------------------------------------------
December 2004 $ 110,000,000
----------------------------------------------------------------------
December 2005 $ 115,000,000
----------------------------------------------------------------------
December 2006 $ 120,000,000
----------------------------------------------------------------------
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
November 14, 2003:
12.1. LOAN DOCUMENTS, ETC.
(a) Each of the Loan Documents (excluding the Security Documents other than
the Guaranty) 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
(excluding the Security Documents other than the Guaranty) from each of the
other parties thereto, and (ii) shall have duly and properly executed each of
the Loan Documents (excluding the Security Documents other than the Guaranty),
to which it is a party, in Boston, Massachusetts.
(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 (excluding the
Security Documents other than the Guaranty). No event shall have occurred on or
Page 89
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 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. 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.
12.8. 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 sections
7.1 and 7.2, respectively.
12.9. 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.
12.10. LEGAL OPINION. 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
Page 90
Effective Date, in form and substance reasonably satisfactory to the Banks and
the Agent, from Xxxxx Xxxxxx, Esq., Senior Vice President and General Counsel of
the Company.
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.
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 sections 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 then in effect 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.
Page 91
13.1.5. LOAN DOCUMENTS. Each of the Loan Documents required by section
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 Loan to Hasbro SA 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 sections 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. 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 then in effect 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 section
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.
Page 92
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 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 $30,000,000.
Page 93
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,
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 principal or interest on 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 section 9.2, section 9.5, section 9.6, the first sentence of
section 9.7, section 9.13, section 9.14, section 10 or section 11, or (ii)
Hasbro SA shall fail to comply with its covenant contained in section 9.2;
(d) if (i) the Company shall fail to comply with any of its covenants
contained in section 9.10 or section 9.16, or (ii) Hasbro SA shall fail to
comply with its covenant in section 9.16, 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 respect of any Capitalized Leases or in respect of
any guaranties by such Hasbro Company of any such Indebtedness of another
Person or any payment obligations under any Permitted Receivables
Securitization Facility, 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 or under any Permitted Receivables
Securitization Facility 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
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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 or under any Permitted Receivables Securitization Facility 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; provided that, for the purposes of this
section 14.1(g) only, the term "Indebtedness" shall exclude any
Indebtedness owing to a Subsidiary of the Company, provided however that
any affirmative enforcement action taken against any of the Hasbro
Companies with respect to such Indebtedness shall nullify the foregoing
exclusion;
(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 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 $30,000,000;
(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 except in accordance with the terms hereof or thereof,
or (ii) following the grant of any security interest pursuant to section
6.2 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
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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 section 23,
or (iii) 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 (iv) 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 (if any) resulting in an
uninsured loss in excess of $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 section
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
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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 specified in section 14.1(h) or section 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 section 14.1(h) or section 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 section 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.
14.4. CERTAIN RIGHTS OF CURE. (a) Any Default or Event of Default may be
waived as provided by section 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 section 14. The Commitments, if terminated pursuant to
this section 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.
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(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 section 2.2, and (iii) subject to
compliance by the Company with the provisions of section 2.2 and this section
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 of the Security Documents, or otherwise with respect to
the realization upon any of the Collateral (in each case following the grant of
any security interest in accordance with section 6.2), 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 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, any Bank Affiliate
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, any Bank Affiliate 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
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Secured Obligations, to the payment of any obligations required to be paid
pursuant to section 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 in any other
currency (hereinafter in this section 14.6 called the "first currency") into any
other currency (hereinafter in this section 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 section 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 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
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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 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 (if and as applicable) which may be necessary to perfect, maintain
perfected or insure the priority of the security interest in and liens upon the
Collateral (if any) granted pursuant to the Security Documents in accordance
with section 6.2, 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,
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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. 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
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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
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 section 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 section 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 section 16.5 shall survive the payment of the Notes and all
other amounts payable hereunder.
16.6. REIMBURSEMENT. Without limiting the provisions of section 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.
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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 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 section 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
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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 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 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 section 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 section 16.11 shall apply to the appointment of a successor.
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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 section 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
unreasonable in any applicable jurisdiction.
16.14. AGENT MAY FILE PROOFS OF CLAIM.
(a) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial, administrative or like proceeding or any assignment for the benefit of
creditors relative to the Company and / or Hasbro SA, the Agent (irrespective of
whether the principal of any Loan, Reimbursement Obligation or Unpaid
Reimbursement Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Agent shall have made
any demand on the Company or Hasbro SA) shall be entitled and empowered, by
intervention in such proceeding, under any such assignment or otherwise:
(i) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, Reimbursement
Obligations or Unpaid Reimbursement Obligations and all other Obligations
that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Banks and the
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Banks and the Agent and their respective
agents and counsel and all other amounts due the Banks and the Agent under
sections 2.2, 5.6, 7.2 and 17) allowed in such proceeding or under any such
assignment; and
(ii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
(b) Any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such proceeding or under any such assignment is
hereby authorized by each Bank to make such payments to the Agent and, in the
event that the Agent shall consent to the making of such payments directly to
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the Banks, nevertheless to pay to the Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agent and its agents
and counsel, and any other amounts due the Agent under sections 2.2, 5.6, 7.2
and 17.
(c) Nothing contained herein shall authorize the Agent to consent to or
accept or adopt on behalf of any Bank any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations owed to such Bank or the
rights of any Bank or to authorize the Agent to vote in respect of the claim of
any Bank in any such proceeding or under any such assignment.
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 Agent's 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, while, and for so long as, the Obligations are secured as provided in
section 6.2, 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) while, and for so long as, the Obligations are secured as
provided in section 6.2, 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 section 17 shall survive payment or
satisfaction in full of all other Obligations.
18. INDEMNIFICATION.
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
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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 (if any), (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 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 section 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 section 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
Page 107
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 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
section 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,
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(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 section 8.8 and section 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. 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
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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 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 section 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 section 14.1 or section 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
section 14.1 or section 14.2 to the extent that such participation is
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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 section 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 Affiliate of the Company and which, following such disclosure, has been
excepted from the provisions of this section 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 section 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 section 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 section 4 of the Federal Reserve Act, 12 U.S.C.
section 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 section
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 sections
4.1, 4.7 or 4.11 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
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
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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 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 section 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 section 22.1 and such Bank assumes responsibility for compliance by
such counsel with such agreement, (d) to bank examiners or any other regulatory
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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 section 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
section 22 pursuant to an agreement in substantially the form of Exhibit I
provided to the Company, or (i) with the consent of the Company. Notwithstanding
anything herein to the contrary, the Company, Hasbro SA, the Agent and each Bank
may disclose to any and all Persons, without limitation of any kind, any
information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Company, Hasbro SA, the
Agent or such Bank relating to such tax treatment and tax structure.
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 section 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:
Page 113
(i) reduce or forgive the principal amount of any Loans or
Reimbursement Obligations, or reduce the rate 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, or postpone any automatic
reduction of such Bank's Commitment pursuant to the last sentence of
section 2.3;
(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 section 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 any of the Restricted Subsidiaries from its
guaranty obligations under the Guaranty, or following any grant of a
security interest in accordance with section 6.2, release all or
substantially all of the Collateral (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 section 23 or the definition of Majority Banks; and
(c) without the written consent of the Agent, amend or waive section 3
or section 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 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
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XXXXXXXXXXXX XX XXXXXXXXXXXXX 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 section 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 section 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 section 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 section 21. Hasbro SA hereby agrees that, to the 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 section 17.12.
Page 115
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 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 section 25. On the Effective Date, the rights and
obligations of the parties evidenced by the Existing Credit Agreement shall be
evidenced by the Agreement, 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 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
Page 116
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 section 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 section
362(a) of the Federal Bankruptcy Code or similar provisions of other applicable
law and the operation of sections 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
collectability 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 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,
Page 117
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 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 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.
Page 118
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 section 27.5
shall be supplemental to and not in derogation of any rights and remedies
of the 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 section 20
hereof.
Page 119
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 section
27 shall be valid and enforceable against the Company to the maximum extent
permitted by applicable law. Accordingly, if any provision of this section 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 section 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 under this
section 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 section 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]
Page 120
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\ Xxxxx X.X. Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx X.X. Xxxxxxxxxx
Title: Sr. V.P. & CFO
HASBRO SA
By:\s\ Xxxxx X.X. Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx X.X. Xxxxxxxxxx
Title: Director
By:
-----------------------------------------
Name:
Title:
Page 121
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:
-----------------------------------------
Name:
Title:
HASBRO SA
By:\s\ X. Xxxxx
-----------------------------------------
Name: X. Xxxxx
Title: Director
By:
-----------------------------------------
Name:
Title:
Page 122
FLEET NATIONAL BANK, individually
and as Agent
By:\s\ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Director
Page 123
CITICORP USA, INC.
By:\s\ Xxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Director
Page 124
COMMERZBANK A.G. NEW YORK AND GRAND
CAYMAN BRANCHES
By:\s\ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
By:\s\ Xxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
Page 000
XXXXXXXX XXXX XX XXXXXXXXXXXXX
By:\s\ Xxxxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
Page 000
XXXX XX XXXXXXX, N.A.
By:\s\ Xxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
Page 127
SCOTIABANK INC.
By:\s\ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
Page 128
BARCLAYS BANK PLC
By:\s\ X. Xxxxxxx
-----------------------------------------
Name: X. Xxxxxxx
Title: Relationship Director
Page 129
BNP PARIBAS
By:\s\ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Head of Large Corporates
By:\s\ Xxxxxxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Managing Director
Page 130
MELLON BANK, N.A.
By:\s\ J. Xxxx Xxxx
-----------------------------------------
Name: J. Xxxx Xxxx
Title: Vice President
Page 131
SCHEDULE 1
BANK COMMITMENTS, AND COMMITMENT PERCENTAGES
Page 132
Final Allocation of Total Commitments
Fleet Bank 60,000,000 17.14285714286%
Citicorp 50,000,000 14.28571428571%
Commerzbank 50,000,000 14.28571428571%
Citizens 40,000,000 11.42857142857%
Bank of America 30,000,000 8.00000000000%
Bank of Nova Scotia 30,000,000 8.00000000000%
Barclays 30,000,000 8.57142857143%
BNP Paribas 30,000,000 8.57142857143%
Mellon 30,000,000 8.57142857143%
Total 350,000,000 100.00000000000%
Page 133
SCHEDULE 2
INDICATIVE TERMS OF PERMITTED RECEIVABLES TRANSACTIONS
Transaction Summary: The Company may establish, directly or
indirectly, one or more special purpose, bankruptcy
remote corporations, limited liability companies,
trusts or other entities (collectively, the
"Receivables Company") that will purchase, acquire by
contribution, pledge or otherwise finance the
acquisition of all or a designated portion of the
trade account receivables, together with any assets,
interests or rights related to such receivables
(collectively, the "Receivables"), generated by the
Company and its Subsidiaries. The purchases,
contributions or financings of the Receivables by the
Receivables Company will be financed in part by the
creation of a receivables facility, with or without
external credit enhancement, in which ownership
interests in, or notes, commercial paper,
certificates or other instruments secured by or
representing, directly or indirectly, beneficial
interests in the Receivables (such ownership
interests, notes, commercial paper, certificates or
instruments, the "Receivables Securities") will be
sold in one or more registered public offerings,
private placements, or other available capital
markets transactions by the Receivables Company or
another entity.
Limited Recourse: The transfer or pledge of Receivables by
the Company and any applicable Subsidiaries to the
Receivables Company will be made with limited
recourse; provided that the Company and any
applicable Subsidiaries may be liable under the
definitive documentation for the creation and
issuance of the Receivables Securities (the
"Receivables Facility Documents") for customary
recourse events, and in any event may be liable for
(a) the breach of certain representations and
warranties (consistent with similar financing
transactions of this type) set forth therein, (b) the
aggregate amount of any dilution with respect to any
transferred or pledged Receivables, (c) its other
agreements and obligations (consistent with similar
financing transactions of this type) under the.
Receivables Facility Documents, (d) any obligations
incurred in respect of any underwriting or placement
agency agreements entered into in connection with the
offering of the Receivables Securities, (e) its
Page 134
servicing obligations and (f) customary
indemnification and repurchase provisions.
Page 135
SCHEDULE 8.7
TITLE TO PROPERTIES; LEASES
On October 28, 2003, Hasbro, Inc. and its affiliates transferred (i) all of the
outstanding shares of capital stock of Wow Wee Limited, and certain intellectual
property related to WowWee's business, to Power Assets Pacific Limited; and (ii)
all of the outstanding shares of capital stock of WowWee Group Company to PRY
Holdings Inc.
Page 136
SCHEDULE 8.11
LITIGATION
NONE.
Page 137
SCHEDULE 8.22
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. Acme Solvents Reclaiming, Inc., Rockford, IL. In 2000, one potentially
responsible party ("PRP") under the federal superfund statute, 42 U.S.C.
ss.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.
2. 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.
3. Xxxxxxx Xxxxxxxx Xxxxxxxxx Xxxx, Xxxx Xxxxxxx, XX. Xxxxxx 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.
Page 138
SCHEDULE 8.23
SUBSIDIARIES
See Exhibit 21 to the Form 10-K, which Exhibit 21 is attached hereto.
Page 139
EX-21 8 a2105770zex-21.htm EXHIBIT 21
QuickLinks -- Click here to rapidly navigate through this document
EXHIBIT 21
HASBRO, INC. AND SUBSIDIARIES
Subsidiaries of the Registrant (a)
NAME UNDER WHICH SUBSIDIARY STATE OR OTHER JURISDICTION OR
DOES BUSINESS INCORPORATION OR ORGANIZATION
------------------------------------------------------------------ -------------------------------
Hasbro International, Inc. Delaware
Hasbro France S.A.S France
Hasbro Deutschland GmbH Germany
Hasbro Italy S.r.l. Italy
Hasbro Latin America Inc. Delaware
Hasbro Chile LTDA Chile
Hasbro Latin America, L.P. Delaware
Hasbro S.A. Switzerland
Hasbro holdings S.A. Switzerland
Hasbro Canada Corporation / Corporation Nova Scotia
Hasbro Canada
Hasbro Asia-Pacific Marketing Ltd. Hong Kong
Tiger Electronics Far East Services, Limited Hong Kong
Hasbro de Mexico X.X.X.xx C. V. Mexico
Hasbro (Schweiz) AG Switzerland
Hasbro U.K. Limited United Kingdom
Group Grosvenor Plc. United Kingdom
MB International B.V. The Netherlands
Hasbro B.V. The Netherlands
Hasbro Hellas Industrial & Commercial Greece
Company S.A.
Hasbro Toys & Games Holdings, S.L. Spain
Hasbro Iberia SL Spain
MB Espana, SA. Spain
S.A. Hasbro N. V. Belgium
Hasbro InterToy Eqitim Araclari Sanayi Ve Turkey
Ticaret A.S.
Hasbro Far East LTD Hong Kong
Tiger Electronics Far East, Limited Hong Kong
WowWee Limited Hong Kong
Has Aust Pty Ltd Australia
Hasbro Australia Limited Australia
Wizards of the Coast, Belgium Belgium
Wizards of the Coast, UK Limited United Kingdom
Hasbro Ireland Limited Ireland
Palmyra Holdings Pte Ltd. Singapore
Hasbro Managerial Services, Inc. Rhode Island
Wizards of the Coast, Inc. Washington
Wizards of the Coast, Italia Sr.l. Italy
Wizards of the Coast, France Franc
Page 140
Wizards of the Coast Retail, 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.
QuickLinks
HASBRO. INC. AND SUBSIDIARIES Subsidiaries of the Registrant(a)
Page 141
SCHEDULE 10.1
EXISTING INDEBTEDNESS
AMOUNTS SHOWN FOR EXTERNAL SHORT-TERM FACILITIES ARE THE MAXIMUM THAT 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 4,390,000
Hasbro Chile Banco de Santander External Short-Term Facility 1,701,000
Hasbro Chile Security External Short-Term Facility 813,000
Hasbro Chile Bank Xxxx External Short-Term Facility 783,000
Hasbro Far East* Prior Owners of Grosvenor Notes Payable 2,356,000 Various
Hasbro France Credit Lyonnais External Short-Term Facility 2,095,000
Hasbro France Societe Generale External Short-Term Facility 6,887,000
Hasbro Greece National Bank of Greece External Short-Term Facility 1,722,000
Hasbro Hong Kong* HSBC External Short-Term Facility 5,547,000
Hasbro Ireland Allied Irish Bank External Short-Term Facility 365,000
Hasbro Israel * Bank Leumi External Short-Term Facility 2,000,000
Hasbro Israel * First Int'l Bank of Israel External Short-Term Facility 1,000,000
Hasbro Portugal Banco Bilbao Vizcaya External Short-Term Facility 172,000
Hasbro SA * UBS External Short-Term Facility 2,234,000
Hasbro Spain Manufacturing Bankinter Capitalized Leases 11,508,000 10/1/2014
Hasbro Spain Manufacturing Bancaja External Short-Term Facility 2,759,000
Hasbro Spain Manufacturing Banco Bilbao Vizcaya External Short-Term Facility 2,759,000
Hasbro Spain Manufacturing Banco de Santander External Short-Term Facility 690,000
Hasbro Spain Manufacturing Bankinter External Short-Term Facility 2,070,000
Hasbro Spain Selling Bankinter Capitalized Leases 7,889,000 10/1/2014
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.
*Guaranteed by Hasbro, Inc.
Page 142
SCHEDULE 10.2
EXISTING LIENS
1. Obligations under the Patent License Agreement dated as of 12/23/98 by
and between Hasbro, Inc. and Fleet Capital Corporation.
2. Obligations under the Patent License Agreement dated as of 6/28/02 by
and between Hasbro, Inc. and Fleet Capital Corporation.
3. Obligations under the Trademark and Copyright License Agreement dated
as of 8/26/03 by and between Hasbro, Inc. and Fleet Capital
Corporation.
4. 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.
5. The Company, Hasbro Internet Holdings, Inc. and Hasbro U.K. Limited
(together the "Sellers") entered into a Settlement Agreement with
Infogrames Entertainment SA ("Infogrames") effective as of December 20,
2001 (the "Settlement Agreement"). The Settlement Agreement provides
Infogrames with a right of first refusal on any sale or other transfer
by the Sellers of any Retained Shares (as defined in the Settlement
Agreement) of Infogrames stock to a non-Affiliate of Hasbro.
6. Each of the filings listed on Exhibit A attached hereto.
Page 143
Exhibit A
DEBTOR: HASBRO, INC.
Secured Party Jurisdiction File Number Date Filed Collateral
-----------------------------------------------------------------------------------------------------------------------
Winthrop Resources Corporation SOS, CA 9927060163 9/17/99 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
9927060168 9/17/99 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit XXX, XX 000000 10/13/98 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Pitney Xxxxx Credit Corporation 593464 11/27/98 All equipment manufactured, sold or
distributed by Pitney Xxxxx Credit Inc.,
Monarch Marketing Systems, Inc, Pitney
Xxxxx Credit Corp, and Dictaphone Corp.,
subject to lease dated 9/23/98 between
debtor and secured party
-----------------------------------------------------------------------------------------------------------------------
Newcourt Communications 657749 9/1/99 Specific leased equipment
Financing Corporation
-----------------------------------------------------------------------------------------------------------------------
99657749 9/1/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Bank One, N.A. 669920 10/25/99 Specific leased equipment (true
lease-filed for precautionary purposes)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing, Inc. 732696 7/25/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Newcourt Communications 734982 8/3/00 Specific leased equipment
Financing Corporation
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 00000000000 6/11/01
0
-----------------------------------------------------------------------------------------------------------------------
Pitney Xxxxx Credit Corporation 20020939564 2/25/02 Specific equipment
0
-----------------------------------------------------------------------------------------------------------------------
Newcourt Communications East 152 8/7/00 Specific leased equipment
Finance Corporation as Lessor Longmeadow
Town, MA
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit SOS, OH AN83810 7/23/97 Specific leased equipment
Corporation
-----------------------------------------------------------------------------------------------------------------------
Tokai Financial Services, Inc. XX0000000 4/16/98 Specific leased equipment-true lease.
Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
Bank One, N.A. AP0100866 10/26/98 Specific leased equipment-true lease.
Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
AP0108004 12/16/98 Specific leased equipment-true lease.
Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
AP0190089 10/25/99 Specific leased equipment-true lease.
Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
Page 144
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. AP0247853 6/14/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
AP025744 7/24/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
AP0254457 7/11/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Copelco Capital Inc. XXX, XX 000000 12/2/96 Specific Equipment (copy machines). True
lease. Filed for precautionary purposes
only
-----------------------------------------------------------------------------------------------------------------------
Receivable Capital Corporation 660728 12/27/96 Certain accounts of other amounts owed by
certain obligors identified in the
Receivables Purchase Agreement dated
12/24/96
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit 661519 1/14/97 Specific leased equipment
Corporation
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit 667574 6/19/97 Specific leased equipment
Corporation
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit 668932 7/21/97 Specific leased equipment
Corporation
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit 673094 11/10/97 Specific leased equipment
Corporation
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit 674427 12/17/97 Specific leased equipment
Corporation
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit 675426 1/12/98 Specific leased equipment
Corporation
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit 681834 6/16/98 Specific leased equipment
Corporation
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit 686721 10/13/91 Specific leased equipment
Corporation
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 687328 10/27/98 Specific leased equipment-true lease.
Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
6//11/01
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 689630 12/21/98 Specific leased equipment-true lease.
-----------------------------------------------------------------------------------------------------------------------
6/11/01
----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 703538 10/26/99 Specific leased equipment-true lease.
-----------------------------------------------------------------------------------------------------------------------
6/11/01
-----------------------------------------------------------------------------------------------------------------------
Pitney Xxxxx Credit Corporation 688757 11/27/98 All equipment manufactured, sold or
distributed by Pitney Xxxxx Credit Inc.,
Monarch Marketing Systems, Inc, Pitney
Xxxxx Credit Corp, and Dictaphone Corp.,
Page 145
subject to lease dated 9/23/98 between
debtor and secured art
-----------------------------------------------------------------------------------------------------------------------
677145 2/27/98 All equipment manufactured, sold or
distributed by Pitney Xxxxx Credit Inc.,
Monarch Marketing Systems, Inc, Pitney
Xxxxx Credit Corp, and Dictaphone Corp.,
subject to lease dated 11/19/97 between
debtor and secured
-----------------------------------------------------------------------------------------------------------------------
3D Capital Coporation 694615 4/12/99 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 713306 5/31/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 713307 5/31/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 713308 5/31/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 714052 6/19/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 714053 6/19/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 715277 7/14/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 715720 7/25/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 716537 8/15/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 720064 10/30/00 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc. 723546 1/22/01 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
IBM Credit Corporation 720332 11/29/00 Specific equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing Inc 723546 1/22/01 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing, Inc. 727093 4/9/01 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing, Inc. 727094 4/9/01 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Dell Financial Services, LP 727480 4/19/01 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing, Inc. 728326 5/8/01 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 728482 5/14/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
IBM Credit Corporation 728710 5/18/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxx Financial Leasing, Inc. 729377 6/4/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Winthrop Resources Corporation 001625 8/27/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 002950 10/9/2001. Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Page 146
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 002963 10/9/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 002964 10/9/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 002965 10/9/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 002966 10/9/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 002983 10/9/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 002984 10/9/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxx Fargo Equipment Finance, Inc. 003859 11/7/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxx Fargo Equipment Finance, Inc. 003860 11/31/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
XxxxXxx, X.X. 000000 11/13/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
12/17/2001
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 003983 11/13/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 003983 11/13/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 003983 11/13/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 003983 11/13/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Summit Funding Group, Inc. 003991 11/13/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Summit Funding Group, Inc. 004210 11/20/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Summit Funding Group, Inc. 004405 11/29/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 004887 12/17/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Summit Funding Group, Inc. 004888 12/17/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Summit Funding Group, Inc. 004897 12/17/2001 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Citizens Leasing Corporation 005668 1/9/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
010968 6/14/2002
-----------------------------------------------------------------------------------------------------------------------
Summit Funding Group, Inc. 005868 1/15/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 006163 1/24/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Citizens Leasing Corporation 006222 1/28/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
010970 6/14/2002
-----------------------------------------------------------------------------------------------------------------------
Citizens Leasing Corporation 006226 1/28/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
010969 6/14/2002
-----------------------------------------------------------------------------------------------------------------------
Page 147
-----------------------------------------------------------------------------------------------------------------------
Citizens Leasing Corporation 006589 2/8/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Citizens Leasing Corporation 006590 2/8/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Pitney Xxxxx Credit Corporation 007112 2/25/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Pullman Bank & Trust 007328 3/4/2002 Computer hardware equipment lease
-----------------------------------------------------------------------------------------------------------------------
008745 4/3/2002
-----------------------------------------------------------------------------------------------------------------------
009081 4/22/2002
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing 007818 3/18/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing 007819 3/18/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
General Electric Capital Corporation 007833 3/18/2002 Computer hardware equipment lease
-----------------------------------------------------------------------------------------------------------------------
012578 8/6/2002
-----------------------------------------------------------------------------------------------------------------------
Fleet National Bank, as Agent 008050 3/25/2002 All Assets
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 008367 4/1/2002 Leased equipment subject to the terms and
conditions of Schedule 58 dated 4/28/1998
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 009319 4/29/2002 Leased equipment subject to the terms and
conditions of Schedule 65 dated
6/22/1999
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 009320 4/29/2002 Leased equipment subject to the terms and
conditions of Schedule 59 dated 4/28/1998
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 009730 5/10/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 009731 5/10/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
Winthrop Resources Corporation 010934 6/17/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
General Electric Capital Corporation 011548 7/3/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
011579 8/6/2002
-----------------------------------------------------------------------------------------------------------------------
General Electric Capital Corporation 011550 7/3/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
012577 8/6/2002
-----------------------------------------------------------------------------------------------------------------------
The CIT Group/Commercial Services, 012305 7/26/2002 All present and future accounts arising
Inc. from debtors sales of goods or
performance of services to WART
Corporation and related instruments
documents and chattel paper.
-----------------------------------------------------------------------------------------------------------------------
Winthrop Resources Corporation 012482 8/2/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Page 148
-----------------------------------------------------------------------------------------------------------------------
Winthrop Resources Corporation 012482 8/2/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Winthrop Resources Corporation 012482 8/2/2002 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
General Electric Capital 012577 8/6/2002 Copy missing?
Corporation
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 012894 8/19/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 012985 8/19/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 012896 8/19/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 012897 8/19/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 012898 8/19/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 012899 8/19/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 012900 8/19/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
NCP Leasing, Inc. 012901 8/19/2002 Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 013984 9/26/2002 Leased equipment subject to the terms and
conditions of Schedule 47 dated 9/9/1996
-----------------------------------------------------------------------------------------------------------------------
De Xxxx Xxxxxx Financial 016380 12/23/2002 Equipment lease
Services, Inc.
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 016948 1/9/2003 Leased equipment subject to the terms and
conditions of Schedule 53 dated 9/15/1997
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 016949 1/9/2003 Leased equipment subject to the terms and
conditions of Schedule 73 dated 3/18/2000
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 016950 1/9/2003 Leased equipment subject to the terms and
conditions of Schedule 59 dated 4/28/1998
-----------------------------------------------------------------------------------------------------------------------
De Xxxx Xxxxxx Financial 019253 3/17/2003 Equipment lease
Services, Inc.
-----------------------------------------------------------------------------------------------------------------------
IBM Credit LLC 019683 3/31/2003 Computer equipment lease (software)
-----------------------------------------------------------------------------------------------------------------------
Comdisco, Inc. 019712 3/31/2003 Leased equipment subject to the terms and
conditions of Schedule 49 dated
2/20/1997
-----------------------------------------------------------------------------------------------------------------------
De Xxxx Xxxxxx Financial 020460 4/17/2003 Equipment lease
Services Inc.
-----------------------------------------------------------------------------------------------------------------------
First Bank of Highland Park 023140 7/1/2003 Equipment lease
-----------------------------------------------------------------------------------------------------------------------
024140 7/28/2003
-----------------------------------------------------------------------------------------------------------------------
Page 149
-----------------------------------------------------------------------------------------------------------------------
First Bank of Highland Park 023145 7/11/2003 Equipment lease
-----------------------------------------------------------------------------------------------------------------------
024133 7/28/2003
-----------------------------------------------------------------------------------------------------------------------
Nextiraone LLC 025114 8/25/2003 Equipment lease
-----------------------------------------------------------------------------------------------------------------------
IBM Credit LLC 20030075467 9/29/2003 Computer equipment lease (software)
0
-----------------------------------------------------------------------------------------------------------------------
Fleet Capital Corporation 027044 10/23/2003 US Patents
-----------------------------------------------------------------------------------------------------------------------
Fleet Capital Corporation 027045 10/23/2003 US Trademarks
-----------------------------------------------------------------------------------------------------------------------
KBA North America Inc., 20030075652 10/27/2003 Equipment lease
Sheetfed Division 0
-----------------------------------------------------------------------------------------------------------------------
Winthrop Resources Corporation 0000-000-0000 6/25/01 Leased equipment
-----------------------------------------------------------------------------------------------------------------------
Page 150
DEBTOR: WIZARDS OF THE COAST, INC.
Secured Party Jurisdiction File Number Date Filed Collateral
-----------------------------------------------------------------------------------------------------------------------
Panasonic SOS, CA 0018860593 6/29/00 Specific leased equipment (copy machine)
Communications
Assignee: Fleet Leasing
Corporation
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation SOS, TX 98-143791 7/14/98 Specific equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 98-207543 10/15/98 Specific equipment (forklift)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 98-236230 11/30/98 Specific equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 99-120357 6/14/99 Specific equipment
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 00-447675 3/6/00 Specific lease equipment (filed for
precautionary purposes only)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 00-618915 11/2/00 Specific lease equipment (filed for
precautionary purposes only)
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 00-632274 11/27/00 Specific equipment
-----------------------------------------------------------------------------------------------------------------------
A.C.S.S. Dallas Industrial, Inc 01-034797 2/22/01 Goods, inventory, equipment, fixtures
situated on or related to Tenants use
of the Premises
-----------------------------------------------------------------------------------------------------------------------
A.C.S.S. Dallas Industrial, Inc 01-034857 2/22/01 Goods, inventory, equipment, fixtures
situated on or related to Tenants use
of the Premises
-----------------------------------------------------------------------------------------------------------------------
Fuji Photo Film USA, Inc. DOL, WA 00-000-0000 6/30/95 Specific equipment
-----------------------------------------------------------------------------------------------------------------------
0000-000-0000 1/14/00
-----------------------------------------------------------------------------------------------------------------------
Xerox Corp. 00-000-0000 1/30/98 Specific equipment (copier)
-----------------------------------------------------------------------------------------------------------------------
Xxxx Commercial Credit Corporation 00-000-0000 5/11/98 Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
Fuji Photo Film USA, Inc. 00-000-0000 12/14/98 Laminator
-----------------------------------------------------------------------------------------------------------------------
Pitney Xxxxx Credit Corporation 00-000-0000 3/15/99 All equipment manufactured, sold or
distributed by Pitney Xxxxx Credit Inc.,
Monarch Marketing Systems, Inc, Pitney
Xxxxx Credit Corp, and Dictaphone Corp.,
subject to lease dated 12/16/98 between
debtor and secured party
-----------------------------------------------------------------------------------------------------------------------
Dupont Color Proofing 00-000-0000 7/22/99 Waterproof Washoff Unit, Waterproof
laminator
-----------------------------------------------------------------------------------------------------------------------
Page 151
-----------------------------------------------------------------------------------------------------------------------
West Coast Retail 0000-000-0000 2/25/01 Specific equipment
-----------------------------------------------------------------------------------------------------------------------
Kodak Polychrome Graphics 0000-000-0000 5/7/01 Laminator
-----------------------------------------------------------------------------------------------------------------------
Fleet National Bank, as Agent 0000-000-0000 3/22/2002 All Assets
-----------------------------------------------------------------------------------------------------------------------
THE CIT 0000-000-0000 7/26/2002 All present and future accounts arising
Group/Commercial Services, Inc. from debtors sales of goods or performance
of services to KMART Corporation and
related instruments documents and chattel
paper...
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 0000-000-0000 4/7/2003 (2) Xxxxxxx Reach with batteries and
chargers
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 0000-000-0000 6/20/2003 Exides Lease
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 0000-000-0000 6/20/2003 Exides Lease
-----------------------------------------------------------------------------------------------------------------------
Xxxxxxx Leasing Corporation 0000-000-0000 6/20/2003 Exides Lease
-----------------------------------------------------------------------------------------------------------------------
Page 152
DEBTOR: ODDZON, INC.
Secured Party Jurisdiction File Number Date Filed Collateral
-----------------------------------------------------------------------------------------------------------------------
SOS, CA 0000000000 9/19/00 state tax lien $133,719.34-Employment
Development department
-----------------------------------------------------------------------------------------------------------------------
THE CIT 2184763-5 7/26/2002 All present and future accounts arising
Group/Commercial from debtors sales of goods or performance
Services, Inc. of services to WART Corporation and
related instruments documents and chattel
paper...
-----------------------------------------------------------------------------------------------------------------------
DEBTOR: TIGER ELECTRONICS, LTD.
Secured Party Jurisdiction File Number Date Filed Collateral
-----------------------------------------------------------------------------------------------------------------------
MBS Business Systems SOS, IL 4302675 11/30/00 Specific equipment (copy machine)
-----------------------------------------------------------------------------------------------------------------------
XXXx, RI
-----------------------------------------------------------------------------------------------------------------------
SOS, WA
-----------------------------------------------------------------------------------------------------------------------
Page 153
SCHEDULE 10.12
RESTRICTIONS ON NEGATIVE PLEDGES
1. The Company, Hasbro Internet Holdings, Inc. and Hasbro U.K. Limited
(together the "Sellers") entered into a Settlement Agreement with
Infogrames Entertainment SA ("Infogrames") effective as of December 20,
2001 (the "Settlement Agreement"). The Settlement Agreement provides
Infogrames with a right of first refusal on any sale or other transfer
by the Sellers of any Retained Shares (as defined in the Settlement
Agreement) of Infogrames stock to a non-Affiliate of Hasbro.
2. Two indentures of the Company 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 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.
Page 154
