TIME WARNER FINANCING TRUST and TIME WARNER INC.
Underwriting Agreement
New York, New York
June __, 1995
Morgan Stanley & Co. Incorporated
as Representative of the several Underwriters
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
Time Warner Financing Trust (the "Trust"), a statutory
business trust organized under the Business Trust Act (the "Delaware Act") of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
SECTION 3801 et seq.), proposes to sell to the underwriters named in Schedule I
hereto (the "Underwriters"), for whom you (the "Representative") are acting as
representative, [__________] [$___] Preferred Exchangeable Redemption Cumulative
Securities (the "Preferred Securities") to be specified in Schedule II hereto.
The Preferred Securities and the Common Securities (as defined herein) are to be
issued pursuant to the terms of a declaration of trust, dated as of __________,
1995, as amended and restated (the "Declaration"), among Time Warner Inc., a
Delaware corporation (the "Company" and, together with the Trust, the
"Offerors"), as sponsor, the trustees named therein (the "Time Warner Trustees")
and the holders from time to time of undivided beneficial interests in the
assets of the Trust. The Declaration is qualified as an indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Pursuant to
the Declaration, the number of Time Warner Trustees will initially be five.
Three of the Time Warner Trustees (the "Regular Trustees") will be persons who
are employees or officers of, or affiliated with, the Company. The fourth
trustee will be a financial institution unaffiliated with the Company that will
serve as property trustee under the Declaration and as indenture trustee with
respect to the Preferred Securities for purposes of the Trust Indenture Act (the
"Property Trustee"). The fifth Time Warner Trustee will be a financial
institution or an affiliate thereof which maintains a principal place of
business or residence in the State of Delaware (the "Delaware Trustee"). [
] will act as the Property Trustee and its affiliate will act as the Delaware
Trustee until removed or replaced by the holder of the Common Securities. The
Preferred Securities will be guaranteed by the Company on a subordinated basis
with respect to distributions and payments upon liquidation, redemption or
otherwise (the "Preferred Securities Guarantee") pursuant to the Preferred
Securities Guarantee Agreement dated as of __________, 1995 (the "Preferred
Securities Guarantee Agreement") between the Company and ___________, as Trustee
(the "Guarantee Trustee"). The assets of the Trust will consist of, among other
things, % Subordinated Notes due December 30, 1997 (the "Subordinated Notes") of
the
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Company which will be issued under an indenture, dated as of June , 1995 (the
"Subordinated Notes Indenture"), between the Company and , as
Trustee (the "Indenture Trustee"). Under certain circumstances, the Subordinated
Notes will be distributable to the holders of undivided beneficial interests in
the assets of the Trust. The Preferred Securities, the related Preferred
Securities Guarantees and the Subordinated Notes are referred to herein
as the "Securities".
The Company has the right (the "Time Warner Exchange Right")
to require the holders of the Preferred Securities, in whole or in part, to
exchange, at any time and from time to time prior to maturity, Preferred
Securities for shares of common stock, par value $.50 per share (the "Hasbro
Common Stock"), of Hasbro, Inc., a Rhode Island corporation ("Hasbro"), subject
to certain adjustments, in accordance with the terms and subject to the
conditions set forth in the Declaration.
The Offerors understand that the Underwriters propose to make
a public offering of the Preferred Securities as soon as the Underwriters deem
advisable after this Agreement has been executed and delivered, and the
Declaration, the Preferred Securities Guarantee Agreement and the Indenture have
been qualified under the Trust Indenture Act. The entire proceeds from the sale
of the Securities will be combined with the entire proceeds from the sale by the
Trust to the Company of its common securities (the "Common Securities")
guaranteed by the Company, to the extent set forth in the Prospectus, with
respect to distributions and payments upon liquidation, and redemption (the
"Common Securities Guarantee" and, together with the Preferred Securities
Guarantee, the "Guarantees") pursuant to the Common Securities Guarantee
Agreement (the "Common Securities Guarantee Agreement" and, together with the
Preferred Securities Guarantee Agreement, the "Guarantee Agreements"), dated as
of June , 1995, between the Guarantee Trustee, as Trustee, and will be used by
the Trust to purchase an equivalent amount of the Subordinated Notes.
1. Representations and Warranties. The Offerors jointly
and severally represent and warrant to, and agree with, each Underwriter as set
forth below in this Section 1. Certain terms used in this Section 1 are defined
in paragraph (bb) hereof.
(a) Each of the Offerors meets the requirements for the use of
Form S-3 under the Securities Act of 1933 (the "Act") and has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement (File No. 33-_____) on such Form, including a
prospectus, for registration under the Act of the Preferred Securities,
the Guarantees, the Subordinated Notes and the Time Warner Exchange
Rights. The Hasbro Common Stock currently owned by an indirect wholly
owned subsidiary of the Company into which the Preferred Securities are
exchangeable is not required to be registered under the Act in
connection with the offering and sale of the Preferred Securities or
the exchange of the Preferred
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Securities as described in the Prospectus. The Exchange Property (as
defined in the Prospectus) consists solely of the Hasbro Common Stock
owned by such subsidiary on the date hereof.
(b) On the Effective Date, the Registration Statement did and
on the Closing Date, the Prospectus will, comply in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934 (the "Exchange Act"), the Trust Indenture Act and
the respective rules thereunder; on the Effective Date, the
Registration Statement did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date, each of the
Declaration, the Indenture and the Guarantee Agreements did and will
comply in all material respects with the requirements of the Trust
Indenture Act and the rules thereunder; and, on the date hereof, the
Prospectus does not, and on the Closing Date, the Prospectus will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to (i) those parts of the Registration Statement which
shall constitute the Statements of Eligibility and Qualification (Form
T-1) under the Trust Indenture Act of the Property Trustee, the
Guarantee Trustee and the Indenture Trustee or (ii) the information
contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with information
furnished in writing to the Offerors by or on behalf of any Underwriter
through the Representative specifically for inclusion in the
Registration Statement or the Prospectus.
(c) The Company is validly existing as a corporation in good
standing under the laws of the State of Delaware, with full corporate
power and authority under such laws to own its properties and conduct
its business as described in the Prospectus, to enter into and perform
its obligations under this Agreement, the Declaration, the Indenture
and each of the Guarantee Agreements and to purchase, own and hold the
Common Securities issued by the Trust; and the Company is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property
of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, considered as one enterprise.
(d) Each of the Company's significant subsidiaries, as such
term is defined in Rule 1-02(v) of Regulation S-X under the Act, is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with full power and
authority under such laws to own its properties and conduct its
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business as described in the Prospectus and is duly qualified to
transact business as a foreign corporation or partnership and is in
good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to
so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise.
(e) The Company's authorized equity capitalization and
pro forma equity capitalization is as set forth in the Prospectus.
(f) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act with the power
and authority to own property and to conduct its business as described
in the Registration Statement and Prospectus and to enter into and
perform its obligations under this Agreement, the Preferred Securities,
the Common Securities and the Declaration and is not required to be
authorized to do business in any other jurisdiction; the Trust is not a
party to or otherwise bound by any agreement other than those described
in the Prospectus; the Trust is not and will not be classified as an
association taxable as a corporation for United States federal income
tax purposes; and the Trust is and will be treated as a consolidated
subsidiary of the Company pursuant to generally accepted accounting
principles.
(g) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration Statement and
Prospectus, will be validly issued and (subject to the terms of the
Declaration) fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will conform to all statements
relating thereto contained in the Prospectus; the issuance of the
Common Securities is not subject to any preemptive or other similar
rights; and at the Closing Date, all of the issued and outstanding
Common Securities of the Trust will be directly owned by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(h) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(i) The Preferred Securities have been duly authorized by the
Declaration and, when issued and delivered pursuant to this Agreement
against payment of the consideration set forth in Schedule II hereto,
will be validly issued and (subject to the terms of the Declaration)
fully paid and non-assessable preferred undivided beneficial interests
in the assets of the Trust, will be entitled to the benefits of the
Declaration and will conform to all statements relating thereto
contained in the Prospectus; the
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issuance of the Preferred Securities is not subject to preemptive or
other similar rights; holders of Preferred Securities will be entitled
to the same limitation of personal liability extended to stockholders
of private corporations for profit; the Offerors have filed a
preliminary listing application and all required supporting documents
with respect to the Preferred Securities with the New York Stock
Exchange and the Offerors have no reason to believe that the Preferred
Securities will not be authorized for listing, subject to official
notice of issuance and evidence of satisfactory distribution.
(j) The Declaration has been duly authorized by the Company
and, at the Closing Date, will have been duly executed and delivered by
the Company and the Time Warner Trustees, and assuming due
authorization, execution and delivery of the Declaration by the
Property Trustee, the Declaration will, at the Closing Date, be a valid
and binding obligation of the Company and the Time Warner Trustees,
enforceable against the Company and the Time Warner Trustees in
accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
laws affecting creditors' rights generally from time to time in effect
and subject as to enforceability to general principles of equity,
regardless of whether considered in a proceeding in equity or at law);
and the Declaration will conform to all statements relating thereto
contained in the Prospectus.
(k) Each of the (i) Common Securities Guarantee Agreement and
(ii) Preferred Securities Guarantee Agreement has been duly authorized
by the Company and, when validly executed and delivered by the Company,
will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms and the
Guarantees and the Guarantee Agreements will conform to all statements
relating thereto contained in the Prospectus; and the Preferred
Securities Guarantee Agreement, at the Closing Date, will have been
duly qualified under the Trust Indenture Act.
(l) The Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject as to enforceability
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law); and the Indenture will conform to all
statements relating thereto contained in the Prospectus.
(m) The Subordinated Notes have been duly authorized by the
Company and, at the Closing Date, will have been duly executed by the
Company and, when authenticated in the manner provided for in the
Indenture and delivered against
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payment therefor as described in the Prospectus, will constitute valid
and binding obligations of the Company, enforceable against the Company
in accordance with their terms, will be in the form contemplated by,
and entitled to the benefits of, the Indenture and will conform to all
statements relating thereto in the Prospectus.
(n) The Company's obligations under the Preferred Securities
Guarantee and Common Securities Guarantee are subordinate and junior in
right of payment to all other liabilities of the Company and pari passu
with the most senior preferred stock issued from time to time, if any,
by the Company.
(o) The Subordinated Notes are subordinated and junior in
right of payment to all present and future senior indebtedness (as
defined in the Indenture) of the Company and rank pari passu with the
Company's [other general unsecured creditors].
(p) There is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body
or any arbitrator involving the Trust, the Company or any of its
subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is not described or
filed as required.
(q) No authorization, approval, consent, order or license of
any government, governmental instrumentality, agency or body or court
(other than under the Act and the securities or blue sky laws of
various jurisdictions) is required for the authorization, issuance,
sale and delivery of the Preferred Securities or the offering of the
Common Securities, the Subordinated Notes or the Guarantees, the
consummation by the Trust and the Company of the transactions
contemplated by this Agreement or the delivery of shares of Hasbro
Common Stock upon the exchange of the Preferred Securities.
(r) Neither the Company nor any of its subsidiaries is in
violation of its Restated Certificate of Incorporation, as amended, or
By-laws, as amended; the Trust is not in violation of the Declaration
or its Certificate of Trust filed with the State of Delaware on June
_____, 1995 (the "Certificate of Trust"); and the execution, delivery
and performance of this Agreement, the Declaration, the Preferred
Securities, the Common Securities, the Indenture, the Subordinated
Notes, the Guarantee Agreements and the Guarantees, the delivery of
shares of Hasbro Common Stock upon the exchange of the Preferred
Securities and the consummation of the transactions contemplated herein
and therein and compliance by the Offerors with their respective
obligations hereunder and thereunder have been duly authorized by all
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necessary action (corporate or otherwise) on the part of the Offerors
and do not and will not result in any violation of the Restated
Certificate of Incorporation, as amended, or By-laws, as amended, of
the Company or the Declaration or Certificate of Trust of the Trust and
do not and will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust or the Company under (i) that certain
Amended and Restated Credit Agreement (the "TWE Credit Agreement"),
dated as of June 23, 1992, among Time Warner Entertainment Company,
L.P., a Delaware limited partnership ("TWE"), Bankers Trust Company and
Chemical Bank, as Managing Agents, the Agents and the Co-Agents named
therein and the Banks named therein, that certain revolving credit
facility (the "New Credit Agreement"), dated as of June __, 1995, among
TWE, the Time Warner Entertainment-Advance/Newhouse Partnership, a New
York general partnership, TWI Cable, a wholly owned subsidiary of the
Company and __________, as Managing Agent, the Agents and the Co-Agents
named therein and the Banks named therein or any indenture, mortgage or
loan agreement, or any other agreement or instrument, to which the
Trust or the Company is a party or by which the Trust or the Company
may be bound or to which any of the Trust's or the Company's properties
may be subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise), earnings, business
prospects of the Trust or of the Company and its subsidiaries,
considered as one enterprise), (ii) any existing applicable law, rule
or regulation (except for such conflicts, breaches, liens, charges or
encumbrances that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Trust or of the Company and its subsidiaries,
considered as one enterprise, and other than the securities or blue sky
laws of various jurisdictions), or (iii) any judgment, order or decree
of any government, governmental instrumentality or court having
jurisdiction over the Trust, the Company or any of their respective
properties.
(s) The documents incorporated by reference in the Prospectus,
as of the dates they were filed with the Commission, complied as to
form in all material respects with the requirements of the Exchange
Act.
(t) __________, __________ and __________ (the "Regular
Trustees") of the Trust are employees of the Company and have been duly
authorized by the Company to execute and deliver the Declaration; the
Declaration has been duly executed and delivered by the Regular
Trustees and is a valid and binding obligation of each Regular Trustee,
enforceable against such Regular Trustee in accordance with its terms.
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(u) The Trust is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(v) Each of Ernst & Young LLP, Deloitte & Touche LLP, Paul
Scherer & Company LLP and Arthur Andersen LLP, which is reporting upon
the audited financial statements and schedules included or incorporated
by reference in the Registration Statement, are independent accountants
in accordance with the provisions of the Exchange Act and the rules and
regulations thereunder.
(w) The consolidated financial statements and the related
notes of the Company and the Trust, Newhouse Broadcasting Cable
Division of Newhouse Broadcasting Corporation and Subsidiaries
("Newhouse"), Vision Cable Division of Vision Cable Communications,
Inc. and Subsidiaries ("VCD"), Cablevision Industries Corporation and
Subsidiaries ("CVI"), Cablevision Industries Limited Partnership and
Combined Entities ("CVI L.P.") and KBLCOM Incorporated ("KBLCOM")
included or incorporated by reference in the Registration Statement
present fairly in accordance with generally accepted accounting
principles the consolidated financial position of the Company and the
Trust, CVI, Newhouse, VCD, CVI L.P. and KBLCOM, as the case may be, as
of the dates indicated and the consolidated results of operations and
cash flows of the Company and the Trust, CVI, Newhouse, VCD, CVI L.P.
and KBLCOM, as the case may be, for the periods specified. Such
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved, except as otherwise noted therein and subject, in
the case of interim statements, to normal year-end audit adjustments.
The financial statement schedules included or incorporated by reference
in the Registration Statement present fairly in accordance with
generally accepted accounting principles the information required to be
stated therein. Any pro forma financial statements of the Company and
other pro forma financial information included or incorporated by
reference in the Registration Statement present fairly the information
shown therein. Such pro forma financial statements and other pro forma
financial information, to the extent required, have been prepared in
accordance with applicable rules and guidelines of the Commission, if
any, with respect thereto, have been properly compiled on the pro forma
basis described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(x) The shares of Hasbro Common Stock owned by an indirect
wholly owned subsidiary of the Company at the Closing Date are
sufficient in number to meet the initial exchange requirements of the
Preferred Securities and such shares have been duly authorized and
validly issued, and, except to the extent (if any)
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otherwise provided in the laws of the State of Rhode Island, are full
paid and nonassessable.
(y) The shares of Hasbro Common Stock owned by an indirect
wholly owned subsidiary of the Company at the Closing Date are owned
free and clear of any pledge, lien, security interest, encumbrance or
claim, except for the rights of first refusal contained in Section 4(I)
of the Shareholders Rights Agreement dated May 17, 1983 between Warner
Communications Inc. and Hasbro Industries, Inc., as amended by an
amendment dated December 1, 1985 (as so amended, the "Shareholders'
Agreement"), which rights of first refusal have expired, and if
certificates for such shares are delivered upon the surrender of the
Preferred Securities for exchange in accordance with the Declaration,
such shares will be free and clear of any pledge, lien, security
interest, encumbrance or claim created or suffered to exist by the
Company or any of its subsidiaries.
(z) To the best knowledge of the Company, the shares of Hasbro
Common Stock owned by an indirect wholly owned subsidiary of the
Company as described in the Prospectus are listed on the American Stock
Exchange.
(aa) The Company has no reason to believe that the periodic
reports and other documents filed by Hasbro under sections 13 and 15 of
the 1934 Act contain any material misstatements or have material
omissions.
(bb) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term the "Effective Date" shall
mean each date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective and each
date after the date hereof on which a document incorporated by
reference in the Registration Statement is filed. "Execution Time"
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. The registration statement referred to
in paragraph (a) above (as amended, if applicable) and the prospectus
constituting a part thereof (including, in each case, all documents
incorporated or deemed to be incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Act and the information, if any,
deemed to be part thereof pursuant to Rule 430A(b) of the rules and
regulations of the Commission under the 1933 Act (the Regulations")),
as from time to time amended or supplemented pursuant to the Act, the
Exchange Act or otherwise, are herein after referred to as the
"Registration Statement" and the "Prospectus", respectively, except
that if any revised prospectus shall be provided to the Underwriters by
the Offerors for use in connection with the offering of the Preferred
Securities, which differs from the Prospectus on file at the Commission
at the time the Registration Statement becomes effective (whether or
nor such revised prospectus is required to be filed by the Offerors
pursuant to Rule 424(b) of the Regulations), the term "Prospectus"
shall
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refer to such revised prospectus from and after the time it is first
provided to the Underwriters for such use. All references in this
Agreement to financial statements and schedules and other information
that is "contained", "included" or "stated" in the Registration
Statement or the Prospectus (and all other references of like import)
shall be deemed to mean and include all such financial statements and
schedules and other information that are or are deemed to be
incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include the filing of any
document under the Act that is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case
may be.
(cc) None of the Trust, the Time Warner Trustees, the Company,
its directors or officers or any person who controls the Trust or the
Company, as the case may be, within the meaning of Section 15 of the
Act has taken, directly or indirectly, any action which has constituted
or resulted in stabilization or manipulation of the price of any debt
security of the Trust or the Company or any equity security of Hasbro
in order to facilitate the sale or resale of the Preferred Securities.
(dd) None of the Trust, the Time Warner Trustees, the Company,
its directors or any persons who controls the Trust or the Company, as
the case may be, within the meaning of Section 15 of the Act is an
affiliate of Hasbro within the meaning of the Act or the regulations
issued thereunder and the factual statements set forth in the opinion
of Paul, Weiss, Rifkind, Wharton & Garrison attached as Exhibit C
hereto are true and correct.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Trust agrees to sell to each Underwriter, and each Underwriter agrees, severally
and not jointly, to purchase from the Trust, at the purchase price set forth in
Schedule II hereto, the Preferred Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) The initial public offering price of the Preferred
Securities, the initial exchange rate applicable to the Preferred Securities,
the number of shares of Hasbro Common Stock for which each Preferred Security
shall initially be exchangeable, the purchase price to be paid by the
Underwriter for the Preferred Securities and the other information called for in
Schedule II hereto have each been determined and set forth in Schedule II
hereto.
3. Delivery and Payment. (a) The Company will deliver the
Preferred Securities to you for the respective accounts of the several
Underwriters at the office of Shearman & Sterling, 599 Lexington Avenue, New
York, New York 10022, against payment
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of the purchase price by certified or official bank check or checks in funds
available the next succeeding business day drawn to the order of the Trust on
the [fourth] business day after the date hereof, or at such other time not later
than [ten] full business days thereafter as you and the Company determine (such
time being herein referred to as the "Closing Date"). Certificates for the
Preferred Securities shall be registered in such names and in such denominations
as the Representative may request not less than [two] full business days in
advance of the Closing Date.
The Company agrees to have the Preferred Securities available
for inspection, checking and packaging by the Representative in New York, New
York, not later than 1:00 P.M. on the business day prior to the Closing Date.
4. Agreements. The Offerors agree with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, to become effective. Prior to the termination of the
offering of the Securities, the Offerors will not file any amendment to
the Registration Statement or supplement to the Prospectus unless the
Offerors have furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object on a timely basis. Subject to the foregoing sentence,
the Offerors will cause the Prospectus, properly completed, to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Representative of such timely filing. The Offerors
will promptly advise the Representative (i) when the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, shall have become effective, (ii) when the Prospectus shall
have been filed with the Commission pursuant to Rule 424(b), (iii)
when, prior to termination of the offering of the Preferred Securities,
any amendment to the Registration Statement shall have been filed or
become effective, (iv) of any request by the Commission for any
amendment or supplement to the Registration Statement or the Prospectus
or for any additional information relating to the offering of the
Preferred Securities, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi)
of the receipt by the Offerors of any notification with respect to the
suspension of the qualification of the Preferred Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Offerors will use their efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Preferred Securities is required to be delivered under the Act, any
event occurs as a result of which the
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Prospectus would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary, in the opinion of counsel
for you or counsel for the Offerors, to amend or supplement the
Registration Statement or the Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Offerors promptly
will prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 4, an amendment or supplement
which will correct such statement or omission or effect such
compliance.
(c) As soon as practicable, the Trust will make generally
available to its security holders and to the Representative an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Offerors will use their best efforts to cause the
Preferred Securities to be duly authorized for listing on the New York
Stock Exchange and to be registered under the Exchange Act.
(e) For a period of three years after the Closing Date, the
Company will furnish to you and, upon request, to each Underwriter,
copies of all annual reports, quarterly reports and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company
to its stockholders generally.
(f) The proceeds of the offering of the Preferred Securities
will be applied as set forth in the Prospectus.
(g) The Offerors will furnish to the Representative and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of any preliminary prospectus and the
Prospectus as the Representative may reasonably request.
(h) The Company will pay and bear all costs and expenses
incident to the performance of each Offeror's obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits),
as originally filed and as amended, any preliminary prospectus and the
Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Underwriters, (ii) the preparation,
printing and distribution of this Agreement, the Declaration, the
Indenture, the Guarantee
13
Agreements, the Preferred Securities, the Blue Sky Survey and the Legal
Investment Survey, (iii) the delivery of the Preferred Securities to
the Underwriters, (iv) the fees and disbursements of the Trust's and
the Company's counsel and accountants, (v) the qualification of the
Preferred Securities and the Subordinated Notes under the applicable
securities laws in accordance with Section 4(i) and any filing for
review of the offering with the National Association of Securities
Dealers, Inc., including filing fees and fees and disbursements of
counsel for the Underwriters in connection therewith and in connection
with the Blue Sky Survey and the Legal Investment Survey, (vi) any fees
charged by rating agencies for rating the Preferred Securities and the
Subordinated Notes, (vii) the fees and expenses of the Indenture
Trustee, including the fees and disbursements of counsel for the
Indenture Trustee, in connection with the Indenture and the
Subordinated Notes, (viii) the fees and expenses of the Property
Trustee, including the fees and disbursements of counsel for the
Property Trustee and Delaware Trustee in connection with the
Declaration and the Certificate of Trust, (ix) any expenses and listing
fees in connection with the listing of the Preferred Securities and, if
applicable, the Subordinated Notes on the New York Stock Exchange, (x)
the cost and charges of any transfer agent or registrar and (xi) the
costs of qualifying the Preferred Securities with The Depository Trust
Company.
(i) The Offerors will arrange for the qualification of the
Preferred Securities and the Subordinated Notes for distribution,
offering and sale under the laws of such jurisdictions as the
Representative may designate, will maintain such qualifications in
effect so long as required for the distribution of the Preferred
Securities and the Subordinated Notes and will arrange for the
determination of the legality of the Preferred Securities and the
Subordinated Notes for purchase by institutional investors; provided,
however, that the Trust or the Company, as the case may be, shall not
be required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required
to qualify but for this Section 4(i), (ii) file any general consent to
service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not so subject.
(j) Until the business day following the Closing Date, neither
of the Offerors will, without the consent of Morgan Stanley & Co.
Incorporated, offer, sell or contract to sell, or announce the offering
of, any debt securities covered by any registration statement filed
under the Act.
(k) Each of the Offerors confirms as of the date hereof that
it is in compliance with all provisions of Section 1 of Laws of
Florida, Chapter 92-198, An Act Relating to Disclosure of Doing
Business with Cuba, and each of the Offerors further agrees that if the
information reported in the Prospectus concerning its business with
Cuba or with any person or affiliate located in Cuba changes in any
14
material way, such Offeror will provide the Florida Department of
Banking and Finance (the "Department") notice of such business or
change, as appropriate, in a form acceptable to the Department.
(l) During the period of 45 days after the date hereof, the
Trust and the Company will not make or contract to make any offering,
sale or other disposition of any shares of Hasbro Common Stock (except
(i) in connection with exchanges of the Preferred Securities for shares
of Hasbro Common Stock in accordance with the terms of the Declaration,
(ii) upon the exercise of exchange rights by holders of the Company's
Liquid Yield Option'tm' Notes due 2012 (the "LYON'tm's") in accordance
with the terms thereof, (iii) to an affiliate of the Trust or the
Company if such affiliate shall have executed an appropriate document
in form and substance satisfactory to the Underwriters to the effect
that such affiliate will be subject to the same restrictions as are
imposed upon the Trust and the Company pursuant to this subsection (l)
or (iv) in connection with a tender offer or exchange offer for Hasbro
Common Stock) or any securities convertible into or exchangeable for
shares of Hasbro Common Stock (except to the Underwriters pursuant to
this Agreement), without the prior written consent of Morgan Stanley &
Co. Incorporated.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy in all material respects of the representations and warranties on
the part of the Offerors contained herein as of the Execution Time and the
Closing Date, to the accuracy in all material respects of the statements of the
Trust and the Company made in any certificates pursuant to the provisions
hereof, to the performance by the Trust and the Company of their obligations
hereunder, to the due execution and delivery of the Declaration, the Indenture
and the Guarantee Agreements, to the absence of any event or condition which
would give you the right to terminate this Agreement and to the following
additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M. on the date hereof, or with your consent, at a
later time and date, not later, however, than 5:30 P.M. on the first
business day following the date hereof; and at the Closing Date no stop
order suspending the effectiveness of the Registration Statement shall
have been issued under the Act or proceedings therefor initiated or
threatened by the Commission. The Prospectus shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by Rule 424(b).
(b) At the Closing Date, the Offerors shall have furnished to
you the opinion of Peter R. Haje, General Counsel to the Offerors,
dated the Closing Date, substantially in the form of Exhibit A hereto.
15
(c) At the Closing Date, the Offerors shall have furnished to
you the opinion of Cravath, Swaine & Moore, counsel to the Offerors,
dated the Closing Date, substantially in the form of Exhibit B hereto.
(d) At the Closing Date, the Offerors shall have furnished to
you the opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to
the Offerors, dated the Closing Date, substantially in the form of
Exhibit C hereto.
(e) At the Closing Date, you shall have received from
___________, counsel of __________, as Property Trustee under the
Declaration and Guarantee Trustee under the Guarantee Agreements, dated
the Closing Date, substantially in the form of Exhibit D hereto.
(f) The Representative shall have received from Shearman &
Sterling, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the legal existence of the Trust, the
Preferred Securities, the Indenture, the Preferred Securities Guarantee
Agreement, this Agreement, the Registration Statement, the Prospectus
and other related matters as you may reasonably require, and the
Offerors shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(g) The Representative shall have received from Davis, Polk &
Wardwell, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to certain U.S. federal income tax
matters, the 1940 Act and other related matters as you may reasonably
require, and the Offerors shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(h) Each of the Trust and the Company shall have furnished to
you a certificate of the Trust and the Company, respectively, signed by
[the Time Warner Trustees] for the Trust and by any two officers who
are an Executive or Senior Vice President of the Company for the
Company, respectively, dated the Closing Date, to the effect that the
signers of such certificates have carefully examined the Registration
Statement, the Prospectus and this Agreement and that:
(i) the representations and warranties of the Trust
and the Company, as the case may be, in this Agreement are
true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing
Date and the Trust and the Company, as the case may be, has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
16
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Trust's or
the Company's, as the case may be, knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus, there has been no
material adverse change in the condition (financial or
otherwise), earnings, or business prospects of the Company and
its subsidiaries, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Prospectus.
(i) At the Closing Date and at the Execution Time, Ernst &
Young LLP shall have furnished to the Representative a letter or
letters, dated respectively as of the Closing Date and the Execution
Time, in form and substance satisfactory to you, confirming that they
are independent auditors within the meaning of the Act and the Exchange
Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated in
the Registration Statement and the Prospectus and reported on
by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and executive,
finance and audit committees of the Company and its
subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to the date of the most recent audited
financial statements in or incorporated in the Prospectus, and
such other inquiries and procedures as may be specified in
such letter, nothing came to their attention which caused them
to believe that:
(1) any unaudited financial statements
included or incorporated in the Registration
Statement and the Prospectus do not comply as to form
in all material respects with applicable accounting
requirements of the Act and the Exchange Act and with
the published
17
rules and regulations of the Commission with respect
to financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange
Act; or said unaudited financial statements are not
in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated in the
Registration Statement and the Prospectus; or
(2) with respect to the period subsequent to
the date of the most recent unaudited financial
statements in or incorporated in the Registration
Statement and the Prospectus, there were any
increases, at a specified date not more than five
business days prior to the date of the letter, in the
long-term debt of the Company and its consolidated
subsidiaries or any decreases in stockholders' equity
or the consolidated capital stock of the Company as
compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated
in the Registration Statement and the Prospectus, or
for the period from the date of the most recent
unaudited financial statements included or
incorporated in the Registration Statement and the
Prospectus to such specified date there were any
decreases, as compared with the corresponding period
in the preceding year, in revenues, income before
income taxes (or any increase in the loss before
income taxes) or net income (or any increase in net
loss), except in all instances for decreases or
increases disclosed in the Prospectus; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus and in Exhibit 12 to the
Registration Statement agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of
legal interpretation.
(j) At the Closing Date and at the Execution Time, each of
Deloitte & Touche LLP, Paul Scherer & Company LLP and Arthur Andersen
LLP shall have furnished to you a letter or letters, dated respectively
as of the Closing Date and the Execution Time, in form and substance
satisfactory to you, confirming that they are independent auditors with
respect to KBLCOM, Newhouse and VCD and CVI and CVI L.P., respectively,
within the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder and to the same
effect as the letter or letters of Ernst & Young LLP as described in
Section 5(i) hereto.
18
(k) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus, there shall
not have been (i) any decrease or increase specified in the letter or
letters referred to in paragraph (h) of this Section 5 or (ii) any
change, or any development involving a prospective change, in or
affecting the business (including the results of operations or
management) or properties of the Trust or the Company and its
subsidiaries or of Hasbro and its subsidiaries the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the reasonable
judgment of the Representative, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of
the Securities as contemplated by the Registration Statement (exclusive
of any amendment thereof) and the Prospectus.
(l) Subsequent to the Execution Time, there shall not have
been any downgrade in the credit ratings of the Company's debt
securities by Moody's Investor Services, Inc. or Standard & Poor's
Ratings Group, nor shall the Company have been placed under special
surveillance, with negative implications, by either such rating agency.
[(m) At the Closing Date, the Preferred Securities shall have
been approved for listing on the New York Stock Exchange upon notice of
issuance.]
(n) Prior to the Closing Date, the Offerors shall have
furnished to the Representative such further information, certificates
and documents as the Representative may reasonably request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representative and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by you and such
cancellation shall be without liability of any party to any other party, except
to the extent provided in Sections 4 and 6. Notice of such cancellation shall be
given to the Offerors in writing or by telephone or telegraph confirmed in
writing.
6. Reimbursement of Underwriter's Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Trust or the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Trust or the
Company will reimburse the Underwriters severally upon
19
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) The Offerors agree to
jointly and severally indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i)(x) any failure to
register the Hasbro Common Stock under the Act in connection with the initial
offering of the Preferred Securities or the exchange of Preferred Securities for
Hasbro Common Stock pursuant to the terms of the Preferred Securities, (y) any
untrue statement or alleged untrue statement of a material fact contained in the
reports and other documents filed by Hasbro under the Exchange Act or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or (z)
any untrue statement or omission or alleged untrue statement or alleged omission
made or alleged to have been made by or on behalf of Hasbro regarding Hasbro or
the market value of the Hasbro Common Stock and which statements or omissions,
in the case of the foregoing clauses (y) or (z), adversely affect or allegedly
adversely affect a holder of Securities, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the registration statement for
the registration of the Securities as originally filed or in any amendment
thereof, or in any preliminary prospectus or the Prospectus, or in any amendment
thereof or supplement thereto or (iii) the omission or alleged omission to state
in the documents referred to in clause (ii) above a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
in each case agrees to reimburse each such indemnified party, as incurred, for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Trust and the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon (i) any such untrue statement or alleged untrue statement or
omission or alleged omission made in the documents referred to in clause (ii)
above in reliance upon and in conformity with written information furnished to
the Trust and the Company by or on behalf of the Underwriter specifically for
inclusion therein or (ii) that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of the Trustee. This indemnity agreement will be in addition
to any liability which the Trust or the Company may otherwise have.
20
(b) The Company agrees to indemnify the Trust against all
loss, liability, claim, damage and expense whatsoever, as due from the Trust
under 7(a) hereunder.
(c) Each Underwriter agrees to indemnify and hold harmless the
Offerors, their directors, trustees, each of their officers who signs the
Registration Statement, and each person who controls the Offerors within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Offerors to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Offerors by or on behalf of such Underwriter specifically for inclusion in the
documents referred to in clause (ii) in 7(a). This indemnity agreement will be
in addition to any liability which any Underwriter may otherwise have. The
Offerors acknowledge that the statements set forth in the last paragraph of the
cover page and the [first, third and ninth] paragraphs under the heading
"Underwriting" constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in the documents referred to in
the foregoing indemnity, and you, as the Representative, confirm that such
statements are correct.
(d) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party (it being
understood, however, that in connection with such action, the indemnifying party
shall not be liable for the
21
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
representing the indemnified parties who are parties to such action or actions),
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 7 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Offerors and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Offerors and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Offerors and by the Underwriters from the
offering of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Offerors and
the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Offerors, on the one hand, and of the Underwriters, on the other hand, in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Offerors shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses), and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by or concerning the Trust, the Company or
Hasbro on the one hand or provided by the Underwriters on the other. The
Offerors and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (e), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to
22
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and each person who controls the
Trust or the Company within the meaning of either the Act or the Exchange Act,
each trustee of the Trust or officer of the Company who shall have signed the
Registration Statement and each trustee of the Trust or director of the Company
shall have the same rights to contribution as the Offerors, subject in each case
to the applicable terms and conditions of this paragraph (e).
8. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any one of the Securities agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Securities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate amount of
Securities set forth in Schedule I hereto, the remaining Underwriters shall have
the right to purchase all, but shall not be under any obligation to purchase
any, of the Securities, and if such nondefaulting Underwriters do not purchase
all the Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 8, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representative shall determine
in order that the required changes in the Registration Statement and the
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Trust and the Company and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representative, by notice given to the
Offerors prior to delivery of and payment for the Securities, if prior to such
time (i) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or the Pacific Stock Exchange or
trading in Hasbro Common Stock shall have been suspended by the Commission or
the American Stock Exchange or trading in securities generally on either of such
Exchanges shall have been suspended or limited or minimum or maximum prices
shall have been established on either of such Exchanges, or maximum ranges for
prices for securities have been required, by such Exchanges or by order of the
Commission or any other governmental authority, (ii) a banking moratorium shall
have been declared either by
23
Federal or New York State authorities or (iii) there shall have occurred any new
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets of the United States is such as to make it, in the judgment of
the Representative, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus. If this Agreement
is terminated pursuant to this Section, such termination shall be without
liability of any party to any other party, except to the extent provided in
Sections 4 and 6.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Trust or the Time Warner Trustees, the Company or its officers and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter, the Trust or the Time Warner Trustees or the Company or any of the
officers, directors, trustees or controlling persons referred to in Section 7
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 6 and 7 hereof shall survive the termination or
cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representative, will be
mailed, delivered or telegraphed and confirmed to it, at the address set forth
on page 1 hereof, or, if sent to the Offerors, will be mailed, delivered or
telegraphed and confirmed to it at 75 Rockefeller Plaza, New York, New York
10019, attention of General Counsel.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, trustees and controlling persons referred to in Section 7
hereof, and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. Business Day. For purposes of this Agreement, "business
day" means any day on which the New York Stock Exchange is open for trading.
15. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
24
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Trust, the Company and the several Underwriters.
Very truly yours,
TIME WARNER FINANCING TRUST
By: _________________________________
Name:
Title:
TIME WARNER INC.
By: _________________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted.
MORGAN STANLEY & CO. INCORPORATED
By: _________________________________
Name:
Title:
For themselves and the other several Underwriters, if any, named in Schedule I
to the foregoing Agreement.
SCHEDULE I
Number of Preferred
Securities to Be
Underwriter Purchased
SCHEDULE II
TIME WARNER FINANCING TRUST and TIME WARNER INC.
[12,000,000] [$____] Preferred
Exchangeable Redemption
Cumulative Securities
1. The initial public offering price per security for the
Preferred Securities shall be $25.00.
2. The purchase price per security for the Preferred
Securities to be paid by the several Underwriters shall be $25.00,
being an amount equal to the initial public offering price set forth
above.
3. The compensation per Preferred Security to be paid by the
Company to the several Underwriters in respect of their commitments
hereunder shall be $__________; provided, however, that the
compensation per Preferred Security for sales of 10,000 or more
Preferred Securities to a single purchaser shall be
$____________.
[4. The Preferred Securities shall be exchangeable for shares
of Hasbro Common Stock at an initial rate of _____ shares of Hasbro
Common Stock per Preferred Security].
EXHIBIT A
FORM OF OPINION OF PETER R. HAJE, ESQ.
(i) the Company is validly existing as a corporation in good
standing under the laws of the State of Delaware, with full corporate
power and authority under such laws to own its properties and conduct
its business as described in the Prospectus, to enter into and perform
its obligations under the Underwriting Agreement, the Declaration, the
Indenture and each of the Guarantee Agreements and to purchase, own and
hold the Common Securities issued by the Trust; and the Company is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property
of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, considered as one enterprise;
(ii) each of the Company's significant subsidiaries, as such
term is defined in Rule 1-02(v) of Regulation S-X under the Act, is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with full power and
authority under such laws to own its properties and conduct its
business as described in the Prospectus and is duly qualified to
transact business as a foreign corporation or partnership and is in
good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to
so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise;
(iii) the Company's authorized equity capitalization and pro
forma equity capitalization is as set forth in the Prospectus;
(iv) the Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act with the
power and authority to own property and to conduct its business as
described in the Registration Statement and Prospectus and to enter
into and perform its obligations under the Underwriting Agreement, the
Preferred Securities, the Common Securities and the Declaration and is
not required to be authorized to do business in any other jurisdiction;
the Trust is not a party to or otherwise bound by any agreement other
than those described in the Prospectus; the Trust is not and will not
be classified as an association taxable as a corporation for United
States federal income tax purposes; and the Trust is and will be
treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles;
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(v) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Trust, the Company or any of its subsidiaries of a character required
to be disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract or
other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit,
which is not described or filed as required;
(vi) no authorization, approval, consent or license of any
government, governmental instrumentality, agency or body or court
(other than under the Act and the securities or blue sky laws of
various jurisdictions) is required for the authorization, issuance,
sale and delivery of the Preferred Securities or the offering of the
Common Securities, the Subordinated Notes or the Guarantees, the
consummation by the Trust and the Company of the transactions
contemplated by the Underwriting Agreement or the delivery of shares of
Hasbro Common Stock upon the exchange of the Preferred Securities;
(vii) the Declaration, the Underwriting Agreement, the
Indenture and the Guarantee Agreements have been duly authorized,
executed and delivered by the Trust and the Company, as the case may
be;
(viii) neither the Company nor any of its subsidiaries is in
violation of its Restated Certificate of Incorporation, as amended, or
By-Laws, as amended; the Trust is not in violation of the Declaration
or its Certificate of Trust; and the execution, delivery and
performance of this Agreement, the Declaration, the Preferred
Securities, the Common Securities, the Indenture, the Subordinated
Notes, the Guarantee, the Guarantee Agreements and the Guarantees, the
delivery of shares of Hasbro Common Stock upon the exchange of the
Preferred Securities and the consummation of the transactions
contemplated herein and therein and compliance by the Offerors with
their respective obligations hereunder and thereunder have been duly
authorized by all necessary action (corporate or otherwise) on the part
of the Offerors and do not and will not result in any violation of the
Restated Certificate of Incorporation, as amended, or By-laws, as
amended, of the Company or the Declaration or Certificate of Trust of
the Trust and do not and will not conflict with, or result in a breach
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Trust or the Company under (i) the
TWE Credit Agreement, the New Credit Agreement or any indenture,
mortgage or loan agreement, or any other agreement or instrument known
to such counsel, to which the Trust or the Company is a party or by
which the Trust or the Company may be bound or to which any of the
Trust's or the Company's properties may be subject (except for
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such conflicts, breaches or defaults or liens, charges or encumbrances
that would not have a material adverse effect on the condition
(financial or otherwise), earnings or business prospects of the Trust
or the Company and its subsidiaries, considered as one enterprise),
(ii) any existing applicable law, rule or regulation (except for such
conflicts, breaches, liens, charges or encumbrances that would not have
a material adverse effect on the condition (financial or otherwise),
earnings or business prospects of the Trust or the Company and its
subsidiaries, considered as one enterprise, and other than the
securities or blue sky laws of various jurisdictions), or (iii) any
judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over the Trust, the
Company or any of their respective properties;
(ix) the documents incorporated by reference in the Prospectus
(except for the financial statements and other financial or statistical
data included therein or omitted therefrom, as to which such counsel
need express no opinion), as of the dates they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act;
(x) the Regular Trustees are employees of the Company and have
been duly authorized by the Company to execute and deliver the
Declaration; the Declaration has been duly executed and delivered by
the Regular Trustees and is a valid and binding obligation of each
Regular Trustee, enforceable against such Regular Trustee in accordance
with its terms;
(xi) the Trust is not an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the 1940
Act; and
(xii) to the best knowledge of such counsel, the shares of
Hasbro Common Stock owned by an indirect wholly owned subsidiary of the
Company as described in the Prospectus are owned by such subsidiary,
free and clear of any pledge, lien, security interest, encumbrance or
claim except for the rights of first refusal contained in Section 4(I)
of the Shareholders' Agreement, which have expired.
In addition, such counsel shall also state as follows: As
General Counsel, I have reviewed and participated in the preparation of the
Registration Statement and the Prospectus, including the documents incorporated
by reference therein. In examining the Registration Statement and Prospectus, I
have necessarily assumed the correctness and completeness of the statements made
or included therein by the Trust and the Company, as the case may be, and take
no responsibility therefor. However, in the course of the preparation by the
Trust and the Company of the Registration Statement and the Prospectus, I have
participated in conferences with the Time Warner Trustees of the Trust and
certain officers of, and accountants for, the Company with respect thereto, and
my examination of the Registration Statement and Prospectus and my discussions
in the above-mentioned
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conferences did not disclose any information which gave me reason to believe
that the Registration Statement (except for the financial statements and other
financial or statistical data included therein or omitted therefrom, as to which
I express no opinion) at the time it became effective included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading or that the Prospectus (except as aforesaid), at
its issue date or on the date of this opinion, included or includes any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Such counsel shall also state that he has reviewed the opinion
of Paul, Weiss, Rifkind, Wharton & Garrison delivered to you on the date hereof
and that he believes you are justified in relying thereon.
[Such counsel may also state that, for the purposes of such
opinion, the Prospectus and the Registration Statement do not include any
documents or other information concerning Hasbro that may have been provided to
investors separately from the Trust's and the Company's prospectus dated June
__, 1995 or their preliminary prospectus dated June __, 1995.]
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
United States, the State of New York, the Delaware Act and the General
Corporation Law of the State of Delaware, to the extent such counsel deems
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom such counsel believes to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the extent such
counsel deems proper, on certificates of the Trustees and responsible officers
of the Company and public officials.
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & MOORE
(i) the Company is validly existing as a corporation in good
standing under the laws of the State of Delaware, with full corporate
power and authority under such laws to own its properties and conduct
its business as described in the Prospectus;
(ii) the Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration Statement and
Prospectus, will be validly issued and (subject to the terms of the
Declaration) fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will conform to all statements
relating thereto contained in the Prospectus; the issuance of the
Common Securities is not subject to any preemptive or other similar
rights; and all of the issued and outstanding Common Securities of the
Trust will be directly owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity;
(iii) the Preferred Securities have been duly authorized by
the Declaration and are validly issued and (subject to the terms of the
Declaration) when delivered to and paid for by the Underwriter pursuant
to the Underwriting Agreement will be fully paid and non-assessable
preferred undivided beneficial interests in the assets of the Trust and
will be entitled to the benefits of the Declaration; the issuance of
the Preferred Securities is not subject to preemptive or other similar
rights; the holders of Preferred Securities will be entitled to the
same limitation of personal liability extended to stockholders of
private corporations for profit; and the Preferred Securities have been
approved for listing on the New York Stock Exchange upon notice of
issuance;
(iv) the Declaration has been duly authorized, executed and
delivered by the Company and each of the Time Warner Trustees, has been
duly qualified under the Trust Indenture Act, and constitutes a legal,
valid and binding instrument enforceable against the Company and each
of the Time Warner Trustees in accordance with its terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and subject as to enforceability to general
principles of equity, regardless of whether considered in a proceeding
in equity or at law);
(v) each of the (i) Common Securities Guarantee Agreement and
(ii) Preferred Securities Guarantee Agreement has been duly authorized,
executed and
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delivered by the Company and (in the case of the Preferred Security
Guarantee Agreement only), assuming it is duly authorized, executed and
delivered by the Guarantee Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms; and the Preferred Securities Guarantee
Agreement has been duly qualified under the Trust Indenture Act;
(vi) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act and constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other laws affecting creditors'
rights generally from time to time in effect and subject as to
enforceability to general principles of equity, regardless of whether
considered in a proceeding in equity or at law);
(vii) the Subordinated Notes have been duly authorized,
executed and delivered by the Company and, when authenticated in the
manner provided for in the Indenture and delivered against payment
therefor as described in the Prospectus, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms;
(viii) the Subordinated Notes are subordinated and junior in
right of payment to all present and future senior indebtedness (as
defined in the Indenture) of the Company and rank pari passu with the
Company's [other general unsecured creditors];
(ix) the Company's obligations under the Preferred Securities
Guarantee and Common Securities Guarantee are subordinate and junior in
right of payment to all other liabilities of the Company and pari passu
with the most senior preferred stock issued from time to time, if any,
by the Company;
(x) the Common Securities, the Preferred Securities, the
Subordinated Notes, each of the Guarantees, the Declaration, the
Indenture and the Guarantee Agreements conform to all statements
relating thereto contained in the Prospectus;
(xi) the Registration Statement has become effective under the
Act; any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule
424(b); to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened; the
Registration Statement and the Prospectus (other than the financial
statements and other financial and statistical information contained
therein as to which such counsel
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need express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the Exchange Act and
the respective rules thereunder; and, assuming that the shares of
Hasbro Common Stock currently owned by an indirect wholly owned
subsidiary of the Company may be resold pursuant to Rule 144(k),
registration of such Hasbro Common Stock is not required under the Act
in connection with the offering and sale of the Securities or the
exchange of Securities as described in the Prospectus;
(xii) the Underwriting Agreement has been duly authorized,
executed and delivered by the Trust and the Company; and
(xiii) the statements made in the Prospectus under
"Description of the PERCS", "Description of the Guarantee",
"Description of the Subordinated Notes", "Effect of Obligations Under
the Subordinated Notes and the Guarantee", "Holding Company Structure"
and "Federal Income Tax Consequences", to the extent that they
constitute matters of law or legal conclusions, have been reviewed by
us and fairly present the information discussed therein in all material
respects.
In addition, such counsel shall also state as follows: We have
necessarily assumed the correctness and completeness of the statements made or
included in the Registration Statement and the Prospectus by the Trust and the
Company, as the case may be, and take no responsibility therefor, except insofar
as such statements relate to the description of the Securities or relate to us.
However, in the course of the preparation by the Trust and the Company of the
Registration Statement and the Prospectus (the documents incorporated by
reference in the Prospectus having been prepared and filed by the Trust and the
Company, as the case may be, without our participation), we participated in
conferences with the Trustees of the Trust and certain officers of, and
accountants for, the Company with respect thereto, and our examination of the
Registration Statement and the Prospectus and our discussions in the
above-mentioned conferences did not disclose any information which gave us
reason to believe that (i) the Registration Statement (except for the financial
statements and other financial or statistical data included therein or omitted
therefrom, as to which we express no opinion), at the time the Registration
Statement became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) the Prospectus (except as
aforesaid), at its issue date or on the date of this opinion, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
[Such counsel may also state that for the purposes of such
opinion, the Prospectus and the Registration Statement do not include any
documents or other information concerning Hasbro that may have been provided to
investors separately from the Trust's and
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the Company's prospectus dated June __, 1995 or their preliminary prospectus
supplement dated June __, 1995.]
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
United States, the State of New York, the Delaware Act and the General
Corporation Law of the State of Delaware, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriter and (B) as to matters of fact, to the extent they deem proper, on
certificates of the Trustees and responsible officers of the Company and public
officials.
EXHIBIT C
FORM OF OPINION OF
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
You have requested our opinion set forth below in connection
with the ownership by Warner Communications Inc., a Delaware corporation
("WCI"), which is a direct or indirect wholly owned subsidiary of Time Warner
Inc., a Delaware corporation ("TWI"), of 12,057,561 shares (the "Hasbro Shares")
of common stock, par value $.50 per share ("Hasbro Common Stock"), of Hasbro,
Inc. ("Hasbro").
In this connection, we have been advised by TWI and WCI that
the facts below in this paragraph are true and correct.
1. WCI purchased 7,838,811 of the Hasbro Shares on May
17, 1983. Such Hasbro Shares were purchased either
from Hasbro pursuant to a Purchase Agreement dated
March 8, 1983 among Hasbro, WCI and Knickerbocker Toy
Co., Inc. or from certain shareholders of Hasbro
pursuant to a Stock Purchase Agreement dated March 8,
1983 among WCI and such shareholders.
2. The 7,838,811 Hasbro Shares purchased by WCI on May
17, 1983 were transferred (i) by WCI to its direct or
indirect wholly owned subsidiary, Warner
Communications Investors, Inc. (whose name was
changed to Time Warner Investors Inc.) ("Investors")
on May 5, 1986, (ii) by Investors to WCI's direct or
indirect wholly owned subsidiary, TW Investment Corp.
("Investment") on February 28, 1992 and (iii) by
Investment to WCI on June 22, 1992.
3. WCI purchased 4,218,750 of the Hasbro Shares on July
11, 1989 upon the exercise of warrants by WCI. WCI
acquired such warrants on May 17, 1983.
4. On the date hereof, WCI is not the beneficial owner
of any shares of Hasbro Common Stock other than the
Hasbro Shares. The Hasbro Shares represent
approximately 13.86% of the outstanding Hasbro Common
Stock (based upon the most recent report by Hasbro of
the outstanding Hasbro Common Stock as of , 199
November 2, 1992 in Hasbro's Quarterly Report on Form
10-Q for the period ended , 199 ).
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5. On the date hereof, TWI is not the beneficial owner
of any shares of Hasbro Common Stock except to the
extent it may be deemed to be the beneficial owner of
the Hasbro Shares.
6. Hasbro had, pursuant to a Shareholder Rights
Agreement dated May 17, 1983 between WCI and Hasbro
(the "Shareholder Rights Agreement"), rights of first
refusal to purchase the Hasbro Shares under certain
circumstances. The Shareholder Rights Agreement
expired on May 17, 1993.
7. WCI is not a party to any agreements, written or
oral, with any party (other than the Shareholder
Rights Agreement) relating to its ownership of Hasbro
Common Stock or providing it any rights with respect
to the management or operations of Hasbro.
8. Neither TWI nor WCI has, at any time, directly or
indirectly, taken an active role in the management or
the day-to-day operations of Hasbro, and no designee
of TWI or WCI has ever served as a director of
Hasbro. Neither TWI nor WCI has any rights to
purchase any additional shares of Hasbro Common Stock
or to name a representative to the board of directors
of Hasbro.
9. All of the facts set forth above in this paragraph
were true and correct on, and have remained unchanged
since, [September 3, 1992].
We have also made such other investigations of fact and law as
we have deemed appropriate to form the basis for this opinion.
Based upon the foregoing and assuming the accuracy of all
facts set forth in the second paragraph of this letter, we are of the opinion
that:
1. Neither TWI nor WCI is an "affiliate" of Hasbro, as such
term is defined in Section(a)(1) of Rule 144 of the Rules and
Regulations under the Securities Act of 1933, as amended ("Rule 144"),
and neither TWI nor WCI has been an affiliate of Hasbro during the
three months preceding the Closing Date (as defined in the Underwriting
Agreement).
2. WCI has beneficially owned all of the Hasbro Shares for a
period of at least three years prior to the Closing Date (as defined in
the Underwriting Agreement).
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3. The Hasbro Shares are eligible for sale for the account of
WCI pursuant to Rule 144, and the provisions of paragraph (k) of Rule
144 will apply to such sale.
EXHIBIT D
FORM OF OPINION OF
[TRUSTEE'S COUNSEL]
(i) ___________ is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of Delaware with all necessary power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of the
Declaration and the Guarantee Agreements.
(ii) The execution, delivery and performance by the Property
Trustee of the Declaration and the Guarantee Agreements have been duly
authorized by all necessary corporate action on the part of the Property
Trustee. The Declaration and the Guarantee Agreements have been duly executed
and delivered by the Property Trustee, and constitute the legal, valid and
binding obligation of the Property Trustee, enforceable against the Property
Trustee in accordance with their terms, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights generally
from time to time in effect and subject as to enforceability to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
(iii) The execution, delivery and performance of the
Declaration and the Guarantee Agreements by the Property Trustee do not conflict
with or constitute a breach of the Articles of Organization or Bylaws of the
Property Trustee.
(iv) No consent, approval or authorization of, or registration
with or notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of the Declaration
and the Guarantee Agreements.
(v) The Property Trustee is the record holder of the
Subordinated Notes and the Guarantees and no security interest, mortgage,
pledge, lien, encumbrance, claim or equity is noted thereon or on the register.