Document:

exv4w1

Exhibit 4.1

 

HASBRO, INC.

$500,000,000 6.35% Notes due 2040

THIRD SUPPLEMENTAL INDENTURE

Dated as of March 11, 2010

to

Indenture Dated as of March 15, 2000

THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK

Trustee

 

 

 

     This THIRD SUPPLEMENTAL INDENTURE (the “Third Supplemental Indenture”) dated as of
March 11, 2010 between HASBRO, INC., a Rhode Island corporation (the “Company”), and THE
BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, as trustee (the “Trustee”).

RECITALS

     WHEREAS, the Company and the Trustee have heretofore executed and delivered to the Trustee an
Indenture dated March 15, 2000 (the “Original Indenture”, and together with this Third
Supplemental Indenture, the “Indenture”) to provide for the issuance of the Company’s debt
securities in one or more series;

     WHEREAS, Sections 2.01, 3.01 and 9.01 of the Original Indenture provide, among other things,
that the Company and the Trustee may, without the consent of Holders, enter into indentures
supplemental to the Original Indenture to provide for specific terms applicable to any series of
notes and to add to the covenants of the Company for the benefit of the Holders of each series of
notes (and if such covenants are to be for the benefit of less than all series of notes, stating
that such covenants are expressly being included solely for the benefit of such series);

     WHEREAS, the Company desires to provide for the issuance of a new series of debt securities to
be designated as the “6.35% Notes due 2040” (the “Notes”), and to set forth the terms that
will be applicable thereto and the forms thereof; and

     WHEREAS, all action on the part of the Company necessary to make this Third Supplemental
Indenture a valid agreement of the Company and to authorize the issuance of the Notes under the
Original Indenture (as supplemented hereby) has been duly taken;

     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the sufficiency and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:

ARTICLE I

APPLICATION OF THIRD SUPPLEMENTAL INDENTURE

AND CREATION OF NOTES

Section 1.01 Application of this Third Supplemental Indenture.

     Notwithstanding any other provision of this Third Supplemental Indenture, the provisions of
this Third Supplemental Indenture, including the covenants set forth herein, are expressly and
solely for the benefit of the Notes.

Section 1.02 Effect of Third Supplemental Indenture.

 

 

     With respect to the Notes only, the Original Indenture shall be supplemented pursuant to
Sections 2.01, 3.01 and 9.01 thereof to establish the terms of the Notes as set forth in this Third
Supplemental Indenture, including as follows:

	 	(a)	 	the definitions set forth in Article One of the Original Indenture shall be
modified to the extent provided in Article II of this Third Supplemental Indenture;
	 
	 	(b)	 	the forms and terms of the securities representing the Notes required to be
established pursuant to Sections 2.01 and 3.01 of the Original Indenture shall be
established in accordance with Sections 1.03, 1.04, 1.05, 1.06, 1.07 and 1.08 of this
Third Supplemental Indenture; and
	 
	 	(c)	 	the provisions of Article Ten of the Original Indenture regarding certain covenants of
the Company shall be supplemented and amended by the provisions of Article IV of this Third
Supplemental Indenture.

Section 1.03 Designation and Amount of Notes.

     The Notes shall be known and designated as the “6.35% Notes due 2040.” The initial maximum
aggregate principal amount of the Notes that may be authenticated and delivered under this Third
Supplemental Indenture shall not exceed $500,000,000 except for Notes authenticated and delivered
upon registration or transfer of, or in exchange for, or in lieu of, Notes pursuant to Sections
2.02, 3.04, 3.05, 3.06 or 9.05 of the Original Indenture (unless the issue of this series of Notes
is “reopened” by issuing additional Notes of such series (the “Additional Notes”)), in an
amount or amounts and registered in the names of such Persons as shall be set forth in any written
order of the Company for the authentication and delivery of the Notes pursuant to Section 3.03 of
the Original Indenture.

Section 1.04 Terms; Form of Security.

     The Notes shall constitute one series for purposes of the Original Indenture and this Third
Supplemental Indenture, including, without limitation, waivers, amendments, redemptions and offers
to purchase. The Company shall issue any Additional Notes by adopting a Board Resolution in the
manner set forth in Section 3.01 of the Original Indenture providing for the terms of such
issuance. Notwithstanding the foregoing, the Notes are issuable in fully registered form as a
global Security (unless otherwise permitted by Section 2.03 of the Original Indenture) without
coupons and shall be in substantially the form of Exhibit A hereto. Upon request by the Depository,
within 14 days after the occurrence of any Event of Default specified in Section 6.01 of the
Original Indenture, the Company shall execute, and the Trustee upon receipt of a Company Order
shall authenticate and deliver, in exchange for the Notes in global form, the Notes in certificated
form in authorized denominations for an aggregate principal amount requested by the Depository up
to the principal amount of the Notes in global form. The Notes are not issuable in bearer form.
The terms and provisions contained in the form of Note shall constitute, and are hereby expressly
made, a part of this Third Supplemental Indenture and the Company, by its execution and delivery of
this Third Supplemental Indenture, expressly agrees to such terms and provisions and to be bound
thereto. Any of the Notes may have such letters, numbers or other marks of identification and such
notations, legends and endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such

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approval) and are not inconsistent with the provisions of the Indenture (and which do not affect
the rights, duties or immunities of the Trustee), or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation of any securities
exchange or automated quotation system on which the Notes may be listed.

Section 1.05 Payment of Principal and Interest.

     (a) The Notes shall mature, and the principal of the Notes shall be due and payable in Dollars
to the Holders thereof, together with all accrued and unpaid interest thereon, on March 15, 2040.

     (b) The Notes shall bear interest at 6.35% per annum from and including March 11, 2010 or from
the most recent Interest Payment Date on which interest has been paid or provided for until the
principal thereof becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum. Interest shall be calculated on the basis of a 360-day year
comprised of twelve 30-day months. Interest on the Notes shall be payable semi-annually in arrears
in Dollars on March 15 and September 15 of each year, commencing on September 15, 2010 (each such
date, an “Interest Payment Date” for the purposes of the Notes under this Third
Supplemental Indenture). Payments of interest shall be made to the Person in whose name a Note (or
predecessor Note) is registered (which shall initially be the Depositary) at the close of business
on March 1 or September 1, as the case may be, next preceding such Interest Payment Date (each such
date, a “Regular Record Date” for the purposes of the Notes under this Third Supplemental
Indenture).

     (c) For so long as the Notes are represented in global form by one or more global Securities,
all payments of principal and interest shall be made by the Company by wire transfer of immediately
available funds in Dollars to the Depositary or its nominee, as the case may be, as the registered
owner of the global Security representing such Notes. In the event that definitive Notes shall
have been issued, all payments of principal and interest shall be made by the Company by wire
transfer of immediately available funds in Dollars to the accounts of the registered Holders
thereof; provided, that the Company may elect to make such payments at the office of the Paying
Agent in The City of New York; and provided further, that the Company may at its option pay
interest by check to the registered address of each Holder of a definitive Note.

     (d) The Notes shall trade in the Depositary’s Same-Day Funds Settlement System until Stated
Maturity (or until they are subject to acceleration pursuant to Article VI of the Original
Indenture) and secondary market trading activity in the Notes may be required by the Depositary to
settle in immediately available funds.

     (e) The Notes are subject to redemption by the Company in whole or in part in the manner
described herein.

Section 1.06 Ranking.

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     The Notes shall be general unsecured obligations of the Company. The Notes shall rank pari
passu in right of payment with all unsecured and unsubordinated indebtedness of the Company and
senior in right of payment to all subordinated indebtedness of the Company.

Section 1.07 Security Registrar and Paying Agent.

     The Company hereby initially appoints the Trustee as Paying Agent and Security Registrar for
the Notes. The Company may change the Paying Agent and Security Registrar without prior notice to
the Holders of the Notes, and the Company or any of its Subsidiaries may act as Paying Agent or
Security Registrar.

Section 1.08 Sinking Fund

     The Notes are not subject to any sinking fund.

ARTICLE II

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 2.01 Definitions.

     (a) All capitalized terms used herein and not otherwise defined below shall have the meanings
ascribed thereto in the Original Indenture.

     (b) The following are definitions used in this Third Supplemental Indenture and to the extent
that a term is defined both herein and in the Original Indenture, the definition in this Third
Supplemental Indenture shall govern with respect to the Notes.

     “Below Investment Grade Rating Event” means the Notes are rated below Investment Grade
by all the Rating Agencies on any date from the date of the public notice of an arrangement that
could result in a Change of Control until the end of the 60-day period following public notice of
the occurrence of a Change of Control (which period shall be extended so long as the rating of the
Notes is under publicly announced consideration for possible downgrade by any of the Rating
Agencies); provided that a Below Investment Grade Rating Event otherwise arising by virtue of a
particular reduction in rating shall not be deemed to have occurred in respect of a particular
Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes
of the definition of Change of Control Repurchase Event hereunder) if any of the Rating Agencies
making the reduction in rating to which this definition would otherwise apply does not announce or
publicly confirm or inform the Trustee in writing at its request that the reduction was the result,
in whole or in part, of any event or circumstance comprised of or arising as a result of, or in
respect of, the applicable Change of Control (whether or not the applicable Change of Control shall
have occurred at the time of the Below Investment Grade Rating Event).

     “Change of Control” means the occurrence of any of the following:

     (1) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions, of all

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or substantially all of the Company’s properties or assets and those of the Company’s
Subsidiaries taken as a whole to any “person” or “group” (as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended), other than the Company or one
of its Subsidiaries;

     (2) the adoption of a plan relating to the Company’s liquidation or dissolution;

     (3) the first day on which a majority of the members of the Company’s Board of
Directors are not Continuing Directors; or

     (4) the consummation of any transaction or series of related transactions (including,
without limitation, any merger or consolidation) the result of which is that any “person” or
“group” (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended), other than the Company or one of its wholly-owned Subsidiaries, becomes the
beneficial owner, directly or indirectly, of more than 50% of the
then outstanding number of shares of the Company’s Voting Stock, measured by voting power rather than number of shares;
provided that a merger shall not constitute a “change of control” under this definition if
(i) the sole purpose of the merger is the Company’s reincorporation in another state and
(ii) the Company’s shareholders and the number of shares of the Company’s Voting Stock,
measured by voting power and number of shares, owned by each of them immediately before and
immediately following such merger are identical.

     “Change of Control Repurchase Event” means the occurrence of both a Change of Control
and a Below Investment Grade Rating Event.

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term (as measured from the date of
redemption) of the Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such Notes.

     “Comparable Treasury Price” means, with respect to any redemption date, (i) the
average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains
fewer than four of such Reference Treasury Dealer Quotations, the average of all such quotations,
or (iii) if only one Reference Treasury Dealer Quotation is received, such quotation.

     “Continuing Directors” means, as of any date of determination, any member of the
Company’s Board of Directors who (1) was a member of such Board of Directors on the date of the
issuance of the Notes; or (2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of such Board of Directors
at the time of such nomination or election (either by a specific vote or by approval of
the Company’s proxy statement in which such member was named as a nominee for election as a
director).

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     “Fitch” means Fitch Ratings.

     “Investment Grade” means a rating of BBB- or better by Fitch (or its equivalent under
any successor rating categories of Fitch), Baa3 or better by Moody’s (or its equivalent under any
successor rating categories of Moody’s) and a rating of BBB- or better by S&P (or its equivalent
under any successor rating categories of S&P) or the equivalent investment grade credit rating from
any additional Rating Agency or Rating Agencies selected by the Company.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Rating Agency” means (1) any Fitch, Moody’s and S&P; and (2) if any of Fitch, Moody’s
or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for
reasons outside of the Company’s control, a “nationally recognized statistical rating organization”
within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange Act of 1934, as
amended, selected by the Company as a replacement agency for Fitch, Moody’s or S&P, as the case may
be.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

     “Quotation Agent” means any Reference Treasury Dealer appointed by the Company.

     “Reference Treasury Dealer” means (i) each of Banc of America Securities LLC and
Citigroup Global Markets Inc. (or their respective affiliates that are Primary Treasury Dealers)
and their respective successors; provided, however, that if any of the foregoing shall cease to be
a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”),
the Company will substitute therefor another Primary Treasury Dealer, and (ii) any other Primary
Treasury Dealer selected by the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.

     “Voting Stock” means, with respect to any person, capital stock of any class or kind
the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such person, even if the right so to
vote has been suspended by the happening of such a contingency.

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     Section 2.02 Other Definitions.

	 	 	 	 	 
	 	 	Term	 	Defined in Section
	 
	 	“Additional Notes”	 	1.03
	 
	 	“Company”	 	Introduction
	 
	 	“Original Indenture”	 	Recitals
	 
	 	“Indenture”	 	Recitals
	 
	 	“Interest Payment Date”	 	1.05(b)
	 
	 	“Notes”	 	Recitals
	 
	 	“Regular Record Date”	 	1.05(b)
	 
	 	“Third Supplemental Indenture”	 	Introduction
	 
	 	“Trustee”	 	Introduction

ARTICLE III

REDEMPTION

     Section 3.01 Optional Redemption.

          (a) The Notes will be redeemable, in whole at any time or in part from time to time, at the
Company’s option at a redemption price equal to the greater of:

	 	(i)	 	100% of the principal amount of the Notes to be redeemed; and
	 
	 	(ii)	 	the sum of the present values of the remaining scheduled payments of principal
and interest thereon (not including any portion of such payments of interest accrued as
of the date of redemption), discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus
25 basis points,

plus, in each case, accrued and unpaid interest thereon to the date of redemption. Notwithstanding
the foregoing, installments of interest on Notes that are due and payable on Interest Payment Dates
falling on or prior to a redemption date will be payable on the Interest Payment Date to the
registered Holders as of the close of business on the Regular Record Date according to the Notes
and the Indenture.

          (b) Notice of any redemption will be mailed at least 30 days but not more than 60 days before
the redemption date to each Holder of the Notes to be redeemed by the Company or by the Trustee on
the Company’s behalf; provided that notice of redemption may be mailed more

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than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction and discharge of the Notes. Unless the Company defaults in payment of
the redemption price, on and after the redemption date, interest will cease to accrue on the Notes
or portions thereof called for redemption. If less than all of the Notes are to be redeemed, the
Notes to be redeemed shall be selected by lot by The Depository Trust Company, in the case of Notes
represented by a global Security, or by the Trustee by a method the Trustee deems to be fair and
appropriate, in the case of Notes that are not represented by a global Security.

ARTICLE IV

CHANGE OF CONTROL

     Section 4.01 Change of Control.

          (a) If a Change of Control Repurchase Event occurs, unless the Company has exercised its right
to redeem the Notes, the Company will make an offer to each Holder of Notes to repurchase all or
any part (in integral multiples of $1,000) of that Holder’s Notes at a repurchase price in cash
equal to 101% of the aggregate principal amount of Notes repurchased plus any accrued and unpaid
interest on the Notes repurchased to the date of purchase. Within 30 days following any Change of
Control Repurchase Event or, at the Company’s option, prior to any Change of Control, but after the
public announcement of an impending Change of Control, the Company will mail a notice to each
Holder, with a copy to the Trustee, describing the transaction or transactions that constitute or
may constitute the Change of Control Repurchase Event and offering to repurchase Notes on the
payment date specified in the notice, which date will be no earlier than 30 days and no later than
60 days from the date such notice is mailed. The notice shall, if mailed prior to the date of
consummation of the Change of Control, state that the offer to purchase is conditioned on the
Change of Control Repurchase Event occurring on or prior to the payment date specified in the
notice.

          (b) The Company will comply with the requirements of Rule 14e-1 under the Securities Exchange
Act of 1934, as amended, and any other securities laws and regulations thereunder, to the extent
those laws and regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control Repurchase Event. To the extent that the provisions of any securities
laws or regulations conflict with the Change of Control Repurchase Event provisions of the Notes,
the Company will comply with the applicable securities laws and regulations and will not be deemed
to have breached its obligations under the Change of Control Repurchase Event provisions of the
Notes by virtue of such conflict.

          (c) On the Change of Control Repurchase Event payment date, the Company will, to the extent
lawful:

	 	(i)	 	accept for payment all Notes or portions of Notes (in integral multiples of $1,000) properly
tendered pursuant to the Company’s offer;
	 
	 	(ii)	 	deposit with the Paying Agent an amount equal to the aggregate purchase price in respect of
all Notes or portions of Notes properly tendered; and

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	 	(iii)	 	deliver or cause to be delivered to the Trustee the Notes properly accepted, together with
an Officers’ Certificate stating the aggregate principal amount of Notes being purchased by the
Company.

          (d) The Paying Agent will promptly mail to each Holder of Notes properly tendered the purchase
price for the Notes, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book-entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of any Notes surrendered; provided, that each new Note will be in a principal amount of
$2,000 or an integral multiple of $1,000 above that amount.

          (e) The Company will not be required to make an offer to repurchase the Notes upon a Change of
Control Repurchase Event if a third party makes such an offer in the manner, at the times and
otherwise in compliance with the requirements for an offer made by the Company and such third party
purchases all Notes properly tendered and not withdrawn under its offer.

ARTICLE V

MISCELLANEOUS

     Section 5.01 Trust Indenture Act Controls.

          If any provision of this Third Supplemental Indenture limits, qualifies or conflicts with
another provision that is required or deemed to be included in this Third Supplemental Indenture by
the Trust Indenture Act, the required or deemed provision shall control.

     Section 5.02 Notices.

          Any notice or communication shall be in writing and delivered in person or mailed by
first-class mail or sent by facsimile (with a hard copy delivered in person or by mail promptly
thereafter) and addressed as follows:

if to the Company:

Hasbro, Inc.

1011 Newport Avenue

Pawtucket, Rhode Island 02862

Attention: Chief Legal Officer and Corporate Secretary

Facsimile: (401) 709-6459

with a copy to:

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

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Attention: Julie Jones

Facsimile: (617) 951-7050

if to the Trustee:

The Bank of Nova Scotia Trust Company of New York

One Liberty Plaza

New York, New York 10006

Attention: Corporate Trust Administration

Facsimile: (212) 225-5436

The Company or the Trustee by notice to the other may designate additional or different addresses
for subsequent notices or communications.

     Section 5.03 Governing Law.

          THIS THIRD SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     Section 5.04 No Personal Liability of Directors, etc.

          None of the Company’s directors, officers, employees, incorporators or stockholders, as such,
shall have any liability for any of the Company’s obligations under the Notes, the Indenture, or
for any claim based on, in respect of, or by reason of, such obligations or their creation. Each
Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.

     Section 5.05 Successors.

          All agreements of the Company in the Indenture and the Notes shall bind its successors. All
agreements of the Trustee in the Indenture shall bind its successors.

     Section 5.06 Multiple Originals.

          The parties may sign any number of copies of this Third Supplemental Indenture. Each signed
copy shall be an original, but all of them together represent the same agreement. One signed copy
is enough to prove this Third Supplemental Indenture.

     Section 5.07 Table of Contents; Headings.

          The table of contents and headings of the Articles and Sections of this Third Supplemental
Indenture have been inserted for convenience of reference only, are not intended to be considered a
part hereof and shall not modify or restrict any of the terms or provisions hereof.

     Section 5.08 Not Responsible for Recitals or Issuance of Notes.

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          The recitals contained herein and in the Notes, except the Trustee’s certificates of
authentication, shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to the validity or
sufficiency of this Third Supplemental Indenture or of the Notes. The Trustee shall not be
accountable for the Company’s use of the proceeds from the Notes or for monies paid over to the
Company pursuant to this Third Supplemental Indenture.

     Section 5.09 Adoption, Ratification and Confirmation.

          The Original Indenture, as supplemented and amended by this Third Supplemental Indenture is in
all respects hereby adopted, ratified and confirmed.

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     IN WITNESS WHEREOF, the parties have caused this Third Supplemental Indenture to be duly
executed as of the date first written above.

	 	 	 	 	 
	 	HASBRO, INC.

 	 
	 	By:  	/s/ Deborah Thomas
 	 
	 	 	Name:  	Deborah Thomas 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 
	 	THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, as Trustee

 	 
	 	By:  	/s/ Warren A. Goshine
 	 
	 	 	Name:  	Warren A. Goshine 	 
	 	 	Title:  	Vice President 	 
	 

Signature page to Third Supplemental Indenture

 

 

EXHIBIT A

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

CUSIP: 418056 AS 6/US418056AS62

ISSUE DATE: March 11, 2010

HASBRO, INC.

6.35% NOTES DUE 2040

			
	$500,000,000
	 	No.: R-1

          Hasbro Inc., a Rhode Island corporation (herein called the “Company”), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of FIVE
HUNDRED MILLION DOLLARS ($500,000,000) or such other principal amount as shall be set forth on
Schedule I hereto on March 15, 2040 and to pay interest thereon at the rate of 6.35%, or as may be
adjusted pursuant to the terms hereof, per annum from March 11, 2010 or from the most recent
interest payment date to which interest has been paid or duly provided for, on March 15 and
September 15 of each year, commencing September 15, 2010 (each an “Interest Payment Date”),
until the principal hereof is paid or made available for payment.

          The interest so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, except as provided in the Indenture hereinafter referred to, be paid to the Person in
whose name this Note (or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which will be the March 1 and September 1, as the
case may be, immediately preceding each Interest Payment Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record
Date and either may be paid to the Person in whose name this

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Note (or one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to the Holders not less than ten days prior to such Special Record Date, or
may be paid at any time in any other lawful manner, all as more fully provided in the Indenture.
Payment of the principal of and interest on this Note will be made in such coin or currency of the
United States of America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal and interest at maturity will be made against presentation of
this Note at the principal corporate trust office of the Trustee in New York, New York (the
“Corporate Trust Office”) (or such other office as may be established pursuant to the
Indenture), by check or wire transfer.

          All capitalized terms used herein and not otherwise defined shall have the meanings ascribed
to them in the Indenture dated as of March 15, 2000 (the “Original Indenture”), as
supplemented by the Third Supplemental Indenture dated as of March 11, 2010 (together with the
Original Indenture, the “Indenture”), between the Company and The Bank of Nova Scotia Trust
Company of New York as trustee (herein called the “Trustee,” which term includes any
successor Trustee under the Indenture).

          Reference is hereby made to the further provisions of this Note set forth on the reverse side
hereof, which further provisions shall for all purposes have the same effect as though fully set
forth at this place.

          Unless the certificate of authentication hereon has been executed by the Trustee under the
Indenture referred to on the reverse hereof by the manual signature of one of its authorized
officers, this Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

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     IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by the manual or
facsimile signature of its Senior Vice President and Chief Financial Officer, under its corporate
seal reproduced hereon and attested by the manual or facsimile signature of its Assistant
Secretary.

Date: March ___, 2010

	 	 	 	 	 
	 	HASBRO, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Deborah Thomas 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer 	 
	 

	 	 	 
	ATTEST:
	 	 
	 
	 	 
	 

Name: Tarrant L. Sibley

	 	 
	Title: Assistant Secretary
	 	 

Trustee’s Certificate of Authentication

          This is one of the Notes described in the Indenture.

Dated: March ___, 2010

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory: 	 
	 	 	 	 

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(Reverse of Note)

HASBRO, INC.

6.35% NOTES DUE 2040

          1. Interest. The Company promises to pay interest on the principal amount of this Note at the
rate per annum shown above, as may be adjusted as set forth below. The Company will pay interest
semiannually on March 15 and September 15 of each year, beginning September 15, 2010. Interest on
the Notes will accrue from the most recent date to which interest has been paid or, if no interest
has been paid from March 11, 2010; provided, that, if there is no existing Event of Default in the
payment of interest, and if this Note is authenticated between a record date referred to on the
face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest
Payment Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

          2. Method of Payment. The Company will pay interest on the Notes (except defaulted interest)
to the Persons who are the registered Holders of the Notes at the close of business on the March 1
or September 1 next preceding the Interest Payment Date. The Company will pay principal and
interest in money of the United States that at the time of payment is legal tender for payment of
public and private debts.

          3. Registrar and Agents. Initially, The Bank of Nova Scotia Trust Company of New York will act
as Registrar, Paying Agent and agent for service of notices and demands. The Company or any of its
Subsidiaries may act as Paying Agent. The address of The Bank of Nova Scotia Trust Company of New
York is One Liberty Plaza, 23rd Floor, New York, New York 10006.

          4. Indenture; Limitations. The Company issued the Notes under the Indenture dated as of March
15, 2000 (the “Original Indenture”, and as supplemented by the Third Supplemental Indenture
dated as of March 11, 2010, the “Indenture”), between the Company and The Bank of Nova
Scotia Trust Company of New York, as trustee (in such capacity, the “Trustee”). Capitalized
terms herein are used as defined in the Indenture unless otherwise defined herein. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended, 15 U.S.C. ss.ss. 77aaa-77bbbb (the “TIA”), as
in effect on the date of the Indenture. The Notes are subject to all such terms, and the Holders of
the Notes are referred to the Indenture and the TIA for a statement of them.

          The Notes are senior unsecured obligations of the Company ranking pari passu with all other
unsecured and unsubordinated indebtedness of the Company from time to time outstanding. The
Indenture imposes certain limitations on the ability of the Company to, among other things, merge
or consolidate with any other Person and sell, lease, transfer or otherwise dispose of all or
substantially all of its properties or assets or to engage in Sale and Leaseback Transactions.

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          5. Optional Redemption by the Company. The Notes will be redeemable, in whole at any time or
in part from time to time, at the Company’s option at a redemption price equal to the greater of:

	 	(i)	 	100% of the principal amount of the Notes to be redeemed; and
	 
	 	(ii)	 	the sum of the present values of the remaining scheduled payments of principal
and interest thereon (not including any portion of such payments of interest accrued as
of the date of redemption), discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus
25 basis points,

plus, in each case, accrued and unpaid interest thereon to the date of redemption. Notwithstanding
the foregoing, installments of interest on Notes that are due and payable on Interest Payment Dates
falling on or prior to a redemption date will be payable on the Interest Payment Date to the
registered Holders as of the close of business on the Regular Record Date according to the Notes
and the Indenture.

          Notice of any redemption will be mailed at least 30 days but not more than 60 days before the
redemption date to each Holder of the Notes to be redeemed by the Company or by the Trustee on the
Company’s behalf; provided that notice of redemption may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of the Notes or a
satisfaction and discharge of the Notes. Unless the Company defaults in payment of the redemption
price, on and after the redemption date, interest will cease to accrue on the Notes or portions
thereof called for redemption. If less than all of the Notes are to be redeemed, the Notes to be
redeemed shall be selected by lot by The Depository Trust Company, in the case of Notes represented
by a global Security, or by the Trustee by a method the Trustee deems to be fair and appropriate,
in the case of Notes that are not represented by a global Security.

          “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term (as measured from the date of
redemption) of the Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such Notes.

          “Comparable Treasury Price” means, with respect to any redemption date, (i) the
average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains
fewer than four of such Reference Treasury Dealer Quotations, the average of all such quotations,
or (iii) if only one Reference Treasury Dealer Quotation is received, such quotation.

          “Quotation Agent” means any Reference Treasury Dealer appointed by the Company.

          “Reference Treasury Dealer” means (i) each of Banc of America Securities LLC and

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Citigroup Global Markets Inc. (or their respective affiliates that are Primary Treasury
Dealers) and their respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury
Dealer”), the Company will substitute therefor another Primary Treasury Dealer, and (ii) any
other Primary Treasury Dealer selected by the Company.

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.

          “Treasury Rate” means, with respect to any redemption date, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.

          6. Change of Control Repurchase Event. If a Change of Control Repurchase Event occurs, unless
the Company has exercised its right to redeem the Notes, the Company will make an offer to each
holder of Notes to repurchase all or any part (in integral multiples of $1,000) of that Holder’s
Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus any accrued and unpaid interest on the Notes repurchased to the date of purchase.
Within 30 days following any Change of Control Repurchase Event or, at the Company’s option, prior
to any Change of Control, but after the public announcement of an impending Change of Control, the
Company will mail a notice to each holder, with a copy to the Trustee, describing the transaction
or transactions that constitute or may constitute the Change of Control Repurchase Event and
offering to repurchase Notes on the payment date specified in the notice, which date will be no
earlier than 30 days and no later than 60 days from the date such notice is mailed. The notice
shall, if mailed prior to the date of consummation of the Change of Control, state that the offer
to purchase is conditioned on the Change of Control Repurchase Event occurring on or prior to the
payment date specified in the notice.

          The Company will comply with the requirements of Rule 14e-1 under the Securities Exchange Act
of 1934, as amended, and any other securities laws and regulations thereunder, to the extent those
laws and regulations are applicable in connection with the repurchase of the Notes as a result of a
Change of Control Repurchase Event. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control Repurchase Event provisions of the Notes, the
Company will comply with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under the Change of Control Repurchase Event provisions of the Notes
by virtue of such conflict.

          On the Change of Control Repurchase Event payment date, the Company will, to the extent
lawful:

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	 	(i)	 	accept for payment all Notes or portions of Notes (in integral multiples of $1,000) properly
tendered pursuant to the Company’s offer;
	 
	 	(ii)	 	deposit with the Paying Agent an amount equal to the aggregate purchase price in respect of
all Notes or portions of Notes properly tendered; and
	 
	 	(iii)	 	deliver or cause to be delivered to the Trustee the Notes properly accepted, together with
an Officers’ Certificate stating the aggregate principal amount of Notes being purchased by the
Company.

          The Paying Agent will promptly mail to each Holder of Notes properly tendered the purchase
price for the Notes, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book-entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of any Notes surrendered; provided, that each new Note will be in a principal amount of
$2,000 or an integral multiple of $1,000 above that amount.

          The Company will not be required to make an offer to repurchase the Notes upon a Change of
Control Repurchase Event if a third party makes such an offer in the manner, at the times and
otherwise in compliance with the requirements for an offer made by the Company and such third party
purchases all Notes properly tendered and not withdrawn under its offer.

          “Below Investment Grade Rating Event” means the Notes are rated below Investment Grade
by all the Rating Agencies on any date from the date of the public notice of an arrangement that
could result in a Change of Control until the end of the 60-day period following public notice of
the occurrence of a Change of Control (which period shall be extended so long as the rating of the
Notes is under publicly announced consideration for possible downgrade by any of the Rating
Agencies); provided that a Below Investment Grade Rating Event otherwise arising by virtue of a
particular reduction in rating shall not be deemed to have occurred in respect of a particular
Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes
of the definition of Change of Control Repurchase Event hereunder) if any of the Rating Agencies
making the reduction in rating to which this definition would otherwise apply does not announce or
publicly confirm or inform the Trustee in writing at its request that the reduction was the result,
in whole or in part, of any event or circumstance comprised of or arising as a result of, or in
respect of, the applicable Change of Control (whether or not the applicable Change of Control shall
have occurred at the time of the Below Investment Grade Rating Event).

          “Change of Control” means the occurrence of any of the following:

          (1) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the Company’s properties or assets and those of the Company’s
Subsidiaries taken as a whole to any “person” or “group” (as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended), other than the Company or one
of its Subsidiaries;

A-7

 

          (2) the adoption of a plan relating to the Company’s liquidation or dissolution;

          (3) the first day on which a majority of the members of the Company’s Board of
Directors are not Continuing Directors; or

          (4) the consummation of any transaction or series of related transactions (including,
without limitation, any merger or consolidation) the result of which is that any “person” or
“group” (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended), other than the Company or one of its wholly-owned Subsidiaries, becomes the
beneficial owner, directly or indirectly, of more than 50% of the
then outstanding number of shares of the Company’s Voting Stock, measured by voting power rather than number of shares;
provided that a merger shall not constitute a “change of control” under this definition if
(i) the sole purpose of the merger is the Company’s reincorporation in another state and
(ii) the Company’s shareholders and the number of shares of the Company’s Voting Stock,
measured by voting power and number of shares, owned by each of them immediately before and
immediately following such merger are identical.

          “Change of Control Repurchase Event” means the occurrence of both a Change of Control
and a Below Investment Grade Rating Event.

          “Continuing Directors” means, as of any date of determination, any member of the
Company’s Board of Directors who (1) was a member of such Board of Directors on the date of the
issuance of the Notes; or (2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of such Board of Directors
at the time of such nomination or election (either by a specific vote or by approval of the
Company’s proxy statement in which such member was named as a nominee for election as a director).

          “Fitch” means Fitch Ratings.

          “Investment Grade” means a rating of BBB- or better by Fitch (or its equivalent under
any successor rating categories of Fitch), Baa3 or better by Moody’s (or its equivalent under any
successor rating categories of Moody’s) and a rating of BBB- or better by S&P (or its equivalent
under any successor rating categories of S&P) or the equivalent investment grade credit rating from
any additional Rating Agency or Rating Agencies selected by the Company.

          “Moody’s” means Moody’s Investors Service, Inc.

          “Rating Agency” means (1) any Fitch, Moody’s and S&P; and (2) if any of Fitch, Moody’s
or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for
reasons outside of the Company’s control, a “nationally recognized statistical rating organization”
within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange Act

A-8

 

of 1934, as amended, selected by the Company as a replacement agency for Fitch, Moody’s or
S&P, as the case may be.

          “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

          “Voting Stock” means, with respect to any person, capital stock of any class or kind
the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such person, even if the right
so to vote has been suspended by the happening of such a contingency.

          7. Convertibilty. The Notes are not Convertible Debt Securities.

          8. Sinking Fund. The Notes are not subject to any sinking fund.

          9. Governing Law. The Notes and the Indenture shall be deemed to be contracts made under the
laws of the State of New York, and for all purposes shall be construed in accordance with the laws
of said state.

          10. Discharge Prior to Maturity. The Company may elect under certain conditions either (A) to
defease and be discharged from any and all obligations with respect to the Notes (except as
otherwise provided in the Indenture) (“defeasance”) or (B) with respect to such Notes, to
be released from its obligations with respect to such Notes relating to restrictions on secured
debt and restrictions on Sale and Leaseback Transactions, pursuant to Sections 10.09 and 10.10 of
the Original Indenture, respectively, (“covenant defeasance”), upon the irrevocable deposit
with the Trustee, in trust for such purpose, of money, and/or U.S. Government Obligations which
through the payment of principal and interest in accordance with their terms will provide money in
an amount sufficient to pay the principal of and interest, if any, on such Notes on the scheduled
due dates therefor. Such a trust may only be established if, among other things, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that (i) the Holders of such Notes
will not recognize income, gain or loss, for federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such defeasance or covenant
defeasance had not occurred (such opinion, in the case of defeasance under clause (A) above, must
refer to and be based upon a ruling of the Internal Revenue Service) and (ii) if the deposit
referred to above shall include U.S. Government Obligations, such deposit shall not result in the
Company, the Trustee or such trust being regulated as an “investment company,” under the Investment
Company Act of 1940, as amended.

          11. Denominations, Transfer, Exchange. The Notes shall be known and designated as the “6.35%
Notes due 2040.” The initial maximum aggregate principal amount of the Notes that may be
authenticated and delivered under the Third Supplemental Indenture shall not exceed $500,000,000
except for Notes authenticated and delivered upon registration or transfer of, or in exchange for,
or in lieu of, Notes pursuant to Sections 2.02, 3.04, 3.05, 3.06 or 9.05 of the

A-9

 

Original Indenture (unless the issue of this series of Notes is “reopened” by issuing additional
Notes of such series (the “Additional Notes”)), in an amount or amounts and registered in
the names of such Persons as shall be set forth in any written order of the Company for the
authentication and delivery of the Notes pursuant to Section 3.03 of the Original Indenture. The
Notes are issuable in registered form without coupons in denominations of $2,000 principal amount
and integral multiples of $1,000 thereof. The Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required
by law or permitted by the Indenture.

          12. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all
purposes.

          13. Amendment and Waiver. Subject to certain exceptions, without notice to the Holders of the
Notes, the Indenture or the Notes may be amended with the consent of (i) the Holders of not less
than a majority in principal amount of the Outstanding Securities, or (ii)

          in case less than all of the several series of Outstanding Securities are affected by such
amendment, the Holders of not less than a majority in principal amount of each series so affected
voting as a single class; and any existing default or compliance with any provision may be waived
with the consent of the Holders of a majority in principal amount of the Notes then outstanding.
Without the consent of or notice to any Holder of Notes, the Company may amend the Indenture or the
Notes to, among other things, cure any ambiguity, to correct or supplement any provision of the
Indenture which may be defective or inconsistent with any other provision of the Indenture, or make
any other provisions with respect to matters or questions arising under the Indenture, provided
that such other provision does not adversely affect the interests of the Holders in any material
respect.

          14. Defaults and Remedies. If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of Notes may declare all
the Notes to be due and payable immediately in the manner and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it, subject to the provisions of the
TIA, before it enforces the Indenture or the Notes. Subject to certain limitations, Holders of a
majority in principal amount of the Notes then outstanding may direct the Trustee in writing in its
exercise of any trust or power with respect to the Notes.

          15. Trustee Dealings with the Company. The Bank of Nova Scotia Trust Company of New York, the
Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.

          16. No Recourse Against Others. No stockholder, director, officer or incorporator, as such,
past, present or future, of the Company or any successor corporation or trust shall have any
liability for any obligation of the Company under the Notes or the Indenture or for any claim based
on, in respect of or by reason of, such obligations or their creation. Each Holder of a Note by
accepting a Note waives and releases all such liability. This waiver and release are part of the

A-10

 

consideration for the issuance of the Notes.

          17. Authentication. This Note shall not be valid until the Trustee signs the certificate of
authentication on the other side of this Note.

          18. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with rights of survivorship and not as tenants in common), CUST (= Custodian), AND U/G/M/A
(= Uniform Gifts to Minors Act).

          The Company will furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to: Hasbro, Inc. 1027 Newport Avenue, Pawtucket, Rhode Island
02862, Attention: General Counsel.

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ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

 

 

 

the within Note and all rights thereunder, hereby irrevocably constituting and appointing                                                            attorney to transfer said Note on the books of the Company, with full
power of substitution in the premises.

Dated:                                        

Signature:                                                            

	NOTICE:	 	THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF
THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.

Signature Guarantee:

SIGNATURE GUARANTEE

          Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

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Schedule I

SCHEDULE OF TRANSFERS AND EXCHANGES

          The following increases or decreases in Principal Amount of this Global Security have been
made:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Principal Amount of	 	Signature of
	 	 	 	 	Amount of Decrease	 	Amount of Increase	 	this Global	 	Authorized
	 	 	 	 	in Principal Amount	 	in Principal Amount	 	Security following	 	Signatory of
	 	 	 	 	of this Global	 	of this Global	 	such Decrease or	 	trustee or
	Date of Exchange	 	Security	 	Security	 	Increase	 	Custodianexv10w1

Exhibit 10.1

			
	 	 	 
	NORTH CAROLINA	 	 
	 	 	 
	COUNTY OF NEW HANOVER
	 	LEASE AGREEMENT

     THIS AGREEMENT OF LEASE (this “Lease”) is made this 30th day of July, 2009, by and between
MARKET PLACE GROUP, LLC, a North Carolina limited liability company (“Landlord”), and TRANS1, INC.,
a North Carolina corporation (“Tenant”).

WITNESSETH:

1. PREMISES. Pursuant to the terms of this Lease, Landlord hereby demises and leases to Tenant,
and Tenant hereby takes and leases from Landlord, that certain building, parking lot, and monument
sign (the “Leased Premises”) located at 301 Government Center Drive (the “Property”), in the City
of Wilmington, North Carolina, having approximately 31,352 square feet of space plus additional
parking lot, all as depicted on Exhibit A attached hereto, the real property of which is legally
described on Exhibit B attached hereto.

2. LENGTH AND COMMENCEMENT OF TERM. The term (the “Term”) of this Lease shall commence upon the
later to occur of the following (“the “Rent Commencement Date”): (i) the date that Landlord
delivers vacant and exclusive possession of the Leased Premises to Tenant with Landlord’s Work, as
specified in Exhibit C, substantially complete to the point that only “punchlist items” remain such
that Tenant’s contractor may perform “Tenant’s Work,” as specified in Exhibit C, without material
interference resulting from any unperformed elements of Landlord’s Work, provided that Landlord
gives Tenant at least ten (10) days’ prior written notice of the actual completion of Landlord’s
Work, (ii) the date that Landlord delivers to Tenant a certificate of completion of Landlord’s Work
to be executed by the General Contractor and Architect, and continue for a period of SIXTY months.
The Tenant will not be responsible for any payments prior to the Rent Commencement Date.

A Certificate of Completion of Landlord Work shall be defined as written certification by the
Architect and General Contractor that all of the Landlord Work as specified in Exhibit C has been
completed, paid for and all liens have been released.

3. OPTION TO EXTEND TERM OF LEASE. Tenant will have an option to extend the Term of this Lease for
an additional FIVE year term. In order for Tenant to exercise its options, Landlord must be
notified, in writing, thereof at least twelve (12) months in advance of the expiration date of the
initial Term, with time being of the essence in regard to said deadline.

4. RENT. (a) Landlord reserves, and Tenant covenants to pay to Landlord without prior demand being
made therefor and without offset of any kind, as rent for the Leased Premises, the sum of
$329,196.00 per annum (“Minimum Rent”), for the first year of this Lease, payable in monthly
installments of $27,433.00 each month, in advance, based upon a rate of $10.50 per square foot for
the 31,352 rentable square feet leased by Tenant. The first month’s rent shall be prepaid by

1

 

Tenant upon execution of this Lease Agreement. At the end of the first year, the rent for the
second year and each succeeding year of the initial Term will be as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Year	 	Rate Per SF	 	Per Annum Rent	 	Per Month Rent
	1
	 	$	10.50	 	 	$	329,196.00	 	 	$	27,433.00	 
	2
	 	$	10.50	 	 	$	329,196.00	 	 	$	27,433.00	 
	3
	 	$	11.57	 	 	$	362,742.64	 	 	$	30,228.55	 
	4
	 	$	11.57	 	 	$	362,742.64	 	 	$	30,228.55	 
	5
	 	$	11.57	 	 	$	362,742.64	 	 	$	30,228.55	 

     (b) The FIVE year option period shall have an annual rental as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Year	 	Rate Per SF	 	Per Annum Rent	 	Per Month Rent
	6
	 	$	15.08	 	 	$	472,706.69	 	 	$	39,392.22	 
	7
	 	$	15.08	 	 	$	472,706.69	 	 	$	39,392.22	 
	8
	 	$	15.08	 	 	$	472,706.69	 	 	$	39,392.22	 
	9
	 	$	15.08	 	 	$	472,706.69	 	 	$	39,392.22	 
	10
	 	$	15.08	 	 	$	472,706.69	 	 	$	39,392.22	 

     (c) All rental payments shall be made to MARKET PLACE GROUP, LLC C/O FJM PROPERTIES, 1908
EASTWOOD ROAD, SUITE 222, WILMINGTON, NC 28403, or at such other address as Landlord may designate
in writing. All rent payments are due on the first day of the month. If payment is not received by
the tenth day of the month, Tenant will pay a late fee equal to four percent (4%) of the rent due.

     (d) Landlord expressly reserves all other rights and remedies provided herein and by law with
respect to nonpayment of the rents provided for herein.

     (e) Rent payable by Tenant under this Lease shall be paid when due without prior demand
therefor (unless such prior demand is expressly provided for in this Lease), shall be payable
without any deductions or setoffs or counterclaims whatsoever (except for credits expressly
permitted by this Lease), and shall be paid by Tenant to Landlord at the address of Landlord set
forth above, or to such payee and/or at such other place as may be designated from time to time by
written notice from Landlord to Tenant.

5. CONSTRUCTION OF THE LEASED PREMISES. Landlord warrants that the Leased Premises are zoned for
the type of use set forth in Section 10 below. Landlord and Tenant agree that:

     (a) Landlord will construct and erect the Leased Premises in compliance with all applicable
federal, state and municipal laws and the rules and regulations of the departments and bureaus
having jurisdiction over the leased property and with such other evidence as shall be reasonably
requested by Tenant.

2

 

     (b) Tenant will construct its complete upfit. Tenant, its employees and agents may enter
upon the Premises at all reasonable times, for the purpose of installing improvements, fixtures and
other equipment. Tenant’s telecommunications agents and employees may enter the facility for the
purpose of installing wiring prior to substantial completion. Landlord, and Tenant, and their
respective contractors shall reasonably cooperate with each other to allow Tenant to install its
improvements, fixtures and other equipment, as well as its telephone and communications wiring,
prior to the Rent Commencement Date.

     (c) Tenant’s contractor will obtain at its expense a builder’s risk and liability insurance
policy acceptable to Tenant and Landlord, naming Tenant and Landlord as additional insureds, as to
both form and insurance company providing coverage of not less than $1,000,000 for damages against
all claims to persons and property prior to delivery of the premises to Tenant as hereinafter set
forth.

     (d) Landlord shall remove or cause its building contractor to remove all tools, scaffolding,
unused and discarded building materials, waste, debris and rubbish of any sort, in, on or about the
Leased Premises prior to the Rent Commencement Date of this Lease. Landlord shall deliver the
Leased Premises to Tenant in a broom clean, presentable condition, complete with parking and
landscaping, with all first floor common areas and Landlord’s Work complete and other such items as
required for receipt of a certificate of completion of Landlord Work to be executed by the General
Contractor and Architect.

     (e) Vacant and exclusive possession of the Premises shall be delivered to Tenant, and such
possession shall be deemed to occur upon receipt of a Certificate of Completion of Landlord Work to
be executed by the General Contractor and Architect unless written objection thereto is delivered
by Tenant to Landlord within ten (10) business days after Tenant’s receipt of the Certificate of
Completion of Landlord Work. Substantial and reasonable completion is defined to mean when
construction is sufficiently complete, in accordance with contract documents, such that only
“punchlist items” remain so that Tenant may occupy the Leased Premises for the Tenant’s upfit.
Landlord shall deliver a Certificate of Completion of Landlord Work to be executed by the General
Contractor and Architect prior to possession being delivered as set forth herein. If Landlord does
not deliver to Tenant vacant and exclusive possession of the Leased Premises and a Certificate of
Completion of Landlord Work by November 30, 2009, then Tenant at Tenant’s sole option, may
terminate its proposed tenancy of the Leased Premises by written notice to Landlord, and neither
party shall have any further obligation to the other. If permitted plans are not delivered by
August 1, 2009 then the above referenced November 30, 2009 date will be extended one day for each
day the permit plans are delayed. Prior to the receipt of the Certificate of Completion of Landlord
Work to be executed by the General Contractor and Architect, in the event of a fire, hurricane or
some other catastrophic condition, causing the building to be damaged to the point that renders
tenancy of 50% or more of the premises illegal or unsafe, then tenant at Tenant’s sole option, may
terminate its proposed tenancy of the Leased Premises by written notice to Landlord, and neither
party shall have any further obligation to the other.

     (f) Landlord warrants to Tenant that all materials and equipment furnished under this contract
will be new unless otherwise specified, and that all work will be of good quality, free

3

 

from faults and defects and in conformity with the contract documents and with this Lease
Tenant shall be responsible for the post Rent Commencement Date maintenance of the infrastructure
of the building on the Leased Premises including all mechanical systems for the entire Term and any
applicable extensions. Tenant is responsible for preventive maintenance care, such as filters,
bulbs and minor repairs. If any of Landlord’s Work is found to be defective or not in accordance
with the contract documents or this Lease, Landlord will correct it promptly after receipt of a
written notice from Tenant to do so. Tenant shall have the obligation to give such notice promptly
upon discovery of any Landlord’s Work found by Tenant to be defective or not in accordance with the
contract documents or this Lease. Except as stated in this subparagraph, Landlord makes no
warranties, expressed or implied, including without limitation as to the condition and fitness for
the purpose intended. Tenant shall have the benefit of all warranties by manufacturers and vendors
of the roof and equipment installed in the Leased Premises and shall have the right (but not the
obligation), at Tenant’s own cost and expense, in Tenant’s name or in Landlord’s name, to assert
all rights and claims which Landlord may have against the manufacturers, any contractors or
subcontractors of the manufacturers or any vendors of the roof and equipment installed or any part
thereof. All proceeds of any recovery shall first be used to restore the affected equipment.

6. PURPOSELY OMMITTED

7. USE OF LEASED PREMISES. The Leased Premises shall be used solely for the conduct of an
OFFICE/RESEARCH AND DEVELOPMENT AND/OR TRAINING FACILITY and for no other purpose. Landlord
represents that the Leased Premises may be used for such purposes.

8. LEASE YEAR. “Lease Year” as used in this Lease means the period from the Rent Commencement Date
to the end of the twelfth full calendar month thereafter and each and every twelve-month period
thereafter during the Term.

9. HOLDING OVER. It is understood and agreed that should the Tenant hold over and stay in
possession of the Leased Premises at the expiration of this Lease, that the same shall not
constitute a renewal of this Lease but shall be on the basis of a month to month tenancy, and that
the said Landlord shall have the right to cause the Tenant to vacate the Leased Premises upon
thirty days written notice to do so.

10. TRADE FIXTURES. All trade fixtures installed in the Leased Premises by Tenant shall remain the
property of, and shall be removable by, Tenant at the expiration of this Lease, if Tenant is not in
default hereunder, and Tenant agrees promptly to repair or reimburse Landlord for the cost of
repairing all damages to the Leased Premises occasioned by the removal of said fixtures.

11. INSURANCE. Prior to the Rent Commencement Date, Landlord covenants that it will keep the
Leased Premises insured against damage by fire, extended coverage and other perils, in an amount
not less than 80% of the replacement cost of said Leased Premises. Landlord will be responsible
for payment of any deductible in the event of fire or casualty. From the time of the Rent
Commencement Date and thereafter for the initial Term of this Lease and any extensions thereof,
Tenant covenants that it will keep the Leased Premises, including Tenant’s upfitted space, insured
against damage by fire, extended coverage and other perils, in an amount not less than 80% of the

4

 

replacement cost of said Leased Premises, and in addition will carry such general liability
coverage for any public areas as it shall deem appropriate. Tenant shall obtain insurance from an
Insurance Company with at least a B+ rating by A.M. Best. Landlord and Mortgage Lender must be
named as primary insured and Tenant shall be named as co-insured, with copies of policies and
declarations provided to both within 60 days of delivery. Additionally, insurance binders shall be
provided to Landlord immediately upon the completion of Landlord Work and prior to Tenant
possession. Landlord and Mortgagee shall be notified by Insurance Company immediately upon any
lapse in coverage. The cost of all insurance so written for such period after the Rent
Commencement Date until the expiration of the Term and any extensions thereof shall be borne by
Tenant. The Insurance Company shall review the amount of coverage annually and shall verify in a
letter to the Landlord that the coverage meets the minimum 80% of the replacement cost requirement.
Tenant will be responsible for payment of any deductible in the event of fire or casualty during
such period. Evidence of said insurance shall be provided to Landlord within 5 business days prior
to the anticipated Rent Commencement Date.

12. MAINTENANCE BY LANDLORD. N/A

13. MAINTENANCE BY TENANT. (a) Tenant agrees that it will, at all times during the Term of this
Lease and at its own cost and expense, keep (i) the interior of the Leased Premises and the
appurtenances thereto, including but not limited to the heating system, air conditioning system,
toilets, plumbing lines, windows, glass, electric lines, fixtures, store front and equipment, in
good condition of repair, making such replacements as may be necessary from time to time, it being
expressly understood that Tenant will be obligated to make all repairs and replacements necessary
to keep the Leased Premises and the appurtenances thereto in good order and condition; and (ii) the
Leased Premises and entryways, sidewalks, driveways and delivery areas adjacent to said Leased
Premises clean and free from obstruction, rubbish, dirt, snow and ice.

     (b) Tenant covenants that it will, at its own cost and expense, within a reasonable time after
being notified in writing by Landlord of the need therefor, make such repairs to roof, outside
walls, windows, store front, doors, gutters and downspouts of the Leased Premises as may be
necessary in order to keep such building in good condition of repair, unless said repairs are
occasioned by the negligence or willful act of Landlord or any of its agents, customers, employees
or contractors, including, but not limited to, defects in, or the failure of Landlord to fully
complete, Landlord’s Work as required pursuant to Paragraph 5 above, in which event such repairs
shall be made by and at the expense of Landlord.

     (c) Tenant shall store all trash, rubbish and garbage in an appropriate manner as reasonably
required by the Landlord and Tenant shall place said trash in the outside receptacles provided by
Tenant. Tenant shall not burn or otherwise dispose of any trash, waste, rubbish or garbage in or
about the Leased Premises.

     (d) Tenant shall pay for all charges during the Term, as may be extended, for landscape
maintenance, pond maintenance, gas, electricity, water and sewer, telephone or other communication
or utility used not including those in paragraph 4(c) above, rendered or supplied upon or in
connection with the Leased Premises and shall indemnify Owner against any liability or damages on
such account. Tenant will provide proof of payment upon Owner’s request.

5

 

14. SUNDRY COVENANTS OF TENANT. (a) Tenant will not assign this Lease nor sublet the Leased
Premises, in whole or in part, without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed, and that if such consent is granted by Landlord, Tenant
will remain primarily liable for the performance of the covenants herein contained binding upon
Tenant. Tenant will comply with all federal, state and municipal laws, ordinances and regulations
relating to the Leased Premises and the business conducted therein; Tenant will pay promptly,
before delinquency, for all electricity, water and other utilities consumed therein, all sewage
disposal charges assessed against the Leased Premises, and all charges attributable the Leased
Premises; Tenant will not use, or permit to be used, the Leased Premises for any illegal or immoral
purpose; Tenant will not make any alterations in or to the building of the Leased Premises without
the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed,
provided that such alterations do not affect the structural or mechanical systems in the Leased
Premises; Tenant will not hold any fire, bankruptcy, going-out-of-business or auction sales.
Notwithstanding anything to the contrary, in the event that Tenant (Trans1, Inc.) is acquired,
Tenant (Trans1, Inc) may transfer this Lease to the acquiring entity by simply serving written
notice to the Landlord. Tenant may also transfer this Lease, upon written notice to Landlord, (i)
to any parent, subsidiary or affiliated company of Tenant, or (ii) in conjunction with any merger,
consolidation or public offering involving Tenant, its parent company or an affiliated company.

     (b) Tenant shall keep the Leased Premises free from insects, pests and vermin of all kinds.

15. EMINENT DOMAIN. If any part of the Leased Premises shall be taken by governmental authority
pursuant to its power of eminent domain, (or Landlord conveys any part of the Leased Premises
following a threat thereof), the Leased Premises shall be reduced in proportion to the amount so
taken or conveyed, unless the amount taken shall be so great that it would be impractical or would
not reasonably serve Tenant’s purposes, in Tenant’s sole judgment) for Tenant to continue operation
in which event this Lease shall be canceled and terminated as of the date of such taking. Tenant
hereby waives any right it may have in and to any condemnation award or sum paid under threat of
condemnation as result of a complete or partial taking of the Leased Premises or any other portion
of the Property, provided, however, that Tenant may recover from the condemning authority for the
taking of Tenant’s trade fixtures and equipment and for the expense of relocating its trade
fixtures, equipment and business. Unless this Lease is canceled and terminated as aforesaid, any
such taking (or any conveyance pursuant to the threat thereof) shall have no effect whatsoever on
any rent payable in accordance with the provisions of this Lease (i.e. Minimum Rent) or other
charges payable as rent, such as taxes, nor shall any rent or related charges be reduced thereby
unless a portion of the Leased Premises is so taken or conveyed pursuant to the threat of such
taking, in which event Minimum Rent and all other charges payable as rent, shall be reduced
proportionately.

16. DAMAGE BY FIRE. If the Leased Premises shall be damaged by fire or other casualty prior to the
Rent Commencement Date, Landlord agrees that it will restore said building with reasonable
dispatch, at Landlord’s sole cost, to substantially the same condition they were in prior to such
damage. From the time of the Rent Commencement Date and thereafter for the initial Term of

6

 

this Lease and any extensions thereof, Tenant will restore said building and the Tenant’s upfit with
said upfit to be performed by Tenant’s contractor under Tenant’s supervision to substantially the
same condition as existed immediately prior to the casualty (subject to modifications required by
applicable law or governmental authorities). If the Leased Premises are rendered untenantable in
whole or in part as a result of such damage, the rent payable hereunder shall be equitably and
proportionately abated (according to loss of use) during the period intervening between the date of
such damage and the date the Leased Premises are restored; provided, however, that if such damage
exceeds fifty percent (50%) of the insurable value of said premises at the time such damage occurs,
either Landlord or Tenant may terminate this Lease as of the date of such damage by giving the
other written notice of its intention to do so, within thirty (30) days after such damage occurs.
If this Lease is so terminated, then rent payable hereunder shall be abated as of the date of such
damage, and Tenant shall remove all of its property from the Leased Premises within thirty (30)
days after the notice of termination was given.

17. TENANT’S INDEMNIFICATION AND LIABILITY INSURANCE. (a) Tenant agrees that it will hold
Landlord and Landlord’s officers, managers, members, agents, principles, partners, successors and
assigns (collectively, “Agents”) harmless from any and all injury or damage to person or property
in, on or about the Leased Premises during the Term or any extension thereof, including, without
limitation, all costs, expenses, claims or suits arising in connection therewith, except to the
extent arising from the negligence or willful misconduct of Landlord or its Agents. Tenant
covenants that it will, at all times during the Term hereof, at its own cost and expense, carry
public liability insurance on the Leased Premises with limits of not less than $1,000,000.00 for
injury or death to one person, $2,000,000.00 for injury or death to more than one person, and
property damage of $500,000.00, which insurance shall be so written as to protect Landlord, its
Agents and Tenant, as their respective interests may appear, with the Landlord named on the policy
as an additional insured. Certificates of such insurance policies shall be delivered to Landlord
promptly after the issuance of the respective policies. If Tenant fails to provide such insurance
within twenty (20) days after receipt of written notice from Landlord, Landlord may (but shall not
be obligated to) do so and collect the cost thereof as a part of rent.

     (b) Landlord and Agents shall not be liable for any damage to persons or property sustained in
or about the Leased Premises during the Term hereof, howsoever caused, except to the extent such
damage arises from the negligence or willful misconduct of Landlord or Agents.

18. WAIVER OF SUBROGATION. Insofar as the insurance policy or policies concerned are not
invalidated thereby, each party hereto waives any and all right of recovery against the other party
or parties hereto for each and every insured loss under the terms of such policy or policies.

19. DEFAULT AND REMEDIES. (a) In the event Tenant shall be in default in the payment of any
installment of rent herein reserved after Landlord has given Tenant ten (10) days prior written
notice of such non-payment, or in the event Tenant shall be in default in the performance of any of
the terms, covenants, conditions or provisions herein contained binding upon Tenant for thirty (30)
days or more after written notice from Landlord (or if such obligation cannot be cured within
thirty (30) days, then after such period of time as reasonably necessary to cure so long as Tenant
has commenced such cure within such thirty (30)-day period and diligently prosecutes the same to
completion) in the event Tenant shall be adjudicated bankrupt or shall become insolvent or

7

 

shall make a general assignment for the benefit of its creditors, or in the event a receiver shall be
appointed for Tenant or a substantial part of its property and such receiver is not removed within
sixty (60) days after appointment, Landlord shall have the right (in addition to all other rights
and remedies provided by law) to terminate this Lease, to reenter and take possession of the Leased
Premises, peaceably or by force, and to remove any property therein, without liability for damage
to, and without obligation to store, such property. In the event of such termination, Landlord may
(but shall be under no obligation to) relet the Leased Premises, or any part thereof, from time to
time, in the name of Landlord or Tenant, without further notice, for such term or terms, on such
conditions and for such uses and purposes as Landlord, in its uncontrolled discretion, may
determine, and Landlord may collect and receive all rents derived therefrom and apply the same,
after deduction of all appropriate expenses, to the payment of the rent payable hereunder, Tenant
remaining liable for any deficiency. Notwithstanding the foregoing or any other provision of this
Lease, Landlord will observe the laws of the State of North Carolina with regards to Landlord’s
rights and Tenant’s rights, including but not limited to the Landlord’s obligation to mitigate
damages for the re-letting of the Leased Premises as well as re-entering the Leased Premises.

     (b) Tenant further agrees to pay all reasonable attorneys fees and court costs incurred by
Landlord on account of Tenant’s default hereunder.

     (c) All remedies of Landlord shall be cumulative.

20. TAXES. Tenant shall pay all real estate taxes and assessments imposed by any governmental
authority upon the Leased Premises which are assessed during the Term of this Lease. All taxes
assessed during the first and last years of this Lease shall be adjusted and prorated, so that
Tenant shall pay its pro rata share for the Term and Landlord shall pay its pro rata share for the
periods prior and subsequent to the Term. If at any time during the Term of this Lease, under the
laws of the City of Wilmington, County of New Hanover, State of North Carolina, the United States
of America or any political subdivision thereof, a tax on rents is assessed against Landlord, in
the form of a license tax or otherwise, such tax shall be deemed to be a real estate tax and shall
be included within the amount which Tenant is required to pay Landlord.

21. SIGNS, AWNINGS AND CANOPIES. Tenant agrees to maintain its sign, awning, canopy, decoration,
lettering, advertising matter or other things in good condition and repair at all times.

22. ADDENDA, RULES AND REGULATIONS. The Addenda, if any, appended to this Lease are hereby made a
part of this Lease, and Owner and Tenant agree to comply with and observe the same. Tenant’s
failure to keep and observe said Addendums shall constitute a breach of the provisions of this
Lease in the same manner as is contained herein the covenants. The Exhibits A, B and C are hereby
made a part of this Lease.

23. SUBORDINATION. Upon request of Landlord, Tenant will, in exchange for a commercially
reasonable non-disturbance agreement, subordinate its rights hereunder to the lien of any mortgage
or mortgages or the lien resulting from any other method of financing or refinancing, now or
hereafter in force against the land and the building of which the Leased Premises are a part or
against any building hereafter placed upon the land of which the Leased Premises are a part, and

8

 

to all advances made or hereafter to be made upon the security thereto. Upon request of any such
mortgagee, Tenant will attorn to and acknowledge the foreclosure purchaser or purchasers as
Landlord hereunder subject to the new owner honoring the terms of this Lease. In addition, Tenant
will, within fifteen (15) days after receipt of written request from Landlord, furnish, at
Landlord’s request, such estoppel agreements, consents to assignment of this Lease or of rent due
hereunder, and attornment agreements as Landlord may reasonably require complying with requirements
of lenders.

24. RIGHT OF ENTRY. Tenant agrees to allow Landlord or its representative(s) or prospective
purchaser(s), upon twenty-four (24) hours’ prior notice to Tenant during regular business hours, to
enter the Leased Premises for the purpose of inspecting the same, for making any repairs deemed
necessary or desirable, or for showing the Leased Premises to any parties; and six months next
preceding the expiration of said term, Tenant will allow the usual one (1) notice of “FOR LEASE” to
be placed on the front walls or doorways of said Leased Premises and to remain thereon without
hindrance or molestation.

25. OWNERS WARRANTY. The Leased Premises and all of the above systems shall be delivered to Tenant
in proper working order, together with any and all warranties or guarantees applicable to the
Leased Premises and fixtures.

26. FORCE MAJEURE. In the event either party hereto shall be delayed or hindered in, or prevented
from, the performance of any act required hereunder by reason of strikes, lock-outs, labor
troubles, inability to procure materials, failure of power, restrictive governmental laws or
regulations, riots, insurrection, war or other reason of a like nature not the fault of the party
delayed in performing work or doing acts required under the terms of this Lease, then performance
of such act shall be excused for the period of the delay and the period of the performance of any
such act shall be extended for a period equivalent to the period of such delay.

27. RIGHT OF ACCESS TO THE PREMISES. Tenant agrees that Landlord or its agents or other
representatives, shall have the right, without abatement of rent, to enter into and upon the Leased
Premises, or any part thereof, upon twenty-four (24) hours’ prior notice to Tenant during regular
business hours for the purpose of examining same or making such repairs or alterations to the
Leased Premises as may be necessary for the safety and preservation thereof, provided, however,
that such examinations, repairs or alterations (unless of an emergency nature) shall be so made as
cause a minimum of interference to the operation of business conducted in the Leased Premises by
Tenant.

28. TENANT’S WORK. This is a Triple Net Lease. The Monthly Rent shall not include:
Telephone services; gas; janitorial services; internet services; any other expenses associated with
the normal operation of Tenant’s business. Tenant shall provide at its own expense building
maintenance and equipment, telephone service and janitorial service for the Leased Premises,
including any deposits or similar charges related thereto. Tenant is responsible for landscaping
maintenance and the pond maintenance expenses for the lot upon which the Leased Premises are
situated. Tenant is responsible for any and all other expenses that may arise out of the normal
use of the Leased Premises.

9

 

29. NOTICES. Any notice herein provided for to be given to Landlord shall be deemed to be given if
any when posted in United States registered or certified mail, postage prepaid, addressed to MARKET
PLACE GROUP, LLC C/O FJM PROPERTIES, 1908 EASTWOOD ROAD, SUITE 222, WILMINGTON, NC 28403, and any
notice herein provided for to be given to Tenant shall be deemed to be given if and when posted in
United States registered or certified mail, postage prepaid, addressed to Tenant at the Leased
Premises, commencing on the Rent Commencement Date and before then to Tenant addressed to TranS1,
Inc., 411 Landmark Drive, Wilmington, NC 28412.

30. QUIET ENJOYMENT. Subject to the terms, covenants and conditions set forth in this Lease,
Landlord covenants that Tenant shall have and enjoy quiet possession of the Leased Premises during
the term hereof. The foregoing express covenant shall be in addition to and not in derogation of
any implied or other rights to quiet enjoyment Tenant may have under applicable law.

31. SECURITY DEPOSIT. NA

32. ENTIRE AGREEMENT. The Lease contains the entire agreement between the parties hereto, and it
cannot be altered or modified in any way except in writing signed by the parties hereto.

33. NO WAIVERS. The failure of Landlord to insist, in any one or more instances, upon strict
performance by Tenant of any covenant of this Lease shall not be construed as a waiver or
relinquishment for the future of such covenant, but the same shall continue and remain in full
force and effect. The receipt by Landlord or its Agent of rent with knowledge of the breach of any
covenant hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of any
provision hereof shall be deemed to have been agreed upon unless expressed in writing signed by the
parties hereto.

34. PRONOUN. Every pronoun used in this Lease shall be construed to be of such number and gender
as the context shall require.

35. RULES AND REGULATIONS.

	1.	 	Tenant shall install, maintain and keep in first-class order such fire extinguishers, placed
in such location in the Leased Premises, as may be required by any City Ordinance, State or
Federal Statute or by any insurance company or rating bureau which insures, or sets rates for
insurance of, the Leased Premises.
	 
	2.	 	Tenant will not cause or permit strong, unusual, offensive or objectionable noise, odors,
fumes, dust or vapors to emanate or be dispelled from the Premises nor burn trash or store or
permit accumulations of any trash, garbage, rubbish or other refuse outside of the Premises
except in compactors or other receptacles;
	 
	3.	 	Tenant will not paint or decorate any part of the exterior of the Leased Premises, or change
the architectural treatment thereof, without first obtaining Owner’s written approval of such
painting or decoration;

10

 

	4.	 	Tenant will keep the inside and outside of all glass in the doors and windows of the Premises
clean and will replace any glass broken with glass of the same kind, size and quality; will
not place or maintain any merchandise, vending machines or other articles in the entry of
Leased Premises, on the footwalks adjacent thereto or elsewhere on the exterior thereof; will
maintain the Leased Premises at its own expense in a clean, orderly and sanitary condition and
free of insects, rodents, vermin, and other pests; will not burn or permit undue accumulation
of garbage, trash, rubbish and other refuse; will remove the same from the Leased Premises to
compactors or other receptacles, and will keep such refuse in proper containers on the
interior of the Leased Premises until so removed from the Leased Premises. If Tenant does not
perform any of this required maintenance, Landlord may have the work done and will bill Tenant
for said work.

36. SALE OF BUILDING. If the Landlord sells the building to a new owner, the Tenant agrees that
they will execute a new lease for the new owner, if the new owner so requests, upon the exact same
terms and conditions of this Lease.

37. TENANT ASSIGNMENT TO WHOLLY OWNED ENTITY. Notwithstanding anything to the contrary, Tenant may
assign the Lease or sublet all or any portion of the Premises without Landlord’s consent to (a) any
entity having 50% or more direct or indirect common ownership with Tenant or (b) any successor in
interest transferee provided, however, that Tenant remains jointly and severally liable for
performance of all covenants of this Lease. Notwithstanding anything to the contrary, in the event
that the Tenant (Trans1, Inc) is acquired, the Tenant (Trans1, Inc.) may assign this Lease to the
acquiring entity by simply giving written notice to the Landlord.

38. SUCCESSORS AND ASSIGNS. This Lease and all the terms, covenants, conditions and provisions
herein contained shall be binding upon and shall inure to the benefit of the parties hereto and
their respective personal representatives, heirs, successors and (if and when assigned in
accordance with the provisions hereof) assigns.

39. CREDIT VERIFICATION. This Lease will not become binding until the Landlord has verified the
Tenant’s credit worthiness. Landlord shall take no more than 7 days to verify the Tenant’s credit.

40. ARBITRATION. Any disputes arising under this Lease between the parties will be resolved by
binding arbitration before one (1) arbitrator under the rules of the American Arbitration
Association.

41. APPLICABLE LAW. This Lease will be interpreted under the laws of the State of North Carolina.

     IN WITNESS WHEREOF each corporate party hereto has caused this Lease to be executed in its
name and behalf by its President, or one of its Vice Presidents; each individual party hereto had
hereunto set his hand, and each partnership party hereto has caused this Lease to be executed in
its name and behalf by at least one of its General Partners.

[SIGNATURE PAGE TO FOLLOW]

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	 	LANDLORD:

MARKET PLACE GROUP, LLC

 	 
	 	/s/ Fred J. Matt
 	(SEAL) 
	 	BY: FRED J. MATT — MEMBER-MANAGER 	 
	 	 	 
	 
	 	TENANT:

TRANS 1, INC.

 	 
	 	/s/ Mike Luetkemeyer
 	(SEAL) 
	 	BY: MIKE LUETKEMEYER — CHIEF FINANCIAL OFFICER	 
	 	 	 
	 

12

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