Document:

Exhibit
4.23

 

 

RIGEL PHARMACEUTICALS, INC.

 

SECOND
INVESTOR RIGHTS AGREEMENT

 

June 26, 2003

 

 

TABLE OF
CONTENTS

 

 

	
  SECTION 1.

  	
  GENERAL.

  	
   

  
	
   

  	
   

  
	
  1.1

  	
  Definitions.

  	
   

  
	
   

  	
   

  
	
  SECTION
  2.

  	
  REGISTRATION;
  ADDITIONAL REGISTRATION RIGHTS; ETC.

  	
   

  
	
   

  	
   

  
	
  2.1

  	
  Registration of the Securities.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Suspension
  Periods

  	
   

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Piggyback Registrations.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Demand
  Registration.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Certain
  Obligations of the Company for Piggyback and Demand Registrations.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Restrictions on Transfer.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  Termination of
  Registration Rights.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.8

  	
  Delay
  of Registration; Furnishing Information.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  Indemnification.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.10

  	
  Assignment of
  Registration Rights.

  	
   

  
	
   

  	
   

  	
   

  
	
  2.11

  	
  Amendment of
  Registration Rights.

  	
   

  
	
   

  	
   

  
	
  SECTION 3.

  	
  CERTAIN COVENANTS OF
  THE PARTIES.

  	
   

  
	
   

  	
   

  
	
  3.1

  	
  Reservation of Common
  Stock.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Rule 144
  Reporting.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Observation
  Rights.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Board of Directors Matters.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Limitation
  on Subsequent Registration Rights.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  Participation
  Rights.

  	
   

  
	
   

  	
   

  	
   

  
	
  3.7

  	
  Nasdaq Listing.

  	
   

  
	
   

  	
   

  
	
  SECTION 4.

  	
  MISCELLANEOUS.

  	
   

  
	
   

  	
   

  
	
  4.1

  	
  Governing Law.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  No Inconsistent Agreements.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Successors
  and Assigns.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Entire
  Agreement.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Specific
  Enforcement.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Severability.

  	
   

  
				

 

i

 

	
  4.7

  	
  Amendment
  and Waiver.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.8

  	
  Notices.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.9

  	
  Attorneys’ Fees.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.10

  	
  Headings.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.11

  	
  Counterparts.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.12

  	
  Aggregation
  of Stock.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.13

  	
  Pronouns.

  	
   

  

 

ii

 

RIGEL
PHARMACEUTICALS, INC.

SECOND
INVESTOR RIGHTS AGREEMENT

 

This Second Investor Rights Agreement (the
“Agreement”)
is entered into as of June 26, 2003 by and among Rigel Pharmaceuticals,
Inc., a Delaware
corporation (the “Company”),
and the investors listed on Exhibit A
hereto, referred to hereinafter as the “Investors” and each individually as an
“Investor.”

 

Recitals

 

Whereas, the Investors are purchasing
shares of the Company’s common stock, par value $.001 per share (the “Common Stock”), and
warrants to purchase shares of Common Stock pursuant to that certain Common
Stock and Warrant Purchase Agreement (the “Purchase Agreement”) dated as of April 29,
2003 (the “Financing”);

 

Whereas, the obligations in the Purchase
Agreement are conditioned upon the execution and delivery of this Agreement;
and

 

Whereas, in connection with the
consummation of the Financing, the parties desire to enter into this Agreement
in order to grant registration and other rights to the Investors as set forth
below.

 

Now, Therefore, in consideration of the
foregoing recitals and the mutual promises, representations, warranties and
covenants hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

 

SECTION 1.          General.

 

1.1          Definitions.  Capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Purchase Agreement.  As
used in this Agreement the following terms shall have the following respective
meanings:

 

(a)           “Common Warrants”  means those certain warrants to purchase
Common Stock issued pursuant to the Purchase Agreement and held by the
Investors listed on Exhibit A hereto and their permitted assigns.

 

(b)           “Exchange Act”  means
the Securities Exchange Act of 1934, as amended.

 

(c)           “Form S-3” means
such form under the Securities Act as in effect on the date hereof or any
successor or similar registration form under the Securities Act subsequently
adopted by the SEC that permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.

 

(d)           “Holder”  means
any person owning of record or having the right to acquire Registrable
Securities, or any assignee of record thereof in accordance with
Section 2.10 hereof, which have not been sold to the public.

 

1

 

(e)           “Initiating Holders”  means
the Holders of at least thirty percent
(30%) of the Registrable Securities then outstanding.

 

(f)            “Prior Investor Rights
Agreement”  means that certain Amended and
Restated Investor Rights Agreement, dated as of April 29, 2003, by and among
the Company and the investors named therein.

 

(g)           “Prior Registrable
Securities”  means the “Registrable Securities”
(as defined in the Prior Investor Rights Agreement) then outstanding under the
Prior Investor Rights Agreement, such Prior Rights Holders and their associated
amounts of Prior Registrable Securities are as set forth hereto on Exhibit B.

 

(h)           “Prior Rights Holders”  means
the “Holders” of “Registrable Securities” (each as defined in the Prior
Investor Rights Agreement) then outstanding under the Prior Investor Rights
Agreement.

 

(i)            “Register,” “registered”
and “registration”  refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement or document.

 

(j)            “Registrable Securities”  means:
(i) the Shares; (ii) the Warrant Shares; and (iii) any shares of Common
Stock issued as (or issuable upon the conversion or exercise of any warrant,
right or other security that is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of, the Shares and
Warrant Shares. Notwithstanding the foregoing, Registrable Securities shall not
include any shares of Common Stock: (A) sold by a person to the public either
pursuant to a registration statement or Rule 144; (B) sold in a private
transaction in which the transferor’s rights under Section 2 of this
Agreement are not assigned; or (C) held by a Holder (together with its
affiliates) during such periods in which all of such shares may be sold by the
Holder pursuant to Rule 144 within 90 days.

 

(k)           “Registration Expenses”  means
all expenses incurred by the Company in complying with Sections 2.1, 2.3
and 2.4 hereof, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company,
reasonable fees and disbursements not to exceed $25,000  of a single special counsel
for the Holders, blue sky fees and expenses and the expense of any special
audits incident to, or required by, any such registration (but excluding the
compensation of regular employees of the Company that shall be paid in any
event by the Company).

 

(l)            “SEC” or “Commission”  means the Securities
and Exchange Commission.

 

(m)          “Securities Act”  means
the Securities Act of 1933, as amended.

 

(n)           “Selling Expenses”  means
all underwriting discounts and selling commissions applicable to a sale of
Registrable Securities.

 

2

 

(o)           “Shares”  means
the shares of Common Stock issued pursuant to the Purchase Agreement and held
by the Investors listed on Exhibit A
hereto and their permitted assigns.

 

(p)            “Special Registration
Statement” means: (i) a registration statement relating to any
employee benefit plan; (ii) a registration statement relating to any corporate
reorganization or transaction under Rule 145 of the Securities Act,
including any registration statements related to the issuance or resale of
securities issued in such a transaction; or (iii) a registration statement in
which the only securities being registered are shares of stock issuable upon
conversion of debt securities.

 

(q)           “Warrant Shares”
means the shares of Common Stock issuable or issued upon exercise of the Common
Warrants.

 

SECTION
2.         Registration; Additional Registration Rights; etc.

 

2.1          Registration of the Securities.  The
Company shall:

 

(a)           prepare
and file with the SEC, as soon as practicable, but in no event later than 10
business days after the Closing Date (as defined in the Purchase Agreement), a
registration statement on Form S-3 (the “Registration Statement”) for an offering to
be made on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act registering the resale from time to time by the Investors of the
Registrable Securities;

 

(b)           use
its commercially reasonable best efforts to cause the Registration Statement to
become effective as soon as practicable and no later than five business days
after the receipt of a notice of “no review” from the SEC or, in the event of SEC
review, no later than 90 days after the Registration Statement is initially
filed by the Company with the SEC;

 

(c)           subject
to Section 2.2, use its commercially reasonable best efforts to prepare and
file with the SEC such amendments and supplements to the Registration Statement
and the related prospectus used in connection therewith (the “Prospectus”) as may
be necessary to keep the Registration Statement current and effective for a
period not exceeding the earlier of: (i) the second anniversary of the initial
effectiveness of the Registration Statement; (ii) the date on which all Holders
may sell all Registrable Securities then held by such Holders without
restriction under Rule 144 of the Securities Act; or (iii) such time as all Registrable
Securities have been sold (together, the “Registration Period”);

 

(d)           furnish
to the Holders with respect to the Registrable Securities registered under the
Registration Statement such number of copies of the Registration Statement and
Prospectuses (including any preliminary prospectuses) in conformity with the
requirements of the Securities Act and such other documents as the Holders may
reasonably request, in order to facilitate the sale or other disposition of all
or any of the Registrable Securities by the Holders;

 

(e)           use
its commercially reasonable best efforts to register and qualify the
Registrable Securities covered by the Registration Statement under such other
securities or Blue Sky laws of such jurisdictions in the United States as shall
be reasonably requested by the Holders; provided, however, that the Company shall
not be required in connection therewith or

 

3

 

as a condition thereto to
qualify to do business or consent to service of process in any jurisdiction in
which it is not now so qualified or has not so consented;

 

(f)            advise
the Holders promptly after it shall receive notice or obtain knowledge of the
issuance of any stop order by the SEC delaying or suspending the effectiveness
of the Registration Statement or of the initiation of any proceeding for that
purpose; and it will promptly use its commercially reasonable best efforts to
prevent the issuance of any stop order or to obtain its withdrawal at the
earliest possible moment if such stop order should be issued;

 

(g)           notify
each Holder of securities registered by such Registration Statement at any time
when a Prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the Prospectus
included in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing; and

 

(h)           bear
all Registration Expenses in connection with the procedures in paragraphs (a)
through (g) of this Section 2.1 and the registration of the Registrable
Securities pursuant to the Registration Statement.

 

2.2          Suspension Periods.

 

(a)           Except
in the event that paragraph (b) below applies, the Company shall: (i) if
necessary to keep the Registration Statement current and effective, promptly
prepare and file from time to time with the SEC post-effective amendments to the
Registration Statement or supplements to the related Prospectus or supplements
or amendments to any document incorporated therein by reference or file any
other required document so that the Registration Statement will not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and so that, as thereafter delivered to purchasers of the Registrable
Securities being sold thereunder, such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii) provide the
Holders with copies of any documents filed pursuant to Section 2.2(a)(i); and
(iii) inform the Holders that the Company has complied with its obligations in
Section 2.2(a)(i) (or that, if the Company has filed a post-effective amendment
to the Registration Statement that has not yet been declared effective, the
Company will notify the Holders to that effect, will use its commercially
reasonable best efforts to secure the effectiveness of such post-effective
amendment as promptly as possible and will promptly notify the Holders pursuant
to Section 2.2(a)(i) hereof when the amendment has become effective).

 

(b)           Subject
to Section 2.2(c) below, in the event: (i) of any request by the SEC or any
other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to
the Registration Statement or related Prospectus or for additional information
so that the Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or otherwise fail to
comply with the

 

4

 

applicable rules and
regulations of the federal securities laws; (ii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, provided
that, considering the advice of counsel, the Company reasonably believes that
it must qualify in such jurisdiction; (iv) of any event or circumstance that,
considering the advice of counsel, the Company reasonably believes necessitates
the making of any changes in the Registration Statement or related Prospectus,
or any document incorporated or deemed to be incorporated therein by reference,
so that, in the case of the Registration Statement, it will not contain any
untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of a related Prospectus, it will not contain
any untrue statement of a material fact or any omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
or (v) that the Company reasonably believes, considering the advice of counsel,
that the Company may, in the absence of a suspension described hereunder, be
required under state or federal securities laws to disclose any corporate
development, the disclosure of which could reasonably be expected to have a
material adverse effect upon the Company, its stockholders, a potentially
material transaction or event involving the Company, or any negotiations,
discussions or proposals directly relating thereto; then the Company shall
deliver a certificate in writing to each Holder (the “Suspension Notice”)
to the effect of the foregoing and, upon receipt of such Suspension Notice, the
Holder will refrain from selling any Registrable Securities pursuant to the
Registration Statement (a “Suspension”)
until the Holder’s receipt of copies of a supplemented or amended Prospectus
prepared and filed by the Company or until the Holder is advised in writing by
the Company that the current Prospectus may be used and the Holder has received
copies of any additional or supplemental filings that are incorporated or
deemed incorporated by reference in any such Prospectus.  In the event of any Suspension, the Company
will use its commercially reasonable best efforts to cause the use of the
Prospectus so suspended to be resumed as soon as reasonably practicable after
delivery of a Suspension Notice to the Holders. In the event that the Company
shall exercise its right to suspend the effectiveness of the Registration
Statement hereunder, the Registration Period during which the Registration
Statement is to remain effective shall be extended by a period of time equal to
the duration of any Suspensions.

 

(c)           Notwithstanding
the foregoing paragraphs of this Section 2.2, the Holders shall not be
prohibited from selling Registrable Securities under the Registration Statement
as a result of Suspensions on more than two occasions of not more than 45 days
each in any 12-month period; provided,
however, that in no event shall any Suspension pursuant to Section
2.2(b)(iv) exceed ten business days.

 

(d)           Provided
that a Suspension is not then in effect, each Holder may sell Registrable
Securities under the Registration Statement, provided that it arranges for
delivery of a current Prospectus to the transferee of such Registrable
Securities.  Upon receipt of a request
therefor, the Company will provide an adequate number of current Prospectuses
to the Holder and supply copies to any other parties requiring such
Prospectuses.

 

5

 

2.3          Piggyback Registrations.

 

(a)           The Company shall notify all Holders
of Registrable Securities then outstanding in writing at least ten  days prior to the filing of
any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding Special Registration Statements) and shall afford each
such Holder an opportunity to include in such registration statement all or
part of such Registrable Securities held by such Holder.  Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it
shall, within ten days after the above-described notice from the Company, so
notify the Company in writing.  Such notice
shall state the intended method of disposition of the Registrable Securities by
such Holder.  If a Holder decides not to
include all of its Registrable Securities in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to
have the right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by the
Company with respect to offerings of its securities, all upon the terms and
conditions set forth herein.

 

(b)           If
the registration statement under which the Company gives notice under this
Section 2.3 is for an underwritten public offering, the Company shall so
advise the Holders of Registrable Securities then outstanding.  In such event, the right of any such Holder
to be included in a registration pursuant to this Section 2.3 shall be
conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein.  All Holders
proposing to distribute their Registrable Securities through such underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.  Notwithstanding any other provision of this
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated: first, to
the Company; second, to the Holders and the Prior Rights Holders on a pro rata
basis based on the aggregate of the Registrable Securities then held by the
Holders under this Agreement and the Prior Registrable Securities then held by
the Prior Rights Holders under the Prior Investor Rights Agreement; and third,
to any stockholders of the Company (other than a Holder or Prior Rights Holder)
on a pro
rata basis; provided, however,
that: (i) no such reduction shall reduce the aggregate amount of securities of
the selling Holders, together with the securities of the Prior Rights Holders,
included in the registration below thirty percent (30%) of the total amount of
securities included in such registration; and (ii) no such reduction shall
reduce the amount of Registrable Securities of the selling Holders included in
the registration unless all Prior Rights Holders exercising piggyback
registration rights in such registration are subject to such reduction in their
Prior Registrable Securities.  Except as
provided above, in no event will shares of any other selling stockholder of the
Company be included in such registration that would reduce the number of shares
that may be included by the Holders and the Prior Rights Holders without the
written consent of the holders of not less than a majority of the aggregate of
the Registrable Securities and the Prior Registrable Securities proposed to be
sold in the offering.  If any
participating Holder disapproves of the terms of any such underwriting, such
participating Holder may elect to withdraw therefrom by written notice to the
Company and the underwriter, delivered prior to the effective date of the
registration statement.  Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the

 

6

 

registration.  For any Holder that is a partnership,
corporation, venture capital fund or limited liability company, the partners,
retired partners, members, retired members and stockholders of such Holder, or
the estates and family members of any such partners, retired partners, members,
retired members and any trusts for the benefit of any of the foregoing person
shall be deemed to be a single “Holder,” and any pro rata reduction with
respect to such “Holder” shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in
such “Holder,” as defined in this sentence.

 

(c)           The
Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 2.3 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in
such registration.

 

2.4          Demand Registration.

 

(a)           In
the event that: (i) the Registration Statement is not declared effective by the
SEC as set forth in Section 2.1(b); (ii) the Holders still hold Registrable
Securities at the end of the Registration Period; or (iii) subject to Section
2.2, the Registration Statement does not remain effective during the
Registration Period, and the Initiating Holders intend to distribute
Registrable Securities, then the Initiating Holders may deliver a written
request to the Company that the Company file a registration statement under the
Securities Act covering the registration of at least $3 million of the
Registrable Securities then outstanding in an underwritten offering. The
Company shall, within 20 business days of the receipt of such request, give
written notice of such request to all Holders, and subject to the limitations
of this Section 2.4, effect, as expeditiously as reasonably possible, the
registration under the Securities Act of all Registrable Securities that all
Holders request to be registered on the form of registration statement then
available to the Company.

 

(b)           If
the Initiating Holders intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 2.4, and the Company
shall include such information in the written notice referred to in Section
2.4(a). In such event, the right of any Holder to include its Registrable
Securities in such registration under this Section 2.4 shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein.  All Holders
proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by a majority in interest of the
Initiating Holders (which underwriter or underwriters shall be reasonably
acceptable to the Company). 
Notwithstanding any other provision of this Section 2.4, if the
underwriter advises the Company that marketing factors require a limitation on
the number of securities underwritten (including Registrable Securities), then
the Company shall so advise all Holders of Registrable Securities that would
otherwise be underwritten pursuant hereto, and the number of shares that may be
included in the underwriting shall be allocated to the Holders of such
Registrable Securities pro rata based on the number of
Registrable Securities held by all such Holders (including the Initiating
Holders). In no event shall any
Registrable Securities be excluded from such underwriting unless all other
securities

 

7

 

are first excluded. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration.

 

(c)           The
Company shall not be required to effect a registration pursuant to this
Section 2.4:

 

(i)            after
the Company has effected three registrations
pursuant to this Section 2.4, and such registrations have been declared or
ordered effective;

 

(ii)           during
the period starting with the date of filing of, and ending on the date one
hundred eighty (180) days following the effective date of, a registration
statement pertaining to a public
offering as described in Section 2.3, other than pursuant to a Special
Registration Statement; provided that the Company makes reasonable
good faith efforts to cause such registration statement to become effective;

 

(iii)         if
within 30 days of receipt of a written request from the Initiating Holders
pursuant to Section 2.4(a), the Company gives notice to the Holders of the
Company’s intention to file a registration statement for a public offering as described in Section
2.3, other than pursuant to a Special Registration Statement,  within
90 days; provided
that if the Company does not file such registration statement within such
90-day period, the Company shall then effect the registration requested by the
Initiating Holders pursuant to Section 2.4;

 

(iv)          if the Company shall
file a registration statement pursuant to this Section 2.3 and then furnish to
the Initiating Holders requesting such registration statement pursuant to this
Section 2.4 a certificate signed by the Chairman of the Board of the
Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
stockholders for such registration statement to become effective at such time,
in which event the Company shall have the right to defer seeking acceleration
of effectiveness of such filing for a period of not more than 30 days after
receipt of a notice of “no review” or completion of the review process from the
SEC; provided
that such right to delay effectiveness of a requested registration shall be
exercised by the Company not more than once
in any 12-month period; and provided
further that the Company shall not register any securities for the
account of itself or any other stockholder during such period (other than
pursuant to a Special Registration Statement); and

 

(v)            in
any particular jurisdiction in which the Company would be required to qualify
to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.

 

2.5          Certain Obligations of the Company for
Piggyback and Demand Registrations.

 

(a)           Whenever
required to effect the registration of any Registrable Securities pursuant to
Section 2.3 or Section 2.4, the Company shall, as expeditiously as reasonably
possible:

 

8

 

(i)            prepare
and file with the SEC a registration statement with respect to such Registrable
Securities, and use its commercially reasonable best efforts to cause such
registration statement to become effective as soon as practicable;

 

(ii)           subject
to Section 2.5(b), use its commercially reasonable best efforts to prepare and
file with the SEC such amendments and supplements to a registration statement
and prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period not exceeding, with respect to
each Holder’s Registrable Securities included in such registration, the earlier
of: (i) the second anniversary of the initial effectiveness of such
registration statement; (ii) the date on which the Holder may sell all Registrable
Securities then held by the Holder without restriction under Rule 144 of the
Securities Act; or (iii) such time as all Registrable Securities held by such
Holder have been sold;

 

(iii)         furnish
to the Holders with respect to the Registrable Securities registered under a
registration statement such number of copies of such registration statement,
and related prospectuses, including preliminary prospectuses, in conformity
with the requirements of the Securities Act, and such other documents as such
Holders may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities by the Holders;

 

(iv)          use
its commercially reasonable best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky laws
of such jurisdictions in the United States as shall be reasonably requested by
the Holders; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented;

 

(v)            advise
the Holders promptly after it shall receive notice or obtain knowledge of the
issuance of any stop order by the SEC delaying or suspending the effectiveness
of a registration statement or of the initiation of any proceeding for that
purpose; and it will promptly use its commercially reasonable best efforts to
prevent the issuance of any stop order or to obtain its withdrawal at the
earliest possible moment if such stop order should be issued;

 

(vi)          in
the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter(s) of such offering; each Holder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement;

 

(vii)         notify
each Holder of securities registered by such registration statement at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;

 

9

 

(viii)        cause
all such Registrable Securities registered under such registration statement to
be listed on each securities exchange on which similar securities issued by the
Company are then listed;

 

(ix)          provide
a transfer agent and registrar for all Registrable Securities registered under
the registration statement and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such
registration; and

 

(x)           use
its commercially reasonable efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities under the registration
statement, on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration under the registration
statement, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (A)
an opinion, dated such date, of the counsel for the Company, in form and
substance as is customarily requested by the underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities and (B) a letter dated such
date, from the independent certified public accountants of the Company and any
company acquired by the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.

 

(b)           Subject
to Section 2.5(c) below, in the event: (i) of any request by the SEC or any
other federal or state governmental authority during the period of
effectiveness of a registration statement filed pursuant to Section 2.3 or
Section 2.4 for amendments or supplements to such registration statement or
related prospectus or for additional information so that the Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or otherwise fail to comply with the
applicable rules and regulations of the federal securities laws; (ii) of the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of such registration statement or the
initiation of any proceedings for that purpose; (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation of any proceeding for such purpose,
provided that, considering the advice of counsel, the Company reasonably
believes that it must qualify in such jurisdiction; (iv) of any event or
circumstance that, considering the advice of counsel, the Company reasonably
believes necessitates the making of any changes in such registration statement
or related prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of such registration
statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of a related
prospectus, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; or (v) that the Company reasonably believes,
considering the advice of counsel, that the Company may, in the absence of a
suspension described hereunder, be required under state or federal securities
laws to disclose any corporate development, the disclosure of

 

10

 

which could reasonably be
expected to have a material adverse effect upon the Company, its stockholders,
a potentially material transaction or event involving the Company, or any
negotiations, discussions or proposals directly relating thereto; then the
Company shall deliver a Suspension Notice to each Holder to the effect of the
foregoing and, upon receipt of such Suspension Notice, the Holder will refrain
from selling any Registrable Securities pursuant to such registration statement
until the Holder’s receipt of copies of a supplemented or amended prospectus
prepared and filed by the Company or until the Holder is advised in writing by
the Company that the current prospectus may be used and the Holder has received
copies of any additional or supplemental filings that are incorporated or
deemed incorporated by reference in any such prospectus.  In the event of any Suspension, the Company
will use its commercially reasonable best efforts to cause the use of the
prospectus so suspended to be resumed as soon as reasonably practicable after
delivery of a Suspension Notice to the Holders. In the event that the Company
shall exercise its right to suspend the effectiveness of such registration
statement hereunder, the period during which such registration statement is to
remain effective pursuant to Section 2.5(a)(ii) shall be extended by a period
of time equal to the duration of any Suspensions.

 

(c)           Notwithstanding
the foregoing paragraphs of this Section 2.5, the Holders shall not be
prohibited from selling Registrable Securities under a registration statement
filed pursuant to Section 2.4 as a result of Suspensions on more than two
occasions of not more than 45 days each in any 12-month period (it being
understood that (i) any delay in effectiveness of a registration statement
pursuant to Section 2.4(c)(iv) shall be counted as an occasion of Suspension
for purposes of this Section 2.5(c) and (ii) any days of delayed effectiveness
of a registration statement pursuant to Section 2.4(c)(iv) shall be counted as
part of the 45-day total allowed for Suspension under this Section 2.5(c)); provided, however, that in no event shall
any Suspension pursuant to Section 2.5(b)(iv) of a registration statement filed
under Section 2.4 exceed ten business days.

 

(d)           Except
as specifically provided herein, all Registration Expenses incurred in
connection with any registration under Section 2.3 or Section 2.4
shall be borne by the Company.  All
Selling Expenses incurred in connection with any registrations under Section
2.3 or Section 2.4 shall be borne by the holders of the securities so
registered pro
rata on the basis of the number of shares so registered.  The Company shall not, however, be required
to pay the Registration Expenses of any registration proceeding begun pursuant
to Section 2.4, the request of which has been subsequently withdrawn by
the Initiating Holders unless: (i) the withdrawal is based upon material
adverse information concerning the Company of which the Initiating Holders were
not aware at the time of such request; or (ii) the Holders of a majority
of the Registrable Securities then outstanding agree to forfeit their right to
one requested registration pursuant to Section 2.4 (in which event such
right shall be deemed forfeited by all Holders).  If the Holders are required to pay the Registration Expenses,
such expenses shall be borne by the holders of securities (including
Registrable Securities) requesting such registration in proportion to the
number of shares for which registration was requested.

 

2.6          Restrictions on Transfer.

 

(a)           Each
Investor agrees that it will not sell, offer to sell, solicit offers to buy,
dispose of, loan, pledge or grant any right with respect to (collectively, a “Disposition”) all or
any portion of the Registrable Securities unless and until:

 

11

 

(i)            there
is then in effect a registration statement under the Securities Act covering
such proposed Disposition and such Disposition is made in accordance with such
registration statement; or

 

(ii)           (A)
if rights under this Agreement are assigned to the transferee, the
transferee has agreed in writing to be bound by the terms of this Agreement,
(B) such Holder shall have notified the Company of the proposed
Disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed Disposition and (C) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company,
that such Disposition will not require registration of such shares under the
Securities Act.

 

(b)           Notwithstanding
the provisions of Section 2.6(a) above, no such restriction shall apply to a
transfer by a Holder that is: (i) a partnership transferring to its
partners or former partners in accordance with partnership interests;
(ii) a corporation transferring to a wholly-owned subsidiary or a parent
corporation that owns all of the capital stock of the Holder;  (iii) a limited liability company
transferring to its members or former members in accordance with their interest
in the limited liability company; (iv) an affiliated venture fund
transferring to another affiliated venture fund; or (v) an individual
transferring to the Holder’s family member or trust for the benefit of an
individual Holder; provided that in each case the transferee
will agree in writing to be subject to the terms of this Agreement to the same
extent as if the transferee were an original Holder hereunder.

 

(c)           Each
certificate representing the Shares or Warrant Shares shall be stamped or
otherwise imprinted with legends substantially similar to the following (in
addition to any legend required under applicable state securities laws):

 

“THE SHARES REPRESENTED
BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM. RIGEL
PHARMACEUTICALS, INC. MAY REQUIRE AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO IT THAT A PROPOSED TRANSFER OR SALE IS IN COMPLIANCE WITH THE ACT.”

 

“THE SALE,
TRANSFER OR VOTING OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED
BY THE TERMS OF A SECOND INVESTOR RIGHTS AGREEMENT BY AND AMONG RIGEL
PHARMACEUTICALS, INC. AND THE INVESTORS NAMED THEREIN. COPIES OF THE AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDERS OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF RIGEL PHARMACEUTICALS, INC. AT

 

12

 

THE PRINCIPAL
EXECUTIVE OFFICES OF RIGEL PHARMACEUTICALS, INC.”

 

(d)           The
Company shall be obligated to reissue promptly unlegended certificates at the
request of any Holder thereof if the Holder shall have (i) sold Registrable
Securities pursuant to an effective registration statement or (ii) obtained an
opinion of counsel (which counsel may be counsel to the Company) reasonably
acceptable to the Company to the effect that the securities proposed to be
disposed of may lawfully be so disposed of without registration, qualification
and legend.

 

(e)           Any
legend endorsed on an instrument pursuant to applicable state securities laws
and the stop-transfer instructions with respect to such securities shall be
removed upon receipt by the Company of an order of the appropriate blue sky
authority authorizing such removal.

 

2.7          Termination of Registration Rights.  All registration rights granted under
this Section 2 shall terminate and be of no further force and effect upon the
earlier of: (i) the date on which the Holders may sell all Registrable
Securities then held by the Holders without restriction under Rule 144 of the
Securities Act; or (ii) such time as all Registrable Securities purchased by
the Investors in the Financing have been sold.

 

2.8          Delay of Registration; Furnishing
Information.

 

(a)           No
Holder shall have any right to obtain or seek an injunction restraining or
otherwise delaying any such registration as the result of any controversy that
might arise with respect to the interpretation or implementation of this
Section 2.

 

(b)           It
shall be a condition precedent to the obligations of the Company to register a
Holder’s Registrable Securities pursuant to Section 2.1, Section 2.3 or
Section 2.4 that such Holder shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them and the intended
method of disposition of such securities as shall be reasonably required to
effect the registration of such Holder’s Registrable Securities.  Upon receipt of such information, the
Company shall promptly update any registration statement (whether or not such
registration statement has been declared effective) used or to be used to
register Registrable Securities.

 

2.9          Indemnification. 
In the event any Registrable Securities are included in a
registration statement under Section 2.1, Section 2.3 or Section 2.4:

 

(a)           To
the extent permitted by law, the Company shall indemnify and hold harmless each
Holder, the partners, members, officers and directors of each Holder, any
underwriter (as defined in the Securities Act) for such Holder and each person,
if any, who controls such Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of, or are based upon, any of the following statements, omissions or
violations (collectively a “Violation”) by the Company: (i) any untrue
statement or alleged untrue statement of a material fact contained

 

13

 

in such registration
statement or incorporated by reference therein, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto; (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading; or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company shall reimburse each
such Holder, partner, member, officer, director, underwriter or controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided however, that the
indemnity agreement contained in this Section 2.9(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of, or is based upon, a Violation that occurs in
reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by or on behalf of such Holder,
partner, member, officer, director, underwriter or controlling person of such
Holder.

 

(b)           To
the extent permitted by law, each Holder shall, if Registrable Securities held
by such Holder are included in such registration statement, indemnify and hold
harmless the Company, each of its directors, its officers and each person, if
any, who controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder’s partners, directors or officers or any
person who controls such Holder, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, or partner,
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of, or are based upon, any of the following statements:
(i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement or incorporated by reference therein,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto; (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading; or (iii) any
violation or alleged violation by the Company of the Securities Act  (collectively, a “Holder Violation”), in each case to the
extent (and only to the extent) that such Holder Violation occurs in reliance
upon and in conformity with written information furnished by such Holder under
an instrument duly executed by such Holder and stated to be specifically for
use in connection with such registration; and each such Holder shall reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter or other Holder, or partner,
officer, director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Holder Violation; provided,
however, that the indemnity agreement contained in this
Section 2.9(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld; provided
further, that in no event

 

14

 

shall any indemnity under
this Section 2.9 exceed the net  proceeds
from the offering received by such Holder.

 

(c)           Promptly
after receipt by an indemnified party under this Section 2.9 of notice of
the commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 2.9, deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to the
parties; provided,
however, that an indemnified party shall have the right to retain
its own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of liability to the indemnified party under this
Section 2.9 to the extent of such prejudice, but the omission so to
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 2.9.

 

(d)           If
the indemnification provided for in this Section 2.9 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect
to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall to the extent permitted by applicable law contribute to the amount paid
or payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the
other in connection with the Violation(s) or Holder Violation(s) that resulted
in such loss, claim, damage or liability, as well as any other relevant
equitable considerations.  The relative
fault of the indemnifying party and of the indemnified party shall be
determined by a court of law by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state
a material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission; provided,
that in no event shall any contribution by a Holder hereunder, when combined
with amounts paid pursuant to Section 2.9(b), exceed the net proceeds from the offering
received by such Holder.

 

(e)           The
obligations of the Company and the Holders under this Section 2.9 shall
survive completion of any offering of Registrable Securities pursuant to a
registration statement under Section 2 and the termination of this
Agreement.  No indemnifying party, in
the defense of any such claim or litigation, shall, except with the consent of
each indemnified party, consent to the entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

 

15

 

2.10        Assignment of Registration Rights.  The rights to cause the Company to
register Registrable Securities pursuant to this Section 2 may be assigned
by a Holder to a transferee or assignee of Registrable Securities that: (a) is
a subsidiary, parent, general partner, limited partner, retired partner, member
or retired member, stockholder or affiliated venture fund of a Holder; (b) is a
Holder’s family member or trust for the benefit of an individual Holder; (c)
acquires at least 100,000  shares of Registrable Securities (as
adjusted for stock splits and combinations); or (d) is an entity affiliated by common control (or other related
entity) with such Holder;  provided, however, that: (i) the
transferor shall, within ten days after such transfer, furnish to the Company
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and (ii) such transferee shall agree to be subject to all restrictions set
forth in this Agreement.

 

2.11        Amendment of Registration Rights.  Any provision of this Section 2 may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least  a majority of the Registrable Securities then outstanding.  Any amendment or waiver effected in accordance
with this Section 2.11 shall be binding upon each Holder and the
Company.  By acceptance of any benefits
under this Section 2, the Holders of Registrable Securities hereby agree
to be bound by the provisions hereunder.

 

SECTION
3.         Certain
Covenants of the Parties.

 

3.1          Reservation of Common Stock.  The Company will at all times reserve
and keep available, solely for issuance and delivery upon the exercise of the
Common Warrants, the Warrant Shares issuable from time to time upon such
exercise.

 

3.2          Rule 144
Reporting.  With a view to making available
to each Holder the benefits of Rule 144 under the Securities Act (or its
successor rule) and any other rule or regulation of the SEC that may at any
time permit the Holder to sell Registrable Securities to the public without
registration or pursuant to Form S-3, the Company covenants and agrees to:  (a) make and keep public information
available, as those terms are understood and defined in Rule 144, until such
time as all Registrable Securities purchased by the Investors in the Financing
have been sold; (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and (c) furnish to the Holder upon request, as long as the Holder owns any
Registrable Securities, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144 of the Securities Act and
the Exchange Act or that it qualifies as a registrant whose securities may be
registered on Form S-3, (ii) a copy of the Company’s most recent Annual Report
on Form 10-K or Quarterly Report on Form 10-Q and (iii) such other information
as may be reasonably requested in order to avail the Holder of any rule or
regulation of the SEC that permits the selling of any such Registrable
Securities without registration or pursuant to such form.

 

3.3          Observation Rights.  For so long as MPM BioVentures
III, L.P. or its affiliates (“MPM Capital”) shall own Registrable Securities
representing not less than 10% of the total shares of Common Stock then
outstanding, the Company shall allow Ms. Ashley Ledbetter (or such other
representative that may be designated by MPM Capital in accordance with this
Section 3.3) to serve as a representative designated by MPM Capital (the “Representative”) to

 

16

 

attend
all regularly scheduled meetings of the Company’s Board of Directors in a
nonvoting capacity, and in connection therewith, the Company shall give such
Representative copies of all notices, minutes, consents and other materials,
financial or otherwise, which the Company provides to its Board of Directors; provided, however, that: (a) MPM Capital
shall not change or substitute its Representative without providing the Company
with 20 days’ prior notice of such change or substitution;  (b) the Representative shall agree to hold
in confidence and trust and to act in a fiduciary manner with respect to all
information so provided; and (c) the Company reserves the right to exclude such
Representative from access to any material or meeting or portion thereof if the
Company believes that such exclusion is reasonably necessary: (i) to preserve
the attorney-client privilege; (ii) to protect highly confidential information;
or (iii) to prevent the disclosure of trade secrets to a competitor.

 

3.4          Board of Directors Matters.  For so long as MPM Capital shall own Registrable Securities representing not less than
10% of the total shares of Common Stock then outstanding:

 

(a)           the
Company’s Board of Directors shall consist of nine members, and the Company’s
Board of Directors shall be divided into three classes, with each class having
a three-year term;

 

(b)           the
Company shall: (i) use its commercially reasonable best efforts to cause Mr. Dennis
Henner, as designated by MPM Capital (the “Class II Designee”), to be nominated and
elected to Class II of the Company’s Board of Directors at each meeting or
pursuant to each consent of the Company’s stockholders for the election of
Class II directors; (ii) use its commercially reasonable best efforts to cause
Mr. Nick Simon, as designated by MPM Capital (the “Class III Designee”
and collectively with the Class II Designee, the “MPM Designees”), to be nominated and
elected to Class III of the Company’s Board of Directors at each meeting or
pursuant to each consent of the Company’s stockholders for the election of
Class III directors; and (iii) if any MPM Designee elected to the Company’s
Board of Directors ceases to be a member of the Company’s Board of Directors
during such person’s term as a director due to such person’s resignation, death
or removal, the Company shall use its commercially reasonable best efforts,
subject to applicable laws and regulations, to cause such vacancy to be filled
by a replacement designated by MPM Capital, and such designee shall be an MPM
Designee for purposes of this Agreement;

 

(c)           as long as an MPM Designee remains on the
Company’s Board of Directors pursuant to Section 3.4(b), then: (i) the Company shall use its
commercially reasonable best efforts to appoint one of the MPM Designees to the
Nominating Committee of the Company’s Board of Directors; and (ii) the Company
shall not materially amend or modify the Charter of the Nominating Committee of
the Company’s Board of Directors as in effect as of the date of this Agreement;
provided, however, that the
Company shall not be required to make any appointment to a committee of the
Company’s Board of Directors if such appointment could reasonably be expected
to conflict with federal securities laws or any other rules or regulations then
in effect of Nasdaq or any exchange on which the Company’s securities are
listed for trading; and provided further that
the Company shall be able to amend or modify the Charter of the Nominating
Committee of the Company’s Board of Directors as is necessary to not conflict
with any applicable federal securities laws, state laws or any other rules or
regulations then in effect of Nasdaq or any exchange on which the Company’s
securities are listed for trading;

 

17

 

(d)           as long as an MPM Designee remains on
the Company’s Board of Directors pursuant to Section 3.4(b), then the Company shall use its
commercially reasonable best efforts to appoint one of the MPM Designees to the
Compensation Committee of the Company’s Board of Directors; provided, however, that the Company shall
not be required to make any appointment to a committee of the Company’s Board
of Directors if such appointment could reasonably be expected to conflict with
federal securities laws or any other rules or regulations then in effect of
Nasdaq or any exchange on which the Company’s securities are listed for
trading; and

 

(e)           the
Company shall use its commercially reasonable efforts to maintain the Company’s
amended and restated certificate of incorporation and bylaws, as amended, to
permit the Company to indemnify its directors and officers to the fullest
extent permitted by law (including to seek to amend such certificate and bylaws
to the extent the law permits greater indemnification than then permitted by
such certificate and bylaws).

 

3.5          Limitation on Subsequent Registration
Rights.  For so long as any
Registrable Securities remain outstanding, after the date of this Agreement, the
Company shall not, without the prior written consent of the holders of at least
a majority  of the aggregate of (a) the
Registrable Securities then outstanding under this Agreement and (b) the Prior
Registrable Securities then outstanding under the Prior Investor Rights
Agreement, enter into any agreement, other than in connection with a Special
Registration Statement, with any holder or prospective holder of any securities
of the Company that would grant such holder registration rights on a parity with, or senior to, those
granted to the Holders hereunder.

 

3.6          Participation
Rights.

 

(a)           The
parties hereby agree that each Investor, so long as such Investor and its
respective affiliates beneficially own at least 10% of all of the outstanding
shares of Common Stock, shall have the right (the “Participation Right”),
but not the obligation, to purchase its Pro Rata Share (as defined below) of
all (or any part) of any New Securities (as defined below). “Pro Rata Share”
equals a fraction, (i) the numerator of which shall be the number of shares of
Common Stock then owned by such Investor (or receivable by such Investor upon
conversion or exercise of all then outstanding convertible or exercisable
securities held by such Investor) and (ii) the denominator of which shall be
the total number of shares of Common Stock then outstanding.

 

(b)           For
purposes of this Agreement, “New Securities” shall mean any shares of, or securities
convertible into or exchangeable or exercisable for any shares of, the
Company’s capital stock; provided, however,
that the term “New Securities” does not include:

 

(i)            any
securities, including shares of Common Stock, to be issued pursuant to a
“public offering” (as such term is determined by the rules, regulations and
guidelines of the National Association of Securities Dealers) of such
securities, or issued pursuant to a registration statement on a Form S-4 or S-8
or substantially equivalent successor form, or, upon the approval of a majority
of the entire Board of Directors of the Company (i.e., a majority of the total
number of directors then in office), any shares issued pursuant to registration
statement and offered publicly (the parties hereto agree that merely because an
offering is to be 

 

18

 

undertaken as a
“take-down” from a shelf registration statement, that factor will not be the
sole determinative factor as to whether such offering is a “public offering”);

 

(ii)           shares
of Common Stock (or options therefor) issued or issuable to employees,
officers, directors, consultants or other service providers of the Company
pursuant to stock options or other stock incentive agreements or plans approved
by a majority of the Company’s Board of Directors and not for capital-raising
transactions;

 

(iii)         any
securities issued upon the conversion or exercise of an convertible or
exercisable securities outstanding as of the date hereof;

 

(iv)          any
shares of Common Stock (or any other security) issued in connection with any
stock split, stock dividend, combination, recapitalization or similar corporate
action for which no consideration is paid or payable;

 

(v)            any
shares of Common Stock (or any other security) issued in connection with (A)
any corporate collaboration agreement, (B) any licensing agreement, (C) any
payment or settlement of any obligation under a material contract and (D) as
compensation for any services rendered to the Company;

 

(vi)          any
securities issued pursuant to an acquisition of the Company approved by its
Board of Directors by means of (A) merger or other form of corporate
reorganization in which outstanding shares of the Company are exchanged for
securities or other consideration issued, or caused to be issued, by the
acquiring corporation or its subsidiary and pursuant to which the holders of
the outstanding voting securities of the Company immediately prior to such
merger or other form of corporate reorganization fail to hold equity securities
representing a majority of the voting power of the Company or surviving entity
immediately following such merger or other form of corporate reorganization or
(B) a sale of all or substantially all the assets of the Company approved by
the Company’s Board of Directors;

 

(vii)         any
shares of Common Stock or Warrants issued pursuant to the Financing;

 

(viii)        any
securities issued in connection with bona fide equipment financings or bona
fide lease agreements; or

 

(ix)          any
securities issued in transactions approved by the Board of Directors (i.e., a
majority of the total number of directors then in office) as being excluded
from the provisions of this Section 3.6.

 

(c)           If
the Company proposes to undertake any issuance of New Securities, it shall,
prior to any such issuance, give written notice to the Investors of its bona
fide intention to issue New Securities (the “Company Notice”), describing the type of
New Securities proposed to be issued, the total number or quantity of New
Securities proposed to be issued, and the price and the general terms upon
which the Company proposes to issue such New Securities. Each Investor may
elect to purchase or acquire its Pro Rata Share of such New Securities (an “Electing Party”) by
delivering written notice (the “Participation Notice”) of its election to so purchase or
acquire such New Securities at the price and upon the general terms specified
in the

 

19

 

Company Notice and
stating the quantity of New Securities to be purchased (not to exceed its Pro
Rata Share). The Participation Notice shall be delivered to the Company within
five (5) business days after the date of delivery of the Company Notice, and
the obligations of the Electing Party thereunder to purchase the elected number
or percentage of New Securities, and the obligations of the Company to sell
such New Securities to the Electing Party, shall be contingent upon the
consummation of the sale or other transaction pursuant to which the New
Securities are proposed to be issued. 
The number or amount of New Securities specified in the Participation
Notice shall be subject to automatic and proportionate reduction in the event
that the total number or quantity of New Securities sold by the Company is
reduced below the number or quantity specified in the Company Notice. If any
Investor fails to give the Participation Notice to the Company within such five
business-day period, or specifies in the Participation Notice that such
Investor will only purchase part, but not all, of such Investor’s Pro Rata
Share (a “Nonpurchasing
Investor”), then such Nonpurchasing Investor shall forfeit the
right hereunder to purchase that part of its Pro Rata Share of such New
Securities that it did not so agree to purchase, and the Company shall promptly
give each Investor (if any) who has timely agreed to purchase its full Pro Rata
Share of such offering of New Securities (a “Purchasing Investor”) written notice of
the failure of any Nonpurchasing Investor to purchase such Nonpurchasing
Investor’s full Pro Rata Share of such offering of New Securities (the “Overallotment Notice”).  Such Overallotment Notice shall be given to
each Purchasing Investor within three business days of the expiration of the
five business-day period. Each Purchasing Investor shall have a right of
overallotment such that such Purchasing Investor may agree to purchase a
portion of the Nonpurchasing Investor’s unpurchased Pro Rata Share of such
offering on a pro rata basis according to the relative Pro Rata Shares of the
Purchasing Investor at any time within three business days after receiving the
Overallotment Notice.

 

(d)           If
the Investors fail to exercise in full the Participation Right within such five
plus three plus three business-day period, then the Company shall have 180
calendar days thereafter to sell the New Securities with respect to which the
Investors’ Participation Rights hereunder were not exercised, at a price not
less than, and upon general terms not more favorable than those specified in
the Company Notice. If the Company has not issued and sold the New Securities
within such 180 calendar-day period, then the Company shall not thereafter
issue or sell any New Securities without again first offering such New
Securities to the Investors pursuant to this Section 3.6.

 

(e)           From
and after the date of this Agreement, the Company shall not enter into any
agreement with any holder or prospective holder of any securities that would
allow such holder or prospective holder a participation right, right of first
refusal, right of first offer or other similar right which is on terms
materially more favorable to such holder or prospective holder than, or in
preference to, the Participation Right granted to the Investors hereunder.

 

3.7          Nasdaq Listing.  The
Company shall use its commercially reasonable best efforts to maintain the
listing of the Registrable Securities on Nasdaq.

 

SECTION 4.         Miscellaneous.

 

4.1          Governing Law.  This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of California, without giving effect to the

 

20

 

principles of conflicts
of law. The parties agree that
any action brought by either party under or in relation to this Agreement,
including without limitation to interpret or enforce any provision of this
Agreement, shall be brought in, and each party agrees to and does hereby submit
to the jurisdiction and venue of, any state or federal court located in the
County of San Francisco, California.

 

4.2          No
Inconsistent Agreements.  The Company has not entered, as of the date
hereof, into any agreement with respect to any of its securities that is
inconsistent with, diminishes or otherwise limits, the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof.

 

4.3          Successors and Assigns.  Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the parties hereto
and their respective successors, assigns, heirs, executors and administrators
and shall inure to the benefit of, and be enforceable by, each person who shall
be a Holder of Registrable Securities from time to time; provided, however, that
prior to the receipt by the Company of adequate written notice of the transfer
of any Registrable Securities specifying the full name and address of the
transferee, the Company may deem and treat the person listed as the holder of
such shares in its records as the absolute owner and holder of such shares for
all purposes, including the payment of dividends or any redemption price.

 

4.4          Entire Agreement. 
This Agreement, including the Exhibits hereto, constitutes the full
and entire understanding and agreement between the parties with regard to the
subject hereof and no party shall be liable or bound to any other in any manner
by any oral or written representations, warranties, covenants and agreements
except as specifically set forth herein. 
Each party expressly represents and warrants that it is not relying on
any oral or written representations, warranties, covenants or agreements
outside of this Agreement; provided, however,
that the parties hereto acknowledge that the Investors have relied on those
certain Consents, Waivers and Agreements, dated as of April 29, 2003, executed
by holders of a majority of the “Registrable Securities” outstanding under (and
as defined in) that certain Amended and Restated Investor Rights Agreement,
dated as of February 3, 2000, by and among the Company and the investors named
therein.

 

4.5          Specific
Enforcement.  It is agreed and understood that monetary
damages would not adequately compensate an injured party for the breach of
Section 3.4 of this Agreement by any other party, that Section 3.4 of this
Agreement shall be specifically enforceable, and that any breach or threatened
breach of Section 3.4 of this Agreement shall be the proper subject of a
temporary or permanent injunction or restraining order.  Further, each party hereto waives any claim
or defense that there is an adequate remedy at law for such breach or threatened
breach Section 3.4 of this Agreement.

 

4.6          Severability.  In
case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired
thereby.

 

21

 

4.7          Amendment and Waiver.

 

(a)           Except
as otherwise expressly provided, this Agreement may be amended or modified only
upon the written consent of the Company and the Holders of at least a majority
of the Registrable Securities then outstanding.

 

(b)           Except
as otherwise expressly provided, the obligations of the Company and the rights
of the Holders under this Agreement may be waived only with the written consent
of the Holders of at least a majority
of the Registrable Securities then outstanding.

 

(c)           For
the purposes of determining the number of Holders entitled to vote or exercise
any rights hereunder, the Company shall be entitled to rely solely on the list
of record holders of its stock as maintained by or on behalf of the Company.

 

4.8          Notices. 
All notices, requests, consents and other communications hereunder shall
be in writing; shall be mailed (a) if within the domestic United States, by
first-class registered or certified airmail, by nationally recognized overnight
express courier, postage prepaid, or by facsimile or (b) if delivered from
outside the United States, by International Federal Express or facsimile; shall
be deemed given: (i) if delivered by first-class registered or certified mail
domestic, three business days after so mailed; (ii) if delivered by nationally
recognized overnight carrier, one business day after so mailed; (iii) if
delivered by International Federal Express, two business days after so mailed;
or (iv) if delivered by facsimile, upon electric confirmation of receipt; and
shall be delivered as addressed as follows:

 

(a)           if
to the Company, to:

 

Rigel Pharmaceuticals, Inc.

1180 Veterans Boulevard

South San
Francisco, CA  94080

Attn:  James M.
Gower

Chairman and Chief Executive Officer

Phone:  (650)
624-1100

Telecopy: 
(650) 624-1133

 

with
a copy to:

 

Cooley Godward llp

Five Palo Alto Square

3000 El Camino Real

Palo Alto, CA 
94306

Attn: Suzanne Sawochka Hooper

Phone: (650) 843-5000

Telecopy: (650) 849-7400

 

(b)           if
to the Investors, at the addresses as set forth on Exhibit A hereto, or at such other address or addresses as may
have been furnished to the Company in writing.

 

4.9          Attorneys’ Fees. 
In the event that any suit or action is instituted under or in
relation to this Agreement, including without limitation to enforce any
provision in this Agreement, the prevailing party in such dispute shall be
entitled to recover from the losing party

 

22

 

all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

 

4.10        Headings.  The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.

 

4.11        Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other parties.

 

4.12        Aggregation of Stock.  All shares of
Registrable Securities held or acquired by affiliated entities or persons or
persons or entities under common management or control shall be aggregated
together for the purpose of determining the availability of any rights under
this Agreement.

 

4.13        Pronouns.  All
pronouns contained herein, and any variations thereof, shall be deemed to refer
to the masculine, feminine or neutral, singular or plural, as to the identity
of the parties hereto may require.

 

 

[Remainder of page
intentionally left blank.]

 

23

 

In Witness Whereof, the parties hereto have
executed this Second
Investor Rights Agreement as of the date set forth
in the first paragraph hereof.

 

	
  COMPANY:

  	
  INVESTORS:

  
	
   

  	
   

  	
   

  
	
  RIGEL
  PHARMACEUTICALS, INC.

  	
  MPM
  BIOVENTURES III, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  James M. Gower

  	
   

  	
  By:

  	
  MPM BioVentures III GP, L.P.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
  Name:  James M. Gower

  	
  By:

  	
  MPM BioVentures III LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
  Title:
   Chairman and Chief Executive Officer

  	
  By:

  	
  /s/
  Dennis Henner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:
  Dennis Henner

  
	
   

  	
   

  
	
   

  	
  Title:  Series A Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MPM
  BIOVENTURES III-QP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MPM BioVentures III GP, L.P.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MPM BioVentures III LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dennis Henner

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:
  Dennis Henner

  
	
   

  	
   

  
	
   

  	
  Title:  Series A Member

  
							

 

SECOND INVESTOR RIGHTS
AGREEMENT

SIGNATURE PAGE

 

 

	
   

  	
  MPM BIOVENTURES III GMBH & CO.

  
	
   

  	
  BETEILIGUNGS KG

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MPM BioVentures III GP, L.P., in its

  
	
   

  	
   

  	
  capacity as the Managing Limited

  
	
   

  	
   

  	
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MPM BioVentures III LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dennis Henner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Dennis Henner

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:  Series A Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MPM BIOVENTURES III PARALLEL

  
	
   

  	
  FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MPM BioVentures III GP, L.P.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MPM BioVentures III LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dennis Henner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Dennis Henner

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:
  Series A Member

  

 

 

	
   

  	
  MPM ASSET MANAGEMENT

  
	
   

  	
  INVESTORS 2003 BVIII LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dennis Henner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Dennis Henner

  
	
   

  	
   

  
	
   

  	
  Title:  Manager

  
	
   

  	
   

  
	
   

  	
  MPM BIOEQUITIES MASTER FUND,

  
	
   

  	
  L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MPM BioEquities GP, L.P.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MPM BioEquities GP LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert W. Liptak

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:
  Robert W. Liptak

  
	
   

  	
   

  
	
   

  	
  Title:  General Partner

  

 

 

	
   

  	
  ALTA CALIFORNIA PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Alta California Management
  Partners, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Garrett Gruener

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  V.P. of Finance & Admin.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ALTA EMBARCADERO PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Garrett Gruener

  	
   

  
	
   

  	
   

  	
  V.P. of Finance & Admin.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ALTA
  BIOPHARMA PARTNERS II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Alta
  BioPharma Management Partners

  
	
   

  	
   

  	
  II,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Hilary Strain

  	
   

  
	
   

  	
   

  	
  V.P. of Finance & Admin.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ALTA EMBARCADERO BIOPHARMA

  
	
   

  	
  PARTNERS II, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Hilary Strain

  	
   

  
	
   

  	
   

  	
  V.P. of Finance & Admin.

  
					

 

 

	
   

  	
  FRAZIER HEALTHCARE IV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  FHM
  IV, LP, its General Partner

  
	
   

  	
  By:

  	
  FHM
  IV, LLC, its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nathan Every

  	
   

  
	
   

  	
   

  	
  Nathan
  Every, Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FRAZIER AFFILIATES IV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  FHM
  IV, LP, its General Partner

  
	
   

  	
  By:

  	
  FHM
  IV, LLC, its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nathan Every

  	
   

  
	
   

  	
   

  	
  Nathan
  Every, Member

  

 

 

	
   

  	
  HBM BIOVENTURES (CAYMAN) LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Arnold

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:    John
  Arnold

  
	
   

  	
   

  
	
   

  	
  Title:      Chairman
  and Managing Director

  

 

 

Exhibit A

 

INVESTORS

 

	
  Investor

  	
   

  	
  Aggregate

  Purchase Price

  	
   

  	
  Shares
  Purchased

  	
   

  	
  Warrant

  Shares

  	
   

  	
  Total

  Registrable

  Securities

  	
   

  
	
  MPM
  BioVentures III, L.P.

  111 Huntington Avenue

  31st Floor

  Boston, MA 02199

  (617) 425-9200 (T)

  (617) 425-9201 (F)

  	
   

  	
  $

  	
  1,399,248.00

  	
   

  	
  242,925

  	
   

  	
  48,585

  	
   

  	
  291,510

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MPM
  BioVentures III-QP, L.P.

  111 Huntington Avenue

  31st Floor

  Boston, MA 02199

  (617) 425-9200 (T)

  (617) 425-9201 (F)

  	
   

  	
  $

  	
  20,810,574.72

  	
   

  	
  3,612,947

  	
   

  	
  722,589

  	
   

  	
  4,335,536

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MPM
  BioVentures III GmbH & Co. Parallel-Beteiligungs KG

  111 Huntington Avenue

  31st Floor

  Boston, MA 02199

  (617) 425-9200 (T)

  (617) 425-9201 (F)

  	
   

  	
  $

  	
  1,758,752.64

  	
   

  	
  305,339

  	
   

  	
  61,068

  	
   

  	
  366,407

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MPM
  BioVentures III Parallel Fund, L.P.

  111 Huntington Avenue

  31st Floor

  Boston, MA 02199

  (617) 425-9200 (T)

  (617) 425-9201 (F)

  	
   

  	
  $

  	
  628,502.40

  	
   

  	
  109,115

  	
   

  	
  21,823

  	
   

  	
  130,938

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MPM
  Asset Management Investors 2003 BVIII LLC

  111 Huntington Avenue

  31st Floor

  Boston, MA 02199

  (617) 425-9200 (T)

  (617) 425-9201 (F)

  	
   

  	
  $

  	
  402,923.52

  	
   

  	
  69,952

  	
   

  	
  13,990

  	
   

  	
  83,942

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MPM
  BioEquities Master Fund, L.P.

  111 Huntington Avenue

  31st Floor

  Boston, MA 02199

  (617) 425-9200 (T)

  (617) 425-9201 (F)

  	
   

  	
  $

  	
  999,999.36

  	
   

  	
  173,611

  	
   

  	
  34,722

  	
   

  	
  208,333

  	
   

  

 

 

	
  Alta
  California Partners, L.P.

  One Embarcadero Center

  Suite 4050

  San Francisco, CA 94111

  (415) 362-4022 (T)

  (415) 362-6178 (F)

  	
   

  	
  $

  	
  977,662.08

  	
   

  	
  169,733

  	
   

  	
  33,947

  	
   

  	
  203,680

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alta
  Embarcadero Partners, LLC

  One Embarcadero Center

  Suite 4050

  San Francisco, CA 94111

  (415) 362-4022 (T)

  (415) 362-6178 (F)

  	
   

  	
  $

  	
  22,337.28

  	
   

  	
  3,878

  	
   

  	
  776

  	
   

  	
  4,654

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alta
  BioPharma Partners II, L.P.

  One Embarcadero Center

  Suite 4050

  San Francisco,

  CA 94111

  (415) 362-4022 (T)

  (415) 362-6178 (F)

  	
   

  	
  $

  	
  6,269,368.32

  	
   

  	
  1,088,432

  	
   

  	
  217,686

  	
   

  	
  1,306,118

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alta
  Embarcadero BioPharma Partners II, LLC

  One Embarcadero Center

  Suite 4050

  San Francisco, CA 94111

  (415) 362-4022 (T)

  (415) 362-6178 (F)

  	
   

  	
  $

  	
  230,630.40

  	
   

  	
  40,040

  	
   

  	
  8,008

  	
   

  	
  48,048

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Frazier
  Healthcare IV, L.P.

  601 Union Street, Suite 3300

  Seattle, WA 98101

  (206) 621-7200 (T)
(206) 621-1848 (F)

  	
   

  	
  $

  	
  7,462,120.32

  	
   

  	
  1,295,507

  	
   

  	
  259,101

  	
   

  	
  1,554,608

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Frazier
  Affiliates IV, L.P.

  601 Union Street, Suite 3300

  Seattle, WA 98101

  (206) 621-7200 (T)
(206) 621-1848 (F)

  	
   

  	
  $

  	
  37,877.76

  	
   

  	
  6,576

  	
   

  	
  1,315

  	
   

  	
  7,891

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HBM
  BioVentures (Cayman) Ltd.

  Unit 10 Eucalyptus Building

  Crewe Road

  P.O. Box 30852 SMB

  Grand Cayman, Cayman Islands

  (345) 946-8002 (T)

  (345) 946-8003 (F)

  	
   

  	
  $

  	
  4,999,996.80

  	
   

  	
  868,055

  	
   

  	
  173,611

  	
   

  	
  1,041,666

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTALS

  	
   

  	
  $

  	
  45,999,993.60

  	
   

  	
  7,986,110

  	
   

  	
  1,597,221

  	
   

  	
  9,583,331

  	
   

  

 

 

Exhibit B

 

PRIOR
RIGHTS HOLDERS

 

As of April 29, 2003

 

 

	
  Investor
  Name and Address

  	
   

  	
  Registrable

  Securities

  	
   

  
	
  Alta California
  Partners, L, P.

  One Embarcadero Center, Suite 4050

  San Francisco, CA 94111

  	
   

  	
  4,579,314

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Alta Embarcadero
  Partners, LLC

  One Embarcadero Center, Suite 4050

  San Francisco, CA 94111

  	
   

  	
  104,618

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CB Capital Investors,
  L.P.

  c/o Chase Capital Partners

  Partners 380

  Madison Avenue, 12th Floor

  New York, NY 10017

  	
   

  	
  833,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fortune Maker
  Corporation

  11/F King Fook Building

  30-32 Des Voeux Road Central

  HONG KONG

  	
   

  	
  550,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Frazier & Company,
  Inc.

  601 Union Street, Suite 2110

  Seattle, WA 98101

  	
   

  	
  15,234

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Frazier Healthcare II,
  L.P.

  601 Union Street, Suite 2110

  Seattle, WA 98101

  	
   

  	
  4,332,575

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Johnson & Johnson
  Development Corporation

  One Johnson & Johnson Plaza

  New Brunswick, NJ 08933

  	
   

  	
  1,666,666

  	
   

  

 

 

	
  Lombard Odier Darier
  Hentsch & Cie

  11, rue de la Corraterie

  1204 Geneva

  Switzerland

  	
   

  	
  4,169,538

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Novartis Pharma AG

  Head Financial Investments

  CH-4002

  Basil, Switzerland

  	
   

  	
  2,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Pfizer, Inc.

  235 East 42nd Street

  New York, NY 10017

  	
   

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Thomas Volpe

  c/o Rigel Pharmaceuticals, Inc.

  1180 Veterans Boulevard

  South San Francisco, CA 94080

  	
   

  	
  33,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  19,284,611<Page>

                                                                    Exhibit 4(d)

                           THIRD AMENDED AND RESTATED
                           REVOLVING CREDIT AGREEMENT

                                   DATED AS OF

                                NOVEMBER 14, 2003

                                      AMONG

                                  HASBRO, INC.,

                                   HASBRO SA,

                           THE BANKS PARTY HERETO, AND

                              FLEET NATIONAL BANK,
                                    AS AGENT

                                      WITH

                             FLEET SECURITIES, INC.,
                            HAVING ACTED AS ARRANGER

<Page>

                                TABLE OF CONTENTS

<Table>
<S>                                                                                <C>
1.  DEFINITIONS AND RULES OF INTERPRETATION........................................1
        1.1.  Definitions..........................................................1
        1.2.  Rules of Interpretation..............................................22

2.  THE SYNDICATED AND COMPETITIVE BID LOAN FACILITY...............................23
        2.1.  Commitment to Lend Syndicated Loans..................................23
        2.2.  Commitment Fee.......................................................24
        2.3.  Reduction of Total Commitment........................................24
        2.4.  Requests for Syndicated Loans........................................25
        2.5.  Competitive Bid Loans................................................25
               2.5.1.   Competitive Bid Borrowings.................................25
               2.5.2.   Repayment of Competitive Bid Loans.........................30
        2.6.  The Notes............................................................30
        2.7.  Interest on Loans....................................................31
        2.8.  Prepayments..........................................................32
        2.9.  Funds for Loans......................................................33
        2.10.  Mandatory Repayments................................................34
        2.11.  Application of Payments; Commitment Reduction.......................35
        2.12.  Optional Currency...................................................35
               2.12.1.  Request for Optional Currency..............................35
               2.12.2.  Funding....................................................36

3.  THE SWING LINE.................................................................36
        3.1.  The Swing Line Loans.................................................37
        3.2.  Notice of Borrowing..................................................37
        3.3.  Interest on Swing Line Loans.........................................37
        3.4.  Repayment of Swing Line Loans........................................38
        3.5.  The Swing Line Note..................................................38

4.  INTEREST; PAYMENTS AND COMPUTATIONS............................................39
        4.1.  Interest; Costs and Expenses.........................................39
        4.2.  Concerning Interest Periods..........................................44
        4.3.  Interest on Overdue Amounts..........................................44
        4.4.  Payments.............................................................44
        4.5.  Computations.........................................................45
        4.6.  Interest Limitation..................................................45
        4.7.  Indemnification......................................................45
        4.8.  Banks' Obligations Several...........................................46
        4.9.  Currency Matters.....................................................46
               4.9.1.   Currency of Account........................................46
</Table>

                                     Page 1
<Page>

<Table>
<S>                                                                                <C>
               4.9.2.   Currency Fluctuations......................................47
               4.9.3.   Exchange Rate..............................................47
               4.9.4.   Denominations..............................................47
        4.10. New Currency.........................................................47
        4.11. No Offset, etc.......................................................48
        4.12.  Forms...............................................................48

5.  LETTERS OF CREDIT..............................................................50
        5.1.  Letter of Credit Commitments.........................................50
               5.1.1.   Commitment to Issue Letters of Credit......................50
               5.1.2.   Letter of Credit Applications..............................50
               5.1.3.   Terms of Letters of Credit.................................51
               5.1.4.   Reimbursement Obligations of Banks.........................51
               5.1.5.   Participations of Banks....................................51
        5.2.  Reimbursement Obligation of the Company..............................51
        5.3.  Letter of Credit Payments............................................52
        5.4.  Obligations Absolute.................................................53
        5.5.  Reliance by Issuer...................................................53
        5.6.  Letter of Credit Fee.................................................54

6.  COLLATERAL SECURITY AND GUARANTIES.............................................54
        6.1.  Release of Collateral................................................54
        6.2.  Security of Company..................................................54
        6.3.  Guaranties and Security of Restricted Subsidiaries...................55
        6.4.  Limitation of Security...............................................56

7.  FEES...........................................................................56
        7.1.  Closing Fees.........................................................56
        7.2.  Agent's Fee..........................................................56

8.  REPRESENTATIONS AND WARRANTIES.................................................56
        8.1.  Corporate Existence..................................................56
        8.2.  Corporate Authority, etc.............................................57
        8.3.  Binding Effect of Documents, etc.....................................57
        8.4.  Governmental Approvals...............................................57
        8.5.  No Event of Default,etc..............................................58
        8.6.  Chief Executive Offices..............................................58
        8.7.  Title to Properties;Leases...........................................58
        8.8.  Financial Statements and Projections.................................58
              8.8.1. Fiscal Year...................................................58
              8.8.2. Financial Statements..........................................58
              8.8.3.  Projections..................................................58
</Table>

                                     Page 2
<Page>

<Table>
<S>                                                                                <C>
        8.9.  No Material Changes, Etc.............................................58
        8.10.  Franchises, Patents, Copyrights, Etc................................59
        8.11.  Litigation..........................................................59
        8.12.  No Materially Adverse Contracts, Etc................................59
        8.13.  Compliance With Other Instruments, Laws, Etc........................59
        8.14.  Taxes...............................................................59
        8.15.  Absence of Financing Statements, Etc................................59
        8.16.  Indebtedness........................................................60
        8.17.  True Copies of Charter and Other Documents..........................60
        8.18.  Employee Benefit Plans..............................................60
               8.18.1.  In General.................................................60
               8.18.2.  Terminability of Welfare Plans.............................60
               8.18.3.  Guaranteed Pension Plans...................................60
               8.18.4.  Multiemployer Plans........................................61
        8.19.  Holding Company and Investment Company Acts.........................61
        8.20.  Certain Transactions................................................61
        8.21.  Use of Proceeds.....................................................61
               8.21.1.  General....................................................61
               8.21.2.  Regulations U and X........................................62
        8.22.  Environmental Compliance............................................62
        8.23.  Subsidiaries........................................................63
        8.24.  Disclosure..........................................................63
        8.25.  Foreign Assets Control Regulations, Etc.............................63

9.  AFFIRMATIVE COVENANTS OF THE COMPANY...........................................63
        9.1.  Punctual Payment.....................................................63
        9.2.  Use of Loan Proceeds.................................................63
        9.3.  Maintenance of Office................................................63
        9.4.  Records and Accounts.................................................64
        9.5.  Financial Statements, Certificates and Information...................64
        9.6.  Notices..............................................................65
               9.6.1.   Defaults...................................................65
               9.6.2.   Environmental Events.......................................66
               9.6.3.   Notification of Claim against Collateral...................66
               9.6.4.   Notices Concerning Inventory Collateral........ ...........66
               9.6.5.   Notice of Litigation and Judgments..... ...................66
        9.7.  Corporate Existence; Maintenance of Properties.......................66
        9.8.  Insurance............................................................67
        9.9.  Taxes................................................................67
        9.10.  Access..............................................................67
        9.11.  Compliance with Laws, Contracts, Licenses, and Permits..............68
        9.12.  Employee Benefit Plans..............................................68
        9.13.  Fiscal Year.........................................................69
        9.14.  Additional Significant Subsidiaries and Restricted Subsidiaries.....69
</Table>

                                     Page 3
<Page>

<Table>
<S>                                                                                <C>
        9.15.  Ratings.............................................................69
        9.16.  Further Assurances..................................................69

10.  CERTAIN NEGATIVE COVENANTS OF THE COMPANY.....................................70
        10.1.  Restrictions on Indebtedness........................................70
        10.2.  Restrictions on Liens...............................................71
        10.3.  Restrictions on Investments.........................................73
        10.4.  Restricted Payments.................................................75
        10.5.  Merger, Consolidation and Disposition of Assets.....................76
               10.5.1.  Mergers and Acquisitions...................................76
               10.5.2.  Disposition of Assets......................................77
        10.6.  Sale and Leaseback..................................................78
        10.7.  Compliance with Environmental Laws..................................78
        10.8.  Subordinated Debt...................................................78
        10.9.  Employee Benefit Plans..............................................78
        10.10. Business Activities.................................................79
        10.11. Transactions with Affiliates........................................79
        10.12. Restrictions on Negative Pledges....................................79
        10.13. Hedging Agreements..................................................80

11.  FINANCIAL COVENANTS...........................................................80
        11.1.  Minimum EBITDA......................................................80
        11.2.  Total Funded Debt to EBITDA.........................................80
        11.3.  Minimum Interest Coverage Ratio.....................................81
        11.4.  Capital Expenditures................................................81

12.  CONDITIONS TO EFFECTIVENESS...................................................81
        12.1.  Loan Documents, etc.................................................81
        12.2.  Performance, etc....................................................82
        12.3.  Certified Copies of Charter Documents...............................82
        12.4.  Proof of Corporate Action...........................................82
        12.5.  Incumbency Certificates.............................................82
        12.6.  Proceedings and Documents...........................................82
        12.7.  Certificates of Insurance...........................................83
        12.8.  Payment of Fees.....................................................83
        12.9.  Legality of Transactions............................................83
        12.10. Legal Opinion.......................................................83

13.  CONDITIONS TO LOANS...........................................................83
        13.1.  Conditions to Loans to the Company..................................83
               13.1.1.  Legality of Transactions...................................83
               13.1.2.  Representations and Warranties.............................83
               13.1.3.  Performance, etc...........................................84
               13.1.4.  Proceedings and Documents..................................84
               13.1.5.  Loan Documents.............................................84
</Table>

                                     Page 4
<Page>

<Table>
<S>                                                                                <C>
        13.2.  Conditions to Loans to Hasbro SA....................................84
               13.2.1.  Legality of Transactions...................................84
               13.2.2.  Representations andWarranties..............................84
               13.2.3.  Performance, etc...........................................84
               13.2.4.  Proceedings and Documents..................................85
               13.2.5.  Loan Documents.............................................85
               13.2.6.  No Defaults................................................85

14.  EVENTS OF DEFAULT; ACCELERATION...............................................86
        14.1.  Remedies Upon Default...............................................86
        14.2.  Termination of Commitments..........................................89
        14.3.  Remedies............................................................89
        14.4.  Certain Rights of Cure..............................................90
        14.5.  Distribution of Collateral Proceeds.................................90
        14.6.  Judgment Currency...................................................91

15.  SETOFF........................................................................93

16.  THE AGENT.....................................................................93
        16.1.  Authorization.......................................................93
        16.2.  Employees and Agents................................................94
        16.3.  No Liability........................................................94
        16.4.  No Representations..................................................94
               16.4.1.  General....................................................94
               16.4.2.  Closing Documentation, etc.................................95
        16.5.  Indemnification.....................................................95
        16.6.  Reimbursement.......................................................96
        16.7.  Non-Reliance on Agent and Other Banks...............................96
        16.8.  Payments............................................................96
               16.8.1.  Payments to Agent..........................................96
               16.8.2.  Distribution by Agent......................................96
               16.8.3.  Delinquent Banks...........................................97
        16.9.  Holders of Notes....................................................97
        16.10.  Agent as Bank......................................................97
        16.11.  Resignation or Removal ofAgent.....................................97
        16.12.  Notification of Defaults and Events of Default.....................98
        16.13.  Duties in the Case of Enforcement..................................98
        16.14.  Agent May File Proofs of Claim.....................................98

17.  EXPENSES......................................................................99

18.  INDEMNIFICATION...............................................................100

19.  SURVIVAL OF COVENANTS, ETC....................................................101
</Table>

                                     Page 5
<Page>

<Table>
<S>                                                                                <C>
20.  ASSIGNMENT AND PARTICIPATION..................................................101
        20.1.  Conditions to Assignment by Banks...................................101
        20.2.  Certain Representations and Warranties; Limitations; Covenants......102
        20.3.  Register............................................................103
        20.4.  New Notes...........................................................103
        20.5.  Participations......................................................103
        20.6.  Assignee or Participant Affiliated with the Company.................104
        20.7.  Miscellaneous Assignment Provisions.................................104
        20.8.  Increased Costs.....................................................104
        20.9.  Assignment by Company...............................................105

21.  NOTICES, ETC..................................................................105

22.  TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.................................106
        22.1.  Confidentiality.....................................................106
        22.2.  Prior Notification..................................................106
        22.3.  Other...............................................................106

23.  CONSENTS, AMENDMENTS, WAIVERS, ETC............................................107

24.  PROVISIONS OF GENERAL APPLICATIONS............................................108
        24.1.  Governing Law.......................................................108
        24.2.  Headings............................................................109
        24.3.  Counterparts........................................................109
        24.4.  Entire Agreement, Etc...............................................109
        24.5.  Waiver of Jury Trial................................................109
        24.6.  Severability........................................................109

25.  TRANSITIONAL ARRANGEMENTS.....................................................110
        25.1.  Existing Credit Agreement Superseded................................110
        25.2.  Return and Cancellation of Notes....................................110
        25.3.  Interest and Fees Under Superseded Agreement........................110

26.  LIABILITY FOR THE OBLIGATIONS.................................................110

27.  GUARANTY......................................................................110
        27.1.  Guaranty of Payment and Performance.................................110
        27.2.  The Company's Agreement to Pay Enforcement Costs, etc...............111
        27.3.  Waivers by the Company; Banks' Freedom to Act.......................111
        27.4.  Unenforceability of Hasbro SA Obligations Against Hasbro SA.........112
        27.5.  Subrogation; Subordination..........................................112
               27.5.1.  Waiver of Rights Against Hasbro SA.........................112
               27.5.2.  Subordination..............................................112
               27.5.3.  Provisions Supplemental....................................113
</Table>

                                     Page 6
<Page>

<Table>
        <S>                                                                        <C>
        27.6.  Termination; Reinstatement..........................................113
        27.7.  Successors and Assigns..............................................113
        27.8.  Severability, etc...................................................113
</Table>

                                     Page 7
<Page>

                             SCHEDULES AND EXHIBITS

<Table>
        <S>                     <C>
        Schedule 1              Banks, Commitments and Commitment Percentages
        Schedule 2              Indicative Terms of Permitted Receivables Transactions
        Schedule 8.7            Title to Properties; Leases
        Schedule 8.11           Litigation
        Schedule 8.22           Environmental Compliance
        Schedule 8.23           Subsidiaries
        Schedule 10.1           Existing Indebtedness
        Schedule 10.2           Existing Liens
        Schedule 10.12          Restrictions on Negative Pledges

        Exhibit A-1             Form of Syndicated Note
        Exhibit A-2             Form of Syndicated Loan Request
        Exhibit B-1             Form of Competitive Bid Note
        Exhibit B-2             Form of Competitive Bid Quote Request
        Exhibit B-3             Form of Invitation for Competitive Bid Quotes
        Exhibit B-4             Form of Competitive Bid Quote
        Exhibit B-5             Form of Notice of Competitive Bid Borrowing
        Exhibit C               Form of Swing Line Loan Request
        Exhibit D               Form of Swing Line Note
        Exhibit E               Form of Compliance Certificate
        Exhibit F               Form of Subordination Agreement
        Exhibit G               Form of Assignment and Acceptance
        Exhibit H               Form of Confidentiality Agreement
        Exhibit I               Form of Company Security Agreement
        Exhibit J               Form of Subsidiary Security Agreement
        Exhibit K               Form of Trademark Agreement
        Exhibit L               Form of Patent Agreements
        Exhibit M               Form of Memorandum of Grant of Security Interest in Copyrights
</Table>

                                     Page 8
<Page>

                           THIRD AMENDED AND RESTATED
                           REVOLVING CREDIT AGREEMENT

     This THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, is dated as of
November 14, 2003, by and among HASBRO, INC. (the "Company"), a Rhode Island
corporation having its principal place of business at 1027 Newport Avenue,
Pawtucket, Rhode Island 02861, HASBRO SA, a corporation organized under the laws
of Switzerland and wholly owned subsidiary of the Company ("Hasbro SA"), and
FLEET NATIONAL BANK and the other lending institutions listed on Schedule 1
(collectively, the "Banks") and FLEET NATIONAL BANK, as agent for the Banks (the
"Agent").

                                   WITNESSETH:

     WHEREAS, pursuant to that certain Second Amended and Restated Revolving
Credit Agreement, dated as of March 19, 2002 (as amended and in effect from time
to time, the "Existing Credit Agreement"), by and among the Company, Hasbro SA,
the Banks, the Agent, and certain other parties thereto, the Banks have made
available certain financing to the Company and Hasbro SA upon the terms and
conditions contained therein; and

     WHEREAS, the Company has requested, among other things, to amend and
restate the Existing Credit Agreement and the Banks are willing to amend and
restate the Existing Credit Agreement on the terms and conditions set forth
herein;

     NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, the Company, the Banks and the Agent agree that as
of the date hereof, the Existing Credit Agreement shall be amended and restated
in its entirety as set forth herein:

                   1. DEFINITIONS AND RULES OF INTERPRETATION.

     1.1. DEFINITIONS. The following terms shall have the meanings set forth in
thissection 1.1 or elsewhere in the provisions of this Agreement referred to
below:

     Accounts. As defined in the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts from time to time; and, with respect to the
Company and its Domestic Subsidiaries, all such Accounts of such Persons,
whether now existing or existing in the future, including, without limitation,
(a) all accounts receivable of such Person, including, without limitation, all
accounts created by or arising from all of such Person's sales of goods or
rendition of services made under any of its trade names, or through any of its
divisions, (b) all unpaid rights of such Person (including rescission, replevin,
reclamation and stopping in transit) relating to the foregoing or arising
therefrom, (c) all rights to any goods represented by any of the foregoing,
including, without limitation, returned or repossessed goods, (d) all reserves
and credit balances held by such Person with respect to any such accounts

                                     Page 9
<Page>

receivable of any purchaser of goods or services or other Person obligated to
make payment to the Company or any of its Subsidiaries (other than any
Receivables Subsidiaries and the Foreign Subsidiaries) in respect of a purchase
of such goods or services, (e) all letters of credit, guarantees or collateral
for any of the foregoing and (f) all insurance policies or rights relating to
any of the foregoing.

     Affiliate. Any Person that would be considered to be an affiliate of the
Company under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Company were
issuing securities.

     Affected Bank. See section 4.1(c).

     Agent. Fleet, acting as agent for the Banks, and each other Person
appointed as the successor Agent in accordance with section 16.11.

     Agent's Fee. See section 7.2.

     Agent's Fee Letter. The fee letter, dated as of the Effective Date, by and
between the Company and the Agent, as the same may be amended and in effect from
time to time.

     Agent's Office. The Agent's office located at 100 Federal Street, Boston,
Massachusetts 02110, or at such other location as the Agent may designate from
time to time.

     Agent's Special Counsel. Bingham McCutchen LLP, or such other counsel as
the Agent may approve.

     Agreement. This Third Amended and Restated Revolving Credit Agreement,
including the Exhibits and Schedules hereto, as originally executed, or if this
Third Amended and Restated Revolving Credit Agreement is further amended, varied
or supplemented from time to time, as so amended, varied or supplemented.

     Applicable Pension Legislation. At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to the Company or any of its Subsidiaries.

     Arranger. Fleet Securities, Inc.

     Asset Sale. Any one or series of related transactions in which the Company
or any of its Subsidiaries conveys, sells, leases, licenses or otherwise
disposes of, directly or indirectly, any of its properties, businesses or assets
whether owned on the Effective Date or thereafter acquired.

     Assignee. A bank or other institution to which a Bank assigns all, or a
proportionate part of all, of such Bank's rights and obligations under this
Agreement and the Notes payable to such transferor Bank, pursuant to the terms
of section 20.

     Assignment and Acceptance. See section 20.1.

     Atari. A societe anonyme organized under the laws of France, formerly known
as Infogrames Entertainment S.A.

                                     Page 10
<Page>

     Attributable Debt. At any time, the amount of obligations outstanding at
such time under the legal documents entered into as part of a Permitted
Receivables Securitization Facility on any date of determination that would be
characterized as principal if such Permitted Receivables Securitization Facility
were structured as a secured lending transaction rather than as a purchase, less
(i) any escrowed or pledged cash proceeds which effectively secure, or are
required to be maintained as reserves by the applicable Receivables Subsidiary
for, the Indebtedness of the Company and its Subsidiaries in respect of, or the
obligations of the Company and its Subsidiaries under, such Permitted
Receivables Securitization Facility, (ii) reasonable attorneys' fees,
accountants' fees, brokerage consultant and other customary fees, underwriting
commissions and other reasonable fees and expenses actually incurred in
connection with such Permitted Receivables Securitization Facility and (iii) any
taxes paid or reasonably estimated to be payable as a result thereof.

     Authorized Financial Officers. The Chief Financial Officer of the Company,
the Controller of the Company and any other officer of the Company designated by
the Company from time to time as the chief financial officer or the chief
accounting officer of the Company and qualified to certify as to financial
information delivered on behalf of the Company and its Subsidiaries pursuant to
section 9.5 hereof; and "Authorized Financial Officer" means any one of the
Authorized Financial Officers.

     Balance Sheet Date. June 29, 2003.

     Bank Affiliate. (a) With respect to any Bank, (i) an affiliate of such Bank
or (ii) any entity (whether a corporation, partnership, limited liability
company, trust or legal entity) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by such Bank or
an affiliate of such Bank and (b) with respect to any Bank that is a fund which
invests in bank loans and similar extensions of credit, any other entity
(whether a corporation, partnership, limited liability company, trust or other
legal entity) that is a fund that invests in bank loans and similar extensions
of credit and is managed by the same investment advisor as such Bank or by an
affiliate of such investment advisor.

     Banks. As defined in the Preamble, and any bank or institution that becomes
an Assignee pursuant to, and fulfills the conditions of, section 20.

     Base Rate. With respect to Loans denominated in Dollars, (a) the rate
(rounded to the nearest 1/100 of 1%) equal to the higher of (i) the variable
annual rate of interest so designated from time to time by Fleet as its "prime
rate", such rate being a reference rate and not necessarily representing the
lowest or best rate being charged to any customer, and (ii) one-half of one
percent (0.5%) above the Federal Funds Effective Rate. For the purposes of this
definition, "Federal Funds Effective Rate" shall mean for any day, the rate per
annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the

                                     Page 11
<Page>

average of the quotations for such day on such transactions received by the
Agent from three funds brokers of recognized standing selected by the Agent; and
(b) with respect to Loans denominated in any Optional Currency, the daily rate
(rounded to the nearest 1/100 of 1%) determined to be the average rate charged
to borrowers of similar quality as the Borrower of Loans denominated in such
Optional Currency as reasonably determined by the Agent.

     Base Rate Loan(s). Loan(s) bearing interest calculated by reference to the
Base Rate.

     Borrowing. A borrowing hereunder by the Company and/or Hasbro SA consisting
of a Loan to the Company and/or Hasbro SA by the Banks or the Swing Line Bank.

     Business Day. Any day (a) on which banking institutions in Boston,
Massachusetts and New York City, New York are open for the conduct of normal
banking business, (b) if such day involves Eurocurrency Rate Loans denominated
in Dollars, a day on which dealings in Dollars can be carried on in the relevant
Eurocurrency Interbank Market and Dollar settlements of such dealings may be
effected in New York City, and (c) if such day involves Loans denominated in any
Optional Currency, a day on which dealings in the relevant Optional Currency and
exchange can be carried on in the relevant Eurocurrency Interbank Market and in
the principal financial center of the country in which such currency is legal
tender.

     Capital Expenditures. With respect to the Company and its Subsidiaries and
for any period, the aggregate of all amounts included in "Additions to property,
plant and equipment" as shown in the Company's statement of cash flows for such
period, determined in accordance with GAAP.

     Capitalized Leases. Leases under which the Company or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.

     Capital Stock. Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

     Casualty Event. With respect to any property (including any interest in
property) of any Hasbro Company, any loss of, damage to, or condemnation or
other taking of, such property for which such Person receives insurance
proceeds, proceeds of a condemnation award or other compensation.

     CERCLA. See section 8.22.

     Change of Control. An event or series of events by which any person or
group of persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act), directly or indirectly, of fifty-one percent (51%) or more of
the outstanding shares of Capital Stock of the Company; or, during any period of
twelve (12) consecutive calendar months, Continuing Directors shall cease to
constitute a majority of the board of directors of the Company.

                                     Page 12
<Page>

     Code. The Internal Revenue Code of 1986, as amended.

     Collateral. All of the property, rights and interests of the Company and
the Restricted Subsidiaries that are or are intended to be subject to the
security interests and mortgages created by the Security Documents.

     Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the maximum amount of such Bank's commitment to make Syndicated Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Company, as the same may be reduced from time to
time; or if such Bank's commitment is terminated pursuant to the provisions
hereof, zero. Each Bank's Commitment shall be deemed to be reduced, while any
Competitive Bid Loans are outstanding, by an amount equal to such Bank's
Commitment Percentage of such outstanding Competitive Bid Loans.

     Commitment Fee. See section 2.2.

     Commitment Fee Rate. At any time of determination, an annual percentage
rate determined in accordance with the Pricing Grid.

     Commitment Percentage. With respect to each Bank, the percentage set forth
opposite such Bank's name on Schedule 1 hereto.

     Company. See preamble.

     Company Loans. The Loans other than the Hasbro SA Loans.

     Company Security Agreement. The Security Agreement between the Company and
the Agent, substantially in the form of Exhibit I hereto to be entered into to
the extent required by section 6.2.

     Competitive Bid Loan(s). A Borrowing hereunder consisting of one or more
revolving credit loans made by any of the Banks whose offer to make a revolving
credit loan as part of such Borrowing has been accepted by the Company and/or
Hasbro SA under the auction bidding procedure described in section 2.5.

     Competitive Bid Notes. See section 2.6.

     Competitive Bid Note Record. A Record with respect to a Competitive Bid
Note.

     Competitive Bid Quote. An offer by a Bank to make a Competitive Bid Loan in
accordance with section 2.5 hereof.

     Competitive Bid Quote Request. See section 2.5.1(b).

     Competitive Bid Rate. See section 2.5.1(d)(ii)(C).

     Compliance Certificate. See section 9.5(c).

                                     Page 13
<Page>

     Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Company and all of its
Subsidiaries, consolidated in accordance with GAAP.

     Consolidated Cash. The consolidated cash and cash equivalents of the
Company and its Subsidiaries, determined in accordance with GAAP.

     Consolidated Net Earnings (or Loss). The consolidated net earnings (or
loss) of the Company and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with GAAP, after
eliminating therefrom all extraordinary items of income.

     Consolidated Operating Profit (or Loss). The consolidated operating profit
(or loss) of the Company and its Subsidiaries identified as such on the
Company's income statement for any period, determined in accordance with GAAP.

     Consolidated Total Funded Debt. As at any date of determination, with
respect to the Company and its Subsidiaries, the amount equal to, without
duplication, (a) the aggregate amount of Indebtedness of the Company and its
Subsidiaries, on a consolidated basis, relating to (i) the borrowing of money or
the obtaining of credit, (ii) the deferred purchase price of assets (other than
trade payables incurred in the ordinary course of business), (iii) in respect of
any Synthetic Leases or any Capitalized Leases and (iv) the face amount of all
letters of credit outstanding plus (b) the aggregate amount of Indebtedness of
the type referred to in clause (a) of another Person (other than the Company or
a Subsidiary thereof) guaranteed by the Company or any of its Subsidiaries plus
(c) the Attributable Debt. In determining under clause (a) of this definition
the Indebtedness of the Company and its Subsidiaries under or in respect of any
Permitted Receivables Securitization Facility or under clause (c) of this
definition the Attributable Debt in respect of any Permitted Receivables
Securitization Facility, such Indebtedness or amount shall be reduced by any
escrowed or pledged cash proceeds which effectively secure such Indebtedness or
the obligations of the Company or any such Subsidiary under such Permitted
Receivables Securitization Facility.

     Consolidated Total Interest Expense. For any period, the aggregate amount
of interest expense of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP for such period.

     Continuing Directors. With respect to any period of twelve (12) consecutive
calendar months, any member of the board of directors of the Company who (a) was
a member of such board of directors on the first day of such period or (b) was
nominated for election or elected to such board of directors with the approval
of a majority of the Continuing Directors who were members of such board of
directors at the time of such nomination or election.

     Copyright Memorandum. The Memorandum of Grant of Security Interest in
Copyrights by and among the Company, the Restricted Subsidiaries and the Agent,
in substantially the form of Exhibit M hereto to be entered into to the extent
required by section 6.2.

                                     Page 14
<Page>

     Credit Insurance Provider. A Person party to a Credit Insurance Provider
Agreement.

     Credit Insurance Provider Agreement. An agreement entered into by and among
the Company, the Subsidiaries of the Company named therein and the Credit
Insurance Provider, pursuant to which the Company and certain of its
Subsidiaries agree to sell, assign, pledge and transfer to the Credit Insurance
Provider certain accounts receivable under the terms and conditions of the
Credit Insurance Provider Agreement.

     Default. Any Event of Default and any event which, but for the giving of
notice or the lapse of time, or both, would constitute an Event of Default.

     Delinquent Bank. See section 16.8.3.

     Distribution. Any of (a) the declaration or payment of any dividend on or
in respect of any shares of any class of Capital Stock of the Company other than
dividends payable solely in shares of common stock of the Company (or payable
pursuant to the Rights Agreement, dated June 16, 1999, between the Company and
Fleet National Bank (f/k/a BankBoston, N.A.) as amended); (b) the purchase,
redemption, defeasance, retirement or other acquisition of any shares of any
class of Capital Stock of the Company directly or indirectly through a
Subsidiary of the Company or otherwise (including the setting apart of assets
for a sinking or other analogous fund to be used for such purpose, and excluding
any such acquisition by way of payment of any portion of the exercise price for
any stock option in such shares, or in respect to any withholding taxes related
to any such stock option exercise); or (c) the return of capital by the Company
to its shareholders as such; or any other distribution on or in respect of any
shares of any class of Capital Stock of the Company.

     Dollar(s) and $. The lawful currency of the United States of America.

     Dollar Equivalent. On any particular date, with respect to any amount
denominated in Dollars, such amount in Dollars, and with respect to any amount
denominated in currency other than Dollars, the amount (as reasonably
ascertained by the Agent which determination shall be conclusive absent manifest
error) of Dollars which could be purchased by the Agent (in accordance with its
normal banking practices) in the London foreign currency deposit market with
such amount of such currency at the Exchange Rate on such date.

     Domestic Subsidiary. Any Subsidiary of the Company that is not a Foreign
Subsidiary.

     Drawdown Date. The date on which any Loan is made or is to be made, and the
date on which any Loan is converted or continued in accordance with section
4.1(a).

     EBITDA. With respect to any particular fiscal period, EBITDA shall mean the
amount equal to (a) Consolidated Operating Profit (or Loss) for such period,
plus (b) in each case without duplication, and to the extent deducted in
calculating Consolidated Operating Profit (or Loss) for such period, (i)
depreciation and amortization of the Company and its Subsidiaries, (ii) other
non-cash charges of the Company and its Subsidiaries, and (iii) extraordinary

                                     Page 15
<Page>

losses of the Company and its Subsidiaries, and minus (c) to the extent included
in Consolidated Operating Profit (or Loss) for such period, extraordinary gains
of the Company and its Subsidiaries for such period, all determined in
accordance with GAAP.

     Effective Date. The date on which all of the conditions set forth in
section 12 have been satisfied, and all "Loans" under and as defined in the
Existing Credit Agreement are converted into Loans hereunder.

     Employee Benefit Plan. Any employee benefit plan within the meaning of
section 3(3) of ERISA maintained or contributed to by the Company or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.

     Environmental Laws. See section 8.22.

     EPA. See section 8.22.

     Equity Issuance. The sale or issuance by the Company or any of its
Subsidiaries of any of its Capital Stock (other than to the Company or any of
its Subsidiaries).

     ERISA. The Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

     ERISA Affiliate. Any Person which is treated as a single employer with the
Company under section 414 of the Code.

     ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of section 4043 of ERISA and the regulations
promulgated thereunder.

     Euro or EUR. The euro referred to in the Council Regulation (EC) No.
1103/97 dated 17 June 1997 passed by the Council of the European Union, or, if
different, the then lawful currency of the member states of the European Union
that participate in the third stage of the Economic and Monetary Union.

     Eurocurrency Interbank Market. Any lawful recognized market in which
deposits of Dollars or the relevant Optional Currencies, as applicable, are
offered by international banking units of United States banking institutions and
by foreign banking institutions to each other and in which foreign currency and
exchange operations or eurocurrency funding operations are customarily
conducted.

     Eurocurrency Offered Rate. With respect to the Interest Period of any
Eurocurrency Rate Loan denominated in Dollars, the annual rate of interest equal
to the rate at which Dollar deposits for such Interest Period are offered based
on information presented on Page 3750 of the Dow Jones Market Service (formerly
known as the Telerate Service) as of 11:00 A.M. (London time) (or as soon
thereafter as practicable) two (2) Business Days preceding the first day of such
Interest Period.

     Eurocurrency Rate. With respect to amounts denominated in any Optional
Currency, the International Eurocurrency Rate. With respect to all Eurocurrency

                                     Page 16
<Page>

Rate Loans denominated in Dollars for any Interest Period, the annual rate of
interest, rounded to the nearest 1/100 of 1%, determined by the Agent for such
Interest Period in accordance with the following formula:

         Eurocurrency Rate =   Eurocurrency Offered Rate
                             ------------------------------
                              1 - Eurocurrency Reserve Rate

     Eurocurrency Rate Loan(s). Loan(s) denominated in Dollars or in any
Optional Currency bearing interest calculated by reference to the Eurocurrency
Rate.

     Eurocurrency Reserve Rate. The rate in effect from time to time, expressed
as a decimal, at which the Banks would be required to maintain reserves under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor or similar regulation relating to such reserve requirements) against
"Eurocurrency Liabilities" (as that term is used in Regulation D), if such
liabilities were outstanding.

     Event of Default. See section 14.1.

     Exchange Rate. With respect to any Optional Currency, at any date of
determination thereof, the spot rate of exchange in London that appears on the
display page applicable to such Optional Currency on the Reuters System (or such
other page as may replace such page on such service for the purpose of
displaying the spot rate of exchange in London) for the conversion of such
Optional Currency into Dollars at 4:00 P.M. (London time) on such date;
provided, however, that if there shall at any time no longer exist such a page
on such service, the Exchange Rate shall be determined by reference to another
similar rate publishing service reasonably selected by the Agent.

     Existing Credit Agreement. See Preamble.

     Fee Letter. The fee letter, dated as of the Effective Date, by and between
the Company and the Agent, as the same may be amended and in effect from time to
time.

     Fees. Collectively, the Commitment Fee, Competitive Bid fees, the Letter of
Credit Fees, the Agent's Fee and the Closing Fees.

     Final Maturity Date. March 18, 2007.

     Fitch. FitchRatings, or its successors.

     Fleet. Fleet National Bank, in its capacity as a Bank hereunder.

     Foreign Subsidiary. Any Subsidiary that conducts substantially all its
business (other than export sales) in countries other than the United States of
America and that is organized under the laws of a jurisdiction other than the
United States of America and the states thereof.

     GAAP. (i) When used in section 11, whether directly or indirectly through
reference to a capitalized term used therein, principles which are (A)
consistent with the principles promulgated or adopted by the Financial

                                     Page 17
<Page>

Accounting Standards Board and its predecessors, in effect for the fiscal period
ended on the Balance Sheet Date, and (B) to the extent consistent with such
principles, the accounting practice of the Company reflected in its financial
statements for the year ended on the Balance Sheet Date; and (ii) when used in
general, other than as provided above, principles which are (A) consistent with
the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors (or successor organizations), as in effect from time
to time and (B) consistently applied with past financial statements of the
Company adopting the same principles.

     GBP. British Pounds Sterling.

     Governmental Authority. Any foreign, federal, state, regional, local,
municipal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof, or any court or arbitrator.

     Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of section 3(2) of ERISA maintained or contributed to by the Company or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.

     Guaranty. The Third Amended and Restated Guaranty, dated as of the
Effective Date, as the same may be amended and in effect from time to time, made
by each Restricted Subsidiary in favor of the Banks and the Agent pursuant to
which each Restricted Subsidiary guarantees to the Banks and the Agent the
payment and performance of the Secured Obligations and in form and substance
reasonably satisfactory to the Agent.

     Hasbro Companies. Collectively, the Company, the Restricted Subsidiaries
and the Significant Subsidiaries.

     Hasbro SA. See preamble.

     Hasbro SA Loans. Any Loans made or to be made by the Banks to Hasbro SA.

     Hasbro SA Obligations. All Obligations of Hasbro SA with respect to the
Hasbro SA Loans.

     Hazardous Substances. See section 8.22.

     Hedging Agreement. Any foreign exchange contract, currency swap agreement,
currency or commodity agreement or other similar agreement or arrangement
designed to protect against the fluctuation in currency values.

     Identified Brands. Collectively, the brand names Action Man, Monopoly, Mr.
Potato Head, Tonka, Lincoln Logs, Playskool, Yahtzee, Clue and GI Joe.

     Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:

                                     Page 18
<Page>

          (a) every obligation of such Person to repay money borrowed,

          (b) every obligation of such Person for principal evidenced by bonds,
     debentures, notes or other similar instruments, including obligations
     incurred in connection with the acquisition of property, assets or
     businesses,

          (c) every reimbursement obligation of such Person with respect to
     letters of credit, bankers' acceptances or similar facilities issued for
     the account of such Person,

          (d) every obligation of such Person issued or assumed as the deferred
     purchase price of property or services (including securities repurchase
     agreements but excluding (i) trade accounts payable or accrued liabilities
     arising in the ordinary course of business which are not overdue or which
     are being contested in good faith, (ii) earnout obligations in respect of
     assets or businesses acquired prior to the Effective Date and (iii)
     obligations to repurchase any Lucas Warrant under the Warrant Amendment
     Agreement,

          (e) every obligation of such Person under any Capitalized Lease,

          (f) every obligation of such Person under any Synthetic Lease,

          (g) all sales with recourse by such Person of (i) accounts or general
     intangibles for money due or to become due, (ii) chattel paper, instruments
     or documents creating or evidencing a right to payment of money or (iii)
     other receivables (collectively "receivables"), whether pursuant to a
     purchase facility or otherwise, other than in connection with the
     disposition of the business operations of such Person relating thereto or a
     disposition of defaulted receivables for collection and not as a financing
     arrangement, and together with any obligation of such Person to pay any
     discount, interest, fees, indemnities, penalties, recourse, expenses or
     other amounts in connection therewith (for the avoidance of doubt, it being
     understood that sales pursuant to Section 10.5.2(j) or (k) are not
     "Indebtedness" under this clause (g) or otherwise),

          (h) Indebtedness of any other entity (including any partnership in
     which such Person is a general partner) to the extent that such Person is
     liable therefor as a result of such Person's ownership interest in or other
     relationship with such entity, except to the extent that the terms of such
     Indebtedness provide that such Person is not liable therefor and such terms
     are enforceable under applicable law,

          (i) every obligation, contingent or otherwise, of such Person
     guaranteeing, or having the economic effect of guaranteeing or otherwise
     acting as surety for, any obligation of a type described in any of clauses
     (a) through (h) (the "primary obligation") of another Person (the "primary
     obligor"), in any manner, whether directly or indirectly, and including,
     without limitation, any such obligation of such Person (i) to purchase or
     pay (or advance or supply funds for the purchase of) any security for the

                                     Page 19
<Page>

     payment of such primary obligation, (ii) to purchase property, securities
     or services for the purpose of assuring the payment of such primary
     obligation, or (iii) to maintain working capital, equity capital or other
     financial statement condition or liquidity of the primary obligor so as to
     enable the primary obligor to pay such primary obligation.

The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (w) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (x) any
Capitalized Lease shall be the discounted aggregate rental obligations under
such Capitalized Lease required to be capitalized on the balance sheet of the
lessee in accordance with GAAP, (y) any sale of receivables shall be the amount
of unrecovered capital or principal investment of the purchaser (other than the
Company or any of its wholly-owned Subsidiaries) thereof, excluding amounts
representative of yield or interest earned on such investment, and (z) any
Synthetic Lease shall be the stipulated loss value, termination value or other
equivalent amount.

     Installment Amount. See section 2.8.

     Intercompany Indebtedness. The aggregate amount of all Indebtedness of any
of the Company or any Operating Subsidiary of the Company to any other of the
Company and its Operating Subsidiaries.

     International Eurocurrency Rate. For any Interest Period with respect to a
Eurocurrency Rate Loan denominated in any Optional Currency, the rate of
interest equal to (a) the applicable British Bankers' Association Interest
Settlement Rate for deposits in the applicable Optional Currency appearing on
Reuters Screen FRBD or the applicable Reuters Screen for such Optional Currency
as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of
such Interest Period in the approximate amount of the relevant Eurocurrency Rate
Loan, and having a maturity equal to such Interest Period, provided, however,
(i) if Reuters Screen FRBD or the applicable Reuters Screen for such Optional
Currency is not available to the Agent, as the case may be, for any reason, the
applicable International Eurocurrency Rate for the relevant Interest Period
shall instead be the applicable British Bankers' Association Interest Settlement
Rate for deposits in the applicable Optional Currency as reported by any other
generally recognized financial information service as of 11:00 a.m. (London
time) 2 (two) Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period, and (ii) if no such British
Bankers' Association Interest Settlement Rate is available, the applicable
International Eurocurrency Rate for the relevant Interest Period shall be the
rate at which the Agent offers to place deposits in the applicable Optional
Currency with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of the relevant Eurocurrency Rate
Loan and having a maturity equal to such Interest Period, divided by (b) a
number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.

     Interest Hedging Agreement. Any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate futures contract,
interest rate option agreement or other agreement or arrangement (including
without limitation any securities repurchase or borrowing arrangement) to which

                                     Page 20
<Page>

the Company or any of its Subsidiaries is a party and intended to protect any of
the Company and its Subsidiaries against fluctuations in interest rates.

     Interest Period. (a) With respect to each Base Rate Loan comprising the
same Borrowing, the period (i) commencing on the Drawdown Date of such
Borrowing, and (ii) ending thirty (30) days thereafter as determined in
accordance with the provisions of this Agreement;

     (b) With respect to each Eurocurrency Rate Loan comprising the same
Borrowing, the period (i) commencing on the Drawdown Date of such Borrowing, and
(ii) ending one (1), two (2), three (3) or six (6) months thereafter as
determined in accordance with the provisions of this Agreement; and

     (c) With respect to each Competitive Bid Loan comprising the same
Borrowing, the period (i) commencing on the date of such Borrowing and (ii)
ending from seven (7) through one hundred eighty (180) days thereafter as
determined in accordance with the provisions of this Agreement.

     Inventory. With respect to the Company or any of the Restricted
Subsidiaries, finished goods, work in progress and raw materials and component
parts inventory and all "Inventory" as such term is defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts owned by such
Person; provided that, proceeds of Inventory shall not include any Receivables
sold, transferred, contributed or pledged to or financed by a Receivables
Subsidiary.

     Investment Grade Rating. A Rating that is at least "BBB-", "Baa3" or "BBB-"
by Fitch, Moody's or S&P, respectively.

     Investment Grade Rating Event. The Company's receipt of a Rating that is at
least one level higher than the lowest Investment Grade Rating from at least two
Rating Agencies.

     Investment Grade Rating Non-Event. The Company's receipt of a Rating that
is the lowest Investment Grade Rating or lower from at least two Rating
Agencies.

     Investments. As to any Person, all expenditures made for the acquisition of
stock or Indebtedness of, or for loans, advances or capital contributions to,
any other Person, in each case to the extent the same would be recorded as an
investment on the balance sheet of the first Person under GAAP. In determining
the aggregate amount of Investments outstanding at any particular time: (a)
there shall be deducted in respect of each such Investment any amount received
as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (b) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise; and (c) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.

     Invitation for Competitive Bid Quotes. See section 2.5.1(c).

                                     Page 21
<Page>

     LC Exposure. At any time, the sum of (a) the aggregate Maximum Drawing
Amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all Unpaid Reimbursement Obligations at such time. The LC Exposure of
any Bank at any time shall be its Commitment Percentage of the total LC Exposure
at such time.

     Letter of Credit. See section 5.1.1.

     Letter of Credit Application. See section 5.1.1.

     Letter of Credit Fee. See section 5.6.

     Letter of Credit Participation. See section 5.1.4.

     Lien. Any mortgage, deed of trust, security interest, pledge,
hypothecation, security assignment, attachment, deposit arrangement, lien
(statutory, judgment or otherwise), or other security agreement or similar
encumbrance or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any
Capitalized Lease, any Synthetic Lease, any financing lease involving
substantially the same economic effect as any of the foregoing and the filing of
any financing statement evidencing any of the foregoing under the Uniform
Commercial Code or comparable law of any jurisdiction).

     Loan Documents. Collectively, this Agreement, the Notes, the Letter of
Credit Applications, the Letters of Credit, the Security Documents (if and as
applicable), the Subordination Agreements, the Agent's Fee Letter and the Fee
Letter.

     Loans. Collectively, the Syndicated Loans, the Competitive Bid Loans and
the Swing Line Loans.

     Lucas Warrants. Collectively, (a) the Warrant to Purchase Shares of Common
Stock, dated October 30, 1998, issued to Lucas Licensing Ltd. for the purchase
of 3,600,000 shares of the common stock of the Company at the exercise price of
$23.33 per share, (b) the Warrant to Purchase Shares of Common Stock, dated
October 30, 1998, issued to Lucasfilm Ltd. for the purchase of 2,400,000 shares
of the common stock of the Company at the exercise price of $23.33 per share,
(c) the Warrant to Purchase Shares of Common Stock, dated October 14, 1997,
issued to Lucas Licensing Ltd. for the purchase of 5,850,000 shares of the
common stock of the Company at the exercise price of $18.67 per share and (d)
the Warrant to Purchase Shares of Common Stock, dated October 14, 1997, issued
to Lucasfilm Ltd. for the purchase of 3,900,000 shares of the common stock of
the Company at the exercise price of $18.67 per share.

     Majority Banks. As of any date, the Banks whose aggregate Commitments
constitute more than fifty percent (50%) of the Total Commitment, provided, that
if at the time Majority Banks is being determined, the Total Commitment has been
terminated, the Majority Banks shall be the Banks holding more than fifty
percent (50%) of the aggregate outstanding principal amount of the Loans on such
date.

     Margin. At any time of determination, an annual percentage rate determined
in accordance with the Pricing Grid.

                                     Page 22
<Page>

     Material Adverse Effect. With respect to any event or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding):

          (a) a material adverse effect on the business, properties, condition,
     assets, operations or results of operations of the Hasbro Companies, taken
     as a whole;

          (b) a material adverse effect on the ability of the Company
     individually or the Hasbro Companies taken as a whole, to perform its or
     their respective Obligations (as the case may be) under the Loan Documents;
     or

          (c) any material impairment of (i) the validity, binding effect or
     enforceability of this Agreement or any of the other Loan Documents, (ii)
     the rights, remedies or benefits available to the Agent or any Bank under
     the Loan Documents or (iii) the attachment, perfection or priority of any
     Lien of the Agent on a material portion of the Collateral under the
     Security Documents (if such Security Documents shall have been entered into
     and remain in full force and effect pursuant to section 6.2).

     Material Asset Sale. Any Asset Sale not in the ordinary course of business
producing Net Cash Sale Proceeds in excess of $35,000,000, but excluding any
Asset Sale permitted under sections 10.5.2(j) or (k) hereof and any Specified
Sale.

     Maximum Drawing Amount. The maximum aggregate amount that the beneficiaries
may at any time draw under outstanding Letters of Credit, as such aggregate
amount may be reduced from time to time pursuant to the terms of the Letters of
Credit.

     Moody's. Moody's Investors Service, or its successors.

     Multiemployer Plan. Any multiemployer plan within the meaning of section
3(37) of ERISA maintained or contributed to by the Company or any ERISA
Affiliate.

     Net Cash Sale Proceeds. The net cash proceeds received by a Person in
respect of any Asset Sale, less the sum of (a) all reasonable out-of-pocket
fees, commissions and other expenses actually incurred in connection with such
Asset Sale, (b) the amount of any transfer, documentary, income or other taxes
required to be paid by the Company or any of its Subsidiaries in connection with
such Asset Sale, (c) the aggregate amount of any Indebtedness (other than under
the Loan Documents) of the Company or any of its Subsidiaries permitted by this
Agreement that was secured by a Permitted Lien with respect to the assets
transferred and is required to be repaid in whole or in part (which repayment,
in the case of any other revolving credit arrangement or multiple advance
arrangement, reduces the commitment thereunder) in connection with such Asset
Sale, (d) the amount of such proceeds attributable to (and payable to) minority
interests, (e) the amount of any reserve reasonably maintained by the Company or
any of its Subsidiaries with respect to indemnification obligations owing
pursuant to the definitive documentation pursuant to which such Asset Sale is

                                     Page 23
<Page>

consummated (with any unused portion of such reserve to constitute Net Cash Sale
Proceeds on the date upon which the indemnification obligations terminate or
such reserve is reduced other than in connection with a payment), and (f)
appropriate amounts to be provided by the Company or any of its Subsidiaries to
be applied to satisfy any reasonable expenses and liabilities associated with
any such property or assets and retained by the Company or any such Subsidiary
after such Asset Sale.

     Net Cash Equity Issuance Proceeds. With respect to any Equity Issuance, the
excess of the gross cash proceeds received by such Person for such Equity
Issuance after deduction of all reasonable transaction expenses (including,
without limitation, underwriting discounts and commissions) actually incurred in
connection with such Equity Issuance.

     New Loans. See section 4.1(e).

     Note(s). Singly, any of, and collectively, all of the Syndicated Notes, the
Competitive Bid Notes and the Swing Line Note.

     Notice of Competitive Bid Borrowing. See section 2.4.1(f).

     Obligations. All indebtedness, obligations and liabilities to the Banks and
the Agent, individually or collectively, arising or incurred under this
Agreement or any of the other Loan Documents, or in respect of Loans made and
any Notes or other instruments at any time evidencing any thereof, whether such
indebtedness, obligations, and liabilities exist on the date of this Agreement
or arise thereafter, or are direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, of the Company
and/or Hasbro SA, as the case may be, including, without limitation, the Hasbro
SA Obligations.

     Operating Subsidiary. As at any particular date, any Subsidiary (other than
a Subsidiary engaged solely in the business of incurring Indebtedness or a
Receivables Subsidiary or other Subsidiary formed in connection with any
Permitted Receivables Securitization Facility) of the Company actively engaged
in the conduct of business.

     Optional Currency. Each of the following types of currency: Euros and GBP.

     Outstanding. With respect to the Loans, the unpaid principal thereof as of
any date of determination.

     Participant. See section 20.5.

     Patent Agreements. Collectively, (a) the Patent Security Agreement
(Registrations) by and among the Company, the Restricted Subsidiaries and the
Agent, in substantially the form of Exhibit L hereto, pertaining to U.S. patent
registrations, to be entered into to the extent required by section 6.2, and (b)
the Patent Security Agreement (Applications), by and among the Company, the
Restricted Subsidiaries and the Agent, in substantially the form of Exhibit L
hereto, pertaining to U.S. patent applications, to be entered into to the extent
required by section 6.2.

     PBGC. The Pension Benefit Guaranty Corporation created by section 4002 of
ERISA and any successor entity or entities having similar responsibilities.

                                     Page 24
<Page>

     Permitted Acquisition. Any acquisition permitted by section 10.5.1(b).

     Permitted Liens. Liens permitted by section 10.2.

     Permitted Receivables Securitization Facility. Any transaction or series of
related transactions providing for the financing of any Receivables; provided
that any such transaction shall be consummated on terms that include terms
substantially as described on Schedule 2 or as the Majority Banks may otherwise
consent, such consent not to be unreasonably withheld.

     Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.

     Pricing Grid. As set forth in the table below:

<Table>
<Caption>
------------------------------------------------------------------------------------------
               RATING (AT LEAST TWO OF                        MARGIN FOR
                 FITCH, MOODY'S OR          MARGIN FOR       EUROCURRENCY   COMMITMENT
     LEVEL       STANDARD & POOR'S)      BASE RATE LOANS      RATE LOANS     FEE RATE
------------------------------------------------------------------------------------------
      <S>     <C>                             <C>                <C>           <C>
       I      BB-/Ba3/BB- or lower            0.75%              2.00%         0.40%
------------------------------------------------------------------------------------------
       II     BB/Ba2/BB                       0.50%              1.75%         0.35%
------------------------------------------------------------------------------------------
      III     BB+/Ba1/BB+                     0.25%              1.50%         0.30%
------------------------------------------------------------------------------------------
       IV     BBB-/Baa3/BBB-                  0.00%              1.25%         0.25%
------------------------------------------------------------------------------------------
       V      BBB/Baa2/BBB                    0.00%              1.00%         0.20%
------------------------------------------------------------------------------------------
       VI     BBB+/Baa1/BBB+ or               0.00%              0.75%         0.15%
              higher
------------------------------------------------------------------------------------------
</Table>

     For  purposes of the foregoing table:

     (i)    during any period in which the Obligations are secured by the Liens
            described in section 6.2, so long as no Event of Default has
            occurred or is continuing, the applicable Margin for Base Rate Loans
            in Levels I, II and III above and the applicable Margin for
            Eurocurrency Rate Loans in Levels I through VI above shall be 0.25%
            lower than the applicable rates set forth above but not less than
            zero.

     (ii)   if the rating system of any Rating Agency shall change, or if any
            Rating Agency shall cease to be in the business of rating corporate
            debt obligations, the Company and the Agent shall negotiate in good
            faith to amend the foregoing table (which amendment shall require
            the consent of the Majority Banks) to reflect such changed rating
            system or the unavailability of ratings from such Rating Agency and,
            pending the effectiveness of any such amendment, the Margin and the

                                     Page 25
<Page>

            Commitment Fee Rate shall be determined by reference to, and shall
            be based on, the higher of, each Rating of each Rating Agency to
            which neither this clause (ii) nor clause (iv) below then applies;

     (iii)  if the Ratings established by the Rating Agencies shall fall within
            different Levels, the Margin and the Commitment Fee Rate shall be
            based on the lower of the two highest Ratings;

     (iv)   if any Rating Agency shall not have a Rating in effect (other than
            by reason of the circumstances referred to in clause (ii) above),
            then the Margin and the Commitment Fee Rate shall be determined by
            reference to, and shall be based on, the higher of, each Rating of
            each Rating Agency to which neither clause (ii) above nor this
            clause (iv) then applies; and

     (v)    if any Rating Agency shall change its Rating (other than by reason
            of the circumstances referred to in clause (ii) above), such change
            shall be effective as of the date on which it is first announced by
            such Rating Agency.

     Each change in the Margin and the Commitment Fee Rate shall apply during
     the period commencing on the effective date of such change and ending on
     the date immediately preceding the effective date of the next such change.

     Rating. The rating issued from time to time (whether on a preliminary basis
or otherwise) by any Rating Agency or such other rating service or services as
the Company may designate from time to time with the consent of the Majority
Banks with respect to the Company's senior unsecured debt.

     Rating Agencies. Collectively, Fitch, Moody's and S&P.

     RCRA. See section 8.22.

     Record. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.

     Receivables. All Accounts and accounts receivable of the Company or any of
its Subsidiaries, including, without limitation, any Accounts and accounts
receivable constituting or evidenced by chattel paper, instruments or general
intangibles, and all proceeds thereof and rights (contractual and other) and
collateral for such Accounts and accounts receivable. Notwithstanding the
foregoing, Receivables shall not include any rights or interests in intellectual
property of the Company or any of its Subsidiaries.

     Receivables Subsidiary. Any special purpose, bankruptcy-remote corporation,
limited liability company, trust or other entity established and majority owned
by the Company that purchases, receives contributions of, or receives financing
secured by, Receivables generated by the Company or any of its Subsidiaries.

                                     Page 26
<Page>

     Real Estate. All real property owned or leased (as lessee or sublessee) by
any of the Hasbro Companies.

     Reemployment Period. See section 2.8.

     Reemployment Rate. See section 2.8.

     Reference Banks. Fleet, Bank of America, N.A., Citicorp USA, Inc., Mellon
Bank, N.A. and Commerzbank AG, New York Branch.

     Reference Period. As of the end of any fiscal quarter, the period of four
(4) consecutive fiscal quarters of the Company and its Subsidiaries ending on
such date, or if any date of determination is not a fiscal quarter end date, the
period of four (4) consecutive fiscal quarters most recently ended (in each case
treated as a single accounting period).

     Refinancing Indebtedness. With respect to the Company and its Subsidiaries,
Indebtedness which (a) refinances, refunds, replaces, renews, repays, restates,
substitutes or extends other Indebtedness of the Company or any of its
Subsidiaries, (b) has a maturity after the Final Maturity Date, and (c) is not
prohibited by section 10.1 hereof.

     Reimbursement Obligation. The Company's obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in section 5.2.

     Replacement Bank. See section 4.1(f).

     Replacement Date. See section 4.1(f).

     Restricted Payment. In relation to the Company and its Subsidiaries, any
(a) Distribution, (b) payment or prepayment by the Company or its Subsidiaries
to the Company's or any Subsidiary's shareholders (or other equity holders) in
their capacity as such, in each case other than (i) to the Company or any
Subsidiary (or any payment or prepayment excluded from the definition of the
term "Distribution") and (ii) the acquisition of the Capital Stock of any
Subsidiary of the Company existing on the Effective Date from any then existing
minority holder thereof, (c) optional repayment, redemption or repurchase of
long term unsecured Indebtedness of the Company existing on the Effective Date,
or (d) derivatives or other transactions with any financial institution,
commodities or stock exchange or clearinghouse (a "Derivatives Counterparty")
obligating the Company or any Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of any Capital Stock of
the Company or such Subsidiary.

     Restricted Subsidiaries. Collectively, (a) Wizards of the Coast, Inc., a
Washington corporation, (b) OddzOn, Inc., a Delaware corporation, and (c)
material Domestic Subsidiaries (other than any Receivables Subsidiary) (i)
created or acquired by the Company following the Effective Date and (ii)
designated as Restricted Subsidiaries by the Company or the Agent in a written
notice (it being understood that any Restricted Subsidiary which merges with and
into the Company such that the Company is the survivor shall no longer
constitute a Restricted Subsidiary following such merger).

                                     Page 27
<Page>

     SARA. See section 8.22.

     Secured Obligations. Collectively, (a) the Obligations, (b) other
Indebtedness of the Company consisting of guaranties of Indebtedness of Foreign
Subsidiaries owing to any Bank or Bank Affiliate, and (c) obligations of the
Company or its Subsidiaries to the Banks or any Bank Affiliate and the Agent
(individually or collectively) arising under Interest Hedging Agreements and
Hedging Agreements, but in each case, only to the extent that, and for so long
as, the provisions of section 6.2 require the Company and its Subsidiaries to
grant security interests in the assets described in section 6.2.

     Security Agreements. Collectively, the Company Security Agreement and the
Subsidiary Security Agreement.

     Security Documents. The Guaranty, the Security Agreements, the Trademark
Agreement, the Patent Agreements, the Copyright Memorandum and all other
instruments and documents, including without limitation Uniform Commercial Code
financing statements, required to be executed or delivered pursuant to any
Security Document.

     Significant Subsidiary. (a) Any Subsidiary of the Company (other than any
Receivables Subsidiary), organized under the laws of the United States or any
State of the United States or the District of Columbia, which, either alone or
together with the Subsidiaries of such Subsidiary, meets either of the following
conditions:

          (i) the investments of the Company and its Subsidiaries in, or their
     proportionate share (based on their equity interests) of the book value of
     the total assets (after intercompany eliminations) of, the Subsidiary in
     question exceed 10% of the book value of the total assets of the Company
     and its Subsidiaries on a consolidated basis, or

          (ii) the equity of the Company and its Subsidiaries in the revenues of
     the Subsidiary in question exceeds 10% of the revenues from continuing
     operations of the Company and its Subsidiaries on a consolidated basis for
     the Company's most recent fiscal year; or

     (b) Any other Subsidiary of the Company designated as a "Significant
Subsidiary" by the Company in a written notice to the Agent.

     Specified Sale. Any disposition of Capital Stock of Atari by the Company
acquired in connection with the sale of the Company's interactive and on-line
businesses to Atari.

     Standard & Poor's. Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies Inc., or its successors.

     Subordinated Debt. Unsecured Indebtedness of any Operating Subsidiary that
is expressly subordinated and made junior to the payment and performance in full
of the Obligations (other than pursuant to the Subordination Agreements), and

                                     Page 28
<Page>

evidenced as such by a written instrument containing subordination provisions in
form and substance reasonably satisfactory to the Majority Banks.

     Subordination Agreement. The Third Amended and Restated Subordination
Agreement, dated as of the Effective Date, among the Company, the Significant
Subsidiaries and the Agent, substantially in the form of Exhibit F hereto; and
"Subordination Agreements" means the Subordination Agreement and any additional
subordination agreements executed and delivered to the Agent for the benefit of
the Banks pursuant to section 9.14 hereof, in each case as amended and in effect
from time to time.

     Subsidiary. Any corporation, limited liability company, association, trust,
or other business entity of which the designated parent shall at any time own
directly or indirectly through a Subsidiary or Subsidiaries at least a majority
(by number of votes) of the outstanding Voting Stock.

     Subsidiary Security Agreement. The Security Agreement among the Restricted
Subsidiaries and the Agent, in substantially the form of Exhibit J hereto, to be
entered into to the extent required by section 6.2.

     Swing Line Bank. Fleet.

     Swing Line Loan. Any loan made by the Swing Line Bank pursuant to section
3.1 hereof.

     Swing Line Loan Maturity Date. See section 3.2.

     Swing Line Loan Request. See section 3.2.

     Swing Line Note. See section 3.5.

     Swing Line Note Record. A Record with respect to a Swing Line Note.

     Syndicated Loan(s). Singly, any of, and collectively, all of, the revolving
credit loans made by the Banks in accordance with their respective Commitment
Percentages to the Company and Hasbro SA as contemplated by section 2.1 hereof.

     Syndicated Note(s). See section 2.6.

     Syndicated Note Record. A Record with respect to a Syndicated Note.

     Synthetic Lease. Any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for U.S. income tax purposes.

     Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time, which as of the Effective Date shall be equal to the
aggregate principal amount of $350,000,000.

                                     Page 29
<Page>

     Trademark Agreement. The Trademark Security Agreement among the Company,
the Restricted Subsidiaries and the Agent, in substantially the form of Exhibit
K hereto, to be entered into to the extent required by section 6.2.

     Type. As to any Syndicated Loan, its nature as a Base Rate Loan or a
Eurocurrency Rate Loan.

     Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which the
Company does not reimburse the Agent and the Banks on the date specified in, and
in accordance with, section 5.2.

     Utilization. An amount equal to the Dollar Equivalent of the sum of (i) the
outstanding amount of all Loans (after giving effect to all amounts requested),
(ii) the Maximum Drawing Amount and (iii) all Unpaid Reimbursement Obligations.

     Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency (unless the happening of any such contingency is not
within the control of the Company).

     Warrant Amendment Agreement. The Warrant Amendment Agreement, dated January
30, 2003 by and among the Company, Lucas Licensing Ltd. and Lucasfilm Ltd.

     Wholly Owned Subsidiary. Any Subsidiary of the Company for which all its
outstanding Voting Stock (other than any directors' qualifying shares and shares
required to be held by foreign nationals under applicable law) is held by the
Company or one or more Wholly Owned Subsidiaries.

     1.2. RULES OF INTERPRETATION.

     (a) A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms and the terms of this Agreement.

     (b) The singular includes the plural and the plural includes the singular.

     (c) A reference to any law includes any amendment or modification to such
law.

     (d) A reference to any Person includes its permitted successors and
permitted assigns.

     (e) Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a consistent basis by the accounting entity
to which they refer.

     (f) The words "include", "includes" and "including" are not limiting.

                                     Page 30
<Page>

     (g) Reference to a particular "section " refers to that section of this
Agreement unless otherwise indicated.

     (h) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.

     (i) Unless otherwise expressly indicated, in the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including," the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including."

     (j) This Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are, however, cumulative and are to be
performed in accordance with the terms thereof.

     (k) This Agreement and the other Loan Documents are the result of
negotiation among, and have been reviewed by counsel to, among others, the Agent
and the Company and are the product of discussions and negotiations among all
parties. Accordingly, this Agreement and the other Loan Documents are not
intended to be construed against the Agent or any of the Banks merely on account
of the Agent's or any Bank's involvement in the preparation of such documents.

              2. THE SYNDICATED AND COMPETITIVE BID LOAN FACILITY.

     2.1. COMMITMENT TO LEND SYNDICATED LOANS. (a) Subject to the terms and
conditions set forth in this Agreement, each of the Banks severally agrees to
lend to the Company and/or Hasbro SA, and the Company and/or Hasbro SA may
borrow, repay, and reborrow from time to time between the Effective Date and the
Final Maturity Date upon notice by the Company and/or Hasbro SA, as the case may
be, to the Agent given in accordance with section 2.4 hereof, such sums in
Dollars and/or, at the Company's and/or Hasbro SA's option from time to time,
subject to section 2.12 hereof, in an Optional Currency as are requested by such
Person ("Syndicated Loans") up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment (as such Commitment has been deemed to be reduced by such Bank's
Commitment Percentage of outstanding Competitive Bid Loans) minus such Bank's
Commitment Percentage of the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations, provided that the Utilization shall not at any time
exceed the Total Commitment. The Syndicated Loans shall be made pro rata in
accordance with each Bank's Commitment Percentage. Each request for Syndicated
Loans hereunder shall constitute a representation by the Company or Hasbro SA,
as the case may be, that the applicable conditions set forth in sections 12 and
13, in the case of the initial Syndicated Loans to be converted into Syndicated
Loans hereunder on the Effective Date, and section 13, in the case of all other
Syndicated Loans, have been satisfied on the date of such request. Each Base
Rate Loan and Eurocurrency Rate Loan shall mature and become due and payable on
the last day of the Interest Period relating thereto and shall be payable in the
currency in which such Loan was made.

                                     Page 31
<Page>

     (b) After any prepayment and at maturity of the Syndicated Loans pursuant
to section 2.1(a) above, the Company and/or Hasbro SA, as applicable, shall be
entitled to reborrow any or all of the principal amount of such Syndicated Loan,
subject to all of the applicable conditions precedent set forth in section 13.
Each Bank's Commitment shall terminate, all Syndicated Loans shall become
finally due and payable and the Company promises to pay or, solely in the case
of Hasbro SA Loans, Hasbro SA promises to pay, on the Final Maturity Date all
Syndicated Loans outstanding on the Final Maturity Date.

     (c) The respective amount of each Bank's Commitment and its Commitment
Percentage shall be as set forth on Schedule 1 hereto, subject to reduction in
accordance with section 2.3 and section 2.11.

     (d) Each Bank represents and warrants that it will use its best efforts to
ensure that the funding of its Loans is not made directly out of the assets of
any "employee benefit plan" or of any "separate account" in which any "employee
benefit plan" has any interest other than a "government plan" (each such term
being used herein as defined in Section 3 of ERISA).

     2.2. COMMITMENT FEE. The Company agrees to pay to the Agent for the pro
rata accounts of the Banks in accordance with their respective Commitment
Percentages a commitment fee (the "Commitment Fee"), calculated at the
applicable annual percentage rate determined in accordance with the Pricing
Grid, on the average daily amount during each calendar quarter or portion
thereof from the Effective Date to the Final Maturity Date by which (a) (i) the
Total Commitment minus (ii) the sum of (A) the Maximum Drawing Amount and (B)
all Unpaid Reimbursement Obligations exceeds (b) the outstanding amount of
Syndicated Loans during such calendar quarter. The Commitment Fee shall be
payable quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the Effective Date, with a final payment on the Final Maturity Date or
any earlier date on which the Commitments shall terminate.

     2.3. REDUCTION OF TOTAL COMMITMENT. The Company shall have the right at any
time and from time to time upon five (5) Business Days written notice to the
Agent to reduce by $10,000,000 or an integral multiple thereof or terminate
entirely the unborrowed portion of the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Company
delivered pursuant to this section 2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Company shall pay to the Agent for the respective accounts of the Banks the
full amount of the Commitment Fee then accrued on the amount of the reduction.
No reduction of the Commitments of the Banks may be reinstated unless otherwise
agreed to by the Company and each of the Banks. Nothing contained in this
section 2.3 shall obligate any Bank in any way whatsoever to reinstate all or
any part of its Commitment after a reduction of such Commitment hereunder. If at
any time the outstanding amount of the Loans exceeds the Total Commitment as a
result of any reduction of the Total Commitment pursuant to this section 2.3,

                                     Page 32
<Page>

then the Company shall immediately pay the amount of such excess to the Agent
for the respective account of the Banks for application to the Loans. Each
payment of Loans shall be allocated among the Banks, in proportion, as nearly as
practicable to the respective unpaid principal amount of each Bank's Syndicated
Note or Competitive Bid Note, as applicable, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion. In addition, the Total Commitment shall be reduced (i)
automatically, pursuant to this section 2.3, effective March 31, 2005, in the
amount of $50,000,000, (ii) automatically, pursuant to this section 2.3,
effective November 30, 2005, in the additional amount of $50,000,000, and (iii)
in accordance with section 2.11.

     2.4. REQUESTS FOR SYNDICATED LOANS. (a) The Company and/or Hasbro SA, as
the case may be, shall give to the Agent written notice in the form of Exhibit
A-2 hereto (or telephonic notice confirmed in a writing in the form of Exhibit
A-2 hereto) of each Syndicated Loan requested hereunder (a "Loan Request") not
later than (i) with respect to Base Rate Loans, 12 noon (Boston time) on the
proposed Drawdown Date (except in the case of Hasbro SA Loans, which written
notice shall be by 8:00 A.M. (Boston time) on the proposed Drawdown Date) of
such Base Rate Loan and (ii) with respect to Eurocurrency Rate Loans, 1:00 P.M.
(Boston time) on the third Business Day prior to the proposed Drawdown Date of
such Eurocurrency Rate Loan, provided, that any notice requesting a Syndicated
Loan be made in an Optional Currency must comply with the requirements of
section 2.12. The Agent shall promptly notify the Banks of the contents of each
such notice at the address or addresses for each Bank set forth on Schedule 1
hereof.

     (b) Each such notice delivered by the Company and/or Hasbro SA, as the case
may be, shall specify (i) the aggregate principal amount of Syndicated Loans
requested, stated in Dollars, or subject to section 2.12, an Optional Currency,
(ii) the Type of Syndicated Loan requested, (iii) the proposed Drawdown Date and
duration of the proposed Interest Period(s) applicable to any Base Rate Loans,
or Eurocurrency Rate Loans and (iv) the Company's and/or Hasbro SA's, as the
case may be, account to which payment of the proceeds of such Syndicated Loan is
to be made. Each such notice (which shall be irrevocable) shall obligate the
Company and/or Hasbro SA to accept the Syndicated Loans requested from the Banks
on the proposed Drawdown Date therefor.

     (c) Each request for Types of Syndicated Loans made hereunder shall be in a
minimum aggregate amount of $5,000,000 or a greater integral multiple of
$1,000,000 (other than requests in Optional Currencies, which shall be in the
amounts prescribed in section 2.12).

     (d) Any Syndicated Loans requested by the Company and/or Hasbro SA pursuant
to this section 2.4 shall be made available to such Person in accordance with
the provisions of section 2.9 hereof.

     2.5. COMPETITIVE BID LOANS.

          2.5.1. COMPETITIVE BID BORROWINGS.

               (a) The Competitive Bid Option. In addition to the Syndicated
          Loans permitted to be made hereunder pursuant to section 2.1 hereof,
          the Company or, solely in the case of Hasbro SA Loans, Hasbro SA may,
          pursuant to the terms of this section 2.5, cause the Agent to request
          the Banks to make offers to fund Competitive Bid Loans to the Company

                                     Page 33
<Page>

          or, solely in the case of Hasbro SA Loans, Hasbro SA from time to time
          prior to the Final Maturity Date. The Banks may, but shall have no
          obligation to, make such offers and the Company or, solely in the case
          of Hasbro SA Loans, Hasbro SA may, but shall have no obligation to,
          accept such offers in the manner set forth in this section 2.5.
          Notwithstanding any other provision herein to the contrary, at no time
          shall the Utilization exceed the Total Commitment.

               (b) Competitive Bid Quote Request. When the Company or, solely in
          the case of Hasbro SA Loans, Hasbro SA wishes to request offers to
          make Competitive Bid Loans under this section 2.5, it shall transmit
          to the Agent by telephone, telex, cable or facsimile (in each case
          confirmed in writing by the Company or, solely in the case of Hasbro
          SA Loans, Hasbro SA) a Competitive Bid Quote Request substantially in
          the form of Exhibit B-2 hereto (a "Competitive Bid Quote Request") so
          as to be received no later than 11:00 a.m. (Boston time) on the first
          Business Day (except in the case of Hasbro SA Loans, which request
          shall be received not later than the second Business Day) prior to the
          requested Drawdown Date, specifying (i) the requested Drawdown Date
          (which must be a Business Day) and the amount of such Competitive Bid
          Loan (which must be a minimum of $5,000,000 or any greater integral
          multiple of $1,000,000 and may not exceed the Total Commitment, and
          (ii) the Interest Period of such Competitive Bid Loan, subject to the
          provisions of the definition of Interest Period, and be accompanied by
          a Competitive Bid fee of $750 payable to the Agent with respect to
          each Competitive Bid Quote Request. The Company or, solely in the case
          of Hasbro SA Loans, Hasbro SA may request offers to make Competitive
          Bid Loans for no more than one (1) amount and three (3) Interest
          Periods in a single Competitive Bid Quote Request. No new Competitive
          Bid Quote Request shall be given until the Company or, solely in the
          case of Hasbro SA Loans, Hasbro SA has notified the Agent of its
          acceptance or non-acceptance of the Competitive Bid Quotes relating to
          any outstanding Competitive Bid Quote Request.

               (c) Invitation for Competitive Bid Quotes. Subsequent to timely
          receipt of a Competitive Bid Quote Request, the Agent shall send to
          the Banks by facsimile an Invitation for Competitive Bid Quotes as
          promptly as possible but not later than 3:00 p.m. (Boston time) on the
          first Business Day prior to the requested Drawdown Date, substantially
          in the form of Exhibit B-3 hereto (an "Invitation for Competitive Bid
          Quotes"), which shall constitute an invitation by the Company or,
          solely in the case of Hasbro SA Loans, Hasbro SA to each Bank to
          submit Competitive Bid Quotes offering to make Competitive Bid Loans
          to which such Competitive Bid Quote Request relates in accordance with
          this section 2.5. If, after receipt by the Agent of a Competitive Bid
          Quote Request from the Company or, solely in the case of Hasbro SA
          Loans, Hasbro SA in accordance with subsection (b) of this section
          2.5.1, the Agent or any Bank shall be unable to complete any procedure
          of the auction process described in subsections (d) through (f)
          (inclusive) of this section 2.5.1 due to the inability of such Person
          to transmit or receive communications through the means specified

                                     Page 34
<Page>

          therein, such Person may rely on telephonic notice for the
          transmission or receipt of such communications. In any case where such
          Person shall rely on telephone transmission or receipt, any
          communication made by telephone shall, as soon as possible thereafter,
          be followed by written confirmation thereof.

               (d) Submission and Contents of Competitive Bid Quotes.

                    (i) Each Bank may, but shall be under no obligation to,
               submit a Competitive Bid Quote containing an offer or offers to
               make Competitive Bid Loans to the Company or, solely in the case
               of Hasbro SA Loans, Hasbro SA in response to any Invitation for
               Competitive Bid Quotes. Each Competitive Bid Quote must comply
               with the requirements of this subsection (d) and must be
               submitted to the Agent by facsimile not later than 10:00 a.m.
               (Boston time) on the requested Drawdown Date (except in the case
               of Hasbro SA Loans, which Competitive Bid Quote must be submitted
               not later than the day prior to the Drawdown Date), provided,
               that Competitive Bid Quotes may be made by the Agent in its
               capacity as a Bank only if it notifies the Company or, solely in
               the case of Hasbro SA Loans, Hasbro SA of the terms of its
               Competitive Bid Quote no later than 9:45 a.m. (Boston time) on
               the requested Drawdown Date (except in the case of Hasbro SA
               Loans, which notice shall be made not later than the day prior to
               the requested Drawdown Date). Subject to the provisions of
               sections 12 and 13 hereof, any Competitive Bid Quote so made
               shall be irrevocable except with the written consent of the Agent
               given on the instructions of the Company or, solely in the case
               of Hasbro SA Loans, Hasbro SA.

                    (ii) Each Competitive Bid Quote shall be in substantially
               the form of Exhibit B-4 hereto and shall in any case specify:

                         (A) the requested Drawdown Date and Interest Periods;

                         (B) the principal amount of the Competitive Bid Loan
                    for which each such offer is being made, which principal
                    amount (w) may be greater than the Commitment of the quoting
                    Bank but may not exceed the Total Commitment, (x) must be
                    $5,000,000 or a larger multiple of $1,000,000, (y) may not
                    exceed the aggregate principal amount of Competitive Bid
                    Loans for which offers were requested, and (z) may be
                    subject to an aggregate limitation as to the principal
                    amount of Competitive Bid Loans for which offers being made
                    by such quoting Bank may be accepted;

                         (C) the rate of interest per annum (rounded to the
                    nearest 1/1000th of 1%) (the "Competitive Bid Rate") offered
                    for each such Competitive Bid Loan, and

                         (D) the identity of the quoting Bank.

                                     Page 35
<Page>

               A Competitive Bid Quote may include up to five (5) separate
               offers by the quoting Bank with respect to each Interest Period
               specified in the related Invitation for Competitive Bid Quotes.

                    (iii) Any Competitive Bid Quote shall be disregarded if it:

                         (A) is not substantially in the form of Exhibit B-4
                    hereto or does not specify all of the information required
                    by subsection (d)(ii);

                         (B) contains qualifying, conditional or similar
                    language (except that it may, in the case of a quote
                    relating to more than one Interest Period, contain the
                    condition described in subsection (d)(ii)(B));

                         (C) proposes terms other than or in addition to those
                    set forth in the applicable Invitation for Competitive Bid
                    Quotes; or

                         (D) arrives after the time set forth in subsection
                    (d)(i).

                    (e) Notice to Company or Hasbro SA. Not later than 10:15
               a.m. (Boston time) on the requested Drawdown Date (except in the
               case of Hasbro SA Loans, which notice shall be on the day prior
               to the requested Drawdown Date), the Agent shall notify the
               Company or, solely in the case of Hasbro SA Loans, Hasbro SA of
               the terms of (i) all Competitive Bid Quotes submitted by the
               Banks in accordance with the preceding subsection (d) and (ii) of
               any Competitive Bid Quote that amends, modifies or is otherwise
               inconsistent with a previous Competitive Bid Quote submitted by
               such Bank with respect to the same Competitive Bid Quote Request.
               Any such subsequent Competitive Bid Quote shall be disregarded by
               the Agent unless such subsequent Competitive Bid Quote is
               submitted solely to correct a manifest error in such former
               Competitive Bid Quote. The Agent's notice to the Company or,
               solely in the case of Hasbro SA Loans, Hasbro SA shall specify
               (A) the aggregate principal amount of Competitive Bid Loans for
               which offers have been received for each Interest Period
               specified in the related Competitive Bid Quote Request, (B) the
               respective principal amounts and Competitive Bid Rates so
               offered, and the identity of the respective Banks submitting such
               offers, and (C) if applicable, limitations on the aggregate
               principal amount of Competitive Bid Loans for which offers in any
               single Competitive Bid Quote may be accepted.

                    (f) Acceptance and Notice by Company or Hasbro SA and Agent.
               Not later than 10:45 a.m. (Boston time) on the requested Drawdown
               Date (except in the case of Hasbro SA Loans, which notice shall
               be on the day prior to the requested Drawdown Date), the Company
               or, solely in the case of Hasbro SA Loans, Hasbro SA shall notify
               the Agent of the Company's or, solely in the case of Hasbro SA
               Loans, Hasbro SA's acceptance or non-acceptance of the offers of
               which it was notified pursuant to the preceding subsection (e) in

                                     Page 36
<Page>

               a notice, transmitted to the Agent by telephone, telex, cable or
               facsimile (in each case confirmed in writing by the Company or,
               solely in the case of Hasbro SA Loans, Hasbro SA), in
               substantially the form of Exhibit B-5 hereto (a "Notice of
               Competitive Bid Borrowing"). Such notice shall specify the
               aggregate principal amount of offers for each Interest Period
               that are accepted. The Company or, solely in the case of Hasbro
               SA Loans, Hasbro SA may accept any Competitive Bid Quote in whole
               or in part; provided that:

                         (i) the aggregate principal amount of each Competitive
                    Bid Loan may not exceed the applicable amount set forth in
                    the related Competitive Bid Quote Request,

                         (ii) the aggregate principal amount of each Competitive
                    Bid Loan must be $5,000,000 or a larger multiple of
                    $1,000,000,

                         (iii) acceptance of offers may only be made on the
                    basis of ascending Competitive Bid Rates, and

                         (iv) no offer may be accepted that is described in
                    subsection (d)(iii) or that otherwise fails to comply with
                    the requirements of this Agreement.

               The Agent shall promptly notify each Bank which submitted a
               Competitive Bid Quote of the acceptance or non-acceptance
               thereof. The Agent will promptly notify each Bank which submitted
               a Competitive Bid Quote and each other Bank which so requests the
               following information from the Agent of (a) the aggregate
               principal amount of, and (b) the range of Competitive Bid Rates
               of the accepted Competitive Bid Loans for each requested Interest
               Period.

                    (g) Allocation by Agent. If offers are made by two (2) or
               more Banks with the same Competitive Bid Rates, for a greater
               aggregate principal amount than the amount in respect of which
               offers are accepted for the related Interest Period, the
               principal amount of Competitive Bid Loans in respect of which
               such offers are accepted shall be allocated by the Agent among
               such Banks as nearly as possible (in such multiples, not less
               than $100,000 as the Agent may deem appropriate) in proportion to
               the aggregate principal amounts of such offers. If any such Bank
               has indicated a minimum acceptable Competitive Bid Loan in its
               Competitive Bid Request, and under the procedures of this
               subsection (g), the Agent would have allocated to it an amount
               less than such minimum, such Competitive Bid Quote will instead
               be deemed to have been withdrawn. Determination by the Agent of
               the amounts of Competitive Bid Loans and the allocation thereof
               shall be conclusive in the absence of manifest error.

                    (h) Funding of Competitive Bid Loans. If, on or prior to the
               Drawdown Date of any Competitive Bid Loan, the Total Commitment
               has not terminated in full and if, on such Drawdown Date, the
               applicable conditions of sections 12 and 13 hereof are satisfied,
               the Bank or Banks whose offers the Company or, solely in the case

                                     Page 37
<Page>

               of Hasbro SA Loans, Hasbro SA has accepted will fund each
               Competitive Bid Loan so accepted. Such Bank or Banks will make
               such Competitive Bid Loans, by crediting the Agent for further
               credit to the Company's or, solely in the case of Hasbro SA
               Loans, Hasbro SA's, specified account, in immediately available
               funds not later than 1:00 p.m. (Boston time) on such Drawdown
               Date.

                  2.5.2. REPAYMENT OF COMPETITIVE BID LOANS. The principal of
         each Competitive Bid Loan shall become absolutely due and payable by
         the Company or, solely in the case of Hasbro SA Loans, Hasbro SA on the
         last day of the Interest Period relating thereto, and the Company or,
         solely in the case of Hasbro SA Loans, Hasbro SA hereby absolutely and
         unconditionally promises to pay to the Agent for the account of the
         relevant Banks on the last day of the Interest Period relating thereto
         the principal amount of all such Competitive Bid Loans, plus interest
         thereon at the applicable Competitive Bid Rate. The Competitive Bid
         Loans shall bear interest at the rate per annum specified in the
         applicable Competitive Bid Quotes. Interest on each Competitive Bid
         Loan shall be payable (a) on the last day of the applicable Interest
         Period, and if any such Interest Period is longer than ninety (90)
         days, also on the last day of each ninety (90) day period following the
         commencement of such Interest Period, and (b) on the Final Maturity
         Date for each Competitive Bid Loan. Subject to the terms of this
         Agreement, the Company or, solely in the case of Hasbro SA Loans,
         Hasbro SA may make Competitive Bid Quote Requests with respect to new
         Borrowings of any amounts so repaid prior to the Final Maturity Date.
         Except after an acceleration pursuant to section 14.1 hereof, no
         principal amount with respect to any Competitive Bid Loan may be repaid
         other than on the last day of the Interest Period relating thereto
         unless otherwise agreed to in writing by the Company or, solely in the
         case of Hasbro SA Loans, Hasbro SA and the funding Bank.
         Notwithstanding the foregoing, Hasbro SA shall have no liability to
         repay any Competitive Bid Loans requested by the Company.

     2.6. THE NOTES. (a) The Syndicated Loans shall be evidenced by separate
promissory notes of the Company and Hasbro SA in substantially the form of
Exhibit A-1 hereto (the "Syndicated Notes"), dated as of the date hereof (or
such other date as a Bank may become a party hereto pursuant to section 20) with
appropriate insertions; one Syndicated Note being payable to the order of each
Bank in a principal amount equal to (i) in the case of the Company, such Bank's
Commitment representing the obligation of the Company to pay to such Bank such
amount and (ii) in the case of Hasbro SA, such Bank's Commitment representing
the obligation of Hasbro SA to pay to such Bank such amount, or in each case, if
less, the aggregate unpaid principal amount of all Syndicated Loans made by such
Bank to such Person hereunder, plus interest accrued thereon as set forth below.
Each of the Company and Hasbro SA hereby irrevocably authorizes each Bank to
make or cause to be made, at or about the time of each Syndicated Loan to such
Person made by such Bank, an appropriate notation on such Bank's Syndicated Note
Record reflecting the unpaid principal amount of all Syndicated Loans made by
such Bank to such Person, and such Bank shall make or cause to be made, at or
about the time of receipt of any payment of principal on the Syndicated Note of
such Bank, an appropriate notation on such Syndicated Note Record reflecting
such payment. The aggregate unpaid amount of Syndicated Loans made by such Bank

                                     Page 38
<Page>

to the Company and Hasbro SA set forth on such Bank's Syndicated Note Records
shall be rebuttably presumptive evidence of the principal amount thereof owing
and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Syndicated Note Records shall not
limit or otherwise affect the obligations of the Company or Hasbro SA hereunder
or under the Syndicated Note of such Person to make payments of principal of or
interest on such Syndicated Note when due.

     (b) Competitive Bid Notes. The Competitive Bid Loans shall be evidenced by
separate promissory notes of the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA in substantially the form of Exhibit B-1 hereto (the
"Competitive Bid Notes"), dated as of the date hereof (or such other date as a
Bank may become a party hereto pursuant to section 20 hereof) with appropriate
insertions; one Competitive Bid Note being payable to the order of each Bank in
a principal amount equal to the Total Commitment and representing the obligation
of the Company or, solely in the case of Hasbro SA Loans, Hasbro SA to pay to
such Bank the aggregate unpaid principal amount of all Competitive Bid Loans
made by such Bank hereunder, as set forth in section 2.5 hereof, plus interest
accrued thereon as set forth below. Each of the Company and Hasbro SA hereby
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of each Competitive Bid Loan to the Company or, solely in the case of
Hasbro SA Loans, Hasbro SA made by such Bank, an appropriate notation on the
Competitive Bid Note Record of such Bank reflecting the unpaid principal amount
of all Competitive Bid Loans made by such Bank, and such Bank shall make or
cause to be made, at or about the time of receipt of any payment of principal on
the Competitive Bid Note of such Bank, an appropriate notation on the
Competitive Bid Note Record reflecting such payment. The aggregate unpaid amount
of Competitive Bid Loans made by such Bank set forth on the Competitive Bid Note
Record shall be rebuttably presumptive evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Competitive Bid Note Record shall not limit
or otherwise affect the obligations of the Company or Hasbro SA hereunder or
under the Competitive Bid Note to make payments of principal of or interest on
the Competitive Bid Note when due.

     2.7. INTEREST ON LOANS.

     (a) Except as provided in section 4.3 hereof, Base Rate Loans outstanding
from time to time shall bear interest during the Interest Period relating
thereto at the annual percentage rate equal to the sum of (i) the Base Rate in
effect from time to time and (ii) the applicable Margin in effect during such
Interest Period. Interest on Base Rate Loans shall be payable in Dollars or in
the applicable Optional Currency in which the underlying Loan was made, as the
case may be, and in accordance with section 4.1(a) hereof.

     (b) Except as provided in section 4.3 hereof, Eurocurrency Rate Loans
outstanding from time to time shall bear interest during the Interest Period
relating thereto at the annual percentage rate equal to the sum of (i) the
Eurocurrency Rate and (ii) the applicable Margin in effect during such Interest
Period. Interest on the Eurocurrency Rate Loans shall be payable in Dollars or
in the applicable Optional Currency in which the underlying Loan was made, as
the case may be, and in accordance with section 4.1(a) hereof.

     (c) Except as provided in section 4.3 hereof, each Competitive Bid Loan
outstanding from time to time shall bear interest at the rate per annum

                                     Page 39
<Page>

specified in the applicable Competitive Bid Quote with respect to such
Competitive Bid Loan. Interest on Competitive Bid Loans shall be payable in
Dollars and in accordance with section 4.1(a) hereof.

     2.8. PREPAYMENTS. The Company or, solely in the case of Hasbro SA Loans,
Hasbro SA shall repay Base Rate Loans or Eurocurrency Rate Loans made to the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA hereunder on the
last day of the Interest Period relating thereto. As provided in section 2.5.2,
the Company or, solely in the case of Hasbro SA Loans, Hasbro SA shall repay
Competitive Bid Loans made to the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA hereunder on the last day of the Interest Period relating
thereto. The Company or, solely in the case of Hasbro SA Loans, Hasbro SA shall
also have the right at any time to prepay Syndicated Loans consisting of Base
Rate Loans, as a whole or in part, without premium or penalty; provided that the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA shall provide
written, telegraphic or telephonic notice to the Agent not later than 11:00 a.m.
(Boston time) on the proposed date of prepayment stating the aggregate principal
amount of such prepayment. Each partial prepayment of any Syndicated Loan
pursuant to this section 2.8 shall be in a minimum aggregate principal amount of
$5,000,000 or some greater integral multiple of $1,000,000 (or the Dollar
Equivalent thereof in an Optional Currency), or, if less, the aggregate
outstanding principal amount of the Syndicated Loans. Subject to the conditions
of section 2.1 hereof, amounts so prepaid may be reborrowed. In addition, the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA may, upon three (3)
Business Days' written, telegraphic or telephonic notice to the Agent stating
the proposed date and the aggregate principal amount of such prepayments, prepay
all, but not less than all, of the Syndicated Loans constituting Eurocurrency
Rate Loans subject to a particular Interest Period on a date other than the last
day of the Interest Period relating thereto; provided, that upon any such
prepayment, and except as set forth in section 4.1(f) hereof, the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA shall pay to the Agent, for the
respective accounts of the Banks on a pro rata basis, a sum which shall be
determined by the Agent (to the extent that the Agent is able to make such
determination), which determination shall be conclusive in the absence of
manifest error, in the following manner after each such payment:

          (a) First, the Agent shall determine the amount (if any) (the
     "Installment Amount") by which (i) the total amount of interest which would
     have otherwise accrued hereunder on each installment of principal so
     prepaid during the period beginning on the date of such payment and ending
     on the last day of the Interest Period relating thereto (the "Reemployment
     Period") exceeds (ii) the total amount of interest which would accrue,
     during the Reemployment Period, at the annual rate of interest determined
     by the Agent (the "Reemployment Rate") as being the prevailing rate per
     annum bid at or about the time of such payment for the purchase of deposits
     of Dollars or the relevant Optional Currency, as applicable, from prime
     banks in the Eurocurrency Interbank Market selected by the Agent in its
     sole discretion (such Reemployment Rate to be the rate payable on an amount
     equal (as nearly as may be) to the Eurocurrency Rate Loans so prepaid and
     to have a maturity (as nearly as may be) equal to the Reemployment Period);

          (b) Second, each Installment Amount shall be treated as payable on the
     last day of the Interest Period relating to the Eurocurrency Rate Loans
     prepaid; and

                                     Page 40
<Page>

          (c) Third, the amount to be paid shall be the present value of the
     Installment Amount determined by discounting the amount thereof from the
     date on which the Installment Amount is to be treated as payable, at the
     same annual interest rate as the Reemployment Rate designated as aforesaid
     by the Agent.

Each prepayment made pursuant to this section 2.8 shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of prepayment.

     2.9. FUNDS FOR LOANS. (a) Each Bank will, upon receiving notice from the
Agent of any request by the Company or, solely in the case of Hasbro SA Loans,
Hasbro SA for Syndicated Loans pursuant to section 2.4, become and be obligated
to make available to the Agent, on the proposed Drawdown Date of each Syndicated
Loan, not later than (a) 2:30 P.M. (Boston time) for Base Rate Loans with
respect to which the Agent sent notice to the Banks pursuant to section 2.4
hereof no earlier than the proposed Drawdown Date of such Loan, and (b) 11:00
A.M. (Boston time) with respect to Eurocurrency Rate Loans and all other Base
Rate Loans, in funds immediately available for credit to the Company's or,
solely in the case of Hasbro SA Loans, Hasbro SA's account, an aggregate amount,
equal to such Bank's Commitment Percentage of the Syndicated Loan requested at
the place specified in the notice delivered by the Company or, solely in the
case of Hasbro SA Loans, Hasbro SA pursuant to section 2.4. Upon satisfaction of
the conditions set forth in sections 12 and 13, as applicable, the Agent will
cause the aggregate amount of such funds actually received by the Agent from the
Banks to be credited to the Company's or, solely in the case of Hasbro SA Loans,
Hasbro SA's account as soon as practicable on the date of such receipt. The
failure or refusal of any Bank to make available to the Agent at the aforesaid
time on any Drawdown Date the amount of the Syndicated Loan to be made by such
Bank thereon shall not relieve the other Banks from their several obligations
hereunder to make their respective Commitment Percentages of any requested
Syndicated Loans.

     (b) The Agent may, unless notified to the contrary by any Bank prior to a
Drawdown Date, assume that such Bank has made available to the Agent on such
Drawdown Date the amount of such Bank's Commitment Percentage of the Syndicated
Loans (or in the case of Competitive Bid Loans, the amount of such Bank's
accepted offers of Competitive Bid Loans, if any) to be made on such Drawdown
Date, and the Agent may (but it shall not be required to), in reliance upon such
assumption, make available to the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA a corresponding amount. If any Bank makes available to the
Agent such amount on a date after such Drawdown Date, such Bank shall pay to the
Agent on demand an amount equal to the product of (i) the average computed for
the period referred to in clause (iii) below, of the weighted average interest
rate paid by the Agent for federal funds acquired by the Agent during each day
included in such period (or, as to Loans denominated in an Optional Currency,
the rate of interest per annum at which overnight deposits in the applicable
Optional Currency, in an amount approximately equal to the amount with respect
to which such rate is being determined, would be offered for such day by the
Agent to major banks in the London interbank market), times (ii) the amount of
such Bank's Commitment Percentage of such Loans (or accepted offers of
Competitive Bid Loans, as applicable), times (iii) a fraction, the numerator of
which is the number of days that elapse from and including such Drawdown Date to

                                     Page 41
<Page>

the date on which the amount of such Bank's Loans shall become immediately
available to the Agent, and the denominator of which is 365. A statement of the
Agent submitted to such Bank with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Loans is not made available to the
Agent by such Bank within three (3) Business Days following such Drawdown Date,
the Agent shall be entitled to recover such amount from the Company or, solely
in the case of Hasbro SA Loans, Hasbro SA on demand, with interest thereon at
the rate per annum applicable to the Loans made on such Drawdown Date.

     2.10. MANDATORY REPAYMENTS. (a) In no event later than (i) seven (7) days
after receipt or (ii) in the case of net cash proceeds received from Casualty
Events not committed or reinvested as provided in clause (D) below or Net Cash
Sale Proceeds from Material Asset Sales permitted to be applied as provided in
clause (II) below and not so applied, the 181st day following receipt, by any of
the Hasbro Companies of:

          (A) Net Cash Sale Proceeds from Material Asset Sales;

          (B) if an Event of Default has occurred and is continuing, Net Cash
     Equity Issuance Proceeds from Equity Issuances by any of the Restricted
     Subsidiaries and Significant Subsidiaries;

          (C) net cash proceeds received by (A) the Company in connection with
     its issuance of any long term unsecured Indebtedness having a maturity
     after the Final Maturity Date (other than purchase money Indebtedness and
     Refinancing Indebtedness) or (B) any Operating Subsidiary of the Company in
     connection with its issuance of any Indebtedness permitted by section
     10.1(c); and

          (D) if an Event of Default has occurred and is continuing, net cash
     proceeds received from Casualty Events by any of the Hasbro Companies which
     have not been committed (as evidenced by a binding written contract) by
     such Person prior to or within one hundred eighty (180) days of receipt of
     such proceeds to the repair or replacement of the property so damaged,
     destroyed or taken, or, if so committed, such repair or replacement of the
     property so damaged, destroyed or taken shall have not commenced prior to
     or within one hundred eighty (180) days of receipt of such proceeds
     pursuant to such binding written contract,

the Company shall pay or (solely in the case of Hasbro SA Loans) shall cause
Hasbro SA to pay to the Agent for the respective accounts of the Banks an amount
equal to (x) (1) fifty percent (50%) of such Net Cash Sale Proceeds from
Material Asset Sales, plus any additional portion of such Net Cash Sale Proceeds
to the extent and when required by clause (II) of the next sentence, and (2) one
hundred percent (100%) of such net cash proceeds from Equity Issuances,
issuances of Indebtedness or Casualty Events, or (y) if less, (1) the then
outstanding principal amount of the Loans and the Unpaid Reimbursement
Obligations and (2) if an Event of Default has occurred and is continuing, the
Maximum Drawing Amount of Letters of Credit then outstanding to be held by the
Agent as cash collateral to secure all Reimbursement Obligations, to be applied
in the manner set forth in section 2.11. Notwithstanding the foregoing,

          (I) no such payment shall be required unless, until and only to the
     extent that such Material Asset Sales, Equity Issuances, issuances of
     Indebtedness or Casualty Events result in net cash proceeds that otherwise

                                     Page 42
<Page>

     would be required to be so applied equal to (x) $5,000,000 or more in any
     period of thirty (30) consecutive days or (y) $15,000,000 in any fiscal
     year of the Company, and

          (II) all or any portion of the fifty percent (50%) of the Net Cash
     Sale Proceeds from any Material Asset Sale remaining after the initial
     application of such Net Cash Sale Proceeds in accordance with the preceding
     sentence of this section 2.10(a) may be applied to repay, redeem or
     repurchase any other Indebtedness within one hundred eighty (180) days of
     receipt of such proceeds, and if any portion of such remaining amount of
     such Net Cash Sale Proceeds is not so applied, an amount equal to such
     portion shall be required to be applied to make payment under this section
     2.10 on the 181st day following receipt of such Net Cash Sale Proceeds.

     (b) If at any time the Utilization exceeds the Total Commitment (as reduced
pursuant to section 2.3), then the Company shall immediately pay or (solely in
the case of Hasbro SA Loans) shall cause Hasbro SA to pay the amount of such
excess to the Agent for the respective account of the Banks to be applied in the
manner set forth in section 2.11.

     (c) Hasbro SA shall have no liability to prepay any Loans to the Company
pursuant to this section 2.10.

     2.11. APPLICATION OF PAYMENTS; COMMITMENT REDUCTION. All payments made
pursuant to section 2.10 shall be applied to reduce the outstanding principal
amount of the Loans and Unpaid Reimbursement Obligations by such amount pro rata
based on the then outstanding principal amount of the Loans and Unpaid
Reimbursement Obligations. Such mandatory repayments shall be allocated among
the Banks in proportion, as nearly as practicable, to the respective outstanding
amounts of each Bank's Note, with adjustments to the extent practicable to
equalize any prior prepayments not exactly in proportion.

     Amounts repaid pursuant to section 2.10(a)(A) or section 2.10(a)(C) may not
be reborrowed. The Total Commitment shall be reduced by an amount equal to the
amount so repaid pursuant to section 2.10(a)(A) or section 2.10(a)(C). No
reduction of the Total Commitment made pursuant to this section 2.11 may be
reinstated.

     2.12. OPTIONAL CURRENCY.

          2.12.1. REQUEST FOR OPTIONAL CURRENCY. Subject to the limitations set
     forth in section 2.1, the Company and/or Hasbro SA may, not later than
     10:00 A.M. (Boston time) three (3) Business Days' prior to the proposed
     Drawdown Date thereof, give notice to the Agent (an "OC Notice") requesting
     that one or more Syndicated Loans be made as Eurocurrency Rate Loans in an
     Optional Currency, provided that any Syndicated Loan proposed to be made
     under this section 2.12 shall be in an amount not less than EUR5,000,000 or
     GBP3,000,000, or a greater amount which is a multiple of the Optional
     Currency equivalent of $1,000,000 in excess thereof in the requested
     Optional Currency. Each OC Notice requesting a Syndicated Loan in an

                                     Page 43
<Page>

     Optional Currency shall be by telephone, telex, telecopy or cable (in each
     case confirmed in writing by the Company or, solely in the case of Hasbro
     SA Loans, Hasbro SA,), specifying (a) the amount of the Syndicated Loan to
     be made, (b) the requested date of the proposed borrowing, (c) the
     requested Optional Currency in which the Syndicated Loan is to be made, (d)
     the initial Interest Period for the Syndicated Loan to be borrowed, and (e)
     the Company's or, solely in the case of Hasbro SA Loans, Hasbro SA's
     account with the Agent to which payment of the proceeds of such Syndicated
     Loan is to be made. Promptly upon receipt of any such notice, the Agent
     shall notify each of the Banks thereof. If any Bank on or prior to the
     second Business Day preceding the first day of any Interest Period for
     which an OC Notice has been delivered requesting a Syndicated Loan in an
     Optional Currency or on any funding date, reasonably determines (which
     determination shall be conclusive absent manifest error) that the Optional
     Currency is not freely transferable and convertible into Dollars or that it
     will be impractical for such Bank to fund the Syndicated Loan in such
     Optional Currency, then such Bank shall so notify the Agent, which
     notification shall be given immediately by the Agent to the Company or,
     solely in the case of Hasbro SA Loans, Hasbro SA, and such Bank's portion
     of the requested Syndicated Loan shall, in each case, notwithstanding any
     contrary election by the Company or, solely in the case of Hasbro SA Loans,
     Hasbro SA, or any other provisions hereof, be denominated in Dollars as a
     Eurocurrency Rate Loan with the same Interest Period as selected by the
     Company or, solely in the case of Hasbro SA Loans, Hasbro SA for such
     Revolving Credit Loan. The Company or, solely in the case of Hasbro SA
     Loans, Hasbro SA may repay such portion of a Syndicated Loan denominated in
     Dollars as a Eurocurrency Rate Loan at any time without premium or penalty,
     subject to any other indemnity under section 4.7, provided that, any Bank
     that has failed to provide the relevant Optional Currency shall not be
     entitled to such indemnity in connection with such Loan. In the event that
     such repayment results in Syndicated Loans outstanding that are not pro
     rata in accordance with the Commitment Percentages, then all subsequent
     principal repayments denominated in the Optional Currency which the
     applicable Bank did not advance shall be made by the Company, or solely in
     the case of Hasbro SA Loans, Hasbro SA to the Agent for the respective
     accounts of such Banks other than such Bank on a pro rata basis until such
     time as the Syndicated Loans are outstanding on a pro rata basis. Subject
     to the foregoing and to the satisfaction of the terms and conditions of
     sections 12 and 13, each Syndicated Loan requested to be made in an
     Optional Currency will be made on the date specified therefor in the OC
     Notice, in the currency requested in the OC Notice and, upon being so made,
     will have the Interest Period requested in the OC Notice.

          2.12.2. FUNDING. Each Bank may make any Eurocurrency Rate Loan
     denominated in an Optional Currency by causing any of its domestic or
     foreign branches or foreign affiliates to make such Eurocurrency Rate Loan
     (whether or not such branch or affiliate is named as a lending office on
     the signature pages hereof); provided that in such event the obligation of
     the Company, or solely in the case of Hasbro SA Loans, Hasbro SA to repay
     such Eurocurrency Rate Loan shall nevertheless be to such Bank and shall,
     for all purposes of this Credit Agreement (including without limitation for
     purposes of the definition of the term "Majority Banks") be deemed made by
     such Bank, to the extent of such Eurocurrency Rate Loan.

                                     Page 44
<Page>

                               3. THE SWING LINE.

     3.1. THE SWING LINE LOANS. Subject to the terms and conditions hereinafter
set forth, upon notice by the Company or, solely in the case of Hasbro SA Loans,
Hasbro SA made to the Swing Line Bank in accordance with section 3.2 hereof, the
Swing Line Bank agrees to lend to the Company or, solely in the case of Hasbro
SA Loans, Hasbro SA Swing Line Loans on any Business Day prior to the Final
Maturity Date in an aggregate principal amount not to exceed $25,000,000 (the
"Maximum Swing Line Loan Amount"). Each Swing Line Loan shall be in a minimum
amount equal to $1,000,000 or an integral multiple thereof. Notwithstanding any
other provisions of this Agreement and in addition to the limit set forth above,
at no time shall the Utilization exceed the Total Commitment; provided, however,
subject to the limitations set forth in this section 3.1 from time to time the
sum of the aggregate outstanding Swing Line Loans plus all outstanding
Syndicated Loans made by the Swing Line Bank may exceed the Swing Line Bank's
Commitment Percentage of the Total Commitment then in effect.

     3.2. NOTICE OF BORROWING. When the Company or, solely in the case of Hasbro
SA Loans, Hasbro SA desires the Swing Line Bank to make a Swing Line Loan, the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA shall send to the
Agent and the Swing Line Bank written notice in the form of Exhibit C hereto (or
telephonic notice confirmed in a writing in the form of Exhibit C hereto) of
each Swing Line Loan requested hereunder (a "Swing Line Loan Request") not later
than 1:00 p.m. (Boston time) on the proposed Drawdown Date (except in the case
of Hasbro SA Loans, which written notice shall be by 8:00 A.M. (Boston time) on
the proposed Drawdown Date) of any Swing Line Loan. Each such Swing Line Loan
Request shall set forth the principal amount of the proposed Swing Line Loan and
the date on which the proposed Swing Line Loan would mature (the "Swing Line
Loan Maturity Date") which shall in no event be later than the Final Maturity
Date. Each Swing Line Loan Request shall be irrevocable and binding on the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA, and shall obligate
the Company or, solely in the case of Hasbro SA Loans, Hasbro SA to borrow the
Swing Line Loan from the Swing Line Bank on the proposed Drawdown Date thereof.
Upon satisfaction of the applicable conditions set forth in this Agreement, on
the proposed Drawdown Date the Swing Line Bank shall make the Swing Line Loan
available to the Company or, solely in the case of Hasbro SA Loans, Hasbro SA no
later than 3:00 p.m. (Boston time) on the proposed Drawdown Date by crediting
the amount of the Swing Line Loan to the account(s) of the Company or, solely in
the case of Hasbro SA Loans, Hasbro SA specified in the Swing Line Loan Request;
provided that the Swing Line Bank shall not advance any Swing Line Loans after
it has received notice from any Bank that a Default or Event of Default has
occurred and stating that no new Swing Line Loans are to be made until such
Default or Event of Default has been cured or waived in accordance with the
provisions of this Agreement. The Swing Line Bank shall not be obligated to make
any Swing Line Loans at any time when any Bank is a Delinquent Bank unless the
Swing Line Bank has entered into arrangements reasonably satisfactory to it to
eliminate the Swing Line Bank's risk with respect to such Delinquent Bank, which
may include cash collateralizing such Delinquent Bank's Commitment Percentage of
the outstanding Swing Line Loans and any such additional Swing Line Loans to be
made.

     3.3. INTEREST ON SWING LINE LOANS. Each Swing Line Loan shall be a Base
Rate Loan and, except as otherwise provided in section 4.3 hereof, shall bear
interest from the Drawdown Date thereof until repaid in full at the rate per
annum equal to the Base Rate plus the Margin with respect to Base Rate Loans,
which shall be paid on each Interest Payment Date for Base Rate Loans.

                                     Page 45
<Page>

     3.4. REPAYMENT OF SWING LINE LOANS. The Company or, solely in the case of
Hasbro SA Loans, Hasbro SA shall repay each outstanding Swing Line Loan on or
prior to the Swing Line Loan Maturity Date. Upon notice by the Swing Line Bank
on any Business Day, each of the Banks hereby agrees to make Syndicated Loans
constituting Base Rate Loans to the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA having outstanding Swing Line Loans, on the next succeeding
Business Day following such notice, in an amount equal to such Bank's Commitment
Percentage of the aggregate amount of all Swing Line Loans outstanding to the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA. The proceeds
thereof shall be applied directly to the Swing Line Bank to repay the Swing Line
Bank for such outstanding Swing Line Loans. Each Bank hereby absolutely,
unconditionally and irrevocably agrees to make such Syndicated Loans upon one
(1) Business Day's notice as set forth above, notwithstanding (a) that the
amount of such Syndicated Loan may not comply with the applicable minimums set
forth herein, (b) the failure of the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA to meet the conditions set forth in sections 12 or 13 hereof,
(c) the occurrence or continuance of a Default or an Event of Default hereunder,
(d) the date of such Syndicated Loan, and (e) the Total Commitment in effect at
such time. In the event that it is impracticable for such Syndicated Loan to be
made for any reason on the date otherwise required above, then each Bank hereby
agrees that it shall forthwith purchase (as of the date such Syndicated Loan
would have been made, but adjusted for any payments received from the Company
or, solely in the case of Hasbro SA Loans, Hasbro SA on or after such date and
prior to such purchase) from the Swing Line Bank, and the Swing Line Bank shall
sell to each Bank, such participations in the Swing Line Loans (including all
accrued and unpaid interest thereon) outstanding as shall be necessary to cause
the Bank to share in such Swing Line Loans pro rata based on their respective
Commitment Percentages (without regard to any termination of the Total
Commitment hereunder) by making available to the Swing Line Bank an amount equal
to such Bank's participation in the Swing Line Loans; provided that (x) all
interest payable on the Swing Line Loans shall be for the account of the Swing
Line Bank as a funding and administrative fee until the date as of which the
respective participation is purchased, and (y) at the time any purchase of such
participation is actually made, the purchasing Bank shall be required to pay the
Swing Line Bank interest on the principal amount of the participation so
purchased for each day from and including the date such Syndicated Loan would
otherwise have been made until the date of payment for such participation at the
rate of interest in effect applicable to Base Rate Loans during such period.
Notwithstanding the foregoing, Hasbro SA shall have no liability to repay any
Swing Line Loans requested by the Company.

     3.5. THE SWING LINE NOTE. The obligation of the Company or, solely in the
case of Hasbro SA Loans, Hasbro SA to repay the Swing Line Loans made pursuant
to this Agreement and to pay interest thereon as set forth in this Agreement
shall be evidenced by separate promissory notes of the Company or, solely in the
case of Hasbro SA Loans, Hasbro SA with appropriate insertions substantially in
the form of Exhibit D attached hereto (the "Swing Line Notes"), dated the
Effective Date and payable to the order of the Swing Line Bank in a principal
amount stated to be the lesser of (a) the Maximum Swing Line Loan Amount, or (b)
the aggregate principal amount of Swing Line Loans at any time advanced by the
Swing Line Bank and outstanding thereunder. Each of the Company and Hasbro SA
irrevocably authorizes the Swing Line Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Swing Line Loan or at the time of

                                     Page 46
<Page>

receipt of any payment of principal on the Swing Line Notes, an appropriate
notation on the Swing Line Note Record reflecting the making of such Swing Line
Loan or (as the case may be) the receipt of such payment. The outstanding amount
of the Swing Line Loans set forth on such Swing Line Note Record shall be prima
facie evidence of the principal amount thereof owing and unpaid to the Swing
Line Bank, but the failure to record, or any error in so recording, any such
amount on such Swing Line Note Record shall not limit or otherwise affect the
actual amount of the obligations of the Company or, solely in the case of Hasbro
SA Loans, Hasbro SA hereunder or under the Swing Line Notes to make payments of
principal of or interest on the Swing Line Notes when due.

                     4. INTEREST; PAYMENTS AND COMPUTATIONS.

     4.1. INTEREST; COSTS AND EXPENSES.

     (a) Elections. At the option of the Company or, solely in the case of
Hasbro SA Loans, Hasbro SA, so long as no Default or Event of Default has
occurred and is then continuing, the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA may elect from time to time to have a portion of the principal
amount of the Syndicated Loans to the Company or, solely in the case of Hasbro
SA Loans, Hasbro SA outstanding from time to time bear interest during any
particular Interest Period calculated by reference to the Base Rate or the
Eurocurrency Rate, provided that any portion of the Syndicated Loans selected to
bear interest by reference to the Base Rate or the Eurocurrency Rate shall be in
an amount not less than $5,000,000 or some greater integral multiple of
$1,000,000 with respect to any single Interest Period. Any election by the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA to have interest
calculated by reference to the Base Rate or the Eurocurrency Rate shall be made
by notice (which shall be irrevocable) to the Agent as provided in section 2.4.
If in any such notice, the Company or, solely in the case of Hasbro SA Loans,
Hasbro SA does not specify whether any Eurocurrency Rate Loans are requested,
the Company or, solely in the case of Hasbro SA Loans, Hasbro SA shall be deemed
to have elected that the requested Syndicated Loans bear interest at the Base
Rate. Any election of a Eurocurrency Rate shall lapse at the end of the expiring
Interest Period unless extended by a further election notice as provided in
section 2.4 hereof. If, on or prior to the last day of any Interest Period for
Base Rate Loans or Eurocurrency Rate Loans, the Company or, solely in the case
of Hasbro SA Loans, Hasbro SA (x) fails to deliver a further election notice
with respect to such Loans pursuant to section 2.4 hereof and this section
4.1(a), and (y) fails to repay all or any part of such Loans as provided in
section 4.4 hereof, then such Syndicated Loans shall be deemed to be Base Rate
Loans in accordance with the terms set forth in section 4.4(b) hereof. Each Base
Rate Loan or Eurocurrency Rate Loan shall bear interest during each Interest
Period relating thereto at the rate set forth in section 2.7 or section 4.3
hereof, as the case may be. Interest on each Base Rate Loan or Eurocurrency Rate
Loan shall be payable (i) on the last day of the Interest Period relating
thereto or (ii) if the Interest Period is longer than ninety (90) days, on the
last day of each 90-day period following the commencement of such Interest
Period and on the last day of such Interest Period.

     (b) Notices, etc. as to Eurocurrency Rate. Promptly after the commencement
of any Interest Period for any Syndicated Loan, the Agent shall notify the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA and each of the
Banks of (A) the applicable interest rate determined by the Agent hereunder with
respect to any Eurocurrency Rate Loan, (B) each date on which interest is
payable hereunder, and (C) the date on which the Interest Period with respect to

                                     Page 47
<Page>

such Syndicated Loan shall end; provided, however, that the obligations of the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA to pay to each Bank
principal and interest as herein provided shall not be subject to or in any way
conditional upon the giving of any such notice by the Agent. Each such notice
shall, absent manifest error, be binding upon each Bank and the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA.

     (c) Substitution of Base Rate. Notwithstanding any other provision of this
Agreement, if (i) the introduction of, any change in, or any change in the
interpretation of, any law or regulation applicable to any Bank (the "Affected
Bank") shall make it unlawful, or any central bank or other Governmental
Authority having jurisdiction thereof shall assert that it is unlawful, or in
the reasonable judgment of such Bank, impracticable, for such Bank to perform
its obligations in respect of any Loans bearing interest based on the
Eurocurrency Rate or (ii) if any Affected Bank shall reasonably determine with
respect to Loans bearing interest based on the Eurocurrency Rate that (A) by
reason of circumstances affecting any Eurocurrency Interbank Market, adequate
and reasonable methods do not exist for ascertaining the Eurocurrency Rate which
would otherwise be applicable during any Interest Period, or (B) deposits of
Dollars or the relevant Optional Currency in the relevant amount for the
relevant Interest Period are not available to such Bank in any Eurocurrency
Interbank Market, or (C) the Eurocurrency Rate does not or will not accurately
reflect the cost to such Bank of obtaining or maintaining the applicable Loans
bearing interest based on the Eurocurrency Rate during any Interest Period, then
any such Affected Bank shall promptly give telephonic, telex or cable notice of
such determination to the Company or, solely in the case of Hasbro SA Loans,
Hasbro SA (which notice shall be conclusive and binding upon the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA absent manifest error), the
Agent and the other Banks. Upon such notification by any Affected Bank, (x) the
obligation of such Affected Bank to make Loans bearing interest based on the
Eurocurrency Rate shall be suspended until such circumstances no longer exist,
(y) any new Loans made by such Affected Bank on or after the date of such
notification, which Loans would otherwise bear interest at the suspended rate
shall be deemed to be Loans bearing interest by reference to the Base Rate, as
necessary, until such suspension is no longer in effect, and (z) so long as it
is not unlawful for the Affected Bank to continue carrying Outstanding Loans
bearing interest at the suspended rate, Outstanding Loans of such Affected Bank
bearing interest based on the Eurocurrency Rate shall continue to bear interest
at the applicable rate based on the Eurocurrency Rate until the end of the
applicable Interest Period. If it is unlawful for any Affected Bank to continue
carrying any Outstanding Loans bearing interest at the suspended rate, such
Affected Bank shall so notify the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA and the Agent and any such Outstanding Loans shall be
automatically converted to Base Rate Loans at the end of the Interest Period
which is current when such notice is given. Notwithstanding any provision of
this section 4.1(c) to the contrary, during any period in which a suspension is
in effect pursuant to this section 4.1(c), the Company or, solely in the case of
Hasbro SA Loans, Hasbro SA may notify the Agent and any Affected Bank to which
such suspension applies that (I) the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA shall repay, in accordance with the provisions of section
4.1(f) hereof, any and all Loans made by such Affected Bank to the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA, and (II) with respect to any
new Loans to be made by the Banks hereunder, the Company or, solely in the case
of Hasbro SA Loans, Hasbro SA shall not borrow from such Affected Bank and the
Commitment of such Affected Bank shall be terminated.

                                     Page 48
<Page>

     (d) Additional Costs and Expenses; Reserve Requirements. Anything herein to
the contrary notwithstanding, if any present or future applicable law (which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank by
any central bank or other fiscal, monetary or other Governmental Authority,
whether or not having the force of law) shall

          (i) subject such Bank to any tax, levy, impost, duty, charge, fee,
     deduction or withholding of any nature not now in effect, with respect to
     the Bank's commitment to make Loans bearing interest based on the
     Eurocurrency Rate or the Bank's Loans bearing interest based on the
     Eurocurrency Rate; provided that this section 4.1(d)(i) shall apply only
     with respect to such Loans, or commitments to make such Loans, as the case
     may be, made to Hasbro SA; or

          (ii) materially change the basis of taxation of payments to such Bank
     on the principal of, interest on or any other amounts payable in respect of
     the Loans bearing interest based on the Eurocurrency Rate as such
     (excluding changes in taxes measured by or imposed on the net income, or on
     the capital or net worth of such Bank; provided that this section
     4.1(d)(ii) shall apply only with respect to Loans made to Hasbro SA;
     provided further that nothing in this parenthetical shall be deemed to
     limit the rights of the Banks or the obligations of the Company and/or
     Hasbro SA pursuant to 4.1(e)); or

          (iii) impose or increase or render applicable any liquidity, capital,
     special deposit or reserve or similar requirements (whether or not having
     the force of law) not now in effect, against assets held by, or deposits in
     or for the account of, or loans by an office of such Bank with respect to
     such Bank's commitment to make Loans bearing interest based on the
     Eurocurrency Rate or such Bank's Loans bearing interest based on the
     Eurocurrency Rate; or

          (iv) impose on such Bank any other condition or requirement not now in
     effect, with respect to such Bank's commitment to make Loans bearing
     interest based on the Eurocurrency Rate or such Bank's Loans bearing
     interest based on the Eurocurrency Rate or any class of loans of which the
     Loans bearing interest based on the Eurocurrency Rate forms a part (other
     than in respect of taxes, which shall be governed solely by sections 4.11,
     4.12 and 4.13; provided that the foregoing exclusion shall not apply with
     respect to such Loans made by any Bank to Hasbro SA), and the result of any
     of the foregoing is (x) to increase the cost to such Bank attributable to
     the making, funding or maintaining of Loans bearing interest based on the
     Eurocurrency Rate or its commitment therefor, (y) to reduce the amount of
     principal, interest, commitment fees or other amounts payable in respect of
     Loans bearing interest based on the Eurocurrency Rate to such Bank
     hereunder or its commitment therefor, or (z) to require such Bank to make
     any payment or to forego any interest or other sum payable in respect of

                                     Page 49
<Page>

     Loans bearing interest based on the Eurocurrency Rate hereunder or its
     commitment therefor, the amount of which payment or foregone interest or
     other sum is calculated by reference to the gross amount of any sum
     receivable or deemed received by such Bank from the Company and/or Hasbro
     SA hereunder;

then, and in each such case, the Company or, solely in the case of Hasbro SA
Loans, Hasbro SA will, upon demand by such Bank made by written notice to the
Company and/or Hasbro SA from time to time as often as the occasion therefor may
arise, pay to such Bank, within ten (10) days after receipt of notice of such
demand, such additional amounts as will be sufficient, in the good faith opinion
of such Bank, to compensate the Bank for such additional costs, reduction,
payment or foregone interest or other sum in respect of Loans bearing interest
based on the Eurocurrency Rate; provided, however, that the Company or, solely
in the case of Hasbro SA Loans, Hasbro SA shall be required to pay only such
additional costs or other amounts which are incurred by such Bank (A) from and
after the date of such notice, with respect to Loans outstanding during Interest
Periods commencing after the date on which the Company or, solely in the case of
Hasbro SA Loans, Hasbro SA receives such notice, (B) with respect to Loans
outstanding on the date of such notice provided that (x) not less than 90 days
remain in the applicable Interest Period for such Loans and (y) such costs are
assessed only for the period commencing on the date of such notice to the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA, and (iii) from and
after the date of such notice to the extent that the incurrence of such
additional costs or amounts is unrelated to Outstanding Loans and is not
otherwise covered by clauses (A) or (B) of this paragraph. Subject to the
provisions of the preceding sentence, a claim by any Bank for all or any part of
any additional amount required to be paid by the Company or, solely in the case
of Hasbro SA Loans, Hasbro SA pursuant to this section 4.1(d) may be made before
and/or after the end of the Interest Period to which such claim relates or
during the Interest Period in which such claim has arisen and before and/or
after any repayment or prepayment of any Eurocurrency Rate Loans owed hereunder
to which such claim relates. A certificate signed by an officer of such Bank,
setting forth the amount of such loss, expense or liability required to be paid
by the Company or, solely in the case of Hasbro SA Loans, Hasbro SA to such
Bank, and the computations made by such Bank to determine such additional
amount, shall be submitted by the Bank to the Company or, solely in the case of
Hasbro SA Loans, Hasbro SA in connection with each demand made at any time by
such Bank upon the Company or, solely in the case of Hasbro SA Loans, Hasbro SA
hereunder, and shall, save for manifest or other obvious error, constitute
conclusive evidence of the additional amount required to be paid by the Company
or, solely in the case of Hasbro SA Loans, Hasbro SA to such Bank upon each such
demand.

     (e) Increased Capital Requirements. If any present or future, or any change
in any present or future, law or any governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) or the
interpretation or administration thereof by a Governmental Authority with
appropriate jurisdiction affects the amount of capital required or expected to
be maintained by any of the Banks or any corporation controlling any of the
Banks and such Bank determines that any of the foregoing imposes or increases a
requirement by such Bank to allocate capital resources to such Bank's credit
facility established hereunder or any loans made pursuant hereto, which would
have the effect of reducing the return on such Bank's capital to a level below
that which such Bank could have achieved (assuming full utilization of the
Bank's capital) but for such increased capital requirements, then such Bank may

                                     Page 50
<Page>

notify the Company and Hasbro SA (with a copy to the Agent) of such fact. To the
extent that the costs of such increased capital requirements are not reflected
in the Base Rate, the Eurocurrency Rate or the Competitive Bid Rate, the
Company, Hasbro SA and such Bank shall thereafter attempt to negotiate in good
faith an adjustment to the compensation payable hereunder with respect to such
Bank's Commitment and, in the case of any Loans made by such Bank after the date
of the Company's and Hasbro SA's receipt of such notice ("New Loans"), all such
New Loans, which adjustment will adequately compensate the Bank in light of
these circumstances. If the Company, Hasbro SA and such Bank are unable to agree
to such adjustment within thirty (30) days of the day on which the Company and
Hasbro SA receive such notice, then effective from the date on which the Company
and Hasbro SA have received such notice (but not earlier than the effective day
of such requirement or retroactive to any date prior to the date on which the
Company and Hasbro SA have received such notice), the fees payable hereunder
with respect to any New Loans made by, or the Commitment of, such Bank shall
increase by an amount which will, in such Bank's reasonable determination,
provide adequate compensation. Such Bank shall allocate such cost increases
among its customers in good faith and on an equitable basis.

     (f) Replacement of Banks. Notwithstanding any other provision of this
Agreement, in the event that (i) the obligation of any Bank to make Eurocurrency
Rate Loans is suspended pursuant to section 4.1(c) hereof, or (ii) any Bank
makes demand upon the Company and/or Hasbro SA pursuant to section 4.1(d) hereof
(or upon the Company pursuant to section 4.11) for the payment of additional
costs or other amounts, or (iii) any Bank makes demand upon the Company and/or
Hasbro SA pursuant to section 4.1(e) hereof for an adjustment to the
compensation payable to such Bank by the Company and/or Hasbro SA hereunder, or
(iv) any Bank is unable to fund a Loan in an Optional Currency, then, in each
such case, the Company and/or Hasbro SA in its discretion may (A) send written
notice to such Bank and the Agent advising such Bank that, subject to the
provisions of this section 4.1(f), its Commitment hereunder shall be terminated
on a date determined by the Company and/or Hasbro SA (the "Replacement Date"),
which Replacement Date shall be no earlier than the date on which such Bank and
the Agent have received such notice from the Company and/or Hasbro SA, and
commencing on the Replacement Date, the Commitment of such Bank hereunder shall
be terminated and no Commitment Fee shall be payable by the Company and/or
Hasbro SA to such Bank with respect to such Commitment, and (B) replace such
Bank with another Bank or other commercial banking institution (the "Replacement
Bank") which has been selected by the Company and/or Hasbro SA and approved by
the Majority Banks, which approval shall not be unreasonably withheld, provided
that the Company and/or Hasbro SA, the Banks and the Agent agree that (w) on or
prior to the Replacement Date, the Company and/or Hasbro SA shall have paid all
principal, interest, fees and other amounts owing by the Company and/or Hasbro
SA hereunder, accruing up to and including the Replacement Date, to the Bank
being replaced on such Replacement Date, (x) as of the Replacement Date, the
Replacement Bank will take over the entire Commitment of the Bank being
replaced, (y) on or prior to the Drawdown Date first following the Replacement
Date, the Company and/or Hasbro SA, the Agent, the Banks (other than the Bank
being replaced) and the Replacement Bank shall make such arrangements by way of
new Syndicated Loans, purchases or refundings of existing Syndicated Loans or
otherwise as will result thereafter in the outstanding and unpaid Syndicated

                                     Page 51
<Page>

Loans of each Bank being equal, as near as may practically be, to such Bank's
Commitment Percentage of all of the outstanding and unpaid Syndicated Loans made
to the Company, and (z) the Agent shall be entitled to receive prior to the
Replacement Date from the Company and/or Hasbro SA and the Replacement Bank such
supplemental agreements, documents, certificates and legal opinions in
connection with the replacement of such Bank as the Agent and the other Banks
may reasonably request to give effect to the foregoing provisions of this
section 4.1(f).

     (g) Change of Lending Office. If a Bank changes its applicable lending
office (other than pursuant to paragraph (h) below) and the effect of the
change, as of the date of the change, would be to cause the Company and/or
Hasbro SA to become obligated to pay any additional amount under this section
4.1 or under section 4.7 (or to cause the Company to become obligated to pay any
additional amounts under section 4.11), the Company and/or Hasbro SA shall not
be obligated to pay such additional amount.

     (h) Mitigation. If a condition or an event occurs which would, or would
upon the passage of time or giving of notice, result in the payment of any
additional amount to any Bank by the Company and/or Hasbro SA pursuant to this
section 4.1 or under section 4.7 (or by the Company pursuant to section 4.11),
such Bank shall take such steps as may reasonably be available to it and
acceptable to the Company and/or Hasbro SA to mitigate the effects of such
condition or event (which may include efforts to rebook the Loans held by such
Bank at another lending office, or through another branch or an affiliate, of
such Bank); provided that such Bank shall not be required to take any step that,
in its reasonable judgment, would be disadvantageous to its business or
operations or would require it to incur any additional cost or expense unless
the Company agrees to reimburse such Bank for such cost or expense.

     4.2. CONCERNING INTEREST PERIODS. No Interest Period for Loans may be
selected by the Company and/or Hasbro SA if such Interest Period ends after the
Final Maturity Date. If any Interest Period would otherwise end on a day which
is not a Business Day for Base Rate, Eurocurrency Rate or Competitive Bid Rate
purposes, as applicable, that Interest Period, shall end on the Business Day
next preceding or next succeeding such day determined by the Agent in accordance
with section 4.4(c). Any Interest Period relating to any Eurocurrency Rate Loan
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a calendar month.

     4.3. INTEREST ON OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue amounts
payable hereunder shall bear interest payable on demand at a rate per annum
equal to two percent (2%) above the rate otherwise in effect with respect to
Base Rate Loans, whether or not any Eurocurrency Rate or Competitive Bid Rate
would otherwise have been applicable thereto, until such amount shall be paid in
full (whether before or after judgment).

     4.4. PAYMENTS. (a) All payments of principal of and interest on Loans made
by the Company or Hasbro SA, any Fees and any other amounts due hereunder shall
be made by the Company or Hasbro SA to the Agent, at or prior to 11:00 A.M.,
Boston time, on any payment date, in Dollars or the applicable Optional Currency
and in immediately available funds at the Agent's Office without setoff,
counterclaim or deduction of any kind. The Agent shall be entitled to debit any
account of the Company or, solely in the case of Hasbro SA Loans, Hasbro SA with
the Agent in the amount of each such payment when due in order to effect timely
payment thereof. Upon receipt by the Agent of any such payment, the Agent shall
promptly send by wire transfer, in immediately available like funds, to each
Bank, to an individual or an account designated by such Bank, such Bank's pro
rata share of such payment.

                                     Page 52
<Page>

     (b) If any Bank makes a Syndicated Loan to the Company or Hasbro SA on a
day on which such Person is to repay all or any part of any Outstanding
Syndicated Loan made to such Person, such Bank shall, to the extent necessary,
apply the proceeds of the requested Syndicated Loan to make such repayment, and
only an amount equal to (i) the excess, if any, of the amount being repaid over
the amount being borrowed shall be remitted by such Person to the Agent for the
account of such Bank as provided in section 2.8 and (ii) the excess, if any, of
the amount being borrowed over the amount being repaid shall be remitted by such
Bank to the Agent for the account of such Person. If the Company and/or Hasbro
SA fails to repay all or any part of any Outstanding Syndicated Loan denominated
in Dollars on the last day of the applicable Interest Period therefor, and if
the Company and/or Hasbro SA fails to deliver an election notice with respect to
such unpaid portion of the Outstanding Syndicated Loan in accordance with the
provisions of sections 2.4 and 4.1(a) hereof, then, subject to satisfaction of
the conditions precedent set forth in section 13 hereof, the Company and/or
Hasbro SA shall be deemed to have requested that the unpaid portion of the
Outstanding Syndicated Loan constitute a new Borrowing as a Base Rate Loan.
Nothing contained in this section 4.4(b) shall obligate the Banks in any way to
make any Loans to the Company and/or Hasbro SA at any time from and after the
Final Maturity Date.

     (c) Whenever a payment hereunder or under the Notes becomes due on a day
which is not a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and interest shall accrue during such
extension (and shall not be considered overdue during such extension), provided,
however, that if such extension would cause payment of interest on or principal
of Eurocurrency Rate Loans to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.

     4.5. COMPUTATIONS. All computations of interest on the Loans shall be based
on (a) with respect to Eurocurrency Rate Loans and Competitive Bid Loans (other
than Eurocurrency Rate Loans and Competitive Bid Loans denominated in GBP), a
360-day year, and (b) with respect to Eurocurrency Rate Loans and Competitive
Bid Loans denominated in GBP, or Base Rate Loans, a 365-day year, and paid for
the actual number of days elapsed.

     4.6. INTEREST LIMITATION. Notwithstanding any other term of this Agreement
or any Note or any other document referred to herein or therein, the maximum
amount of interest, together with any other amounts or charges which may
constitute interest under applicable law, which may be charged to or collected
from any Person liable hereunder or under any Note by the Banks shall be
absolutely limited to, and shall in no event exceed, the maximum amount of
interest which could lawfully be charged or collected under applicable law
(including, to the extent applicable, the provisions of Section 5197 of the
Revised Statutes of the United States of America, as amended, 12 U.S.C. Section
85, as amended), so that the maximum of all amounts constituting interest under
applicable law, howsoever computed, shall never exceed as to any Person liable
therefor such lawful maximum, and any term of this Agreement or any Note or any
other document referred to herein or therein which could be construed as
providing for interest in excess of such lawful maximum shall be and hereby is
made expressly subject to and modified by the provisions of this paragraph.

     4.7. INDEMNIFICATION. In the event that the Company and/or Hasbro SA shall
at any time (a) repay or prepay (other than in accordance with the provisions of
sections 2.8 or 2.12 hereof) any principal of any Eurocurrency Rate Loans or

                                     Page 53
<Page>

Competitive Bid Loans on a date other than the last day of the Interest Period
with respect thereto, whether by reason of acceleration following an Event of
Default or otherwise, or (b) for any reason fail to borrow any Loan with respect
to which the Company and/or Hasbro SA gave a notice of borrowing pursuant to
section 2.4 or section 4.1(a) hereof at an interest rate based on the
Eurocurrency Rate or a Notice of Competitive Bid Borrowing pursuant to section
2.5.1(f) or prepay a Loan as to which notice of prepayment has been given, the
Company or, solely in the case of Hasbro SA Loans, Hasbro SA shall indemnify the
Banks against all losses, costs or expenses incurred by the Banks in respect of
the Company's payment, prepayment or failure to borrow, on the date of such
payment or failure to borrow. Such losses, costs or expenses shall include, but
not be limited to (i) any costs incurred by the Banks in carrying funds which
were to have been borrowed by the Company and/or Hasbro SA or in carrying funds
to cover the amount of any overdue principal of or overdue interest on any Loan,
(ii) any interest payable by the Banks to Banks of the funds borrowed by the
Banks in order to carry the funds referred to in the immediately preceding
sub-clause (i), and (iii) any losses (including losses of anticipated interest
which would otherwise have been required to be paid hereunder through the end of
such then existing or, as the case may be, commencing Interest Period) incurred
by the Banks in liquidating or re-employing funds acquired from third parties to
effect or maintain all or any part of the Loans, provided that to the extent
that the reemployment formula set forth in section 2.8 hereof is capable of
being employed to compute such losses, the Agent shall employ such reemployment
formula to compute such losses. Any losses, costs or expenses payable by the
Company to the Banks pursuant to this section 4.7 shall be without duplication
of any amounts paid by the Company and/or Hasbro SA pursuant to section 2.8,
section 4.1 or section 4.3 hereof.

     4.8. BANKS' OBLIGATIONS SEVERAL. The Banks' obligations hereunder shall be
several and not joint, and no Bank's obligations to lend shall be affected by
any other Bank's failure to make any Loan hereunder.

     4.9. CURRENCY MATTERS.

          4.9.1. CURRENCY OF ACCOUNT. Dollars are the currency of account and
     payment for each and every sum at any time due from the Company or, solely
     in the case of Hasbro SA Loans, Hasbro SA hereunder in each case except as
     expressly provided in this Credit Agreement; provided that:

               (a) each repayment of a Loan, Unpaid Reimbursement Obligation or
          a part thereof shall be made in the currency in which such Loan or
          Unpaid Reimbursement Obligation is denominated at the time of that
          repayment;

               (b) each payment of interest shall be made in the currency in
          which such principal or other sum in respect of which such interest is
          payable, is denominated;

               (c) each payment of Fees shall be in Dollars;

               (d) each payment in respect of costs, expenses and indemnities
          shall be made in the currency in which the same were incurred; and

                                     Page 54
<Page>

               (e) any amount expressed to be payable in a currency other than
          Dollars shall be paid in that other currency.

               No payment to the Agent or any Bank (whether under any judgment
          or court order or otherwise) shall discharge the obligation or
          liability in respect of which it was made unless and until the Agent,
          or such Bank shall have received payment in full in the currency in
          which such obligation or liability was incurred as provided in this
          section 4.9.1, and to the extent that the amount of any such payment
          shall, on actual conversion into such currency, fall short of such
          obligation or liability, actual or contingent, expressed in that
          currency, the Company or, solely in the case of Hasbro SA Loans,
          Hasbro SA agrees to indemnify and hold harmless the Agent or such
          Bank, as the case may be, with respect to the amount of the shortfall.

          4.9.2. CURRENCY FLUCTUATIONS. (a) Not later than 1:00 P.M. (Boston
     time) on the last Business Day of each month with respect to Letters of
     Credit and on the last day of each Interest Period with respect to Loans
     (in each case, the "Calculation Date"), the Agent shall determine the
     Dollar Equivalent as of such date of the LC Exposure or, as the case may
     be, such Loan. Notwithstanding the foregoing, the Agent may determine such
     Dollar Equivalent more frequently than on the Calculation Date, upon notice
     made by the Agent to the Company and, solely in the case of Hasbro SA
     Loans, Hasbro SA. The Dollar Equivalent so determined shall become
     effective on the third Business Day immediately following such
     determination (a "Reset Date") and shall remain effective until the next
     succeeding Reset Date relating to LC Exposure or, as the case may be, such
     Loan.

               (b) If, on any Reset Date, the Dollar Equivalent of the sum of
          the Outstanding Loans and the LC Exposure exceeds the Total
          Commitment, then the Company or, solely in the case of Hasbro SA
          Loans, Hasbro SA shall repay or prepay the Loans in accordance with
          this Credit Agreement in an aggregate principal amount such that,
          after giving effect thereto, the sum of the Outstanding Loans and the
          LC Exposure (expressed in Dollars) no longer exceeds the Total
          Commitment (expressed in Dollars).

          4.9.3. EXCHANGE RATE. For purposes of this Credit Agreement, the
     amount in one currency which shall be equivalent on any particular date to
     a specified amount in another currency shall be determined by reference to
     the Exchange Rate.

          4.9.4. DENOMINATIONS. In the event that any portion of the funds
     available under the terms of this Credit Agreement is denominated in an
     Optional Currency, the Dollar Equivalent of such portion of the funds shall
     be calculated pursuant to section 4.9.3 above. The amount so determined
     shall then be added to the outstanding amount denominated in Dollars for
     the purpose of determining the remaining availability of funds under
     sections 2.1, 2.5, 3 and 5 and any required repayments under section 4.9.2.

     4.10. NEW CURRENCY. If, after the making of any Loan or the issuance,
renewal or extension of any Letter of Credit in any Optional Currency, currency
control or exchange regulations are imposed in the country which issues such

                                     Page 55
<Page>

Optional Currency, as application, with the result that different types of such
Optional Currency (the "New Currency") are introduced and the type of currency
in which the Loan or Letter of Credit was made (the "Original Currency") no
longer exists or the Company or, solely in the case of Hasbro SA Loans, Hasbro
SA is not able to make payment to the Agent for the account of the Banks or the
Agent in such Original Currency, then all payments to be made by the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA hereunder in such currency
shall be made to the Agent in such amount and such type of the New Currency as
shall be equivalent to the amount of such payment otherwise due hereunder in the
Original Currency. In addition, notwithstanding the foregoing provisions of this
section 4.10, if, after the making of any Loan or the issuance, renewal or
extension of any Letter of Credit in any Optional Currency, the Company or,
solely in the case of Hasbro SA Loans, Hasbro SA are not able to make payment to
the Agent for the account of the Banks or the Agent in the type of currency in
which such Loan was made or, as the case may be, such Letter of Credit was
issued, extended or renewed because of the imposition of any such currency
control or exchange regulation, then such Loan or, as the case may be,
Reimbursement Obligation in respect of such Letter of Credit shall instead be
repaid when due in Dollars in a principal amount equal to the Dollar Equivalent
(as of the date of repayment) of such Loan or, as the case may be, Reimbursement
Obligation in respect of such Letter of Credit.

     4.11. NO OFFSET, ETC. All payments after November 14, 2003 by the Company
hereunder and under any of the other Loan Documents shall be made without
recoupment, setoff or counterclaim and free and clear of and without deduction
for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein, excluding any taxes that would not have been
imposed but for a connection between any Bank or the Agent and the jurisdiction
or any political subdivision thereof imposing such tax (other than a connection
arising solely as a result of entering into any Loan Document or performing any
obligations, receiving any payments or enforcing any rights thereunder) unless
the Company is compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Company with respect to any amount payable
by it after November 14, 2003 hereunder or under any of the other Loan
Documents, the Company will pay to the Agent, for the account of the Banks or
(as the case may be) the Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Banks or the Agent to receive the
same net amount which the Banks or the Agent would have received on such due
date had no such obligation been imposed upon the Company; provided, however,
the Company shall not be required to pay any such additional amount to any Bank
or Agent that fails to comply with section 4.12. The Company will deliver
promptly to the Agent receipts for all taxes or other charges deducted from or
paid with respect to payments made by the Company hereunder or under such other
Loan Document.

     4.12. FORMS. Each Bank and Agent that is not a U.S. Person as defined in
Section 7701(a)(30) of the Code for federal income tax purposes (a "Non-U.S.
Lender") hereby agrees that it shall, prior to the date of the first payment by
the Company hereunder to be made to such Bank or the Agent or for such Bank's or
the Agent's account, deliver to the Company and the Agent, as applicable, such
certificates, documents or other evidence, as and when required by the Code or

                                     Page 56
<Page>

Treasury Regulations issued pursuant thereto, including (a) in the case of a
Non-U.S. Bank that is a "bank" for purposes of Section 881(c)(3)(A) of the Code,
two (2) duly completed copies of Internal Revenue Service Form W-8BEN or Form
W-8ECI and any other certificate or statement of exemption required by Treasury
Regulations, or any subsequent versions thereof or successors thereto, properly
completed and duly executed by such Bank or the Agent establishing that with
respect to payments of principal, interest or fees hereunder it is (i) not
subject to United States federal withholding tax under the Code because such
payment is effectively connected with the conduct by such Bank or Agent of a
trade or business in the United States or (ii) totally exempt from United States
federal withholding tax under a provision of an applicable tax treaty and (b) in
the case of a Non-U.S. Bank that is not a "bank" for purposes of Section
881(c)(3)(A) of the Code, a certificate in form and substance reasonably
satisfactory to the Agent and the Company and to the effect that (i) such
Non-U.S. Bank is not a "bank" for purposes of Section 881(c)(3)(A) of the Code,
is not subject to regulatory or other legal requirements as a bank in any
jurisdiction, and has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any governmental authority,
any application made to a rating agency or qualification for any exemption from
any tax, securities law or other legal requirements, (ii) is not a ten (10)
percent shareholder for purposes of Section 881(c)(3)(B) of the Code and (iii)
is not a controlled foreign corporation receiving interest from a related person
for purposes of Section 881(c)(3)(C) of the Code, together with a properly
completed Internal Revenue Service Form W-8 or W-9, as applicable (or successor
forms). Each Bank or the Agent agrees that it shall, promptly upon a change of
its lending office or the selection of any additional lending office, to the
extent the forms previously delivered by it pursuant to this section are no
longer effective, and promptly upon the Company's and the Agent's reasonable
request after the occurrence of any other event (including the passage of time)
requiring the delivery of a Form W-8BEN, Form W-8ECI, Form W-8 or W-9 in
addition to or in replacement of the forms previously delivered, deliver to the
Company and the Agent a properly completed and executed Form W-8BEN, Form
W-8ECI, Form W-8 or W-9, as applicable (or any successor forms thereto). Each
assignee, participant or other transferee pursuant to section 20 shall, upon the
effectiveness of the related transfer, be required to provide all of the forms,
documentation or certifications required pursuant to this subsection, provided
that in the case of a participant such participant shall furnish all such
required forms, documentation or certifications to the Bank from which the
related participation shall have been purchased, and such Bank shall in turn
furnish all such required forms (including without limitation Internal Revenue
Service Form W-8IMY), documentation and certifications to the Company and the
Agent, together with such other forms, documentation or certifications as may be
necessary to establish a total exemption from deduction or withholding of U.S.
federal income taxes on payments hereunder or under any of the other Loan
Documents. In addition, each Bank and the Agent that is not a U.S. Person shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Bank or the Agent unless any change in treaty, law
or regulation has occurred both after November 14, 2003 and after the date on
which such Bank or the Agent becomes a party to this Agreement which renders all
such forms inapplicable or which would prevent such Bank or the Agent from duly
completing and delivering any such form with respect to it and such Bank or the
Agent so advises the Company.

     4.13. REIMBURSEMENT OF REFUND. If the Agent or a Bank determines, in its
reasonable discretion, that it has received a refund of any tax with respect to
which the Company has paid additional amounts pursuant to section 4.11, it shall

                                     Page 57
<Page>

pay over such refund to the Company, net of all reasonable out-of-pocket
expenses of the Agent or a Bank and without interest (other than any interest
paid by the relevant jurisdiction or a political subdivision thereof); provided
that the Company, upon the request of the Agent or a Bank, agrees to repay the
amount paid over to the Company by the Agent or such Bank in the event the Agent
or such Bank is required to repay such refund to such jurisdiction or political
subdivision thereof.

                              5. LETTERS OF CREDIT.

     5.1. LETTER OF CREDIT COMMITMENTS.

          5.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the terms and
     conditions hereof and the execution and delivery by the Company of a letter
     of credit application on the Agent's customary form (a "Letter of Credit
     Application"), the Agent on behalf of the Banks and in reliance upon the
     agreement of the Banks set forth in section 5.1.4 and upon the
     representations and warranties of the Company contained herein, agrees, in
     its individual capacity, to issue, extend and renew for the account of the
     Company one or more standby or documentary letters of credit (individually,
     a "Letter of Credit"), denominated in Dollars or an Optional Currency in
     such form as may be requested from time to time by the Company and agreed
     to by the Agent; provided, however, that, after giving effect to such
     request, (a) the sum of the Dollar Equivalent of the aggregate Maximum
     Drawing Amount and all Unpaid Reimbursement Obligations shall not exceed
     $15,000,000 at any one time (or such other amount as may be agreed from
     time to time by the Company and the Agent and notified to the Banks) and
     (b) Utilization shall not exceed the Total Commitment. Notwithstanding the
     foregoing, the Agent shall have no obligation to issue any Letter of Credit
     to support or secure any Indebtedness of the Company or any of its
     Subsidiaries to the extent that such Indebtedness was incurred prior to the
     proposed issuance date of such Letter of Credit, unless in any such case
     the Company demonstrates to the reasonable satisfaction of the Agent that
     (x) such prior incurred Indebtedness was then fully secured by a prior
     perfected and unavoidable security interest in collateral provided by the
     Company or such Subsidiary to the proposed beneficiary of such Letter of
     Credit or (y) such prior incurred Indebtedness was then secured or
     supported by a letter of credit issued for the account of the Company or
     such Subsidiary.

          5.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
     Application shall be completed to the reasonable satisfaction of the Agent.
     In the event that any provision of any Letter of Credit Application shall
     be inconsistent with any provision of this Agreement, then the provisions
     of this Agreement shall, to the extent of any such inconsistency, govern.

          5.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
     extended or renewed hereunder shall, among other things, (a) provide for
     the payment of sight drafts for honor thereunder when presented in
     accordance with the terms thereof and when accompanied by the documents
     described therein, and (b) have an expiry date no later than the date which
     is fourteen (14) days (or, if the Letter of Credit is confirmed by a
     confirmer or otherwise provides for one or more nominated persons,
     forty-five (45) days) prior to the Final Maturity Date. Each Letter of

                                     Page 58
<Page>

     Credit so issued, extended or renewed shall be subject (to the extent
     consistent with this Agreement) to the Uniform Customs and Practice for
     Documentary Credits (1993 Revision), International Chamber of Commerce
     Publication No. 500 or any successor version thereto adopted by the Agent
     in the ordinary course of its business as a letter of credit issuer and in
     effect at the time of issuance of such Letter of Credit (the "Uniform
     Customs") or, if agreed to by the Company, the International Standby
     Practices (ISP98), International Chamber of Commerce Publication No. 590,
     or any successor code of standby letter of credit practices among banks
     adopted by the Agent in the ordinary course of its business as a standby
     letter of credit issuer and in effect at the time of issuance of such
     Letter of Credit.

          5.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally agrees
     that it shall be absolutely liable, without regard to the occurrence of any
     Default or Event of Default or any other condition precedent whatsoever, to
     the extent of such Bank's Commitment Percentage, to reimburse the Agent on
     demand for the amount of each draft paid by the Agent under each Letter of
     Credit to the extent that such amount is not reimbursed by the Company
     pursuant to section 5.2 (such agreement for a Bank being called herein the
     "Letter of Credit Participation" of such Bank).

          5.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a Bank shall
     be treated as the purchase by such Bank of a participating interest in the
     Company's Reimbursement Obligation under section 5.2 in an amount equal to
     such payment. Each Bank shall share in accordance with its participating
     interest in any interest which accrues pursuant to section 5.2.

     5.2. REIMBURSEMENT OBLIGATION OF THE COMPANY. In order to induce the Agent
to issue, extend and renew each Letter of Credit and the Banks to participate
therein, the Company hereby agrees to reimburse or pay to the Agent, for the
account of the Agent or (as the case may be) the Banks, with respect to each
Letter of Credit issued, extended or renewed by the Agent hereunder,

          (a) except as otherwise expressly provided in section 5.2(b) and (c),
     on each date that any draft presented under such Letter of Credit is
     honored by the Agent after the Agent determines that the documents
     (including any draft) delivered in connection with such presentment are in
     conformity with such Letter of Credit, or the Agent otherwise makes a
     payment with respect thereto, (i) the amount paid by the Agent under or
     with respect to such Letter of Credit, and (ii) the amount of any taxes,
     fees, charges or other costs and expenses whatsoever reasonably incurred by
     the Agent or any Bank in connection with any payment made by the Agent or
     any Bank under, or with respect to, such Letter of Credit, other than as a
     result of the Agent's or any such Bank's gross negligence or willful
     misconduct,

          (b) upon the reduction (but not termination) of the Total Commitment
     to an amount less than the Maximum Drawing Amount, an amount equal to such
     difference, which amount shall be held by the Agent for the benefit of the
     Banks and the Agent as cash collateral for all Reimbursement Obligations,
     and

          (c) upon the termination of the Total Commitment, or the acceleration
     of the Reimbursement Obligations with respect to all Letters of Credit in

                                     Page 59
<Page>

     accordance with section 14, an amount equal to the then Maximum Drawing
     Amount on all outstanding Letters of Credit, which amount shall be held by
     the Agent for the benefit of the Banks and the Agent as cash collateral for
     all Reimbursement Obligations.

     Each such payment shall be made to the Agent at the Agent's Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Company under this section 5.2 at any time from the date such amounts become
due and payable (whether as stated in this section 5.2, by acceleration or
otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in section 4.3 for overdue
principal on the Syndicated Loans.

     5.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Company of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. If the Company fails to reimburse the Agent as provided in
section 5.2 on or before the date that such draft is paid or other payment is
made by the Agent, the Agent may at any time thereafter notify the Banks of the
amount of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m.
(Boston time) on the Business Day next following the receipt of such notice,
each Bank shall make available to the Agent, at the Agent's Office, in
immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period (or, as to Letters of Credit
denominated in an Optional Currency, the rate of interest per annum at which
overnight deposits in the applicable Optional Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by the Agent to major banks in the
London interbank market), times (b) the amount equal to such Bank's Commitment
Percentage of such Unpaid Reimbursement Obligation, times (c) a fraction, the
numerator of which is the number of days that elapse from and including the date
the Agent paid the draft presented for honor or otherwise made payment to the
date on which such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation shall become immediately available to the Agent, and the denominator
of which is 360. The responsibility of the Agent in respect of a presentment of
any Letter of Credit to the Company and the Banks shall be only to determine
that the documents (including each draft) delivered under each Letter of Credit
in connection with such presentment shall be in conformity with such Letter of
Credit, provided that this section 5.3 shall not relieve the Agent of any
liability resulting from the gross negligence or willful misconduct of the
Agent, or otherwise affect any defense or other right the Company may have as a
result of any such gross negligence or willful misconduct.

     5.4. OBLIGATIONS ABSOLUTE. The Company's obligations under this section 5
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Company may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Company further agrees with the Agent and
the Banks that the Agent and the Banks shall not be responsible for, and the

                                     Page 60
<Page>

Company's Reimbursement Obligations under section 5.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Company, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Company against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Company agrees that any action taken or omitted by the
Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Company and shall not result in any liability on the part of the Agent or any
Bank to the Company. Notwithstanding the foregoing, nothing in this section 5.4
shall relieve the Agent or any Bank of any liability resulting from the gross
negligence or willful misconduct of the Agent or such Bank, or otherwise affect
any defense or other right that the Company may have as a result of any such
gross negligence or willful misconduct.

     5.5. RELIANCE BY ISSUER. To the extent not inconsistent with section 5.4,
the Agent shall be entitled to rely, and shall be fully protected in relying,
upon any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telecopy, telex or facsimile message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall first have
received such advice or concurrence of the Majority Banks as it reasonably deems
appropriate or it shall first be indemnified to its reasonable satisfaction by
the Banks against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of the Majority Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
the Banks and all future holders of the Syndicated Notes or of Letter of Credit
Participations. Notwithstanding the foregoing, nothing in this section 5.5 shall
relieve the Agent of any liability resulting from the gross negligence or
willful misconduct of the Agent, or otherwise affect any defense or other right
that the Company or Hasbro SA may have as a result of any such gross negligence
or willful misconduct.

     5.6. LETTER OF CREDIT FEE. The Company shall pay to the Agent, for the
accounts of the Banks in accordance with their respective Commitment
Percentages, a letter of credit fee (a "Letter of Credit Fee") with respect to
each Letter of Credit, computed for the period from and including the date of
issuance, extension or renewal of such Letter of Credit to the expiry date of
such Letter of Credit, at a rate per annum equal to (a) in respect of any
standby Letter of Credit, the applicable Margin per annum with respect to
Eurocurrency Rate Loans on the aggregate face amount of standby Letters of
Credit outstanding and (b) in respect of any documentary Letter of Credit, fifty
percent (50%) of the applicable Margin per annum with respect to Eurocurrency
Rate Loans on the aggregate face amount of documentary Letters of Credit
outstanding. Such Letter of Credit Fee shall be payable (i) in respect of
standby Letters of Credit, periodically in arrears on the last Business Day of

                                     Page 61
<Page>

each March, June, September and December occurring after the date of issuance,
extension or renewal of each such standby Letter of Credit and on the Final
Maturity Date, and (ii) in respect of documentary Letters of Credit,
periodically in arrears on the last Business Day of each March, June, September
and December occurring after the date of issuance, extension or renewal of each
such documentary Letter of Credit and on the Final Maturity Date. In addition,
the Company shall, on the date of issuance, extension or renewal of any Letter
of Credit, pay to the Agent a fronting fee for the account of the Agent equal to
one-tenth of one percent (0.10%) per annum of the face amount of each such
standby or documentary Letter of Credit. In respect of each Letter of Credit,
the Company shall also pay to the Agent for the Agent's own account, at such
other time or times as such charges are customarily made by the Agent, the
Agent's customary issuance, amendment, negotiation or document examination and
other administrative fees as in effect from time to time.

                     6. COLLATERAL SECURITY AND GUARANTIES.

     6.1. RELEASE OF COLLATERAL. The parties hereto acknowledge and agree that
the Agent, on behalf of the Banks and the Agent, hereby releases its Liens on
the Collateral under the Existing Credit Agreement and that each of the Security
Documents (as defined in the Existing Credit Agreement) are terminated and have
no further force or effect.

     6.2. SECURITY OF COMPANY. The parties hereto acknowledge and agree that at
such time as either of the following events occurs:

          (i) the ratio of Consolidated Total Funded Debt at the end of any
fiscal quarter to EBITDA for the Reference Period then ended shall be 2.25x or
higher (except with respect to the fiscal quarter ending September 26, 2004,
where such ratio shall be 2.50x or higher); or

          (ii) the Company's Rating drops below BB or Ba3;

     the Company shall, within sixty (60) Business Days of such event, cause the
Obligations to be secured by a perfected first priority security interest
(subject only to Permitted Liens entitled to priority under applicable law) in
all of the following, whether then owned or thereafter acquired, including all
books and records and other recorded data in each case relating to the
following: (a) Inventory of the Company, and (b) the Company's U.S. trademarks
(and U.S. applications and U.S. registrations thereof owned by the Company in
its own name (except for "intent to use" applications for trademark
registrations filed pursuant to Section 1(b) of the Lanham Act, unless and until
an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of
the Lanham Act has been filed)), U.S. copyrights (and U.S. applications and U.S.
registrations thereof) and U.S. patents and U.S. patent applications, in each
case relating exclusively to the Identified Brands (but with respect to the
Playskool brand, no U.S. patents and U.S. patent applications, and only U.S.
trademarks (and U.S. applications and U.S. registrations thereof (except for
"intent to use" applications for trademark registrations filed pursuant to
Section 1(b) of the Lanham Act, unless and until an Amendment to Allege Use or a
Statement of Use under Sections 1(c) and 1(d) of the Lanham Act has been filed))
and U.S. copyrights (and U.S. applications and U.S. registrations thereof), in
each case that did not arise from particular products, shall be included in the
Collateral), in each case pursuant to the terms of and as and to the extent
provided in the Company Security Agreement, the Trademark Agreement, the Patent
Agreements and the Copyright Memorandum to which the Company will become a party
pursuant to this section 6.2.

                                     Page 62
<Page>

     Without limiting the foregoing, in the event that following the grant of
security interests under this section 6.2, any part of the Collateral is sold or
otherwise disposed of in connection with a sale, disposition or other
transaction permitted hereunder (other than any Asset Sale permitted under
sections 10.5.2(j) or (k) hereof) or any part of the Collateral is sold or
otherwise disposed of and paid for in connection with any Asset Sale permitted
under sections 10.5.2(j) or (k) hereof, the Liens on such Collateral granted
pursuant to any Security Document shall be automatically released and the Agent
shall execute and deliver to the Company or the relevant Restricted Subsidiary,
as the case may be, all releases or other documents (including without
limitation, Uniform Commercial Code termination statements), and take all other
actions necessary or reasonably desirable for the release of such Liens.

     Notwithstanding anything to the contrary contained in this section 6.2, in
the event that at any time following the grant of security interests under this
section 6.2, (i) the Company's Rating raises to or above BB or Ba3, or (ii) the
ratio of Consolidated Total Funded Debt at the end of each of two consecutive
fiscal quarters to EBITDA for each Reference Period then ended shall be less
than 2.25x, the Liens on the Collateral granted pursuant to this section 6.2
shall be automatically released and the Agent shall execute and deliver to the
Company or the relevant Restricted Subsidiary, as the case may be, all releases
or other documents (including without limitation, Uniform Commercial Code
termination statements), and take all other action necessary or reasonably
desirable for the release of such Liens.

     6.3. GUARANTIES AND SECURITY OF RESTRICTED SUBSIDIARIES. The Obligations
shall also be guaranteed pursuant to the terms of the Guaranty. Within sixty
(60) Business Days following the occurrence of either of the events referred to
in section 6.2(i) or (ii), the Company shall cause the obligations of each of
the Restricted Subsidiaries under the Guaranty to be in turn secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the following, whether then
owned or thereafter acquired, including all books and records and other recorded
data in each case relating to the following: (a) Inventory of each such
Restricted Subsidiary, and (b) such Restricted Subsidiary's U.S. trademarks (and
U.S. applications and U.S. registrations thereof owned by such Restricted
Subsidiary in its own name (except for "intent to use" applications for
trademark registrations filed pursuant to Section 1(b) of the Lanham Act, unless
and until an Amendment to Allege Use or a Statement of Use under Sections 1(c)
and 1(d) of the Lanham Act has been filed)), U.S. copyrights (and U.S.
applications and U.S. registrations thereof) and U.S. patents and U.S. patent
applications, in each case relating exclusively to the Identified Brands (but
with respect to the Playskool brand, no U.S. patents and U.S. patent
applications, and only U.S. trademarks (and U.S. applications and U.S.
registrations thereof (except for "intent to use" applications for trademark
registrations filed pursuant to Section 1(b) of the Lanham Act, unless and until
an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of
the Lanham Act has been filed)) and U.S. copyrights (and U.S. applications and
U.S. registrations thereof), in each case that did not arise from particular
products, shall be included in the Collateral), in each case pursuant to the
terms of and as and to the extent provided in the Subsidiary Security Agreement,
the Trademark Agreement, the Patent Agreements and the Copyright Memorandum to
which such Restricted Subsidiary will become a party pursuant to section 6.2.

     6.4. LIMITATION OF SECURITY. Notwithstanding anything to the contrary
contained in this section 6 or in any of the Security Documents, no Lien shall
be granted on any shares of stock of any Subsidiary of the Company or any
evidences of indebtedness of any Subsidiary of the Company.

                                     Page 63
<Page>

                                    7. FEES.

     7.1. CLOSING FEES. The Company agrees to pay to the Agent for the account
of each Bank on the Effective Date the closing fees (the "Closing Fees") in the
amounts and on the terms and conditions set forth in the Fee Letter.

     7.2. AGENT'S FEE. The Company shall pay to the Agent for the Agent's own
account an Agent's fee (the "Agent's Fee") in the amounts and on the terms and
conditions set forth in the Agent's Fee Letter.

                       8. REPRESENTATIONS AND WARRANTIES.

     The Company represents and warrants to the Banks that:

     8.1. CORPORATE EXISTENCE.

     (a) Each of the Hasbro Companies and Hasbro SA (i) is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (ii) has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction where such qualification is
necessary except where a failure to be so qualified would not have a Material
Adverse Effect.

     (b) Each of the Hasbro Companies and Hasbro SA has adequate corporate power
and authority and has full legal right to enter into each of the Loan Documents
to which it is or is to become a party, to perform, observe and comply with all
of its agreements and obligations under each of such documents, and, with
respect to the Company, to make all of the borrowings contemplated by this
Agreement.

     8.2. CORPORATE AUTHORITY, ETC. The execution, delivery and performance by
each of the Hasbro Companies and Hasbro SA of each of the Loan Documents to
which it is a party, the performance by each of the Hasbro Companies and Hasbro
SA of all of its agreements and obligations under each of such documents, and
the making by the Company of all of the borrowings contemplated by this
Agreement, have been duly authorized by all necessary corporate action on the
part of each of the Hasbro Companies and Hasbro SA and their respective
shareholders and do not and will not (i) contravene any provision of any of
their charter or by-laws (each as from time to time in effect), (ii) conflict
with, or result in a breach of any material term, condition or provision of, or
constitute a default under or result in the creation of any Lien upon any of the
property of any of the Hasbro Companies and Hasbro SA under any agreement, trust
deed, indenture, mortgage or other instrument to which any of the Hasbro
Companies and Hasbro SA is or may become a party or by which any of the Hasbro
Companies and Hasbro SA or any of the property of any of the Hasbro Companies
and Hasbro SA is or may become bound or affected, the consequences of which

                                     Page 64
<Page>

would have a Material Adverse Effect, (iii) violate or contravene any provision
of any law, regulation, order, ruling or interpretation thereunder or any
decree, order or judgment of any court or governmental or regulatory authority,
bureau, agency or official (all as from time to time in effect and applicable to
any of the Hasbro Companies and/or Hasbro SA), except where such violation or
contravention would not have a Material Adverse Effect, (iv) require any
waivers, consents or approvals by any of the creditors of any of the Hasbro
Companies and Hasbro SA which have not been obtained, (v) require any consents
or approvals by any shareholders of any of the Hasbro Companies and/or Hasbro SA
(except such as will be duly obtained on or prior to the Effective Date and will
be in full force and effect on and as of the Effective Date), or (vi) require
obtaining any approval, consent, order, authorization or license by, or giving
notice to, or taking any other action with respect to, any governmental or
regulatory authority or agency under any provision of any applicable law that
have not been obtained, given or taken (other than any filings of this Agreement
and the other Loan Documents with the Securities and Exchange Commission
required to be made after the date hereof ("SEC Filings") and any filings in
connection with the Security Documents), except where the failure to do so would
not result in a Material Adverse Effect.

     8.3. BINDING EFFECT OF DOCUMENTS, ETC. Each of the Hasbro Companies and
Hasbro SA has duly executed and delivered each of the Loan Documents to which it
is a party and each of such documents is in full force and effect with respect
to such Person. The agreements and obligations of each of the Hasbro Companies
and Hasbro SA contained in each of the Loan Documents to which it is a party
constitute its legal, valid and binding obligations enforceable against it in
accordance with their respective terms except as enforceability is limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws relating to or affecting generally the enforcement of creditors'
rights and except to the extent that the availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.

     8.4. GOVERNMENTAL APPROVALS. The execution, delivery and performance by the
Company and any of its Subsidiaries of this Agreement and the other Loan
Documents to which the Company or any of its Subsidiaries is or is to become a
party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained or made, and except for SEC Filings and
filings in connection with the Security Documents.

     8.5. NO EVENT OF DEFAULT, ETC. No Default or Event of Default has occurred
and is continuing.

     8.6. CHIEF EXECUTIVE OFFICES. Until the Agent receives notice of a change,
the chief executive offices of the Company and the offices where substantially
all of the material financial records and books of account of the Company are
kept, are located in Pawtucket and/or East Providence, Rhode Island.

     8.7. TITLE TO PROPERTIES; LEASES. Except as indicated on Schedule 8.7
hereto, the Company and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Company and its Subsidiaries as at the Balance
Sheet Date or acquired since that date (except property and assets sold or
otherwise disposed of in the ordinary course of business since that date),
subject to no Liens except Permitted Liens.

                                     Page 65
<Page>

     8.8. FINANCIAL STATEMENTS AND PROJECTIONS.

          8.8.1. FISCAL YEAR. Each of the Hasbro Companies has a fiscal year
     ending on the last Sunday in December of each calendar year, subject to
     adjustment pursuant to section 9.13.

          8.8.2. FINANCIAL STATEMENTS. There has been furnished to the Banks (a)
     a consolidated balance sheet of the Company and its Subsidiaries as at
     December 29, 2002, a consolidated statement of earnings, and a consolidated
     statement of cash flows for the fiscal year then ended, audited by KPMG
     LLP, the Company's independent certified public accountants, and (b) an
     unaudited condensed consolidated balance sheet of the Company and its
     Subsidiaries as at the Balance Sheet Date and an unaudited condensed
     consolidated statement of earnings for the fiscal quarter then ended. Each
     such balance sheet and statement of earnings has been prepared in
     accordance with GAAP and fairly presents the financial condition of the
     Company as at the close of business on the date thereof and the results of
     operations for the fiscal period then ended.

          8.8.3. PROJECTIONS. The Company's projections of the annual operating
     budgets of the Company and its Subsidiaries on a consolidated basis,
     balance sheets and cash flow statements for the 2004 to 2007 fiscal years
     have been delivered to each Bank. To the knowledge of the Company or any of
     its Subsidiaries as of the Effective Date, no facts exist that
     (individually or in the aggregate) would result in any material change in
     any of such projections. The projections are based upon estimates and
     assumptions believed to be reasonable by the management of the Company at
     the time of preparation thereof and reflect estimates of the Company and
     its Subsidiaries of the results of operations and other information
     projected therein believed to be reasonable by the management of the
     Company at the time of preparation thereof.

     8.9. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date, there has been
no event or occurrence which has had a Material Adverse Effect. Since the
Balance Sheet Date, the Company has not made any Restricted Payment except as
permitted by section 10.4 hereof.

     8.10. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Hasbro Companies
possesses all material franchises, patents, copyrights, trademarks, permits,
service marks, trade names, domain names, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of its business substantially
as now conducted, without any known conflict or conflicts with any rights of
others which would, individually or in the aggregate, have a Material Adverse
Effect.

     8.11. LITIGATION. Except as set forth on Schedule 8.11 hereto and except as
required to be disclosed pursuant to section 9.6, there are no actions, suits,
proceedings or investigations of any kind pending or threatened against any of
the Hasbro Companies before any court, tribunal or administrative agency or
board which would reasonably be expected to be adversely determined and, if
adversely determined, either in any case or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.

     8.12. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Hasbro Companies is
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which has or is expected in the future to have

                                     Page 66
<Page>

a Material Adverse Effect. None of the Hasbro Companies is a party to any
contract or agreement which has or is expected, in the judgment of the Company's
officers, to have any Material Adverse Effect.

     8.13. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the Hasbro
Companies is in violation of any provision of its charter documents, by-laws,
or, to the best of the Company's knowledge, any agreement or instrument to which
it may be subject or by which it or any of its properties may be bound or any
decree, order, judgment, or any statute, license, rule or regulation, in any of
the foregoing cases in a manner which would result in a Material Adverse Effect.

     8.14. TAXES. Each of the Hasbro Companies has filed all federal, state and
other income and all other tax returns, reports and declarations due and
required by any jurisdiction to which any of them is subject. Each of the Hasbro
Companies has paid, or has made reasonable provision for payment of, all
material taxes (if any) which have or may become due and payable pursuant to any
of the said returns or pursuant to any matters raised by audits or for other
reasons known to the Company, except for taxes the amount, applicability, or
validity of which are currently being contested by it in good faith by
appropriate proceedings and with respect to which the Company has set aside on
its books, in accordance with GAAP, reserves reasonably deemed by it to be
adequate with respect thereto. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company know no basis for any such claim, except for taxes the amount,
applicability, or validity of which are currently being contested by it in good
faith by appropriate proceedings and with respect to which the Company has set
aside on its books, in accordance with GAAP, reserves reasonably deemed by it to
be adequate with respect thereto.

     8.15. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry, or other public office, which purports to cover,
affect or give notice of any present or possible future Lien on any assets or
property of the Company or any of its Subsidiaries (other than Foreign
Subsidiaries) or rights thereunder.

     8.16. INDEBTEDNESS. None of the Operating Subsidiaries of the Company has
any Indebtedness other than Indebtedness of the kind expressly permitted by the
provisions contained in section 10.1 of this Agreement. As of the Balance Sheet
Date, all Indebtedness of the Company and its Subsidiaries that is required by
GAAP to be shown on the consolidated balance sheet of the Company and its
Subsidiaries described in section 8.8.2(b) hereof is shown on such consolidated
balance sheet.

     8.17. TRUE COPIES OF CHARTER AND OTHER DOCUMENTS. Each of the Hasbro
Companies and Hasbro SA has furnished or caused to be furnished to each of the
Banks true and complete copies of (a) all of the charter and other incorporation
documents of each of the Hasbro Companies and Hasbro SA (together with any and
all amendments thereto), and (b) the by-laws of each of the Hasbro Companies and
Hasbro SA (together with any and all amendments thereto).

                                     Page 67
<Page>

     8.18. EMPLOYEE BENEFIT PLANS.

          8.18.1. IN GENERAL. Except as would not reasonably be expected to have
     a Material Adverse Effect, each Employee Benefit Plan and each Guaranteed
     Pension Plan has been maintained and operated in compliance in all material
     respects with the provisions of ERISA and all Applicable Pension
     Legislation and, to the extent applicable, the Code, including but not
     limited to the provisions thereunder respecting prohibited transactions and
     the bonding of fiduciaries and other persons handling plan funds as
     required by section 412 of ERISA. The Company has heretofore delivered to
     the Agent the most recently completed annual report, Form 5500, with all
     required attachments, and actuarial statement required to be submitted
     under section 103(d) of ERISA, with respect to each Guaranteed Pension
     Plan.

          8.18.2. TERMINABILITY OF WELFARE PLANS. Except for severance payment
     arrangements and except as disclosed in (i) the financial statements of the
     Company and its Subsidiaries described in section 8.8.2 or delivered
     pursuant to section 9.5 or (ii) the periodic and other reports of the
     Company filed from time to time with the Securities and Exchange
     Commission, no Employee Benefit Plan, which is an employee welfare benefit
     plan within the meaning of section 3(1) or section 3(2)(B) of ERISA,
     provides benefit coverage subsequent to termination of employment, except
     as required by Title I, Part 6 of ERISA or the applicable state insurance
     laws.

          8.18.3. GUARANTEED PENSION PLANS. Each contribution required to be
     made to a Guaranteed Pension Plan, whether required to be made to avoid the
     incurrence of an accumulated funding deficiency, the notice or lien
     provisions of section 302(f) of ERISA, or otherwise, has been timely made.
     No waiver of an accumulated funding deficiency or extension of amortization
     periods has been received with respect to any Guaranteed Pension Plan, and
     neither the Company nor any ERISA Affiliate is obligated to or has posted
     security in connection with an amendment to a Guaranteed Pension Plan
     pursuant to section 307 of ERISA or section 401(a)(29) of the Code. No
     liability to the PBGC (other than required insurance premiums, all of which
     have been paid) has been incurred by the Company or any ERISA Affiliate
     with respect to any Guaranteed Pension Plan and there has not been any
     ERISA Reportable Event (other than an ERISA Reportable Event as to which
     the requirement of thirty (30) days notice has been waived), or any other
     event or condition which presents a material risk of termination of any
     Guaranteed Pension Plan by the PBGC. As of the Effective Date, based on the
     latest valuation of each Guaranteed Pension Plan (which in each case
     occurred within twelve months of the date of this representation), and on
     the actuarial methods and assumptions employed for that valuation, the
     aggregate benefit liabilities of all such Guaranteed Pension Plans within
     the meaning of section 4001 of ERISA did not exceed the aggregate value of
     the assets of all such Guaranteed Pension Plans, disregarding for this
     purpose the benefit liabilities and assets of any Guaranteed Pension Plan
     with assets in excess of benefit liabilities.

          8.18.4. MULTIEMPLOYER PLANS. Neither the Company nor any ERISA
     Affiliate has incurred any material liability that remains outstanding
     (including secondary liability) to any Multiemployer Plan as a result of a
     complete or partial withdrawal from such Multiemployer Plan under section
     4201 of ERISA or as a result of a sale of assets described in section 4204
     of ERISA. Neither the Company nor any ERISA Affiliate has been notified

                                     Page 68
<Page>

     that any Multiemployer Plan is in reorganization or insolvent under and
     within the meaning of section 4241 or section 4245 of ERISA or is at risk
     of entering reorganization or becoming insolvent, or that any Multiemployer
     Plan intends to terminate or has been terminated under section 4041A of
     ERISA.

     8.19. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Company nor
any of its Subsidiaries is a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940, as amended.

     8.20. CERTAIN TRANSACTIONS. To the best of the Company's knowledge, and
except as disclosed in the Company's Forms 10-K or proxy statements (or would be
so disclosed but for the fact that the filing thereof is not yet due), each as
filed with the Securities and Exchange Commission, none of the officers,
directors, or employees of any of the Hasbro Companies is presently a party to
any transaction (other than arms-length transactions pursuant to which any of
the Hasbro Companies makes payments in the ordinary course of business upon
terms no less favorable than the such Person could obtain from third parties,)
with the Company or any of its Subsidiaries (other than (i) for services as
employees, officers and directors, or (ii) for all related transactions with any
one Person, transactions involving an aggregate amount not in excess of $60,000
at any one time), including, without limitation, any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

     8.21. USE OF PROCEEDS.

          8.21.1. GENERAL. The proceeds of the Loans shall be used for working
     capital and general corporate purposes, including the refinancing of
     indebtedness including the Existing Credit Agreement and to satisfy the
     Company's obligations pursuant to guaranties of Indebtedness of Foreign
     Subsidiaries. The Company will obtain Letters of Credit solely for working
     capital and general corporate purposes.

          8.21.2. REGULATIONS U AND X. No portion of any Loan is to be used, and
     no portion of any Letter of Credit is to be obtained, for the purpose of
     purchasing or carrying any "margin security" or "margin stock" as such
     terms are used in Regulations U and X of the Board of Governors of the
     Federal Reserve System, 12 C.F.R. Parts 221 and 224.

     8.22. ENVIRONMENTAL COMPLIANCE. The Company has taken all necessary steps
to investigate the past and present condition and usage of the Real Estate and
the operations conducted thereon and, based upon such diligent investigation,
has determined that, except as set forth on Schedule 8.22 hereto or except as
would not reasonably be expected to have a Material Adverse Effect:

                                     Page 69
<Page>

          (a) none of the Company, its Subsidiaries or any operator of the Real
     Estate or any operations thereon is in violation, or alleged violation, of
     any judgment, decree, order, law, license, rule or regulation pertaining to
     environmental matters, including without limitation, those arising under
     the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
     Environmental Response, Compensation and Liability Act of 1980 as amended
     ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
     ("SARA"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
     Substances Control Act, or any state, local or foreign law, statute,
     regulation, ordinance, order or decree relating to health, safety or the
     environment (hereinafter "Environmental Laws");

          (b) neither the Company nor any of its Subsidiaries has received
     notice within the last five (5) years from any third party including,
     without limitation, any Governmental Authority, (i) that any one of them
     has been identified by the United States Environmental Protection Agency
     ("EPA") as a potentially responsible party under CERCLA with respect to a
     site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B;
     (ii) that any hazardous waste, as defined by 42 U.S.C. section 6903(5), any
     hazardous substances as defined by 42 U.S.C. section 9601(14), any
     pollutant or contaminant as defined by 42 U.S.C. section 9601(33) and any
     toxic substances, oil or hazardous materials or other chemicals or
     substances regulated by any Environmental Laws ("Hazardous Substances")
     which any one of them has generated, transported or disposed of has been
     found at any site at which a Governmental Authority has conducted or has
     ordered that any Company or any of its Subsidiaries conduct a remedial
     investigation, removal or other response action pursuant to any
     Environmental Law; or (iii) that it is or shall be a named party to any
     claim, action, cause of action, complaint, or legal or administrative
     proceeding (in each case, contingent or otherwise) arising out of any third
     party's incurrence of costs, expenses, losses or damages of any kind
     whatsoever in connection with the release of Hazardous Substances; and

          (c) none of the Company and its Subsidiaries is required under any
     applicable Environmental Law to perform Hazardous Substances site
     assessments, or to remove or remediate Hazardous Substances, or to give
     notice to any Governmental Authority or record or deliver to other Persons
     an environmental disclosure document or statement by virtue of the
     transactions set forth herein and contemplated hereby.

     8.23. SUBSIDIARIES. As of December 29, 2002, the Company had no active
Subsidiaries that are not listed in Exhibit 21 to the Form 10-K of the Company
for the fiscal year ended December 29, 2002, as filed with the Securities and
Exchange Commission, a copy of such Exhibit 21 is attached hereto as Schedule
8.23, except for certain inactive or immaterial Subsidiaries that would not, if
taken as a whole, constitute a Significant Subsidiary. During the period between
December 30, 2002 and the Effective Date, the Company has had no Significant
Subsidiaries other than (a) Hasbro International, Inc., a Delaware corporation,
and (b) Wizards of the Coast, Inc., a Washington corporation.

     8.24. DISCLOSURE. No representation or warranty made by any of the Hasbro
Companies and Hasbro SA in this Agreement or in any agreement, instrument,
document, certificate, statement or letter furnished to the Agent or the Banks

                                     Page 70
<Page>

by or on behalf of the any of the Hasbro Companies and Hasbro SA in connection
with any of the transactions contemplated by any of the Loan Documents contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances in which they are made. Except as disclosed herein or
otherwise disclosed in writing to the Agent and the Banks, there is no fact
known to the Company which has a Material Adverse Effect, or which is reasonably
likely in the future to have a Material Adverse Effect, exclusive of effects
resulting from changes in general economic conditions, legal standards or
regulatory conditions.

     8.25. FOREIGN ASSETS CONTROL REGULATIONS, ETC.

     Neither the Company nor any of its Subsidiaries is an entity on the
"Specially Designated Nationals and Blocked Persons" list maintained by the
Office of Foreign Assets Control of the United States Treasury Department.

                    9. AFFIRMATIVE COVENANTS OF THE COMPANY.

     The Company covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:

     9.1. PUNCTUAL PAYMENT. The Company and/or Hasbro SA will duly and
punctually pay or cause to be paid the principal and interest on the Loans, all
Reimbursement Obligations, all Fees and all other amounts provided for in this
Agreement and the other Loan Documents to which the Company or any of its
Subsidiaries is a party, all in accordance with the terms of this Agreement and
such other Loan Documents.

     9.2. USE OF LOAN PROCEEDS. The Company and/or Hasbro SA shall use the
proceeds of the Loans and obtain Letters of Credit solely for the purposes set
forth in section 8.21.

     9.3. MAINTENANCE OF OFFICE.

     (a) The Company will maintain its chief executive offices in Pawtucket
and/or East Providence, Rhode Island, or at such other place or places in the
United States of America as the Company shall designate upon written notice to
the Agent, where notices, presentations and demands to or upon the Company in
respect of the Loan Documents may be given or made.

     (b) Hasbro SA will maintain its chief executive offices at Route de
Courroux 6, 2800 Delemont, Switzerland, or at such other place or places as
Hasbro SA shall designate upon written notice to the Agent, where notices,
presentations and demands to or upon Hasbro SA in respect of the Loan Documents
may be given or made.

     9.4. RECORDS AND ACCOUNTS. The Company will (a) keep, and cause each of its
Subsidiaries to keep, true and accurate records and books of account in which
full, true and correct entries will be made in accordance with GAAP or, in the
case of Foreign Subsidiaries, statutory reporting principles, (b) maintain
adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties and the

                                     Page 71
<Page>

properties of its Subsidiaries, contingencies, and other reserves, and (c) at
all times engage KPMG LLP or other independent certified public accountants
reasonably satisfactory to the Agent as the independent certified public
accountants of the Company and will not permit more than thirty (30) days to
elapse between the cessation of such firm's (or any successor firm's) engagement
as the independent certified public accountants of the Company and the
appointment in such capacity of a successor firm as shall be reasonably
satisfactory to the Agent.

     9.5. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Company will
deliver to each of the Banks:

          (a) as soon as practicable, but, in any event not later than one
     hundred (100) days after the end of each fiscal year of the Company, the
     consolidated and consolidating balance sheet of the Company and its
     Subsidiaries as at the end of such year, and the related consolidated and
     consolidating statement of earnings and the consolidated statement of cash
     flows, with each setting forth in comparative form the figures for the
     previous fiscal year and all such consolidated statements to be in
     reasonable detail, prepared in accordance with GAAP, and certified without
     qualification (except as to changes in GAAP with which such accountants
     concur) and without an expression of uncertainty as to the ability of the
     Company or any of its Subsidiaries to continue as going concerns by KPMG
     LLP or by other independent certified public accountants reasonably
     satisfactory to the Agent, together with a written statement from such
     accountants to the effect that they have read a copy of this Agreement, and
     that, in making the examination necessary to said certification, they have
     obtained no knowledge of any Default or Event of Default, or, if such
     accountants shall have obtained knowledge of any then existing Default or
     Event of Default they shall disclose in such statement any such Default or
     Event of Default; provided that such accountants shall not be liable to the
     Banks for failure to obtain knowledge of any Default or Event of Default;

          (b) as soon as practicable, but in any event not later than sixty (60)
     days after the end of each of the first three (3) fiscal quarters of each
     fiscal year of the Company, copies of the unaudited consolidated and
     consolidating balance sheet of the Company and its Subsidiaries, each as at
     the end of such quarter, and the related consolidated and consolidating
     statement of earnings and the consolidated statement of cash flows for the
     portion of the Company's fiscal year then elapsed, all in reasonable detail
     and prepared in accordance with GAAP, together with a certificate of any
     Authorized Financial Officer of the Company that, subject to changes
     resulting from audit and year-end adjustments, the information contained in
     such financial statements fairly presents the financial condition and
     results of operations of the Company and its Subsidiaries for the periods
     covered;

          (c) simultaneously with the delivery of the financial statements
     referred to in (a) and (b) above, a statement, in the form attached hereto
     as Exhibit E (a "Compliance Certificate"), certified by any Authorized
     Financial Officer of the Company that the Company is in compliance with the
     covenants contained in sections 9, 10 and 11 as of the end of the

                                     Page 72
<Page>

     applicable period and setting forth in reasonable detail computations
     evidencing such compliance with the financial covenants set forth in
     section 11 and (if applicable) reconciliations to reflect changes in GAAP
     since the Balance Sheet Date;

          (d) contemporaneously with the filing or mailing thereof, copies of
     all other financial statements and reports as the Company shall send to any
     holders of Indebtedness of the Company or the stockholders of the Company,
     and copies of all regular and periodic reports which the Company may be
     required to file with the Securities and Exchange Commission or any similar
     or corresponding federal or state governmental commission, department or
     agency substituted therefor;

          (e) (i) while, and for so long as, the Obligations are secured as
     provided in section 6.2, within fifteen (15) Business Days after the end of
     the first three fiscal quarters of each year, an inventory designation
     report in form and substance reasonably satisfactory to the Agent, and (ii)
     within thirty (30) Business Days after the end of the fourth fiscal quarter
     of each year, an inventory designation report in form and substance
     reasonably satisfactory to the Agent;

          (f) as soon as practicable, but in any event not later than sixty (60)
     days after the end of each fiscal year, the budget of the Company for the
     next fiscal year, and from time to time upon the reasonable request of the
     Agent, projections of the Company and its Subsidiaries updating those
     projections delivered to the Banks and referred to in section 8.8.3 or, if
     applicable, updating any later such projections delivered in response to
     this section 9.5(f); and

          (g) from time to time such other financial data and information as the
     Agent or any Bank may reasonably request.

     9.6. NOTICES.

          9.6.1. DEFAULTS. The Company will promptly notify the Agent and each
     of the Banks in writing of the occurrence of any Default or Event of
     Default, together with a reasonably detailed description thereof, and the
     actions the Company proposes to take with respect thereto. If (i) any
     Person shall give any notice or take any other action in respect of a
     claimed default (whether or not constituting an Event of Default) under
     this Agreement or any other note, evidence of indebtedness, indenture or
     other obligation to which or with respect to which the Company or any of
     its Subsidiaries is a party or obligor, whether as principal, guarantor,
     surety or otherwise, and (ii) the aggregate amount of all of the
     indebtedness of the Company and its Subsidiaries in respect of such claimed
     defaults shall exceed $15,000,000 at any one time, the Company shall
     forthwith give written notice thereof to the Agent and each of the Banks,
     describing the notice or action and the nature of the claimed default.

          9.6.2. ENVIRONMENTAL EVENTS. The Company will promptly give notice to
     the Agent and each of the Banks (a) of any violation of any Environmental
     Law that the Company or any of its Subsidiaries reports in writing or is
     reportable by such Person in writing (or for which any written report
     supplemental to any oral report is made) to any Governmental Authority that
     would reasonably be expected to have a Material Adverse Effect and (b) upon

                                     Page 73
<Page>

     becoming aware thereof, of any inquiry, proceeding, investigation, or other
     action, including a notice from any agency of potential environmental
     liability, of any Governmental Authority that would reasonably be expected
     to have a Material Adverse Effect.

          9.6.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. Following the grant
     of any security interest in accordance with section 6.2, the Company will,
     immediately upon becoming aware thereof, notify the Agent and each of the
     Banks in writing of any material setoff, claims, withholdings or other
     defenses to which any of the Collateral, or the Agent's rights with respect
     to the Collateral, are subject, except for any thereof permitted by the
     Security Documents or any Permitted Liens, and other than reconciliations
     with customers and vendors in the ordinary course of business.

          9.6.4. NOTICES CONCERNING INVENTORY COLLATERAL. Following the grant of
     any security interest in accordance with section 6.2, the Company shall
     provide to the Agent prompt notice of any physical count of the Company's
     or any of the Restricted Subsidiaries' Inventory, together with a copy of
     the results thereof certified by the Company or such Restricted Subsidiary.

          9.6.5. NOTICE OF LITIGATION AND JUDGMENTS. The Company will, and will
     cause each of its Subsidiaries to, give notice to the Agent and each of the
     Banks in writing within fifteen (15) days of becoming aware of any
     litigation or proceedings threatened in writing or any pending litigation
     and proceedings affecting the Company or any of its Subsidiaries or to
     which the Company or any of its Subsidiaries is or becomes a party
     involving an uninsured claim against the Company or any of its Subsidiaries
     that could reasonably be expected to have a Material Adverse Effect and
     stating the nature and status of such litigation or proceedings. The
     Company will, and will cause each of its Subsidiaries to, give notice to
     the Agent and each of the Banks, in writing, in form and detail reasonably
     satisfactory to the Agent, within ten (10) days of any judgment, final or
     otherwise, against the Company or any of its Subsidiaries in an amount not
     covered by insurance in excess of $15,000,000.

     9.7. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Company will, and
will cause each of the other Hasbro Companies and Hasbro SA to, maintain its
legal existence and good standing under the laws of its jurisdiction of
incorporation, maintain its qualification to do business in each state in which
the failure to do so would have a Material Adverse Effect, and maintain all of
its rights and franchises reasonably necessary to the conduct of its business.
The Company will cause all of its properties and those of the other Hasbro
Companies used or useful in the conduct of its business or the business of the
Hasbro Companies to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and will
cause each of the Hasbro Companies to continue to engage primarily in the
businesses now conducted by them and in related businesses; provided, however,

                                     Page 74
<Page>

that, subject to the provisions of section 10.5.2 hereof, nothing in this
section 9.7 shall prevent any Asset Sale permitted by section 10.5.2 hereof, or
prevent the Company from discontinuing the operation and maintenance of any of
its properties, or those of its Subsidiaries, or from dissolving or liquidating
any Subsidiary or from consolidating or merging any Subsidiary with or into
another Subsidiary or with and into the Company, if such discontinuance,
dissolution or liquidation, consolidation or merger is, in the judgment of the
Company, desirable in the conduct of the business of the Company and its
Subsidiaries on a consolidated basis and does not in the aggregate have a
Material Adverse Effect.

     9.8. INSURANCE. The Company will maintain, and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurance
companies, funds or underwriters, or by reasonable self-insurance, insurance of
the kinds, covering the risks and in the relative proportionate amounts usually
carried by reasonable and prudent companies conducting businesses similar to
that of the Company and otherwise in accordance with the terms of the Security
Documents (if any) to which such Person becomes and remains a party pursuant to
section 6.2 hereof.

     9.9. TAXES. The Company will, and will cause each of the other Hasbro
Companies to, duly pay and discharge, or cause to be paid and discharged, before
the same shall become overdue, all taxes, assessments and other governmental
charges imposed upon it and its real properties, sales and activities, or any
part thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies, which if unpaid might by law become a lien or
charge upon any of its property; provided, however, that any such tax,
assessment, charge, levy or claim need not be paid if either (a) the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Company or such Subsidiary shall have set aside on its
books, in accordance with GAAP, adequate reserves with respect thereto or (b)
such taxes, assessments and other governmental charges in the aggregate are not
material to the business or assets of the Company and its Subsidiaries on a
consolidated basis; and provided, further, that the Company and such Subsidiary
will pay or arrange for the bonding of all such taxes, assessments, charges,
levies or claims forthwith upon the commencement of proceedings to foreclose any
lien which may have attached as security therefor.

     9.10. ACCESS. The Company will, and will cause each of the other Hasbro
Companies to, (a) permit the Agent, by its representatives and agents, to
inspect any of the properties, including, without limitation, corporate books,
computer files and tapes and financial records of each of the Hasbro Companies,
to examine and make copies of the books of accounts and other financial records
of each of the Hasbro Companies at such reasonable times and intervals as the
Agent may determine, and (b) permit each of the Banks to discuss the affairs,
finances and accounts of each of the Hasbro Companies with, and to be advised as
to the same by, their respective officers at such reasonable times and intervals
as the Banks may designate. The Banks and the Agent agree that they will treat
in confidence all financial information with respect to the Company and its
Subsidiaries and all information obtained during such inspection or discussion
or pursuant to section 9.5 which has not become public without violation hereof,
and will not, without the consent of the Company, disclose such information to
any third party or any trust or investment employee or trust or investment
officer of any Bank, and, if any representative or agent of the Banks or the
Agent shall not be an employee of one of the Banks or the Agent or any affiliate
of the Banks or the Agent, such designee shall be reputable and of recognized

                                     Page 75
<Page>

standing and shall agree in writing to treat in confidence the information
obtained during any such inspection and, without the prior written consent of
the Company, not to disclose such information to any third party or make use of
such information for personal gain. Notwithstanding the foregoing, the Company
hereby authorizes the Agent and each of the Banks to disclose information
obtained pursuant to this Agreement to banks or other financial institutions who
are participants or potential participants in or assignees of the Loans made or
to be made hereunder (provided, that prior to any such disclosure to any such
participant, potential participant or assignee, such Person shall have agreed to
be bound by the provisions of this section 9.10 and section 22 pursuant to a
confidentiality agreement substantially in the form of Exhibit H hereto and
provided to the Company), and where required by applicable law or required or
requested by governmental or regulatory authorities.

     9.11. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The Company
will, and will cause each of the other Hasbro Companies to, comply with (i) all
applicable laws and regulations wherever its business is conducted, including,
without limitation, Environmental Laws, except where the failure to comply is
not reasonably likely to have a Material Adverse Effect, (ii) the provisions of
its charter documents and by-laws, (iii) all agreements and instruments by which
it or any of its properties may be bound except where the failure to comply is
not reasonably likely to have a Material Adverse Effect, and (iv) all applicable
decrees, orders, and judgments, except where the failure to comply is not
reasonably likely to have a Material Adverse Effect. If at any time while any
Loan, Note, Unpaid Reimbursement Obligation or Letter of Credit is outstanding
or any Bank has any obligation to make Loans hereunder or the Agent has any
obligations to issue, extend or renew any Letters of Credit, any authorization,
consent, approval, permit or license from any officer, agency or instrumentality
of any government shall become necessary or required in order that the Company
may fulfill any of its obligations hereunder, the Company will promptly take or
cause to be taken all reasonable steps within the power of the Company to obtain
such authorization, consent, approval, permit or license and furnish the Banks
with evidence thereof.

     9.12. EMPLOYEE BENEFIT PLANS. The Company will (a) promptly upon filing the
same with the Department of Labor or Internal Revenue Service upon request of
the Agent, furnish to the Agent a copy of the most recent actuarial statement
required to be submitted under section 103(d) of ERISA and Annual Report, Form
5500, with all required attachments, in respect of each Guaranteed Pension Plan
and (b) promptly upon receipt or dispatch, furnish to the Agent any notice,
report or demand sent or received in respect of a Guaranteed Pension Plan under
sections 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in
respect of a Multiemployer Plan, under sections 4041A, 4202, 4219, 4242, or 4245
of ERISA.

     9.13. FISCAL YEAR. The Company will have a fiscal year which ends on the
last Sunday in December of each calendar year. The Company may change its fiscal
year upon (a) sixty (60) days prior written notice to the Agent and the Banks
and (b) in the case of a change in fiscal year where the new fiscal year end is
not within forty-five (45) days of the fiscal year end specified in the first
sentence of this section 9.13, receipt by the Company of the prior written
consent of the Majority Banks, which consent shall not be unreasonably withheld,
provided that the granting of such consent by the Majority Banks shall be
conditioned upon the Company's entering into such appropriate amendments to this
Agreement, and delivering therewith such supplemental documents, agreements,
certificates, accounting reports, and legal opinions, as may be reasonably
requested by the Majority Banks in order to reflect the impact of such change in
fiscal year on the terms hereof.

                                     Page 76
<Page>

     9.14. ADDITIONAL SIGNIFICANT SUBSIDIARIES AND RESTRICTED SUBSIDIARIES.
Within thirty (30) days after the formation or acquisition by the Company or its
Subsidiaries of any Person which is not designated in this Agreement as a Hasbro
Company and otherwise meets the conditions set forth in the definition of
"Significant Subsidiary" herein for constituting a Significant Subsidiary or
meets the conditions set forth in the definition of "Restricted Subsidiary"
herein for constituting a Restricted Subsidiary, such Person will be deemed to
be a Hasbro Company under this Agreement and the Company will cause such Person
to observe all the obligations and be bound by all the limitations set forth in
this Agreement with respect to Hasbro Companies, including, without limitation,
if such Subsidiary is a Significant Subsidiary, requiring the execution and
delivery of a Subordination Agreement in the form of, mutatis mutandis, Exhibit
F hereto; and if such Subsidiary is a Restricted Subsidiary, requiring the
execution and delivery of a joinder agreement, in form and substance reasonably
satisfactory to the Agent, to the Guaranty and if and to the extent required
under section 6.2, the Subsidiary Security Agreement, together with other
documents, certificates and instruments (including Perfection Certificates and
UCC financing statements) required to be delivered pursuant to such Security
Documents and otherwise as may be reasonably requested by the Agent in
accordance with section 6.2. Once any Person has been so designated as a Hasbro
Company hereunder, such Person shall continue to be a Hasbro Company hereunder
until the earlier of (i) the date on which such Person ceases to be a Subsidiary
of the Company in accordance with the terms of section 10.5.2 or the last
sentence of section 9.6, and (ii) the date on which such Person shall have
performed in full its obligations under the Loan Documents and the Loan
Documents to which such Person is a party have ceased to be in force and effect.

     9.15. RATINGS. Promptly upon the Company receiving notice of the issuance
of any Rating or the change in any existing Rating, the Company shall give
written notice of such Rating and of the resultant Rating to the Agent. The
Agent promptly shall furnish copies of each of such notices to the Banks.

     9.16. FURTHER ASSURANCES. The Company and (solely with respect to the
Hasbro SA Loans) Hasbro SA will cooperate with the Banks and execute such
further instruments and documents as the Banks shall reasonably request to carry
out to their reasonable satisfaction the transactions contemplated by this
Agreement and the other Loan Documents.

                 10. CERTAIN NEGATIVE COVENANTS OF THE COMPANY.

     The Company covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:

     10.1. RESTRICTIONS ON INDEBTEDNESS. The Company will not permit any
Operating Subsidiary of the Company to create, incur, assume, guarantee or be or
remain liable with respect to, contingently or otherwise, any Indebtedness other
than:

          (a) Intercompany Indebtedness of Operating Subsidiaries of the
     Company;

          (b) Indebtedness of Foreign Subsidiaries;

                                     Page 77
<Page>

          (c) Subordinated Debt or other long term unsecured Indebtedness having
     a maturity at least one (1) year after the Final Maturity Date and
     providing for no payments of principal prior to the Final Maturity Date;
     provided that, in the case of the incurrence of additional Subordinated
     Debt or other long term unsecured Indebtedness by such Subsidiary after the
     Effective Date, (i) the Company applies the net cash proceeds of such
     additional Subordinated Debt or other long term unsecured Indebtedness in
     accordance with section 2.10(a)(iii) and (ii) no Default or Event of
     Default has occurred and is continuing at the time of the incurrence of
     such additional Indebtedness or would result after giving effect thereto;

          (d) Indebtedness incurred in connection with the acquisition after the
     date hereof of any real or personal property by such Operating Subsidiary
     or under any Capitalized Lease, provided that the aggregate principal
     amount of such Indebtedness of the Operating Subsidiaries shall not exceed
     the aggregate amount of $10,000,000 at any one time;

          (e) Indebtedness to the Banks and the Agent arising under any of the
     Loan Documents;

          (f) sales of receivables in connection with asset dispositions
     permitted under section 10.5.2;

          (g) other Indebtedness existing on the date hereof and described on
     Schedule 10.1 hereto;

          (h) Indebtedness in respect of Interest Hedging Agreements in an
     aggregate amount not to exceed, in the case of Interest Hedging Agreements
     to which neither the Agent nor any Bank or Bank Affiliate is a party,
     $75,000,000 outstanding at any time;

          (i) Indebtedness in connection with any Permitted Receivables
     Securitization Facility; and

          (j) other Indebtedness in an aggregate principal amount not to exceed
     $25,000,000 outstanding at any time.

     10.2. RESTRICTIONS ON LIENS. The Company will not, and will not permit any
Subsidiary (other than any Foreign Subsidiary) to, (a) create or incur or suffer
to be created or incurred or to exist any Lien upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; or (d) sell,
assign, pledge or otherwise transfer any "receivables" as defined in clause (g)
of the definition of the term "Indebtedness," with or without recourse (except

                                     Page 78
<Page>

the conversion or exchange of accounts receivable into or for notes receivable
in connection with the compromise or collection thereof, or as otherwise
permitted by section 10.5.2); provided that the Company or any of its
Subsidiaries may create or incur or suffer to be created or incurred or to
exist:

          (i) Liens to secure taxes, assessments and other government charges or
     claims for labor, material or supplies, but only to the extent that and so
     long as the payment thereof shall not at the time be required to be made in
     accordance with section 9.9 hereof;

          (ii) deposits or pledges made in connection with, or to secure payment
     of, worker's compensation, unemployment insurance, old age pensions or
     other social security or insurance-related obligations, or to secure the
     performance of bids, tenders, contracts (other than those relating to
     borrowed money) or leases (other than Capitalized Leases), or to secure
     statutory obligations or surety or appeal bonds, or to secure indemnity,
     performance or other similar bonds or obligations required in the ordinary
     course of business;

          (iii) Liens in respect of judgments or awards that have been in force
     for less than the applicable appeal period so long as execution is not
     levied thereunder or in respect of which the Company or the appropriate
     Subsidiary of the Company shall at the time in good faith be prosecuting an
     appeal or a proceeding for review and in respect of which a stay of
     execution shall have been obtained pending such appeal or review;

          (iv) Liens of carriers, warehousemen, mechanics and materialmen, and
     other like Liens arising in the ordinary course of business, in existence
     less than one hundred twenty (120) days from the date of creation thereof
     in respect of obligations not overdue or being contested in good faith by
     appropriate proceedings, with respect to which obligations the Company has
     set aside on its books reserves in accordance with GAAP;

          (v) encumbrances consisting of easements, rights of way, zoning
     restrictions, restrictions on the use of real property and defects and
     irregularities in the title thereto, landlord's or lessor's liens under
     leases to which the Company or a Subsidiary of the Company is a party, and
     other minor Liens, none of which in the opinion of the Company interferes
     materially with the use of the property affected in the ordinary conduct of
     the business of the Company and its Subsidiaries, which defects do not
     individually or in the aggregate have a material adverse effect on the
     business of the Hasbro Companies, considered as a whole;

          (vi) Liens consisting of purchase money security interests in or
     purchase money mortgages on real or personal property acquired after the
     date hereof to secure purchase money Indebtedness incurred in connection
     with the acquisition of such property or Capitalized Leases, which Liens
     cover only the real or personal property so acquired or leased provided
     that the aggregate amount of Indebtedness secured by such Liens and
     Capitalized Leases does not exceed $50,000,000 outstanding at any time;

          (vii) Liens existing on the date hereof and listed on Schedule 10.2
     hereto;

                                     Page 79
<Page>

          (viii) Liens securing the Secured Obligations in favor of the Agent
     for the benefit of the Banks and the Agent;

          (ix) Liens on the property or assets of a Person which becomes a
     Subsidiary of the Company after the date hereof securing Indebtedness of
     such Subsidiary permitted under section 10.1 provided that (i) such Liens
     existed at the time such Person became such a Subsidiary and were not
     created in anticipation thereof and (ii) any such Lien is not spread to
     cover any property or assets of such Person after the time such person
     becomes a Subsidiary;

          (x) Liens existing on assets or properties at the time of the
     acquisition thereof by the Company or any Subsidiary of the Company which
     were not created in anticipation of the acquisition thereof by the Company
     or such Subsidiary, and which do not materially interfere with the use,
     occupancy, operation and maintenance of the property or assets subject
     thereto or extend to or cover any assets or property of the Company or such
     Subsidiary other than the assets or property being acquired or secure any
     Indebtedness not permitted under section 10.1;

          (xi) any encumbrance or restriction (including, without limitation,
     put and call agreements and transfer restrictions, but not pledges) with
     respect to the Capital Stock of any joint venture or similar arrangement
     created pursuant to the joint venture or similar agreements with respect to
     such joint venture or similar arrangement;

          (xii) a Lien on the shares of Capital Stock of Atari and other related
     rights and interests to secure the Company's obligations under a collar or
     other hedging agreement between the Company and a third party to hedge
     against fluctuations in the price of such shares;

          (xiii) Liens on assets of any Foreign Subsidiary securing Indebtedness
     of any Foreign Subsidiary permitted by section 10.1(b) or section 10.1(j);

          (xiv) Liens on assets to secure obligations in respect of Interest
     Hedging Agreements not to exceed, in the case of Interest Hedging
     Agreements to which neither the Agent nor any Bank or Bank Affiliate is a
     party, $75,000,000 in aggregate amount at any time outstanding;

          (xv) Liens on any receivables and related assets subject to any Asset
     Sale permitted under sections 10.5.2(j) hereof;

          (xvi) Liens created pursuant to and in accordance with any Permitted
     Receivables Securitization Facility; and

          (xvii) other Liens on assets which secure obligations not exceeding
     $25,000,000 in aggregate amount at any time outstanding.

     10.3. RESTRICTIONS ON INVESTMENTS. The Company will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:

                                     Page 80
<Page>

          (a) securities with maturities of one (1) year or less from the date
     of acquisition issued or fully guaranteed or insured by the United States
     Government or any agency thereof;

          (b) certificates of deposit and time deposits, bankers acceptances and
     overnight bank deposits of any Bank or of any commercial bank having
     capital and surplus in excess of $500,000,000;

          (c) repurchase obligations of any Bank or of any commercial bank
     having capital and surplus in excess of $500,000,000, having a term of not
     more than 30 days with respect to securities issued or fully guaranteed or
     insured by the United States Government or any agency or instrumentality
     thereof;

          (d) commercial paper of a domestic issuer rated at least "A2" or the
     equivalent thereof by Standard & Poor's or any successor rating agency or
     "P-2" or the equivalent thereof by Moody's or any successor rating agency
     (or if at such time neither is issuing ratings, then a comparable rating of
     such other nationally recognized rating agency as shall be approved by the
     Agent in its reasonable judgment)

          (e) securities with maturities of one (1) year or less from the date
     of acquisition issued or fully guaranteed by any state, commonwealth or
     territory of the United States, by any political subdivision or taxing
     authority of any such state, commonwealth or territory or by any foreign
     government, the securities of which state, commonwealth, territory,
     political subdivision, taxing authority or foreign government (as the case
     may be) are rated at least "A" by Standard & Poor's or any successor rating
     agency or "A" by Moody's or any successor rating agency (or if at such time
     neither is issuing ratings, then a comparable rating of such other
     nationally recognized rating agency as shall be approved by the Agent in
     its reasonable judgment);

          (f) securities with maturities of one (1) year or less from the date
     of acquisition backed by standby letters of credit issued by any Bank or
     any commercial bank having capital and surplus in excess of $500,000,000;

          (g) shares of money market funds that are subject to the risk limiting
     conditions of Rule 2a-7 or any successor rule of the Securities and
     Exchange Commission under the Investment Company Act of 1940, as amended;

          (h) investments similar to any of the foregoing denominated in Dollars
     or foreign currencies approved by the board of directors or Treasurer of
     the Company, and in each case provided in clauses (a), (b) and (d) above,
     maturing within twelve (12) months after the date of acquisition;

          (i) Investments existing on the date hereof;

                                     Page 81
<Page>

          (j) Investments arising from payments under (i) the Guaranty, (ii)
     guaranties of the Indebtedness of a Foreign Subsidiary permitted by section
     10.1(b), or (iii) the guaranty set forth in section 27 of this Agreement;

          (k) Investments received as proceeds of asset dispositions permitted
     by section 10.5.2;

          (l) Investments consisting of loans and advances to officers,
     directors and employees for moving, entertainment, travel and other similar
     expenses and other Investments in connection with the relocation of
     employees in the ordinary course of business;

          (m) Investments by the Company or a Subsidiary of the Company in
     Subsidiaries formed (i) for the purpose of consummating Permitted
     Acquisitions or acquired in connection with Permitted Acquisitions, or (ii)
     in connection with any Permitted Receivables Securitization Facility;

          (n) Investments in the Company or any Subsidiary of the Company,
     provided that neither the Company nor any Restricted Subsidiary shall make
     any Investment in any Foreign Subsidiary unless (i) such Investment is in
     the ordinary course of business or is necessary in the reasonable judgment
     of management of the Company for the operation of the business of any
     Foreign Subsidiary or Foreign Subsidiaries or (ii) after giving effect to
     such Investment, all such Investments in Foreign Subsidiaries made pursuant
     to this subclause (ii) do not exceed $100,000,000 outstanding at such time;

          (o) Investments permitted by section 10.5;

          (p) Investments in the nature of pledges, deposits or other Liens (i)
     with respect to leases or utilities provided to third parties in the
     ordinary course of business or (ii) otherwise described under section 10.2;

          (q) Investments representing evidences of Indebtedness, securities or
     other property received from another Person in connection with any
     bankruptcy or proceeding or other reorganization of such other Person or as
     a result of foreclosure, perfection or enforcement of any Lien or exchange
     for evidences of Indebtedness, securities or other property of such other
     Person;

          (r) Investments constituting Capital Expenditures to the extent
     permitted by section 11.4;

          (s) Investments under any forward contract, futures contract, swap,
     option or other financing agreement or arrangement (including, without
     limitation, caps, floors, collars and similar agreements), the value of
     which is dependent upon interest rates, currency exchange rates,
     commodities or other indices, to the extent permitted by section 10.13;

                                     Page 82
<Page>

          (t) Investments consisting of loans and advances to officers,
     directors or employees relating to indemnification or reimbursement of any
     officers, directors or employees in respect of liabilities relating to
     their serving in any such capacity; and

          (u) other Investments in an aggregate amount not to exceed $30,000,000
     at any one time outstanding.

     10.4. RESTRICTED PAYMENTS. The Company will not make any Restricted
Payment; provided, however, so long as no Default or Event of Default then
exists or would result from such payment, the Company may:

          (a) declare or pay quarterly dividends on or in respect of any shares
     of any class of Capital Stock of the Company in any fiscal year in an
     aggregate amount not to exceed the greater of $50,000,000 per annum or 50%
     of Consolidated Net Earnings for the prior fiscal year;

          (b) repay, redeem or repurchase all or any portion of its long term
     debt, provided that, immediately prior to and after giving effect to such
     repayment, redemption or repurchase, (A) so long as the Company has
     obligations to repurchase Lucas Warrants pursuant to the Warrant Amendment
     Agreement, the sum of (x) the unused and available Commitment, (y) amounts
     unused and available under the Permitted Receivables Securitization
     Facility and (z) the total aggregate amount of the Company's domestic cash
     on hand, is no less than $150,000,000; or (B) in the event that the Company
     no longer has any obligations to repurchase the Lucas Warrants pursuant to
     the Warrant Amendment Agreement, the sum of (x), (y) and (z) above shall be
     no less than $50,000,000;

          (c) redeem or repurchase any shares of any class of Capital Stock of
     the Company, or enter into and perform its obligations under any derivative
     agreements with the same economic effect as such redemption or repurchase
     now or at a later date, provided that, after giving effect to such
     redemption or repurchase, (A) the pro forma ratio of EBITDA for the
     Reference Period ending immediately prior to such redemption or repurchase
     to Consolidated Total Interest Expense for such period is no less than 10.0
     : 1.00, and (B) the pro forma ratio of Consolidated Total Funded Debt for
     the Reference Period ending immediately prior to such redemption or
     repurchase to EBITDA for such period shall not exceed 1.75 : 1.00 (after
     giving pro forma effect to such redemption or repurchase as if it occurred
     on the first day of such period);

          (d) repay, redeem or repurchase any Indebtedness with (i) any proceeds
     of any Refinancing Indebtedness or (ii) subject to section 2.10(II), no
     more than fifty percent (50%) of the Net Cash Sale Proceeds of any Material
     Asset Sale;

          (e) repurchase any Lucas Warrant as a result of the holder thereof
     exercising its put option to sell such Lucas Warrant to the Company as
     provided under the Warrant Amendment Agreement, up to an aggregate amount
     not to exceed $100,000,000 in cash or $110,000,000 in Capital Stock of the
     Company;

                                     Page 83
<Page>

          (f) repurchase any Lucas Warrant as a result of the Company exercising
     its call option to buy such Lucas Warrant from the holders as provided
     under the Warrant Amendment Agreement, up to an aggregate amount not to
     exceed (i) $200,000,000 in cash, provided that, after giving effect to such
     repurchase, (A) the pro forma ratio of EBITDA for the Reference Period
     ending immediately prior to such repurchase to Consolidated Total Interest
     Expense for such period is no less than 10.0 : 1.00, and (B) the pro forma
     ratio of Consolidated Total Funded Debt for the Reference Period ending
     immediately prior to such repurchase to EBITDA for such period shall not
     exceed 1.75 : 1.00 (after giving pro forma effect to such redemption or
     repurchase as if it occurred on the first day of such period); or (ii)
     $220,000,000 in Capital Stock of the Company; and

          (g) make other Restricted Payments in any fiscal year in an aggregate
     amount not to exceed $15,000,000.

     10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.

          10.5.1. MERGERS AND ACQUISITIONS. The Company will not, and will not
     permit any of its Subsidiaries to, become a party to any merger,
     amalgamation or consolidation, or agree to or effect any acquisition of at
     least a majority of the assets or Capital Stock of any Person, or any
     business unit or product line thereof (other than the acquisition of assets
     in the ordinary course of business consistent with past practices) except:

               (a) the merger or consolidation of one (1) or more of the
          Subsidiaries of the Company with and into the Company, or the merger
          or consolidation of two (2) or more Subsidiaries of the Company;
          provided that if any of the parties to such merger or consolidation is
          a Restricted Subsidiary, the survivor of such merger or consolidation
          shall be a Restricted Subsidiary or the Company; or

               (b) the acquisition of stock or other securities of, or any
          assets of, any Person, provided that:

                    (i) no Default or Event of Default has occurred and is
               continuing or would result from such acquisition;

                    (ii) not less than five (5) Business Days prior to the
               consummation of such proposed acquisition, the Company shall have
               delivered to the Agent a Compliance Certificate demonstrating pro
               forma compliance with the financial covenants set forth in
               section 11 hereof; and

                    (iii) the aggregate purchase price for all such acquisitions
               shall not exceed (A) $50,000,000 in any fiscal year (and any
               portion of any amount not utilized in any fiscal year shall be
               carried over to increase the amount permitted in any subsequent
               fiscal year); provided that, (1)(x) the limitation set forth in
               clause (A) above shall not apply to any such acquisition
               consummated after the occurrence of an Investment Grade Rating
               Event and prior to the subsequent occurrence, if any, of a
               Investment Grade Rating Non-Event (an "Investment Grade

                                     Page 84
<Page>

               Acquisition"), (y) the aggregate purchase price for all
               Investment Grade Acquisitions consummated in any fiscal year
               shall not exceed $100,000,000 for such fiscal year (and any
               portion of any amount not utilized in any fiscal year shall be
               carried over to increase the amount permitted in subsequent
               fiscal years), and (z) in the event of any such subsequent
               occurrence of any Investment Grade Rating Non-Event, the
               limitation set forth in clause (A) above shall apply to any such
               acquisition consummated after such occurrence and prior to the
               subsequent occurrence of an Investment Grade Rating Event, and
               (2) any earnout payments in respect of assets or business
               acquired prior to the Effective Date shall not be included in the
               calculation of any amount described in this clause (iii); or

               (c) the acquisition of Capital Stock of any Subsidiary of the
          Company existing on the Effective Date from any then existing minority
          holder thereof.

          10.5.2. DISPOSITION OF ASSETS. The Company will not, and will not
     permit any of its Subsidiaries to, become a party to or agree to or effect
     any disposition or swap of assets, other than (a) the sale of inventory,
     (b) the licensing of intellectual property, (c) the disposition of obsolete
     or other assets not necessary for the operation of the Company's or such
     Subsidiary's business, in each case in the ordinary course of business, (d)
     Asset Sales provided that in the case of such Asset Sale, (i) no Default or
     Event of Default has occurred and is continuing or would result from such
     Asset Sale and, (ii) to the extent required thereunder, the Net Cash Sale
     Proceeds are applied to the Loans as set forth in section 2.10(a)(i); (e)
     the sale or discount by any Foreign Subsidiary with or without recourse of
     accounts receivable or notes receivable arising in the ordinary course of
     business, or the conversion or exchange of accounts receivable into or for
     notes receivable in connection with the compromise or collection thereof,
     (f) disposition of assets by the Company to any of its Restricted
     Subsidiaries or by any Subsidiary to the Company or any of its Restricted
     Subsidiaries, or by any Foreign Subsidiary to the Company or any
     Subsidiary, (g) the abandonment, sale or other disposition of intellectual
     property that, in the reasonable judgment of the Company, is no longer
     economically practicable to maintain or useful in the conduct of the
     business of the Hasbro Companies taken as a whole, (h) any sale or
     disposition of any claim as a creditor in a bankruptcy or similar
     proceeding in the ordinary course of business, (i) any Specified Sale, (j)
     sales, assignments, pledges or transfers of receivables for a credit
     enhancement purpose, pursuant to any Credit Insurance Provider Agreement;
     provided, however, that any lien granted by the Company to such Credit
     Insurance Provider under the Credit Insurance Provider Agreement shall
     cover only such receivables, and (k) the sale, transfer, discount,
     contribution, pledge or other disposition of Receivables and related assets
     in connection with any Permitted Receivables Securitization Facility.
     Nothing in this section 10.5.2 shall prevent the Company from discontinuing
     the operation and maintenance of any of its properties, or those of its
     Subsidiaries, or from dissolving or liquidating any Subsidiary or from
     consolidating or merging any Subsidiary with or into another Subsidiary or
     with and into the Company, if such discontinuance, dissolution or
     liquidation, consolidation or merger is, in the judgment of the Company,
     desirable in the conduct of the business of the Company and its
     Subsidiaries on a consolidated basis and does not in the aggregate have a
     Material Adverse Effect.

                                     Page 85
<Page>

     10.6. SALE AND LEASEBACK. The Company will not, and will not permit any of
its Subsidiaries (other than a Foreign Subsidiary) to, enter into any
arrangement, directly or indirectly, whereby the Company or any Subsidiary of
the Company shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that the Company or
any Subsidiary of the Company intends to use for substantially the same purpose
as the property being sold or transferred, except in connection with any Asset
Sale permitted under section 10.5.2.

     10.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as would not reasonably be
expected to result in a Material Adverse Effect, the Company will not, and will
not permit any of its Subsidiaries to, (a) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances except to the extent required by its day-to-day operations and in all
instances in compliance with applicable Environmental Laws, (b) cause or permit
to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (c) generate any
Hazardous Substances on any of the Real Estate except to the extent required by
its day-to-day operations and in all instances in compliance with applicable
Environmental Laws, (d) conduct any activity at any Real Estate or use any Real
Estate in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Hazardous Substances
on, upon or into the Real Estate or (e) otherwise conduct any activity at any
Real Estate or use any Real Estate in any manner that would violate any
Environmental Law or bring such Real Estate in violation of any Environmental
Law.

     10.8. SUBORDINATED DEBT. The Company will not permit any Operating
Subsidiary to amend, supplement or otherwise modify (a) the subordination terms
of any of the Subordinated Debt or (b) any other terms of any of the
Subordinated Debt, the effect of which would be to shorten maturity or average
weighted life, increase pricing or amount, make covenants or default provisions
more restrictive, add covenants or default provisions, or otherwise make such
Subordinated Debt materially more burdensome to the such Operating Subsidiary or
in any manner be materially adverse to the interests of the Banks and the Agent,
or prepay, redeem or repurchase any of the Subordinated Debt or send any
irrevocable notice of prepayment, redemption or repurchase to holders of any
Subordinated Debt.

     10.9. EMPLOYEE BENEFIT PLANS. Neither the Company nor any ERISA Affiliate
will:

          (a) engage in any "prohibited transaction" within the meaning of
     section 406 of ERISA or section 4975 of the Code which could result in a
     material liability for the Company or any of its Subsidiaries; or

          (b) permit any Guaranteed Pension Plan to incur an "accumulated
     funding deficiency", as such term is defined in section 302 of ERISA,
     whether or not such deficiency is or may be waived; or

          (c) fail to contribute to any Guaranteed Pension Plan to an extent
     which, or terminate any Guaranteed Pension Plan in a manner which, could
     result in the imposition of a lien or encumbrance on the assets of the
     Company or any of its Subsidiaries pursuant to section 302(f) or section
     4068 of ERISA; or

                                     Page 86
<Page>

          (d) amend any Guaranteed Pension Plan in circumstances requiring the
     posting of security pursuant to section 307 of ERISA or section 401(a)(29)
     of the Code;

          (e) permit or take any action which would result in the aggregate
     benefit liabilities (with the meaning of section 4001 of ERISA) of all
     Guaranteed Pension Plans exceeding the value of the aggregate assets of
     such Plans by more than $15,000,000 at any time, disregarding for this
     purpose the benefit liabilities and assets of any such Plan with assets in
     excess of benefit liabilities; or

          (f) permit or take any action which would contravene any Applicable
     Pension Legislation in the United States, except as such action would not
     be reasonably likely to result in a Material Adverse Effect.

     10.10. BUSINESS ACTIVITIES. The Company will not, and will not permit any
of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Effective Date and in related businesses.

     10.11. TRANSACTIONS WITH AFFILIATES. The Company will not, and will not
permit any of its Subsidiaries to, engage in any material transaction with any
Affiliate that is not the Company or a Subsidiary (other than in connection with
services as employees, officers and directors), including any material contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such Affiliate or, to the knowledge of the
Company, any corporation, partnership, trust or other entity in which any such
Affiliate has a substantial interest or is an officer, director, trustee or
partner, on terms materially more favorable to such Person than would have been
obtainable on an arm's-length basis in the ordinary course of business excluding
(a) any transaction with an Affiliate controlled by the Company entered into in
the ordinary course of business, (b) Restricted Payments that otherwise comply
with this Agreement, (c) any transaction relating to the issuance of any class
of Capital Stock of the Company and (d) any transaction entered into in
connection with a Permitted Receivables Securitization Facility.

     10.12. RESTRICTIONS ON NEGATIVE PLEDGES. The Company will not, nor will it
permit any of its Subsidiaries (other than any Receivables Subsidiary, Foreign
Subsidiaries or Subsidiaries of any thereof) to, except for those existing
agreements set forth and described on Schedule 10.12, enter into or permit to
exist any arrangement or agreement (excluding this Agreement, and the Loan
Documents and except any industrial revenue or development bonds, agreements
governing any purchase money liens, acquisition agreements or Capitalized Leases
or operating leases entered into in the ordinary course of business otherwise
permitted hereby (in which case any prohibition or limitation shall only be
effective against the assets that are, or are to be, financed, acquired or
leased thereby) and agreements in connection with any Permitted Receivables
Securitization Facility) which directly or indirectly prohibits the Company or
any of its Subsidiaries from creating, assuming or incurring any Lien in favor
of the Banks or the Agent upon its properties, revenues or assets or those of
any of its Subsidiaries whether now owned or hereafter acquired.

                                     Page 87
<Page>

     10.13. HEDGING AGREEMENTS. Other than in connection with any Permitted
Receivables Securitization Facility or in the ordinary course of business and
not for purposes of speculation, the Company will not, and will not permit any
of its Subsidiaries to, enter into any Hedging Agreements.

                            11. FINANCIAL COVENANTS.

     The Company covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:

     11.1. MINIMUM EBITDA. The Company will not permit EBITDA for any Reference
Period ending with the fiscal quarter referenced in the table below to be less
than the amount set forth in the table below opposite such fiscal quarter in
such table:

<Table>
<Caption>
       Fiscal Quarter Ending:                                EBITDA
     ----------------------------------------------------------------------
       <S>                                               <C>
       Fourth Quarter 2003                               $ 400,000,000
     ----------------------------------------------------------------------
       First Quarter 2004 and Thereafter                 $ 425,000,000
     ----------------------------------------------------------------------
</Table>

     11.2. TOTAL FUNDED DEBT TO EBITDA. The Company will not permit the ratio of
Consolidated Total Funded Debt at the end of any fiscal quarter set forth in the
table set forth below to EBITDA for the Reference Period then ended to exceed
the ratio set forth opposite such fiscal quarter set forth in table below:

<Table>
<Caption>
          Fiscal Quarter Ending:                            Ratio
     ----------------------------------------------------------------------
         <S>                                              <C>
         Fourth Quarter 2003                              2.50:1.00
     ----------------------------------------------------------------------
         First Quarter 2004                               2.50:1.00
     ----------------------------------------------------------------------
         Second Quarter 2004                              2.50:1.00
     ----------------------------------------------------------------------
         Third Quarter 2004                               2.75:1.00
     ----------------------------------------------------------------------
         Fourth Quarter 2004 and                          2.50:1.00
         Thereafter
     ----------------------------------------------------------------------
</Table>

     11.3. MINIMUM INTEREST COVERAGE RATIO. The Company will not permit, for any
Reference Period ending with the fiscal quarter referenced in the table below,
the ratio of (a) EBITDA for such period to (b) Consolidated Total Interest
Expense for such period to be less than the ratio set forth in the table below
opposite such fiscal quarter in such table:

                                     Page 88
<Page>

<Table>
<Caption>
         Fiscal Quarter Ending:                            Ratio
     ----------------------------------------------------------------------
         <S>                                             <C>
         Fourth Quarter 2003 and                         7.50:1.00
         Thereafter
     ----------------------------------------------------------------------
</Table>

     11.4. CAPITAL EXPENDITURES. During any fiscal year referenced in the table
set forth below, the Company will not, and will not allow any of its
Subsidiaries to, make Capital Expenditures that exceed the aggregate amount set
forth in the table below opposite such period in such table:

<Table>
<Caption>
               Fiscal Year Ending:                           Amount
     ----------------------------------------------------------------------
         <S>                                              <C>
         December 2003                                    $ 100,000,000
     ----------------------------------------------------------------------
         December 2004                                    $ 110,000,000
     ----------------------------------------------------------------------
         December 2005                                    $ 115,000,000
     ----------------------------------------------------------------------
         December 2006                                    $ 120,000,000
     ----------------------------------------------------------------------
</Table>

                        12. CONDITIONS TO EFFECTIVENESS.

     The obligations of the Banks to convert the outstanding Syndicated Loans
under the Existing Credit Agreement to Syndicated Loans hereunder and to make
the initial Syndicated Loans, the Swing Line Bank to make the initial Swing Line
Loans and of the Agent to issue any initial Letters of Credit shall be subject
to the satisfaction of the following conditions precedent on or prior to
November 14, 2003:

     12.1. LOAN DOCUMENTS, ETC.

     (a) Each of the Loan Documents (excluding the Security Documents other than
the Guaranty) shall have been duly and properly authorized, executed and
delivered by the respective party or parties thereto and shall be in full force
and effect on and as of the Effective Date. The Agent (i) shall have accepted
delivery in Boston, Massachusetts of each of the duly executed Loan Documents
(excluding the Security Documents other than the Guaranty) from each of the
other parties thereto, and (ii) shall have duly and properly executed each of
the Loan Documents (excluding the Security Documents other than the Guaranty),
to which it is a party, in Boston, Massachusetts.

     (b) Executed original counterparts of each of the Loan Documents (other
than the Notes) shall have been furnished to each Bank or the Agent in
sufficient copies for each Bank and an executed copy of the Notes for each Bank
shall have been delivered to such Bank.

     12.2. PERFORMANCE, ETC. Each of the Hasbro Companies and Hasbro SA shall
have duly and properly performed, complied with and observed each of the
covenants, agreements and obligations to be performed, complied with or observed
by it on or prior to such date contained in the Loan Documents (excluding the
Security Documents other than the Guaranty). No event shall have occurred on or

                                     Page 89
<Page>

prior to the Effective Date and be continuing on such Effective Date, and no
condition shall exist on such Effective Date, which constitutes a Default or an
Event of Default.

     12.3. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each Bank or the Agent (in
sufficient copies for each Bank) shall have received from each of the Hasbro
Companies and Hasbro SA a copy, each of which shall have been certified by a
duly authorized officer of such Person to be true and complete on and as of the
Effective Date, of each of (a) the charter or other incorporation documents of
such Person in effect on such date of certification, and (b) the by-laws or
equivalent governing document of such Person as in effect on such date.

     12.4. PROOF OF CORPORATE ACTION. The Agent shall have received from each of
the Hasbro Companies and Hasbro SA copies for each Bank, certified by a duly
authorized officer of such Person to be true and complete on and as of the
Effective Date, of the records of all corporate action taken by such Person to
authorize (a) its execution and delivery of each of the Loan Documents to which
it is or is to become a party, (b) its performance of all of its agreements and
obligations under each of the Loan Documents, and (c) in the case of the Company
and Hasbro SA, the borrowings contemplated by this Agreement.

     12.5. INCUMBENCY CERTIFICATES. The Agent shall have received from each of
the Hasbro Companies and Hasbro SA copies for each Bank of an original
incumbency certificate, dated as of the Effective Date signed by a duly
authorized officer of such Person and giving the name and bearing a specimen
signature of certain individuals who shall be authorized: (i) to sign, in the
name and on behalf of such Person, each of the Loan Documents to which it is or
is to become a party; and (ii) to give notices to make application for the Loans
and Letters of Credit and to take other action on behalf of such Person under
the Loan Documents.

     12.6. PROCEEDINGS AND DOCUMENTS. All corporate, governmental and other
proceedings in connection with the transactions contemplated by the Loan
Documents, and all instruments and documents incidental thereto, shall be in
form and substance reasonably satisfactory to the Agent and the Agent shall have
received all such counterpart originals or certified or other copies of all such
instruments and documents as the Agent shall have reasonably requested.

     12.7. CERTIFICATES OF INSURANCE. The Agent shall have received certificates
of insurance from an independent insurance broker dated as of the Effective Date
or such earlier date as may be reasonably satisfactory to the Agent, identifying
insurers, types of insurance, insurance limits, and policy terms, and otherwise
describing the insurance obtained.

     12.8. PAYMENT OF FEES. The Company shall have paid to the Banks or the
Agent, as appropriate, the Closing Fees and the Agent's Fee pursuant to sections
7.1 and 7.2, respectively.

     12.9. LEGALITY OF TRANSACTIONS. No change in applicable law shall have
occurred as a consequence of which it shall have become and continue to be
unlawful (a) for any Bank to perform any of its agreements or obligations under
any of the Loan Documents to which it is a party on the Effective Date or (b)
for the Company to perform any of its material agreements or obligations under
any of the Loan Documents to which it is a party on the Effective Date.

     12.10. LEGAL OPINION. Each of the Banks and the Agent shall have received a
favorable legal opinion addressed to the Banks and the Agent, dated as of the

                                     Page 90
<Page>

Effective Date, in form and substance reasonably satisfactory to the Banks and
the Agent, from Barry Nagler, Esq., Senior Vice President and General Counsel of
the Company.

                            13. CONDITIONS TO LOANS.

     13.1. CONDITIONS TO LOANS TO THE COMPANY. The obligations of the Banks to
make any Syndicated Loan, the Swing Line Bank to make any Swing Line Loan, and
of the Agent to issue, extend or renew any Letter of Credit, in each case to or
for the account of the Company and whether on or after the Effective Date, shall
also be subject to the satisfaction of the following conditions precedent:

          13.1.1. LEGALITY OF TRANSACTIONS. With respect to any such obligation
     of any Bank, it shall not be unlawful (a) for such Bank to perform any of
     its agreements or obligations under any of the Loan Documents to which such
     Bank is a party on the Drawdown Date of such Loans, or (b) for any of the
     Hasbro Companies to perform any of its material agreements or obligations
     under any of the Loan Documents to which it is a party on such date.

          13.1.2. REPRESENTATIONS AND WARRANTIES. Each of the representations
     and warranties made by or on behalf of the Company and its Subsidiaries to
     the Banks in this Agreement or any other Loan Document (other than
     representations and warranties made by Hasbro SA to the Banks in this
     Agreement or any other Loan Document) shall be true and correct in all
     material respects when made and shall for all purposes of this Agreement,
     be deemed to be repeated on and as of the date of the Company's notice of
     borrowing for such Loan on and as of the Drawdown Date of such Loan, or the
     issuance, extension or renewal of such Letter of Credit, and shall be true
     and correct in all material respects on and as of each of such dates,
     except, in each case, as affected by the consummation of the transactions
     contemplated by the Loan Documents or to the extent representations and
     warranties expressly referring to an earlier date shall relate to such
     earlier date.

          13.1.3. PERFORMANCE, ETC. Each of the Hasbro Companies shall have duly
     and properly performed, complied with and observed in all material respects
     each of its covenants, agreements and obligations contained in sections 9
     and 10 hereof, and shall have duly and properly performed, complied with
     and observed in all material respects its covenants, agreements, and
     obligations in all other articles of this Agreement and any of the other
     Loan Documents to which it is a party or by which it is bound on the
     Drawdown Date for such Loan or the date of the issuance, extension or
     renewal of such Letter of Credit. No event shall have occurred on or prior
     to such date and be continuing on such date, and no condition shall exist
     on such date, which constitutes a Default or an Event of Default.

          13.1.4. PROCEEDINGS AND DOCUMENTS. All corporate, governmental and
     other proceedings in connection with the transactions contemplated by the
     Loan Documents then in effect and all instruments and documents incidental
     thereto shall be in form and substance reasonably satisfactory to the Agent
     and the Agent shall have received all such counterpart originals or
     certified or other copies of all such instruments and documents as the
     Agent shall have reasonably requested.

                                     Page 91
<Page>

          13.1.5. LOAN DOCUMENTS. Each of the Loan Documents required by section
     9.14 hereof shall have been duly and properly authorized, executed and
     delivered by the respective party or parties thereto and shall be in full
     force and effect on and as of such date.

     13.2. CONDITIONS TO LOANS TO HASBRO SA. The obligations of the Banks to
make any Loan to Hasbro SA after the Effective Date shall be subject to the
satisfaction of the following conditions precedent:

          13.2.1. LEGALITY OF TRANSACTIONS. With respect to any such obligation
     of any Bank, it shall not be unlawful (a) for such Bank to perform any of
     its agreements or obligations under any of the Loan Documents to which such
     Bank is a party on the Drawdown Date of such Loans, or (b) for Hasbro SA or
     any of the Hasbro Companies to perform any of its material agreements or
     obligations under any of the Loan Documents to which it is a party on such
     date.

          13.2.2. REPRESENTATIONS AND WARRANTIES. Each of the representations
     and warranties made by or on behalf of the Company and its Subsidiaries
     (including Hasbro SA) to the Banks in this Agreement or any other Loan
     Document shall be true and correct in all material respects when made and
     shall for all purposes of this Agreement, be deemed to be repeated on and
     as of the date of Hasbro SA's notice of borrowing for such Loan on and as
     of the Drawdown Date of such Loan, and shall be true and correct in all
     material respects on and as of each of such dates, except, in each case, as
     affected by the consummation of the transactions contemplated by the Loan
     Documents or to the extent representations and warranties expressly
     referring to an earlier date shall relate to such earlier date.

          13.2.3. PERFORMANCE, ETC. Hasbro SA and each of the Hasbro Companies
     shall have duly and properly performed, complied with and observed in all
     material respects each of its respective covenants, agreements and
     obligations contained in sections 9 and 10 hereof, and shall have duly and
     properly performed, complied with and observed in all material respects its
     covenants, agreements, and obligations in all other articles of this
     Agreement and any of the other Loan Documents to which it is a party or by
     which it is bound on the Drawdown Date for such Loan. No event shall have
     occurred on or prior to such date and be continuing on such date, and no
     condition shall exist on such date, which constitutes a Default or an Event
     of Default.

          13.2.4. PROCEEDINGS AND DOCUMENTS. All corporate, governmental and
     other proceedings in connection with the transactions contemplated by the
     Loan Documents then in effect and all instruments and documents incidental
     thereto shall be in form and substance reasonably satisfactory to the Agent
     and the Agent shall have received all such counterpart originals or
     certified or other copies of all such instruments and documents as the
     Agent shall have reasonably requested.

          13.2.5. LOAN DOCUMENTS. Each of the Loan Documents required by section
     9.14 hereof shall have been duly and properly authorized, executed and
     delivered by the respective party or parties thereto and shall be in full
     force and effect on and as of such date.

                                     Page 92
<Page>

          13.2.6. NO DEFAULTS. None of the following events shall have occurred
     and be continuing:

               (a) Hasbro SA shall fail to pay at maturity, or within any
          applicable period of grace, any Indebtedness for borrowed money or
          credit received or in respect of any Capitalized Leases or in respect
          of any guaranties by Hasbro SA of any such Indebtedness of another
          Person, or fail to observe or perform any material term, covenant or
          agreement contained in any agreement by which it is bound, evidencing
          or securing Indebtedness for borrowed money or credit received or in
          respect of any Capitalized Leases for such period of time as would
          permit (assuming the giving of appropriate notice if required) the
          holder or holders thereof or of any obligations issued thereunder to
          accelerate the maturity thereof, or to rescind the purchase of any
          such obligations, and the aggregate amount of all of such Indebtedness
          for borrowed money or credit received or in respect of any Capitalized
          Leases of Hasbro SA or in respect of any guaranties by Hasbro SA of
          any such Indebtedness of another Person in respect of which any one or
          more of such defaults or failures shall at any time be continuing
          under any one or more of such agreements shall exceed $25,000,000 at
          any one time;

               (b) Hasbro SA makes an assignment for the benefit of creditors,
          or admits in writing its inability to pay or generally fails to pay
          its debts as they mature or become due, or petitions or applies for
          the appointment of a trustee or other custodian, liquidator or
          receiver of Hasbro SA or of any substantial part of the assets of
          Hasbro SA, or commences any case or other proceeding relating to
          Hasbro SA under any bankruptcy, reorganization, arrangement,
          insolvency, readjustment of debt, dissolution or liquidation or
          similar law of any jurisdiction now or hereafter in effect, or takes
          any action to authorize or in furtherance of any of the foregoing, or
          if any such petition or application is filed or any such case or other
          proceeding is commenced against Hasbro SA and Hasbro SA indicates its
          approval thereof, consent thereto or acquiescence therein or such
          petition or application shall not have been dismissed within
          forty-five (45) days following the filing thereof;

               (c) a decree or order is entered appointing any such trustee,
          custodian, liquidator or receiver or adjudicating Hasbro SA bankrupt
          or insolvent, or approving a petition in any such case or other
          proceeding, or a decree or order for relief is entered in respect of
          Hasbro SA in an involuntary case under federal bankruptcy laws as now
          or hereafter constituted; or

               (d) there shall remain in force, undischarged, unsatisfied and
          unstayed, for more than thirty (30) days, whether or not consecutive,
          any final judgment against Hasbro SA which, with other outstanding
          final judgments, undischarged, unsatisfied and unstayed, against
          Hasbro SA exceeds in the aggregate $30,000,000.

                                     Page 93
<Page>

                      14. EVENTS OF DEFAULT; ACCELERATION.

     14.1. REMEDIES UPON DEFAULT. If any of the following events ("Events of
Default" or, if the giving of notice or the lapse of time or both is required,
then, prior to such notice and/or lapse of time, "Defaults") shall occur:

          (a) if the Company shall fail to pay any principal of the Company
     Loans, or the Company and Hasbro SA shall each fail to pay any principal of
     the Hasbro SA Loans, when the same shall become due and payable, whether at
     the stated date of maturity or any accelerated date of maturity or at any
     other date fixed for payment;

          (b) if the Company shall fail to pay any interest on the Company Loans
     or principal or interest on the Unpaid Reimbursement Obligations, any Fees
     hereunder, or other sums due hereunder, or the Company and Hasbro SA shall
     each fail to pay interest on the Hasbro SA Loans, in each case within three
     (3) Business Days after the date on which the same shall become due and
     payable whether at the stated date of maturity or any accelerated date of
     maturity or at any other date fixed for payment;

          (c) if (i) the Company shall fail to comply with any of its covenants
     contained in section 9.2, section 9.5, section 9.6, the first sentence of
     section 9.7, section 9.13, section 9.14, section 10 or section 11, or (ii)
     Hasbro SA shall fail to comply with its covenant contained in section 9.2;

          (d) if (i) the Company shall fail to comply with any of its covenants
     contained in section 9.10 or section 9.16, or (ii) Hasbro SA shall fail to
     comply with its covenant in section 9.16, and in each case such failure
     shall continue for a period of ten (10) days;

          (e) if any of the Hasbro Companies and/or Hasbro SA shall fail to
     perform any term, covenant or agreement contained in any of the Loan
     Documents (other than those specified in subsections (a), (b), (c) and (d)
     above) for twenty (20) days after written notice of such failure has been
     given to the Company by the Agent;

          (f) if any representation or warranty of any of the Hasbro Companies
     and/or Hasbro SA in any of the Loan Documents or in any document or
     instrument delivered pursuant to or in connection with this Agreement shall
     prove to have been false in any material respect upon the date when made or
     deemed to have been made or repeated;

          (g) if any of the Hasbro Companies shall fail to pay at maturity, or
     within any applicable period of grace, any Indebtedness for borrowed money
     or credit received or in respect of any Capitalized Leases or in respect of
     any guaranties by such Hasbro Company of any such Indebtedness of another
     Person or any payment obligations under any Permitted Receivables
     Securitization Facility, or fail to observe or perform any material term,
     covenant or agreement contained in any agreement by which it is bound,
     evidencing or securing Indebtedness for borrowed money or credit received
     or in respect of any Capitalized Leases or under any Permitted Receivables
     Securitization Facility for such period of time as would permit (assuming
     the giving of appropriate notice if required) the holder or holders thereof
     or of any obligations issued thereunder to accelerate the maturity thereof,
     or to rescind the purchase of any such obligations, and the aggregate

                                     Page 94
<Page>

     amount of all of such Indebtedness for borrowed money or credit received or
     in respect of any Capitalized Leases of the Hasbro Companies or in respect
     of any guaranties by any Hasbro Company of any such Indebtedness of another
     Person or under any Permitted Receivables Securitization Facility in
     respect of which any one or more of such defaults or failures shall at any
     time be continuing under any one or more of such agreements shall exceed
     $25,000,000 at any one time; provided that, for the purposes of this
     section 14.1(g) only, the term "Indebtedness" shall exclude any
     Indebtedness owing to a Subsidiary of the Company, provided however that
     any affirmative enforcement action taken against any of the Hasbro
     Companies with respect to such Indebtedness shall nullify the foregoing
     exclusion;

          (h) if any of the Hasbro Companies makes an assignment for the benefit
     of creditors, or admits in writing its inability to pay or generally fails
     to pay its debts as they mature or become due, or petitions or applies for
     the appointment of a trustee or other custodian, liquidator or receiver of
     any of the Hasbro Companies or of any substantial part of the assets of any
     of the Hasbro Companies, or commences any case or other proceeding relating
     to any of the Hasbro Companies under any bankruptcy, reorganization,
     arrangement, insolvency, readjustment of debt, dissolution or liquidation
     or similar law of any jurisdiction now or hereafter in effect, or takes any
     action to authorize or in furtherance of any of the foregoing, or if any
     such petition or application is filed or any such case or other proceeding
     is commenced against any of the Hasbro Companies and the such Person
     indicates its approval thereof, consent thereto or acquiescence therein or
     such petition or application shall not have been dismissed within
     forty-five (45) days following the filing thereof;

          (i) if a decree or order is entered appointing any such trustee,
     custodian, liquidator or receiver or adjudicating any of the Hasbro
     Companies bankrupt or insolvent, or approving a petition in any such case
     or other proceeding, or a decree or order for relief is entered in respect
     of any of the Hasbro Companies in an involuntary case under federal
     bankruptcy laws as now or hereafter constituted;

          (j) if there shall remain in force, undischarged, unsatisfied and
     unstayed, for more than thirty (30) days, whether or not consecutive, any
     final judgment against any of the Hasbro Companies which, with other
     outstanding final judgments undischarged, unsatisfied and unstayed against
     the Hasbro Companies exceeds in the aggregate $30,000,000;

          (k) the holders of all or any part of the Subordinated Debt shall
     accelerate the maturity of all or any part of the Subordinated Debt, the
     Subordinated Debt shall be repaid, redeemed or repurchased in whole or in
     part or an offer to repay, redeem or repurchase the Subordinated Debt in
     whole or in part shall have been made;

          (l) (i) if any of the Loan Documents shall be cancelled, terminated,
     revoked or rescinded except in accordance with the terms hereof or thereof,
     or (ii) following the grant of any security interest pursuant to section
     6.2 the Agent's Liens in a material portion of the Collateral shall cease
     to be perfected (other than by the Agent's failure to file Uniform
     Commercial Code financing statements delivered by the Company or any
     Restricted Subsidiary, as applicable, or to make any required filings
     delivered by the Company or any Restricted Subsidiary with the United

                                     Page 95
<Page>

     States Patent and Trademark Office or the United States Copyright Office or
     to continue such Uniform Commercial Code financing statements or filings
     with the United States Patent and Trademark Office or United States
     Copyright Office in accordance with applicable law), or shall cease to have
     the priority contemplated by the Security Documents, in each case otherwise
     than in accordance with the terms thereof or with the express prior written
     agreement, consent or approval of the Banks in accordance with section 23,
     or (iii) any action at law, suit or in equity or other legal proceeding to
     cancel, revoke or rescind any of the Loan Documents shall be commenced by
     any of the Hasbro Companies and/or Hasbro SA party thereto, or (iv) any
     court or any other governmental or regulatory authority or agency of
     competent jurisdiction shall make a determination that, or issue a
     judgment, order, decree or ruling to the effect that ,any one or more of
     the Loan Documents is illegal, invalid or unenforceable in accordance with
     the terms thereof and such judgment, order, decree or ruling shall continue
     in full force and effect for a period of thirty (30) days;

          (m) there shall occur any loss, theft, destruction of, or material
     damage to the Inventory included in the Collateral (if any) resulting in an
     uninsured loss in excess of $20,000,000 during any one policy period, or
     any strike, lockout, labor dispute, embargo, condemnation, act of God or
     public enemy, or other casualty, which in any such case causes, for more
     than fifteen (15) consecutive days, the cessation or substantial
     curtailment of revenue producing activities at any facility of the Company
     or any of its Subsidiaries if such event or circumstance is not covered by
     business interruption insurance and would have a Material Adverse Effect;

          (n) the Company or any ERISA Affiliate incurs any liability to the
     PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
     aggregate amount exceeding $15,000,000, or the Company or any ERISA
     Affiliate is assessed withdrawal liability pursuant to Title IV of ERISA by
     a Multiemployer Plan requiring aggregate annual payments exceeding
     $5,000,000, or any of the following occurs with respect to a Guaranteed
     Pension Plan: (i) an ERISA Reportable Event, or a failure to make a
     required installment or other payment (within the meaning of section
     302(f)(1) of ERISA), provided that such event (A) would be expected to
     result in liability of the Company or any of its Subsidiaries to the PBGC
     or such Guaranteed Pension Plan in an aggregate amount exceeding
     $15,000,000 and (B) would constitute grounds for the termination of such
     Guaranteed Pension Plan by the PBGC, for the appointment by the appropriate
     United States District Court of a trustee to administer such Guaranteed
     Pension Plan or for the imposition of a lien in favor of such Guaranteed
     Pension Plan; or (ii) the appointment by a United States District Court of
     a trustee to administer such Guaranteed Pension Plan; or (iii) the
     institution by the PBGC of proceedings to terminate such Guaranteed Pension
     Plan;

          (o) a Change of Control shall occur; or

          (p) Hasbro SA shall no longer qualify as a Wholly Owned Subsidiary;

then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Company declare all amounts owing with respect to this Agreement and the

                                     Page 96
<Page>

Notes and the other Loan Documents and all Reimbursement Obligations to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company and Hasbro SA; provided that in the event
of any Event of Default specified in section 14.1(h) or section 14.1(i) hereof,
all such amounts shall become immediately due and payable automatically and
without any requirement of notice from the Agent or any Bank.

     14.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in section 14.1(h) or section 14.1(i) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the Banks
shall be relieved of all further obligations to make Loans to the Company and/or
Hasbro SA and the Agent shall be relieved of all further obligations to issue,
extend or renew Letters of Credit. If any other Event of Default shall have
occurred and be continuing, the Agent may and, upon the request of the Majority
Banks, shall, by notice to the Company and Hasbro SA, terminate the unused
portion of the credit hereunder, and upon such notice being given such unused
portion of the credit hereunder shall terminate immediately and each of the
Banks shall be relieved of all further obligations to make Loans and the Agent
shall be relieved of all further obligations to issue, extend or renew Letters
of Credit. No termination of the credit hereunder shall relieve the Company or
any of its Subsidiaries of any of the Obligations.

     14.3. REMEDIES. In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Banks shall have accelerated
the maturity of the Loans pursuant to section 14.1, each Bank, if owed any
amount with respect to the Loans or the Reimbursement Obligations, may, with the
consent of the Majority Banks but not otherwise, proceed to protect and enforce
its rights by suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement and the other Loan Documents or any instrument pursuant to which
the Obligations to such Bank are evidenced, including as permitted by applicable
law the obtaining of the ex parte appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of such Bank. No remedy
herein conferred upon any Bank or the Agent or the holder of any Note or
purchaser of any Letter of Credit Participation is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.

     14.4. CERTAIN RIGHTS OF CURE. (a) Any Default or Event of Default may be
waived as provided by section 23 hereof and any Default or Event of Default so
waived shall be deemed to have been cured and not to be continuing, and upon
such waiver the Company, Hasbro SA and each of the Banks shall be restored to
their respective positions prior to the existence of the Default or Event or
Default, whether or not acceleration of the maturity of the Loans shall have
occurred pursuant to this section 14. The Commitments, if terminated pursuant to
this section 14 by reason of any Event of Default so waived, shall be
reinstated. In the event that the Commitments, once terminated, are so
reinstated, the Commitment Fee shall be payable as though no termination had
occurred. No such waiver shall extend to or affect any subsequent or other
Default or Event of Default or impair any rights consequent thereon.

                                     Page 97
<Page>

     (b) Notwithstanding any other provision of this Agreement to the contrary,
if a Default or Event of Default shall occur at any time when no Loans shall be
outstanding and all other Obligations shall have been paid in full, the Company
may give notice to the Agent and the Banks (i) of the occurrence or continuance
of such Default or Event of Default, (ii) of the Company's request to terminate
the Commitments in their entirety pursuant to section 2.2, and (iii) subject to
compliance by the Company with the provisions of section 2.2 and this section
14.4(b), of the Company's request that the Default or Event of Default be deemed
not to have occurred, and upon termination of the Commitments and payment by the
Company and/or Hasbro SA of all Fees and other sums payable by the Company
and/or Hasbro SA hereunder, the Company, Hasbro SA, the Agent, and the Banks
shall be deemed to have agreed, by mutual consent, that no Default or Event of
Default shall have occurred hereunder.

     14.5. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following the
occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any of the Security Documents, or otherwise with respect to
the realization upon any of the Collateral (in each case following the grant of
any security interest in accordance with section 6.2), such monies shall be
distributed for application as follows:

          (a) First, to the payment of, or (as the case may be) the
     reimbursement of the Agent for or in respect of all reasonable costs,
     expenses, disbursements and losses which shall have been incurred or
     sustained by the Agent in connection with the collection of such monies by
     the Agent, for the exercise, protection or enforcement by the Agent of all
     or any of the rights, remedies, powers and privileges of the Agent under
     this Agreement or any of the other Loan Documents or in respect of the
     Collateral or in support of any provision of adequate indemnity to the
     Agent against any taxes or Liens which by law shall have, or may have,
     priority over the rights of the Agent to such monies;

          (b) Second, to all other Secured Obligations (other than obligations
     of the Company and its Subsidiaries to any of the Banks, any Bank Affiliate
     and/or the Agent with respect to any Interest Hedging Agreements and
     Hedging Agreements) in such order or preference among types of Secured
     Obligations as the Majority Banks may determine; provided, however, that
     (i) distributions shall be made (A) pari passu among Secured Obligations
     with respect to the Agent's Fee and all other Secured Obligations and (B)
     with respect to each type of Secured Obligation owing to the Banks, such as
     interest, principal, fees and expenses, among the Banks pro rata, based on
     the then outstanding amount of Secured Obligations (and on the assumption
     that Secured Obligations consisting of guaranties are equal to the amount
     of the outstanding obligations guaranteed), and (ii) the Agent may in its
     discretion make proper allowance to take into account any Secured
     Obligations not then due and payable;

          (c) Third, to obligations of the Company and its Subsidiaries to any
     of the Banks, any Bank Affiliate and/or the Agent with respect to any
     Interest Hedging Agreements and Hedging Agreements;

          (d) Fourth, upon payment and satisfaction in full or other provisions
     for payment in full satisfactory to the Banks and the Agent of all of the

                                     Page 98
<Page>

     Secured Obligations, to the payment of any obligations required to be paid
     pursuant to section 9-615(a)(3) of the Uniform Commercial Code of The
     Commonwealth of Massachusetts; and

          (e) Fifth, the excess, if any, shall be returned to the Company or to
     such other Persons as are entitled thereto.

     14.6. JUDGMENT CURRENCY. If, for the purpose of obtaining judgment in any
court or obtaining an order enforcing a judgment, it becomes necessary to
convert any amount due under this Credit Agreement in Dollars or in any other
currency (hereinafter in this section 14.6 called the "first currency") into any
other currency (hereinafter in this section 14.6 called the "second currency"),
then the conversion shall be made at the Agent's spot rate of exchange for
buying the first currency with the second currency prevailing at the Agent's
close of business on the Business Day next preceding the day on which the
judgment is given or (as the case may be) the order is made. Any payment made to
the Agent or any Bank pursuant to this Credit Agreement in the second currency
shall constitute a discharge of the obligations of Hasbro and/or Hasbro SA, as
the case may be, to pay to the Agent and the Banks any amount originally due to
the Agent and the Banks in the first currency under this Credit Agreement only
to the extent of the amount of the first currency which the Agent and each of
the Banks is able, on the date of the receipt by it of such payment in any
second currency, to purchase, in accordance with the Agent's and such Bank's
normal banking procedures, with the amount of such second currency so received.
If the amount of the first currency falls short of the amount originally due
from either the Company or Hasbro SA to the Agent and the Banks in the first
currency under this Credit Agreement, such Person hereby agrees that it will
indemnify the Agent and each of the Banks against and save the Agent and each of
the Banks harmless from any shortfall so arising. This indemnity shall
constitute an obligation of the Company or Hasbro SA, as the case may be,
separate and independent from the other obligations contained in this Credit
Agreement, shall give rise to a separate and independent cause of action and
shall continue in full force and effect notwithstanding any judgment or order
for a liquidated sum or sums in respect of amounts due to the Agent or any Bank
under this Credit Agreement or under any such judgment or order. The covenant
contained in this section 14.6 shall survive the payment in full of all of the
other obligations of the Company or Hasbro SA, as the case may be, under this
Credit Agreement.

                                   15. SETOFF.

     Regardless of the adequacy of any collateral, during the continuance of an
Event of Default, (i) any deposits or other sums credited by or due from any of
the Banks to the Company and any securities or other property of the Company in
the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Company to such Bank and (ii) any deposits or other
sums credited by or due from any of the Banks to Hasbro SA and any securities or
other property of Hasbro SA in the possession of such Bank may be applied to or
set off by such Bank against the payment of the Hasbro SA Obligations and any
and all other liabilities, direct, or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, of Hasbro SA to such Bank. ANY
AND ALL RIGHTS TO REQUIRE ANY BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO

                                     Page 99
<Page>

EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF THE COMPANY OR HASBRO SA, AS THE CASE MAY BE, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Banks agree with each other Bank
that (a) if an amount to be set off is to be applied to Indebtedness of the
Company or Hasbro SA, as the case may be, to such Bank, other than Indebtedness
evidenced by the Notes held by such Bank or constituting Reimbursement
Obligations owed to such Bank, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Bank or constituting Reimbursement Obligations owed to such Bank, and (b)
if such Bank shall receive from the Company or Hasbro SA, as the case may be,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim evidenced by the Notes held by, or
constituting Reimbursement Obligations owed to, such Bank by proceedings against
the Company and/or Hasbro SA at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by, or Reimbursement Obligations owed to, such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to the
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by it or Reimbursement Obligations owed it, its
proportionate payment as contemplated by this Agreement; provided that if all or
any part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.

                                 16. THE AGENT.

     16.1. AUTHORIZATION.

     (a) The Agent is authorized to take such action on behalf of each of the
Banks and to exercise all such powers as are hereunder and under any of the
other Loan Documents and any related documents delegated to the Agent, together
with such powers as are reasonably incident thereto, including the authority,
without the necessity of any notice to or further consent of the Banks, from
time to time to take any action with respect to any Collateral or the Security
Documents (if and as applicable) which may be necessary to perfect, maintain
perfected or insure the priority of the security interest in and liens upon the
Collateral (if any) granted pursuant to the Security Documents in accordance
with section 6.2, provided that no duties or responsibilities not expressly
assumed herein or therein shall be implied to have been assumed by the Agent.

     (b) The relationship between the Agent and each of the Banks is that of an
independent contractor. The use of the term "Agent" is for convenience only and
is used to describe, as a form of convention, the independent contractual
relationship between the Agent and each of the Banks. Nothing contained in this
Agreement nor the other Loan Documents shall be construed to create an agency,
trust or other fiduciary relationship between the Agent and any of the Banks.

     (c) As an independent contractor empowered by the Banks to exercise certain
rights and perform certain duties and responsibilities hereunder and under the
other Loan Documents, the Agent is nevertheless a "representative" of the Banks,

                                    Page 100
<Page>

as that term is defined in Article 1 of the Uniform Commercial Code, for
purposes of actions for the benefit of the Banks and the Agent with respect to
all collateral security and guaranties contemplated by the Loan Documents. Such
actions include the designation of the Agent as "secured party", "mortgagee" or
the like on all financing statements and other documents and instruments,
whether recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.

     16.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Agreement and the other Loan Documents. The Agent may
utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Company.

     16.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.

     16.4. NO REPRESENTATIONS.

               16.4.1. GENERAL. The Agent shall not be responsible for the
          execution or validity or enforceability of this Agreement, the Notes,
          the Letters of Credit, any of the other Loan Documents or any
          instrument at any time constituting, or intended to constitute,
          collateral security for the Notes, or for the value of any such
          collateral security or for the validity, enforceability or
          collectability of any such amounts owing with respect to the Notes, or
          for any recitals or statements, warranties or representations made
          herein or in any of the other Loan Documents or in any certificate or
          instrument hereafter furnished to it by or on behalf of the Company or
          any of its Subsidiaries, or be bound to ascertain or inquire as to the
          performance or observance of any of the terms, conditions, covenants
          or agreements herein or in any instrument at any time constituting, or
          intended to constitute, collateral security for the Notes or to
          inspect any of the properties, books or records of the Company or any
          of its Subsidiaries. The Agent shall not be bound to ascertain whether
          any notice, consent, waiver or request delivered to it by the Company
          and/or Hasbro SA or any holder of any of the Notes shall have been
          duly authorized or is true, accurate and complete. The Agent has not
          made nor does it now make any representations or warranties, express
          or implied, nor does it assume any liability to the Banks, with

                                    Page 101
<Page>

          respect to the credit worthiness or financial conditions of the
          Company or any of its Subsidiaries. Each Bank acknowledges that it
          has, independently and without reliance upon the Agent or any other
          Bank, and based upon such information and documents as it has deemed
          appropriate, made its own credit analysis and decision to enter into
          this Agreement.

               16.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
          compliance with the conditions set forth in section 12, each Bank that
          has executed this Agreement shall be deemed to have consented to,
          approved or accepted, or to be satisfied with, each document and
          matter either sent, or made available, by the Agent or the Arranger to
          such Bank for consent, approval, acceptance or satisfaction, or
          required thereunder to be consented to or approved by or acceptable or
          satisfactory to such Bank, unless an officer of the Agent or the
          Arranger active upon the Company's account shall have received notice
          from such Bank not less than five (5) days prior to the Effective Date
          specifying such Bank's objection thereto and such objection shall not
          have been withdrawn by notice to the Agent or the Arranger to such
          effect on or prior to the Effective Date.

     16.5. INDEMNIFICATION. Without limiting the obligations of the Company
and/or Hasbro SA hereunder or under any other Loan Document, the Banks agree to
indemnify and hold harmless the Agent and its affiliates, ratably in accordance
with their respective Commitment Percentages, for any and all liabilities,
obligations, losses, damages, penalties, claims, actions and suits (whether
groundless or otherwise) judgments, costs, expenses (including any expenses for
which the Agent or such affiliate has not been reimbursed by the Company and/or
Hasbro SA as required by section 18) or disbursements of any kind or nature
whatsoever which may at any time (including without limitation at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or the
Notes or any of the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or the enforcement of any of the terms hereof or thereof or of any such other
documents, provided that no Bank shall be liable for any of the foregoing to the
extent they arise from the Agent's gross negligence or willful misconduct. The
agreements in this section 16.5 shall survive the payment of the Notes and all
other amounts payable hereunder.

     16.6. REIMBURSEMENT. Without limiting the provisions of section 16.5, the
Banks and the Agent hereby agree that the Agent shall not be obliged to make
available to any Person any sum which the Agent is expecting to receive for the
account of that Person until the Agent has determined that it has received that
sum. The Agent may, however, disburse funds prior to determining that the sums
which the Agent expects to receive have been finally and unconditionally paid to
the Agent, if the Agent wishes to do so. If and to the extent that the Agent
does disburse funds and it later becomes apparent that the Agent did not then
receive a payment in an amount equal to the sum paid out, then any Person to
whom the Agent made the funds available shall, on demand from the Agent:

          (a) refund to the Agent the sum paid to that Person; and

          (b) reimburse the Agent for the additional amount certified by the
     Agent as being necessary to indemnify the Agent against any funding or
     other cost, loss, expense or liability sustained or incurred by the Agent
     as a result of paying out the sum before receiving it.

                                    Page 102
<Page>

     16.7. NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank represents that it
has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of the financial condition and affairs of the Company and Hasbro
SA and decision to enter into this Agreement and the other Loan Documents and
agrees that it will, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own appraisals and decisions in
taking or not taking action under this Agreement or any other Loan Document. The
Agent shall not be required to keep informed as to the performance or observance
by the Company and/or Hasbro SA of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or by any other
Person of any agreement or to make inquiry of, or to inspect the properties or
books of, any Person. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning any Person which may come
into the possession of the Agent or any of its affiliates. Each Bank shall have
access to all documents relating to the Agent's performance of its duties
hereunder, at such Bank's request. Unless any Bank shall object promptly after
receiving notice of any action taken by the Agent hereunder, such Bank shall
conclusively be presumed to have approved the same.

     16.8. PAYMENTS.

          16.8.1. PAYMENTS TO AGENT. A payment by the Company and/or Hasbro SA
     to the Agent hereunder or any of the other Loan Documents for the account
     of any Bank shall constitute a payment to such Bank. The Agent agrees
     promptly to distribute to each Bank such Bank's pro rata share of payments
     received by the Agent for the account of the Banks except as otherwise
     expressly provided herein or in any of the other Loan Documents.

          16.8.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent the
     distribution of any amount received by it in such capacity hereunder, under
     the Notes or under any of the other Loan Documents might involve it in
     liability, it may refrain from making distribution until its right to make
     distribution shall have been adjudicated by a court of competent
     jurisdiction. If a court of competent jurisdiction shall adjudge that any
     amount received and distributed by the Agent is to be repaid, each Person
     to whom any such distribution shall have been made shall either repay to
     the Agent its proportionate share of the amount so adjudged to be repaid or
     shall pay over the same in such manner and to such Persons as shall be
     determined by such court.

          16.8.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
     contained in this Agreement or any of the other Loan Documents, any Bank
     that fails (a) to make available to the Agent its pro rata share of any
     Loan or to purchase any Letter of Credit Participation or (b) to comply
     with the provisions of section 15 with respect to making dispositions and
     arrangements with the other Banks, where such Bank's share of any payment
     received, whether by setoff or otherwise, is in excess of its pro rata
     share of such payments due and payable to all of the Banks, in each case

                                    Page 103
<Page>

     as, when and to the full extent required by the provisions of this
     Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be
     deemed a Delinquent Bank until such time as such delinquency is satisfied.
     A Delinquent Bank shall be deemed to have assigned any and all payments due
     to it from the Company and/or Hasbro SA, whether on account of outstanding
     Loans, Unpaid Reimbursement Obligations, interest, fees or otherwise, to
     the remaining nondelinquent Banks for application to, and reduction of,
     their respective pro rata shares of all outstanding Loans and Unpaid
     Reimbursement Obligations. The Delinquent Bank hereby authorizes the Agent
     to distribute such payments to the nondelinquent Banks in proportion to
     their respective pro rata shares of all outstanding Loans and Unpaid
     Reimbursement Obligations. A Delinquent Bank shall be deemed to have
     satisfied in full a delinquency when and if, as a result of application of
     the assigned payments to all outstanding Loans and Unpaid Reimbursement
     Obligations of the nondelinquent Banks, the Banks' respective pro rata
     shares of all outstanding Loans and Unpaid Reimbursement Obligations have
     returned to those in effect immediately prior to such delinquency and
     without giving effect to the nonpayment causing such delinquency.

     16.9. HOLDERS OF NOTES. The Agent may deem and treat the payee of any Note
or the purchaser of any Letter of Credit Participation as the absolute owner
thereof for all purposes hereof until it shall have been furnished in writing
with a different name by such payee or by a subsequent holder, assignee or
transferee.

     16.10. AGENT AS BANK. In its individual capacity, Fleet shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it hereunder, and as the holder of any of the
Notes and as the purchaser of any Letter of Credit Participation, as it would
have were it not also the Agent.

     16.11. RESIGNATION OR REMOVAL OF AGENT. The Agent may resign at any time by
giving sixty (60) days prior written notice thereof to the Banks and the
Company. Upon any such resignation, the Majority Banks, with the prior written
consent of the Company (which consent shall not be unreasonably withheld), shall
have the right to appoint a successor Agent; provided that no such consent of
the Company shall be required if a Default or Event of Default has occurred and
is then continuing. If no successor Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within thirty (30) days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a
financial institution having a rating of not less than A or its equivalent by
Standard and Poor's. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
both as Agent and Swing Line Bank (including without limitation the rights,
powers, privileges and duties of the retiring Agent with respect to such Agent's
commitment to issue Letters of Credit pursuant to section 5), and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Agreement shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent. In the event of a material breach of its duties
hereunder, the Agent may be removed by the Banks for cause and the provisions of
this section 16.11 shall apply to the appointment of a successor.

                                    Page 104
<Page>

     16.12. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this section 16.12 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.

     16.13. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.

     16.14. AGENT MAY FILE PROOFS OF CLAIM.

     (a) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial, administrative or like proceeding or any assignment for the benefit of
creditors relative to the Company and / or Hasbro SA, the Agent (irrespective of
whether the principal of any Loan, Reimbursement Obligation or Unpaid
Reimbursement Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Agent shall have made
any demand on the Company or Hasbro SA) shall be entitled and empowered, by
intervention in such proceeding, under any such assignment or otherwise:

          (i) to file and prove a claim for the whole amount of the principal
     and interest owing and unpaid in respect of the Loans, Reimbursement
     Obligations or Unpaid Reimbursement Obligations and all other Obligations
     that are owing and unpaid and to file such other documents as may be
     necessary or advisable in order to have the claims of the Banks and the
     Agent (including any claim for the reasonable compensation, expenses,
     disbursements and advances of the Banks and the Agent and their respective
     agents and counsel and all other amounts due the Banks and the Agent under
     sections 2.2, 5.6, 7.2 and 17) allowed in such proceeding or under any such
     assignment; and

          (ii) to collect and receive any monies or other property payable or
     deliverable on any such claims and to distribute the same;

     (b) Any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such proceeding or under any such assignment is
hereby authorized by each Bank to make such payments to the Agent and, in the
event that the Agent shall consent to the making of such payments directly to

                                    Page 105
<Page>

the Banks, nevertheless to pay to the Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agent and its agents
and counsel, and any other amounts due the Agent under sections 2.2, 5.6, 7.2
and 17.

     (c) Nothing contained herein shall authorize the Agent to consent to or
accept or adopt on behalf of any Bank any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations owed to such Bank or the
rights of any Bank or to authorize the Agent to vote in respect of the claim of
any Bank in any such proceeding or under any such assignment.

                                  17. EXPENSES.

     The Company agrees to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's net income) on or with respect
to the transactions contemplated by this Agreement (the Company hereby agreeing
to indemnify the Agent and each Bank with respect thereto), (c) the reasonable
fees, expenses and disbursements of the Agent's Special Counsel or any local
counsel to the Agent incurred in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, any amendments, modifications, approvals, consents or
waivers hereto or hereunder, or the cancellation of any Loan Document upon
payment in full in cash of all of the Obligations or pursuant to any terms of
such Loan Document for providing for such cancellation, (d) the reasonable fees,
expenses and disbursements of the Agent or any of its affiliates incurred by the
Agent or such affiliate in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
including, while, and for so long as, the Obligations are secured as provided in
section 6.2, all reasonable collateral appraisal and examination charges, (e)
all reasonable out-of-pocket expenses (including without limitation reasonable
out of pocket attorneys' fees and costs, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges)
incurred by any Bank or the Agent in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against the Company or
any of its Subsidiaries, or the administration thereof after the occurrence and
during the continuance of a Default or Event of Default and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to any Bank's or the Agent's relationship with the Company or any of its
Subsidiaries relating to the Loan Documents or the transactions contemplated
thereby and (f) while, and for so long as, the Obligations are secured as
provided in section 6.2, all reasonable fees, expenses and disbursements of the
Agent incurred in connection with Uniform Commercial Code searches, Uniform
Commercial Code filings, intellectual property searches or intellectual property
filings. The covenants contained in this section 17 shall survive payment or
satisfaction in full of all other Obligations.

                              18. INDEMNIFICATION.

     The Company agrees to indemnify and hold harmless the Agent, the Banks and
each of their respective affiliates, directors, officers, employees and
representatives from and against any and all claims, actions and suits whether

                                    Page 106
<Page>

groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Agreement
or any of the other Loan Documents or the transactions contemplated hereby
including, without limitation, (a) any actual or proposed use by the Company or
any of its Subsidiaries of the proceeds of any of the Loans or Letters of
Credit, (b) the reversal or withdrawal of any provisional credits granted by the
Agent upon the transfer of funds from lock box, bank agency, concentration
accounts or otherwise under any cash management arrangements with the Company or
any Subsidiary or in connection with the provisional honoring of funds
transfers, checks or other items, (c) any actual or alleged infringement of any
patent, copyright, trademark, service mark or similar right of the Company or
any of its Subsidiaries comprised in the Collateral (if any), (d) the Company or
any of its Subsidiaries entering into or performing this Agreement or any of the
other Loan Documents or (e) with respect to the Company and its Subsidiaries and
their respective properties and assets, the violation of any Environmental Law,
the presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding, but
excluding (i) in the case of the Agent or any affiliate, director, officer,
employee or representative thereof, claims arising solely as a result of the
gross negligence or willful misconduct of the Agent or any of its affiliates,
directors, officers, employees or representatives, (ii) in the case of any Bank
or any affiliate, director, officer, employee or representative thereof, claims
arising solely as a result of the gross negligence or willful misconduct of such
Bank or any of its affiliates, directors, officers, employees or
representatives, (iii) litigation commenced by the Company against any Bank or
the Agent which (A) seeks enforcement of the Company's rights hereunder or under
any of the Loan Documents and (B) is finally determined adversely to such Bank
or the Agent, to the extent of such adverse determination, and (iv) claims made
or legal proceedings commenced against the Agent or any Bank by any
securityholder or creditor thereof arising out of and based upon rights afforded
any such securityholder or creditor solely in its capacity as such. In
litigation, or the preparation therefor, the Banks and the Agent and its
affiliates shall be entitled to select their own counsel and, in addition to the
foregoing indemnity, the Company agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of the
Company under this section 18 are unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law. The covenants
contained in this section 18 shall survive payment or satisfaction in full of
all other Obligations.

                         19. SURVIVAL OF COVENANTS, ETC.

     All covenants, agreements, representations and warranties made herein, in
the Notes or in any documents or other papers delivered by or on behalf of the
Company and/or Hasbro SA pursuant hereto shall be deemed to have been relied
upon by the Banks, notwithstanding any investigation heretofore or hereafter
made by it, and shall survive the making by the Banks of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or

                                    Page 107
<Page>

amount due under this Agreement or the Notes or any of the other Loan Documents
remains outstanding and unpaid or any Bank has any obligation to make any Loans
hereunder or the Agent has any obligation to issue, extend or renew any Letter
of Credit, and for such further time as may be otherwise be expressly specified
in this Agreement. All statements contained in any certificate or other paper
delivered to any Bank at any time by or on behalf of the Company and/or Hasbro
SA pursuant hereto or in connection with the transactions contemplated hereby
shall constitute representations and warranties by the Company and/or Hasbro SA
hereunder.

                        20. ASSIGNMENT AND PARTICIPATION.

     20.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
Bank may assign to one or more commercial banks, other financial institutions or
other Persons, all or a portion of its interests, rights and obligations under
this Agreement (including all or a portion of its Commitment Percentage and
Commitment and the same portion of the Loans at the time owing to it, the Notes
held by it and its participating interest in the risk relating to any Letters of
Credit); provided that (a) each of the Agent and, unless a Default or Event of
Default shall have occurred and be continuing, the Company shall have given its
prior written consent to such assignment, which consent, in the case of the
Company and the Agent, will not be unreasonably withheld; except that the
consent of the Company or the Agent shall not be required in connection with any
assignment by a Bank to (i) an existing Bank or (ii) a Bank Affiliate of such
Bank, (b) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this
Agreement, (c) each assignment (or, in the case of assignments by a Bank to its
Bank Affiliates, the aggregate holdings of such Bank and its Bank Affiliates
after giving effect to such assignments), shall be in a minimum amount equal to
$10,000,000 or a multiple of $5,000,000 in excess thereof (or, if less, such
Bank's entire Commitment), and (d) the parties to such assignment shall execute
and deliver to the Agent, for recording in the Register (as hereinafter
defined), an Assignment and Acceptance, substantially in the form of Exhibit G
hereto (an "Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (y) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereunder, and (z) the assigning Bank shall, to the extent provided in such
assignment and upon payment to the Agent of the registration fee referred to in
section 20.3, be released from its obligations under this Agreement.

     20.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:

          (a) other than the representation and warranty that it is the legal
     and beneficial owner of the interest being assigned thereby free and clear
     of any adverse claim, the assigning Bank makes no representation or
     warranty, express or implied, and assumes no responsibility with respect to
     any statements, warranties or representations made in or in connection with
     this Agreement or the execution, legality, validity, enforceability,
     genuineness, sufficiency or value of this Agreement, the other Loan
     Documents or any other instrument or document furnished pursuant hereto or
     the attachment, perfection or priority of any security interest or
     mortgage,

                                    Page 108
<Page>

          (b) the assigning Bank makes no representation or warranty and assumes
     no responsibility with respect to the financial condition of the Company
     and its Subsidiaries or any other Person primarily or secondarily liable in
     respect of any of the Obligations, or the performance or observance by the
     Company and its Subsidiaries or any other Person primarily or secondarily
     liable in respect of any of the Obligations of any of their obligations
     under this Agreement or any of the other Loan Documents or any other
     instrument or document furnished pursuant hereto or thereto;

          (c) such assignee confirms that it has received a copy of this
     Agreement, together with copies of the most recent financial statements
     referred to in section 8.8 and section 9.5 and such other documents and
     information as it has deemed appropriate to make its own credit analysis
     and decision to enter into such Assignment and Acceptance;

          (d) such assignee will, independently and without reliance upon the
     assigning Bank, the Agent or any other Bank and based on such documents and
     information as it shall deem appropriate at the time, continue to make its
     own credit decisions in taking or not taking action under this Agreement;

          (e) such assignee appoints and authorizes the Agent to take such
     action as agent on its behalf and to exercise such powers under this
     Agreement and the other Loan Documents as are delegated to the Agent by the
     terms hereof or thereof, together with such powers as are reasonably
     incidental thereto;

          (f) such assignee agrees that it will perform in accordance with their
     terms all of the obligations that by the terms of this Agreement are
     required to be performed by it as a Bank;

          (g) such assignee represents and warrants that it is legally
     authorized to enter into such Assignment and Acceptance; and

          (h) such assignee acknowledges that it has made arrangements with the
     assigning Bank satisfactory to such assignee with respect to its pro rata
     share of Letter of Credit Fees in respect of outstanding Letters of Credit.

     20.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Syndicated Loans owing to and Letter
of Credit Participations purchased by, the Banks from time to time. The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Company and Hasbro SA, the Agent and the Banks may treat each Person whose name
is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Company and
Hasbro SA and the Banks at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Bank agrees
to pay to the Agent a registration fee in the sum of $3,500.

     20.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance executed
by the parties to such assignment, together with each Note subject to such

                                    Page 109
<Page>

assignment, the Agent shall (i) record the information contained therein in the
Register, and (ii) give prompt notice thereof to the Company, Hasbro SA and the
Banks (other than the assigning Bank). Within five (5) Business Days after
receipt of such notice, the Company and, solely with respect to the Hasbro SA
Loans, Hasbro SA, each at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Assignee in an amount equal to the amount assumed by such Assignee pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained some
portion of its obligations hereunder, a new Note to the order of the assigning
Bank in an amount equal to the amount retained by it hereunder. Such new Notes
shall provide that they are replacements for the surrendered Notes, shall be in
an aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the assigned
Notes. The surrendered Notes shall be cancelled and returned to the Company.

     20.5. PARTICIPATIONS. Each Bank may sell participations to one or more
Banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
each such participation shall be in an amount of not less than $10,000,000, (b)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Company or Hasbro SA and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any Commitment Fee or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest (it being understood that (i) any vote to rescind any
acceleration made pursuant to section 14.1 of amounts owing with respect to the
Loans and other Obligations and (ii) any modifications of the provisions
relating to amounts, timing or application or prepayments of Loans and other
Obligations shall not require the approval of such participant).

     20.6. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE COMPANY. If any assignee
Bank is an Affiliate of the Company, then any such assignee Bank shall have no
right to vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or for purposes
of making requests to the Agent pursuant to section 14.1 or section 14.2, and
the determination of the Majority Banks shall for all purposes of this Agreement
and the other Loan Documents be made without regard to such assignee Bank's
interest in any of the Loans or Reimbursement Obligations. If any Bank sells a
participating interest in any of the Loans or Reimbursement Obligations to a
participant, and such participant is the Company or an Affiliate of the Company,
then such transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to
section 14.1 or section 14.2 to the extent that such participation is

                                    Page 110
<Page>

beneficially owned by the Company or any Affiliate of the Company, and the
determination of the Majority Banks shall for all purposes of this Agreement and
the other Loan Documents be made without regard to the interest of such
transferor Bank in the Loans or Reimbursement Obligations to the extent of such
participation. The provisions of this section 20.6 shall not apply to an
assignee Bank or participant which is also a Bank on the Effective Date or to an
assignee Bank or participant which has disclosed to the other Banks that it is
an Affiliate of the Company and which, following such disclosure, has been
excepted from the provisions of this section 20.6 in a writing signed by the
Majority Banks determined without regard to the interest of such assignee Bank
or transferor Bank, to the extent of such participation, in Loans or
Reimbursement Obligations.

     20.7. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall retain
its rights to be indemnified pursuant to section 18 with respect to any claims
or actions arising prior to the date of such assignment. If any Reference Bank
transfers all of its interest, rights and obligations under this Agreement, the
Agent shall, in consultation with the Company, Hasbro SA and with the consent of
the Company, Hasbro SA and the Majority Banks, appoint another Bank to act as a
Reference Bank hereunder. Anything contained in this section 20 to the contrary
notwithstanding, any Bank may at any time pledge or assign a security interest
in all or any portion of its interest and rights under this Agreement (including
all or any portion of its Notes) to secure obligations of such Bank, including
any pledge or assignment to secure obligations to (a) any of the twelve Federal
Reserve Banks organized under section 4 of the Federal Reserve Act, 12 U.S.C.
section 341 and (b) with respect to any Bank that is a fund that invests in bank
loans, to any lender or any trustee for, or any other representative of, holders
of obligations owed or securities issued by such fund as security for such
obligations or securities or any institutional custodian for such fund or for
such lender. Any foreclosure or similar action by any Person in respect of such
pledge or assignment shall be subject to the other provisions of this section
20. No such pledge or the enforcement thereof shall release the pledgor Bank
from its obligations hereunder or under any of the other Loan Documents, provide
any voting rights hereunder to the pledgee thereof, or affect any rights or
obligations of the Company, Hasbro SA or Agent hereunder.

     20.8. INCREASED COSTS. No assignee, participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under sections
4.1, 4.7 or 4.11 than such Bank would have been entitled to receive with respect
to the rights transferred, unless such transfer is made with the Company's prior
written consent.

     20.9. ASSIGNMENT BY COMPANY. The Company and/or Hasbro SA shall not assign
or transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.

                                21. NOTICES, ETC.

     Except as otherwise expressly provided in this Agreement, all notices and
other communications made or required to be given pursuant to this Agreement or
the Notes or any Letter of Credit Applications shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight courier, or sent by telegraph,
telecopy, facsimile or telex and confirmed by delivery via courier or postal
service, addressed as follows:

          (a) (i) if to the Company, at 1011 Newport Avenue, Pawtucket, Rhode
     Island 02861-2538, Attention: David D. R. Hargreaves, Senior Vice President

                                    Page 111
<Page>

     and Chief Financial Officer, with a copy to the Company at 1027 Newport
     Avenue, Pawtucket, Rhode Island 02861-2500, Attention: General Counsel, or
     at such other address or addresses for notice as the Company shall last
     have furnished in writing to the Person giving the notice and (ii) if to
     Hasbro SA, at Route de Courroux 6, 2800 Delemont, Switzerland, with a copy
     to the Company, at 1011 Newport Avenue, Pawtucket, Rhode Island 02862-0200,
     Attention: David D. R. Hargreaves, Senior Vice President and Chief
     Financial Officer, or at such other address or addresses for notice as the
     Company and/or Hasbro SA shall last have furnished in writing to the Person
     giving the notice;

          (b) if to the Agent, at 100 Federal Street, Boston, Massachusetts
     02110, Attention: John P. O'Loughlin, Director, or such other address for
     notice as the Agent shall last have furnished in writing to the Person
     giving the notice; and

          (c) if to any Bank, at such Bank's address set forth on Schedule 1
     hereto, or such other address for notice as such Bank shall have last
     furnished in writing to the Person giving the notice.

Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (a) if delivered by hand to a responsible officer of the
party to which it is directed, at the time of the receipt thereof by such
officer, (b) if sent by registered or certified first-class mail, postage
prepaid, when received by a responsible officer or employee of the party to
which it is directed, provided that such receipt may be evidenced by return
receipt signed by a responsible officer or employee of the party to which it is
directed, and (c) if sent by telegraph, telecopy, facsimile or telex, at the
time of dispatch thereof, if in normal business hours in the state where
received or otherwise at the opening of business on the next Business Day.

               22. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.

     22.1. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Company or any of its Subsidiaries
pursuant to this Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this section 22, or becomes available to any of the Banks or the
Agent on a nonconfidential basis from a source other than the Company or any of
its Subsidiaries without a duty of confidentiality to the Company or such
Subsidiary being violated, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Banks or the Agent
so long as the relevant Bank or Agent informs such counsel of the agreement
under this section 22.1 and such Bank assumes responsibility for compliance by
such counsel with such agreement, (d) to bank examiners or any other regulatory

                                    Page 112
<Page>

authority having jurisdiction over any Bank or the Agent, or to auditors or
accountants, (e) to the Agent or any Bank, (f) in connection with any litigation
to which any one or more of the Banks or the Agent is a party, or in connection
with the enforcement of rights or remedies hereunder or under any other Loan
Document, (g) to a Bank Affiliate or a Subsidiary or affiliate of the Agent so
long as the relevant Bank or Agent informs such Bank Affiliate, subsidiary or
affiliate of the agreement under this section 22.1 and such Bank or the Agent
assumes responsibility for compliance by such Person with such agreement, (h) to
any actual or prospective assignee or participant or any actual or prospective
counterparty (or its advisors) to any swap or derivative transactions referenced
to credit or other risks or events arising under this Agreement or any other
Loan Document so long as such actual or prospective assignee, participant or
counterparty, as the case may be, agrees to be bound by the provisions of this
section 22 pursuant to an agreement in substantially the form of Exhibit I
provided to the Company, or (i) with the consent of the Company. Notwithstanding
anything herein to the contrary, the Company, Hasbro SA, the Agent and each Bank
may disclose to any and all Persons, without limitation of any kind, any
information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Company, Hasbro SA, the
Agent or such Bank relating to such tax treatment and tax structure.

     22.2. PRIOR NOTIFICATION. Unless specifically prohibited by applicable law
or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Company of any request for disclosure of any such non-public
information by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Bank by such governmental agency) or pursuant to legal process and afford
the Company the opportunity to obtain a protective order or other appropriate
remedy or agreement to maintain confidentiality of the information.

     22.3. OTHER. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it by the Company or any of its
Subsidiaries. The obligations of each Bank under this section 22 shall supersede
and replace the obligations of such Bank under any confidentiality letter in
respect of this financing signed and delivered by such Bank to the Company prior
to the date hereof and shall be binding upon any assignee of, or purchaser of
any participation in, any interest in any of the Loans or Reimbursement
Obligations from any Bank.

                     23. CONSENTS, AMENDMENTS, WAIVERS, ETC.

     Any consent or approval required or permitted by this Agreement to be given
by the Banks may be given, and any term of this Agreement, the other Loan
Documents or any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Company or any of its
Subsidiaries of any terms of this Agreement, the other Loan Documents or such
other instrument or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Company and the
written consent of the Majority Banks. Notwithstanding the foregoing, no
amendment, modification or waiver shall:

          (a) without the written consent of the Company and each Bank directly
     affected thereby:

                                    Page 113
<Page>

               (i) reduce or forgive the principal amount of any Loans or
          Reimbursement Obligations, or reduce the rate of interest on the Notes
          (subject to the provisions of clause (ii) of the definition of
          "Pricing Grid") or the amount of the Commitment Fee or Letter of
          Credit Fees;

               (ii) increase the amount of such Bank's Commitment or extend the
          expiration date of such Bank's Commitment, or postpone any automatic
          reduction of such Bank's Commitment pursuant to the last sentence of
          section 2.3;

               (iii) postpone or extend the Final Maturity Date or any other
          regularly scheduled dates for payments of principal of, or interest
          on, the Loans or Reimbursement Obligations or any Fees or other
          amounts payable to such Bank (it being understood that (A) any vote to
          rescind any acceleration made pursuant to section 14.1 of amounts
          owing with respect to the Loans and other Obligations and (B) any
          modifications of the provisions relating to prepayments of Loans and
          other Obligations shall require only the approval of the Majority
          Banks); and

               (iv) other than pursuant to a transaction permitted by the terms
          of this Agreement, release any of the Restricted Subsidiaries from its
          guaranty obligations under the Guaranty, or following any grant of a
          security interest in accordance with section 6.2, release all or
          substantially all of the Collateral (excluding, if the Company or any
          Restricted Subsidiary becomes a debtor under the federal Bankruptcy
          Code, the release of "cash collateral", as defined in Section 363(a)
          of the federal Bankruptcy Code pursuant to a cash collateral
          stipulation with the debtor approved by the Majority Banks);

          (b) without the written consent of all of the Banks, amend or waive
     this section 23 or the definition of Majority Banks; and

          (c) without the written consent of the Agent, amend or waive section 3
     or section 15, the amount or time of payment of the Agent's Fee or any
     Letter of Credit Fees payable for the Agent's account or any other
     provision applicable to the Agent.

No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Agent or any Bank in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Company shall entitle the Company to other or further notice or demand in
similar or other circumstances.

                     24. PROVISIONS OF GENERAL APPLICATIONS.

     24.1. GOVERNING LAW. (a) THIS AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
COMPANY AND HASBRO SA AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE

                                    Page 114
<Page>

COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE COMPANY OR HASBRO SA, AS THE CASE MAY BE, BY MAIL
AT THE ADDRESS SPECIFIED IN section 21. EACH OF THE COMPANY AND HASBRO SA HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

     (b) Hasbro SA hereby irrevocably and unconditionally appoints the Company
(in such capacity, the "Process Agent"), as its agent to receive on behalf of
Hasbro SA and its respective property service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding in any such court of the Commonwealth of Massachusetts or any federal
court sitting therein and agrees promptly to appoint a successor Process Agent.
In any such action or proceeding in such court of the Commonwealth of
Massachusetts or federal court sitting therein, such service may be made on
Hasbro SA by delivering a copy of such process to Hasbro SA in care of the
Process Agent at such Process Agent's address set forth in section 21 and by
depositing a copy of such process in the mails by certified or registered air
mail, addressed to Hasbro SA at its address referred to in section 21 (such
service to be effective upon such receipt by the Process Agent and the
depositing of such process in the mails as aforesaid). Hasbro SA hereby
irrevocably and unconditionally authorizes and directs such Process Agent to
accept such service on its behalf. As an alternate method of service, Hasbro SA
also irrevocably and unconditionally consents to the service of any and all
process in any such action or proceeding in such court of the Commonwealth of
Massachusetts or any federal court sitting therein by mailing of copies of such
process to Hasbro SA by certified or registered air mail at its address referred
to in section 21. Hasbro SA hereby agrees that, to the fullest extent permitted
by applicable law, a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

     24.2. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.

     24.3. COUNTERPARTS. This Agreement and any amendment hereof may be executed
in several counterparts and by each party on a separate counterpart, each of
which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought. Delivery by facsimile by any of
the parties hereto of an executed counterpart hereof or of any amendment or
waiver hereto shall be as effective as an original executed counterpart hereof
or of such amendment or waiver and shall be considered a representation that an
original executed counterpart hereof or such amendment or waiver, as the case
may be, will be delivered.

     24.4. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in section 17.12.

                                    Page 115
<Page>

     24.5. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND HASBRO SA HEREBY WAIVES
ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE AGENT OR ANY
BANK RELATING TO THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN
DOCUMENTS AND AGREES THAT IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. Except
as prohibited by law, each of the Company and Hasbro SA hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, consequential or punitive damages or any
damages other than, or in addition to, actual damages. The Company and Hasbro SA
(a) certify that no representative, agent or attorney of any Bank or the Agent
has represented, expressly or otherwise, that such Bank or the Agent would not,
in the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledge that the Agent and the Banks have been induced to enter into this
Agreement, the other Loan Documents to which it is a party by, among other
things, the waivers and certifications contained herein.

     24.6. SEVERABILITY. The provisions of this Agreement are severable and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.

                         25. TRANSITIONAL ARRANGEMENTS.

     25.1. EXISTING CREDIT AGREEMENT SUPERSEDED. This Agreement shall on the
Effective Date supersede the Existing Credit Agreement in its entirety, except
as provided in this section 25. On the Effective Date, the rights and
obligations of the parties evidenced by the Existing Credit Agreement shall be
evidenced by the Agreement, the "Syndicated Loans" as defined in the Existing
Credit Agreement shall be converted to Syndicated Loans hereunder, and all
outstanding letters of credit issued by Fleet for the account of the Company
prior to the Effective Date shall, for the purposes of this Credit Agreement, be
Letters of Credit.

     25.2. RETURN AND CANCELLATION OF NOTES. Upon receipt by any Bank of its
Notes hereunder on the Effective Date, any "Notes" of the Company held by such
Bank pursuant to and as defined in the Existing Credit Agreement shall be deemed
to be no longer outstanding. As soon as reasonably practicable after its receipt
of its Notes hereunder on the Effective Date, each Bank will promptly return to
the Company, marked "Substituted" or "Cancelled", as the case may be, any notes
of the Company held by such Bank pursuant to the Existing Credit Agreement.

     25.3. INTEREST AND FEES UNDER SUPERSEDED AGREEMENT. All interest and fees
and expenses, if any, owing or accruing under or in respect of the Existing
Credit Agreement through the Effective Date shall be calculated as of the

                                    Page 116
<Page>

Effective Date (prorated in the case of any fractional periods), and shall be
paid as of the Effective Date. Commencing on the Effective Date, the Commitment
Fee shall be payable by the Company to the Agent for the account of the Banks in
accordance with section 2.2.

                       26. LIABILITY FOR THE OBLIGATIONS.

     (a) Notwithstanding anything herein to the contrary, the Company covenants
and agrees that all Obligations with respect to all Loans, Reimbursement
Obligations and any other Obligations payable to the Agent or any of the Banks
shall constitute the obligations of the Company individually.

     (b) Notwithstanding any other provision hereof or of any other Loan
Document, Hasbro SA shall have no liability for any Obligations other than the
Hasbro SA Obligations, or for any other liability or obligation of the Company.

                                  27. GUARANTY.

     27.1. GUARANTY OF PAYMENT AND PERFORMANCE. The Company hereby guarantees to
the Banks and the Agent the full and punctual payment when due (whether at
stated maturity, by required pre-payment, by acceleration or otherwise), as well
as the performance, of all of the Hasbro SA Obligations including all such which
would become due but for the operation of the automatic stay pursuant to section
362(a) of the Federal Bankruptcy Code or similar provisions of other applicable
law and the operation of sections 502(b) and 506(b) of the Federal Bankruptcy
Code or similar provisions of other applicable law. This guaranty is an
absolute, unconditional and continuing guaranty of the full and punctual payment
and performance of all of the Hasbro SA Obligations and not of their
collectability only and is in no way conditioned upon any requirement that the
Agent or any Bank first attempt to collect any of the Hasbro SA Obligations from
Hasbro SA or resort to any collateral security or other means of obtaining
payment. Should Hasbro SA default in the payment or performance of any of the
Hasbro SA Obligations, the obligations of the Company hereunder with respect to
the Hasbro SA Obligations in default shall become immediately due and payable to
the Agent, for the benefit of the Banks and the Agent, without demand or notice
of any nature, all of which are expressly waived by the Company. Payments by the
Company hereunder may be required by the Agent on any number of occasions.

     27.2. THE COMPANY'S AGREEMENT TO PAY ENFORCEMENT COSTS, ETC. The Company
further agrees, as the principal obligor and not as a guarantor only, to pay to
the Agent, on demand, all reasonable costs and expenses (including court costs
and reasonable legal expenses) incurred or expended by the Agent or any Bank in
connection with the Hasbro SA Obligations, this guaranty and the enforcement
thereof.

     27.3. WAIVERS BY THE COMPANY; BANKS' FREEDOM TO ACT. The Company agrees
that the Hasbro SA Obligations will be paid and performed strictly in accordance
with their respective terms, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or any Bank with respect thereto. The Company waives
promptness, diligences, presentment, demand, protest, notice of acceptance,
notice of any Hasbro SA Obligations incurred and all other notices of any kind,

                                    Page 117
<Page>

all defenses which may be available by virtue of any valuation, stay, moratorium
law or other similar law now or hereafter in effect, any right to require the
marshalling of assets of the Company or any other entity or other person
primarily or secondarily liable with respect to any of the Hasbro SA
Obligations, and all suretyship defenses generally. Without limiting the
generality of the foregoing, the Company agrees to the provisions of any
instrument evidencing, securing or otherwise executed in connection with any
Hasbro SA Obligation and agrees that the obligations of the Company hereunder
shall not be released or discharged, in whole or in part, or otherwise affected
by any of the following to the same extent as if the Company at all times had
been the principal obligor on all Hasbro SA Obligations: (i) the failure of the
Agent or any Bank to assert any claim or demand or to enforce any right or
remedy against the Company or any other entity or other person primarily or
secondarily liable with respect to any of the Hasbro SA Obligations; (ii) any
extensions, compromise, refinancing, consolidation or renewals of any Hasbro SA
Obligation; (iii) any change in the time, place or manner of payment of any of
the Hasbro SA Obligations or any rescissions, waivers, compromise, refinancing,
consolidation, amendments or modifications of any of the terms or provisions of
this Credit Agreement, the Notes, the other Loan Documents or any other
agreement evidencing, securing or otherwise executed in connection with any of
the Hasbro SA Obligations; (iv) the addition, substitution or release of any
entity or other person primarily or secondarily liable for any Hasbro SA
Obligation; (v) the adequacy of any rights which the Agent or any Bank may have
against any collateral security or other means of obtaining repayment of any of
the Hasbro SA Obligations; (vi) the impairment of any collateral securing any of
the Hasbro SA Obligations, including without limitation the failure to perfect
or preserve any rights which the Agent or any Bank might have in such collateral
security or the substitution, exchange, surrender, release, loss or destruction
of any such collateral security; or (vii) any other act or omission which might
in any manner or to any extent vary the risk of the Company or otherwise operate
as a release or discharge of the Company (other than the irrevocable payment in
cash of the relevant Hasbro SA Obligation), all of which may be done without
notice to the Company. To the fullest extent permitted by law, the Company
hereby expressly waives any and all rights or defenses arising by reason of (A)
any "one action" or "anti-deficiency" law which would otherwise prevent the
Agent or any Bank from bringing any action, including any claim for a
deficiency, or exercising any other right or remedy (including any right of
set-off), against the Company before or after the Agent's or such Bank's
commencement or completion of any foreclosure action, whether judicially, by
exercise of power of sale or otherwise, or (B) any other law which in any other
way would otherwise require any election of remedies by the Agent or any Bank.

     27.4. UNENFORCEABILITY OF HASBRO SA OBLIGATIONS AGAINST HASBRO SA. If for
any reason the Company or Hasbro SA has no legal existence or is under no legal
obligation to discharge any of the Hasbro SA Obligations, or if any of the
Hasbro SA Obligations have become irrecoverable from the Company or Hasbro SA by
reason of the Company's or Hasbro SA's insolvency, bankruptcy or reorganization
or by other operation of law or for any other reason, this guaranty shall
nevertheless be binding on the Company and not affected thereby to the same
extent as if the Company at all times had been the principal obligor on all such
Hasbro SA Obligations. In the event that acceleration of the time for payment of
any of the Hasbro SA Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Company, or for any other reason, all such amounts
otherwise subject to acceleration under the terms of this Credit Agreement, the
Notes, the other Loan Documents or any other agreement evidencing, securing or
otherwise executed in connection with any of the Hasbro SA Obligations shall be
immediately due and payable by the Company.

                                    Page 118
<Page>

     27.5. SUBROGATION; SUBORDINATION.

          27.5.1. WAIVER OF RIGHTS AGAINST HASBRO SA. Until the final payment
     and performance in full of all of the Hasbro SA Obligations, the Company
     shall not exercise any rights against Hasbro SA arising as a result of
     payment by the Company hereunder, by way of subrogation, reimbursement,
     restitution, contribution or otherwise; the Company will not claim any
     setoff, recoupment or counterclaim against Hasbro SA in respect of any
     liability of the Company to Hasbro SA; and the Company waives any benefit
     of and any right to participate in any collateral security which may be
     held by the Agent or any Bank as security for the payment of any Hasbro SA
     Obligations.

          27.5.2. SUBORDINATION. The payment of any amounts due with respect to
     any indebtedness of Hasbro SA now or hereafter owed to the Company is
     hereby subordinated to the prior payment in full of all of the Hasbro SA
     Obligations. The Company agrees that, after the occurrence of any default
     the payment or performance of any of the Hasbro SA Obligations, the Company
     will not demand, sue for or otherwise attempt to collect any such
     indebtedness of the Hasbro SA to the Company until all of the Hasbro SA
     Obligations shall have been paid in full. If, notwithstanding the foregoing
     sentence, the Company shall collect, enforce or receive any amounts in
     respect of such indebtedness, such amounts shall be collected, enforced and
     received by the Company as trustee for the Banks and the Agent and be paid
     over to the Agent, for the benefit of the Banks and the Agent on account of
     the Hasbro SA Obligations without affecting in any manner the liability of
     the Company under the other provisions of this guaranty.

          27.5.3. PROVISIONS SUPPLEMENTAL. The provisions of this section 27.5
     shall be supplemental to and not in derogation of any rights and remedies
     of the Banks and the Agent or any affiliate of any Banks and the Agent
     under any separate subordination agreement which such Bank and the Agent or
     such affiliate may at any time and from time to time enter into with the
     Company.

     27.6. TERMINATION; REINSTATEMENT. This guaranty shall remain in full force
and effect so long as any Hasbro SA Obligation is outstanding or any Bank has
any obligation to make any Hasbro SA Loans. This guaranty shall continue to be
effective or be reinstated, if at any time any payment made or value received
with respect to any of the Hasbro SA Obligations is rescinded or must otherwise
be returned by the Agent or any Bank upon the insolvency, bankruptcy or
reorganization of the Company, or otherwise, all as though such payment had not
been made or value received.

     27.7. SUCCESSORS AND ASSIGNS. This guaranty shall be binding upon the
Company, its successors and assigns, and shall inure to the benefit of and be
enforceable by the Agent and the Banks and its successors, transferees and
assigns. Without limiting the generality of the foregoing sentence, each Bank
may assign or otherwise transfer its rights and obligations under this Credit
Agreement, the Notes and the other Loan Documents to any other entity or other
person, and such other entity or other person shall thereupon become vested, to
the extent set forth in the agreement evidencing such assignment or transfer,
with all the rights in respect thereof granted to such Bank herein, all in
accordance with and to the extent complying with and provided in section 20
hereof.

                                    Page 119
<Page>

     27.8. SEVERABILITY, ETC. It is the intention and agreement of the Company,
the Agent and the Banks that the obligations of the Company under this section
27 shall be valid and enforceable against the Company to the maximum extent
permitted by applicable law. Accordingly, if any provision of this section 27
creating any obligation of the Company in favor of the Agent and the Banks shall
be declared to be invalid or unenforceable in any respect or to any extent, it
is the stated intention and agreement of the Company, the Agent and the Banks
that any balance of the obligation created by such provision and all other
obligations of the Company to the Agent or any Bank created by other provisions
of this section 27 shall remain valid and enforceable. Likewise, if by final
order a court of competent jurisdiction shall declare any sums which the Agent
or any Bank may be otherwise entitled to collect from the Company under this
section 27 to be in excess of those permitted under any law (including any
federal or state fraudulent conveyance or like statute or rule of law)
applicable to the Company's obligations under this section 27, it is the stated
intention and agreement of the Company, the Agent and the Banks that all sums
not in excess of those permitted under such applicable law shall remain fully
collectible by the Agent or such Bank from the Company.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                    Page 120
<Page>

  IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as an
agreement under seal as of the date first set forth above.

                                   HASBRO, INC.

                                   By:\s\ David D.R. Hargreaves
                                      -----------------------------------------
                                   Name: David D.R. Hargreaves
                                   Title: Sr. V.P. & CFO

                                   HASBRO SA

                                   By:\s\ David D.R. Hargreaves
                                      -----------------------------------------
                                   Name: David D.R. Hargreaves
                                   Title:   Director

                                   By:
                                      -----------------------------------------
                                   Name:
                                   Title:

                                    Page 121
<Page>

     IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as an
agreement under seal as of the date first set forth above.

                                   HASBRO, INC.

                                   By:
                                      -----------------------------------------
                                      Name:
                                      Title:

                                   HASBRO SA

                                   By:\s\ T. Paine
                                      -----------------------------------------
                                      Name:    T. Paine
                                      Title:   Director

                                   By:
                                      -----------------------------------------
                                      Name:
                                      Title:

                                    Page 122
<Page>

                                   FLEET NATIONAL BANK, individually
                                   and as Agent

                                   By:\s\ Kenneth S. Struglia
                                      -----------------------------------------
                                      Name: Kenneth S. Struglia
                                      Title:   Director

                                    Page 123
<Page>

                                   CITICORP USA, INC.

                                   By:\s\ Sandy Salgado
                                      -----------------------------------------
                                      Name: Sandy Salgado
                                      Title:   Director

                                    Page 124
<Page>

                                   COMMERZBANK A.G. NEW YORK AND GRAND
                                   CAYMAN BRANCHES

                                   By:\s\ Robert S. Taylor, Jr.
                                      -----------------------------------------
                                      Name: Robert S. Taylor, Jr.
                                      Title: Senior Vice President

                                   By:\s\ Andrew P. Lusk
                                      -----------------------------------------
                                      Name: Andrew P. Lusk
                                      Title: Vice President

                                    Page 125
<Page>

                                   CITIZENS BANK OF MASSACHUSETTS

                                   By:\s\ Stephanie Epkins
                                      -----------------------------------------
                                      Name: Stephanie Epkins
                                      Title: Vice President

                                    Page 126
<Page>

                                   BANK OF AMERICA, N.A.

                                   By:\s\ Casey Cosgrove
                                      -----------------------------------------
                                      Name: Casey Cosgrove
                                      Title: Vice President

                                    Page 127
<Page>

                                   SCOTIABANK INC.

                                   By:\s\ William E. Zarrett
                                      -----------------------------------------
                                      Name: William E. Zarrett
                                      Title: Managing Director

                                    Page 128
<Page>

                                   BARCLAYS BANK PLC

                                   By:\s\ V. Muldoon
                                      -----------------------------------------
                                      Name:    V. Muldoon
                                      Title: Relationship Director

                                    Page 129
<Page>

                                   BNP PARIBAS

                                   By:\s\ Bruno Lavole
                                      -----------------------------------------
                                      Name:    Bruno Lavole
                                      Title:   Head of Large Corporates

                                   By:\s\ Christopher Criswell
                                      -----------------------------------------
                                      Name: Christopher Criswell
                                      Title: Managing Director

                                    Page 130
<Page>

                                   MELLON BANK, N.A.

                                   By:\s\ J. Wade Bell
                                      -----------------------------------------
                                      Name:  J. Wade Bell
                                      Title: Vice President

                                    Page 131
<Page>

                                   SCHEDULE 1

                  BANK COMMITMENTS, AND COMMITMENT PERCENTAGES

                                    Page 132
<Page>

<Table>
<Caption>
                              Final Allocation           of Total Commitments
<S>                               <C>                        <C>
Fleet Bank                         60,000,000                 17.14285714286%
Citicorp                           50,000,000                 14.28571428571%
Commerzbank                        50,000,000                 14.28571428571%
Citizens                           40,000,000                 11.42857142857%
Bank of America                    30,000,000                  8.57142857143%
Bank of Nova Scotia                30,000,000                  8.57142857143%
Barclays                           30,000,000                  8.57142857143%
BNP Paribas                        30,000,000                  8.57142857143%
Mellon                             30,000,000                  8.57142857143%

Total                             350,000,000                100.00000000000%
</Table>

                                    Page 133
<Page>

                                   SCHEDULE 2

             INDICATIVE TERMS OF PERMITTED RECEIVABLES TRANSACTIONS

Transaction Summary:       The Company may establish, directly or
                           indirectly, one or more special purpose, bankruptcy
                           remote corporations, limited liability companies,
                           trusts or other entities (collectively, the
                           "Receivables Company") that will purchase, acquire by
                           contribution, pledge or otherwise finance the
                           acquisition of all or a designated portion of the
                           trade account receivables, together with any assets,
                           interests or rights related to such receivables
                           (collectively, the "Receivables"), generated by the
                           Company and its Subsidiaries. The purchases,
                           contributions or financings of the Receivables by the
                           Receivables Company will be financed in part by the
                           creation of a receivables facility, with or without
                           external credit enhancement, in which ownership
                           interests in, or notes, commercial paper,
                           certificates or other instruments secured by or
                           representing, directly or indirectly, beneficial
                           interests in the Receivables (such ownership
                           interests, notes, commercial paper, certificates or
                           instruments, the "Receivables Securities") will be
                           sold in one or more registered public offerings,
                           private placements, or other available capital
                           markets transactions by the Receivables Company or
                           another entity.

Limited Recourse:          The transfer or pledge of Receivables by
                           the Company and any applicable Subsidiaries to the
                           Receivables Company will be made with limited
                           recourse; provided that the Company and any
                           applicable Subsidiaries may be liable under the
                           definitive documentation for the creation and
                           issuance of the Receivables Securities (the
                           "Receivables Facility Documents") for customary
                           recourse events, and in any event may be liable for
                           (a) the breach of certain representations and
                           warranties (consistent with similar financing
                           transactions of this type) set forth therein, (b) the
                           aggregate amount of any dilution with respect to any
                           transferred or pledged Receivables, (c) its other
                           agreements and obligations (consistent with similar
                           financing transactions of this type) under the.
                           Receivables Facility Documents, (d) any obligations
                           incurred in respect of any underwriting or placement
                           agency agreements entered into in connection with the
                           offering of the Receivables Securities, (e) its

                                    Page 134
<Page>

                           servicing obligations and (f) customary
                           indemnification and repurchase provisions.

                                    Page 135
<Page>

                                  SCHEDULE 8.7

                           TITLE TO PROPERTIES; LEASES

On October 28, 2003, Hasbro, Inc. and its affiliates transferred (i) all of the
outstanding shares of capital stock of Wow Wee Limited, and certain intellectual
property related to WowWee's business, to Power Assets Pacific Limited; and (ii)
all of the outstanding shares of capital stock of WowWee Group Company to PRY
Holdings Inc.

                                    Page 136
<Page>

                                  SCHEDULE 8.11

                                   LITIGATION

NONE.

                                    Page 137
<Page>

                                  SCHEDULE 8.22

                            ENVIRONMENTAL COMPLIANCE

     Below are listed material matters as to which the Company does not possess
sufficient information to calculate future costs, if any, which it may incur:

1.   Acme Solvents Reclaiming, Inc., Rockford, IL. In 2000, one potentially
     responsible party ("PRP") under the federal superfund statute, 42 U.S.C.
     ss.9601 et seq., asserted general claims against other PRPs, including the
     Company, based upon their status as PRPs at an operationally related site.
     Illinois EPA has asserted claims for approximately $100,000 in past costs
     at this newly-identified site. Future costs, if any, have not been
     determined. The Company's share of liability at the new site has been
     assessed by the PRP Group at 1.875 percent.

2.   Volney Landfill Superfund Site, Oswego, NY. In 1998, the Company settled
     its liability with respect to operable unit one ("OU-1") of the cleanup at
     this Site for less than $15,000, including claims for Natural Resource
     Damages by EPA, based on a total cleanup cost for OU-1 of approximately $7
     million. Costs for the OU-2 remedy have not yet been determined.

3.   Skinner Landfill Superfund Site, West Chester, OH. Kenner has not been
     officially named as a PRP at this Site. However, the PRP group requested
     Kenner to participate in 1998 and Kenner declined. As yet, there has been
     no further communication from EPA or the PRP group. Total costs of cleanup
     at the Site are unknown.

     In addition to the foregoing, the Company and/or its subsidiaries have over
the course of the past 15 years been identified as PRPs or otherwise been
involved in the investigation and/or cleanup of other state and federal
superfund sites. The company has no reason to believe that either individually
or in the aggregate its involvement in these other matters will have a Material
Adverse Effect.

                                    Page 138
<Page>

                                  SCHEDULE 8.23

                                  SUBSIDIARIES

     See Exhibit 21 to the Form 10-K, which Exhibit 21 is attached hereto.

                                    Page 139
<Page>

EX-21 8 a2105770zex-21.htm EXHIBIT 21
QuickLinks -- Click here to rapidly navigate through this document

                                                                      EXHIBIT 21

                          HASBRO, INC. AND SUBSIDIARIES
                       Subsidiaries of the Registrant (a)

<Table>
<Caption>
                NAME UNDER WHICH SUBSIDIARY                            STATE OR OTHER JURISDICTION OR
                     DOES BUSINESS                                     INCORPORATION OR ORGANIZATION
------------------------------------------------------------------     -------------------------------
<S>                                                                    <C>
Hasbro International, Inc.                                             Delaware
     Hasbro France S.A.S                                               France
         Hasbro Deutschland GmbH                                       Germany
     Hasbro Italy S.r.l.                                               Italy
     Hasbro Latin America Inc.                                         Delaware
         Hasbro Chile LTDA                                             Chile
         Hasbro Latin America, L.P.                                    Delaware
     Hasbro S.A.                                                       Switzerland
         Hasbro holdings S.A.                                          Switzerland
            Hasbro Canada Corporation / Corporation                    Nova Scotia
            Hasbro Canada
         Hasbro Asia-Pacific Marketing Ltd.                            Hong Kong
              Tiger Electronics Far East Services, Limited             Hong Kong
         Hasbro de Mexico S.R.L.de C. V.                               Mexico
         Hasbro (Schweiz) AG                                           Switzerland
         Hasbro U.K. Limited                                           United Kingdom
         Group Grosvenor Plc.                                          United Kingdom
         MB International B.V.                                         The Netherlands
              Hasbro B.V.                                              The Netherlands
              Hasbro Hellas Industrial & Commercial                    Greece
              Company S.A.
              Hasbro Toys & Games Holdings, S.L.                       Spain
                 Hasbro Iberia SL                                      Spain
              MB Espana, SA.                                           Spain
              S.A. Hasbro N. V.                                        Belgium
              Hasbro InterToy Eqitim Araclari Sanayi Ve                Turkey
              Ticaret A.S.
         Hasbro Far East LTD                                           Hong Kong
              Tiger Electronics Far East, Limited                      Hong Kong
              WowWee Limited                                           Hong Kong
         Has Aust Pty Ltd                                              Australia
              Hasbro Australia Limited                                 Australia
         Wizards of the Coast, Belgium                                 Belgium
         Wizards of the Coast, UK Limited                              United Kingdom
     Hasbro Ireland Limited                                            Ireland
     Palmyra Holdings Pte Ltd.                                         Singapore
Hasbro Managerial Services, Inc.                                       Rhode Island
Wizards of the Coast, Inc.                                             Washington
     Wizards of the Coast, Italia Sr.l.                                Italy
     Wizards of the Coast, France                                      Franc
</Table>

                                    Page 140
<Page>

<Table>
     <S>                                                               <C>
     Wizards of the Coast Retail, Inc.                                 Washington
</Table>

----------------------------
(a)  Inactive subsidiaries and subsidiaries with minimal operations have been
     omitted. Such subsidiaries, if taken as a whole, would not constitute a
     significant subsidiary.

QuickLinks

    HASBRO. INC. AND SUBSIDIARIES Subsidiaries of the Registrant(a)

                                    Page 141
<Page>

                                  SCHEDULE 10.1

                              EXISTING INDEBTEDNESS

AMOUNTS SHOWN FOR EXTERNAL SHORT-TERM FACILITIES ARE THE MAXIMUM THAT MAY BE
OUTSTANDING FROM TIME TO TIME. AMOUNTS SHOWN ARE IN US DOLLARS OR THEIR US
DOLLAR EQUIVALENTS.

<Table>
     <S>                              <C>                            <C>                                <C>           <C>
          Company/Borrower                   Counterparty                  Type/Description                Amount     Maturity Date
           Hasbro Belgium                        CBC                 External Short-Term Facility        4,390,000
            Hasbro Chile                  Banco de Santander         External Short-Term Facility        1,701,000
            Hasbro Chile                       Security              External Short-Term Facility          813,000
            Hasbro Chile                      Bank Bice              External Short-Term Facility          783,000
          Hasbro Far East*            Prior Owners of Grosvenor              Notes Payable               2,356,000       Various
           Hasbro France                   Credit Lyonnais           External Short-Term Facility        2,095,000
           Hasbro France                   Societe Generale          External Short-Term Facility        6,887,000
           Hasbro Greece               National Bank of Greece       External Short-Term Facility        1,722,000
         Hasbro Hong Kong*                       HSBC                External Short-Term Facility        5,547,000
           Hasbro Ireland                 Allied Irish Bank          External Short-Term Facility          365,000
          Hasbro Israel *                     Bank Leumi             External Short-Term Facility        2,000,000
          Hasbro Israel *             First Int'l Bank of Israel     External Short-Term Facility        1,000,000
          Hasbro Portugal                Banco Bilbao Vizcaya        External Short-Term Facility          172,000
            Hasbro SA *                          UBS                 External Short-Term Facility        2,234,000
     Hasbro Spain Manufacturing               Bankinter                   Capitalized Leases            11,508,000      10/1/2014
     Hasbro Spain Manufacturing                Bancaja               External Short-Term Facility        2,759,000
     Hasbro Spain Manufacturing          Banco Bilbao Vizcaya        External Short-Term Facility        2,759,000
     Hasbro Spain Manufacturing           Banco de Santander         External Short-Term Facility          690,000
     Hasbro Spain Manufacturing               Bankinter              External Short-Term Facility        2,070,000
        Hasbro Spain Selling                  Bankinter                   Capitalized Leases             7,889,000      10/1/2014
</Table>

The amount of Indebtedness listed next to each external short-term facility
listed above is the maximum principal amount permitted to be outstanding from
time to time under such facility, and the amount thereof incurred under such
revolving facility from time to time is deemed to be Indebtedness incurred in
compliance with section 10.1(g) of the Credit Agreement to which this Schedule
10.1 is attached.

*Guaranteed by Hasbro, Inc.

                                    Page 142
<Page>

                                  SCHEDULE 10.2

                                 EXISTING LIENS

1.       Obligations under the Patent License Agreement dated as of 12/23/98 by
         and between Hasbro, Inc. and Fleet Capital Corporation.

2.       Obligations under the Patent License Agreement dated as of 6/28/02 by
         and between Hasbro, Inc. and Fleet Capital Corporation.

3.       Obligations under the Trademark and Copyright License Agreement dated
         as of 8/26/03 by and between Hasbro, Inc. and Fleet Capital
         Corporation.

4.       Liens pursuant to or under (a) the Contribution Agreement entered on
         December 6, 2000, by and among the Company, Hasbro U.K. Limited, Hasbro
         Internet Holdings, Inc. and Infogrames Entertainment SA ("Infogrames")
         and (b) the Warrant Agreement entered into between the Company and
         Infogrames on January 26, 2001, in each case relating to the Capital
         Stock of Infogrames.

5.       The Company, Hasbro Internet Holdings, Inc. and Hasbro U.K. Limited
         (together the "Sellers") entered into a Settlement Agreement with
         Infogrames Entertainment SA ("Infogrames") effective as of December 20,
         2001 (the "Settlement Agreement"). The Settlement Agreement provides
         Infogrames with a right of first refusal on any sale or other transfer
         by the Sellers of any Retained Shares (as defined in the Settlement
         Agreement) of Infogrames stock to a non-Affiliate of Hasbro.

6.       Each of the filings listed on Exhibit A attached hereto.

                                    Page 143
<Page>

                                                        Exhibit A

   DEBTOR: HASBRO, INC.

<Table>
<Caption>
  Secured Party                         Jurisdiction     File Number      Date Filed      Collateral
  <S>                                   <C>              <C>              <C>             <C>
-----------------------------------------------------------------------------------------------------------------------
  Winthrop Resources Corporation        SOS, CA          9927060163       9/17/99         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
                                                         9927060168       9/17/99         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                SOS, MA          583169           10/13/98        Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Pitney Bowes Credit Corporation                        593464           11/27/98        All equipment manufactured, sold or
                                                                                          distributed by Pitney Bowes Credit Inc.,
                                                                                          Monarch Marketing Systems, Inc, Pitney
                                                                                          Bowes Credit Corp, and Dictaphone Corp.,
                                                                                          subject to lease dated 9/23/98 between
                                                                                          debtor and secured party
-----------------------------------------------------------------------------------------------------------------------
  Newcourt Communications                                657749           9/1/99          Specific leased equipment
  Financing Corporation
-----------------------------------------------------------------------------------------------------------------------
                                                         99657749         9/1/00          Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Bank One, N.A.                                         669920           10/25/99        Specific leased equipment (true
                                                                                          lease-filed for precautionary purposes)
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing, Inc.                         732696           7/25/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Newcourt Communications                                734982           8/3/00          Specific leased equipment
  Financing Corporation
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                      20010307164      6/11/01
                                        0
-----------------------------------------------------------------------------------------------------------------------
  Pitney Bowes Credit Corporation                        20020939564      2/25/02         Specific equipment
                                        0
-----------------------------------------------------------------------------------------------------------------------
  Newcourt Communications               East             152              8/7/00          Specific leased equipment
  Finance Corporation as Lessor         Longmeadow
                                        Town, MA
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                SOS, OH          AN83810          7/23/97         Specific leased equipment
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  Tokai Financial Services, Inc.                         AP0045826        4/16/98         Specific leased equipment-true lease.
                                                                                          Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
  Bank One, N.A.                                         AP0100866        10/26/98        Specific leased equipment-true lease.
                                                                                          Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
                                                         AP0108004        12/16/98        Specific leased equipment-true lease.
                                                                                          Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
                                                         AP0190089        10/25/99        Specific leased equipment-true lease.
                                                                                          Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                    Page 144
<Page>

<Table>
  <S>                                   <C>              <C>              <C>             <C>
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          AP0247853        6/14/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
                                                         AP025744         7/24/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
                                                         AP0254457        7/11/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Copelco Capital Inc.                  SOS, RI          659691           12/2/96         Specific Equipment (copy machines). True
                                                                                          lease. Filed for precautionary purposes
                                                                                          only
-----------------------------------------------------------------------------------------------------------------------
  Receivable Capital Corporation                         660728           12/27/96        Certain accounts of other amounts owed by
                                                                                          certain obligors identified in the
                                                                                          Receivables Purchase Agreement dated
                                                                                          12/24/96
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                                 661519           1/14/97         Specific leased equipment
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                                 667574           6/19/97         Specific leased equipment
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                                 668932           7/21/97         Specific leased equipment
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                                 673094           11/10/97        Specific leased equipment
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                                 674427           12/17/97        Specific leased equipment
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                                 675426           1/12/98         Specific leased equipment
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                                 681834           6/16/98         Specific leased equipment
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit                                 686721           10/13/91        Specific leased equipment
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                      687328           10/27/98        Specific leased equipment-true lease.
                                                                                          Filed for precautionary purposes only
-----------------------------------------------------------------------------------------------------------------------
                                                                          6//11/01
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                      689630           12/21/98        Specific leased equipment-true lease.
-----------------------------------------------------------------------------------------------------------------------
                                                                          6/11/01
----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                      703538           10/26/99        Specific leased equipment-true lease.
-----------------------------------------------------------------------------------------------------------------------
                                                                          6/11/01
-----------------------------------------------------------------------------------------------------------------------
  Pitney Bowes Credit Corporation                        688757           11/27/98        All equipment manufactured, sold or
                                                                                          distributed by Pitney Bowes Credit Inc.,
                                                                                          Monarch Marketing Systems, Inc, Pitney
                                                                                          Bowes Credit Corp, and Dictaphone Corp.,
</Table>

                                    Page 145
<Page>

<Table>
  <S>                                                    <C>              <C>             <C>
                                                                                          subject to lease dated 9/23/98 between
                                                                                          debtor and secured art
-----------------------------------------------------------------------------------------------------------------------
                                                         677145           2/27/98         All equipment manufactured, sold or
                                                                                          distributed by Pitney Bowes Credit Inc.,
                                                                                          Monarch Marketing Systems, Inc, Pitney
                                                                                          Bowes Credit Corp, and Dictaphone Corp.,
                                                                                          subject to lease dated 11/19/97 between
                                                                                          debtor and secured
-----------------------------------------------------------------------------------------------------------------------
  3D Capital Coporation                                  694615           4/12/99         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          713306           5/31/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          713307           5/31/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          713308           5/31/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          714052           6/19/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          714053           6/19/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          715277           7/14/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          715720           7/25/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          716537           8/15/00         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          720064           10/30/00        Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc.                          723546           1/22/01         Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  IBM Credit Corporation                                 720332           11/29/00        Specific equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing Inc                           723546           1/22/01         Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing, Inc.                         727093           4/9/01          Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing, Inc.                         727094           4/9/01          Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Dell Financial Services, LP                            727480           4/19/01         Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing, Inc.                         728326           5/8/01          Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                         728482           5/14/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  IBM Credit Corporation                                 728710           5/18/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Heller Financial Leasing, Inc.                         729377           6/4/2001        Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Winthrop Resources Corporation                         001625           8/27/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                      002950           10/9/2001.      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                    Page 146
<Page>

<Table>
  <S>                                                     <C>             <C>             <C>
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       002963          10/9/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       002964          10/9/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       002965          10/9/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       002966          10/9/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       002983          10/9/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       002984          10/9/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Wells Fargo Equipment Finance, Inc.                     003859          11/7/2001       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Wells Fargo Equipment Finance, Inc.                     003860          11/31/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  BankOne, N.A.                                           003983          11/13/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
                                                                          12/17/2001
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       003983          11/13/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       003983          11/13/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       003983          11/13/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       003983          11/13/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Summit Funding Group, Inc.                              003991          11/13/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Summit Funding Group, Inc.                              004210          11/20/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Summit Funding Group, Inc.                              004405          11/29/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       004887          12/17/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Summit Funding Group, Inc.                              004888          12/17/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Summit Funding Group, Inc.                              004897          12/17/2001      Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Citizens Leasing Corporation                            005668          1/9/2002        Leased equipment
-----------------------------------------------------------------------------------------------------------------------
                                                          010968          6/14/2002
-----------------------------------------------------------------------------------------------------------------------
  Summit Funding Group, Inc.                              005868          1/15/2002       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                          006163          1/24/2002       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Citizens Leasing Corporation                            006222          1/28/2002       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
                                                          010970          6/14/2002
-----------------------------------------------------------------------------------------------------------------------
  Citizens Leasing Corporation                            006226          1/28/2002       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
                                                          010969          6/14/2002
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                    Page 147
<Page>

<Table>
<S>                                                       <C>             <C>             <C>
-----------------------------------------------------------------------------------------------------------------------
  Citizens Leasing Corporation                            006589          2/8/2002        Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Citizens Leasing Corporation                            006590          2/8/2002        Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Pitney Bowes Credit Corporation                         007112          2/25/2002       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Pullman Bank & Trust                                    007328          3/4/2002        Computer hardware equipment lease
-----------------------------------------------------------------------------------------------------------------------
                                                          008745          4/3/2002
-----------------------------------------------------------------------------------------------------------------------
                                                          009081          4/22/2002
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing                                             007818          3/18/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing                                             007819          3/18/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  General Electric Capital Corporation                    007833          3/18/2002       Computer hardware equipment lease
-----------------------------------------------------------------------------------------------------------------------
                                                          012578          8/6/2002
-----------------------------------------------------------------------------------------------------------------------
  Fleet National Bank, as Agent                           008050          3/25/2002       All Assets
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                          008367          4/1/2002        Leased equipment subject to the terms and
                                                                                          conditions of Schedule 58 dated 4/28/1998
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                          009319          4/29/2002       Leased equipment subject to the terms and
                                                                                          conditions of Schedule 65 dated
                                                                                          6/22/1999
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                          009320          4/29/2002       Leased equipment subject to the terms and
                                                                                          conditions of Schedule 59 dated 4/28/1998
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       009730          5/10/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       009731          5/10/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  Winthrop Resources Corporation                          010934          6/17/2002       Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  General Electric Capital Corporation                    011548          7/3/2002        Leased equipment
-----------------------------------------------------------------------------------------------------------------------
                                                          011579          8/6/2002
-----------------------------------------------------------------------------------------------------------------------
  General Electric Capital Corporation                    011550          7/3/2002        Leased equipment
-----------------------------------------------------------------------------------------------------------------------
                                                          012577          8/6/2002
-----------------------------------------------------------------------------------------------------------------------
  The CIT Group/Commercial Services,                      012305          7/26/2002       All present and future accounts arising
  Inc.                                                                                    from debtors sales of goods or
                                                                                          performance of services to WART
                                                                                          Corporation and related instruments
                                                                                          documents and chattel paper.
-----------------------------------------------------------------------------------------------------------------------
  Winthrop Resources Corporation                          012482          8/2/2002        Leased equipment
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                    Page 148
<Page>

<Table>
<S>                                                       <C>             <C>             <C>
-----------------------------------------------------------------------------------------------------------------------
  Winthrop Resources Corporation                          012482          8/2/2002        Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Winthrop Resources Corporation                          012482          8/2/2002        Leased equipment
-----------------------------------------------------------------------------------------------------------------------
  General Electric Capital                                012577          8/6/2002        Copy missing?
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       012894          8/19/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       012985          8/19/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       012896          8/19/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       012897          8/19/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       012898          8/19/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       012899          8/19/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       012900          8/19/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  NCP Leasing, Inc.                                       012901          8/19/2002       Computer equipment lease
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                          013984          9/26/2002       Leased equipment subject to the terms and
                                                                                          conditions of Schedule 47 dated 9/9/1996
-----------------------------------------------------------------------------------------------------------------------
  De Lage Landen Financial                                016380          12/23/2002      Equipment lease
  Services, Inc.
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                          016948          1/9/2003        Leased equipment subject to the terms and
                                                                                          conditions of Schedule 53 dated 9/15/1997
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                          016949          1/9/2003        Leased equipment subject to the terms and
                                                                                          conditions of Schedule 73 dated 3/18/2000
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                          016950          1/9/2003        Leased equipment subject to the terms and
                                                                                          conditions of Schedule 59 dated 4/28/1998
-----------------------------------------------------------------------------------------------------------------------
  De Lage Landen Financial                                019253          3/17/2003        Equipment lease
  Services, Inc.
-----------------------------------------------------------------------------------------------------------------------
  IBM Credit LLC                                          019683          3/31/2003       Computer equipment lease (software)
-----------------------------------------------------------------------------------------------------------------------
  Comdisco, Inc.                                          019712          3/31/2003       Leased equipment subject to the terms and
                                                                                          conditions of Schedule 49 dated
                                                                                          2/20/1997
-----------------------------------------------------------------------------------------------------------------------
  De Lage Landen Financial                                020460          4/17/2003       Equipment lease
  Services Inc.
-----------------------------------------------------------------------------------------------------------------------
  First Bank of Highland Park                             023140          7/1/2003        Equipment lease
-----------------------------------------------------------------------------------------------------------------------
                                                          024140          7/28/2003
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                    Page 149
<Page>

<Table>
<S>                                                       <C>              <C>            <C>
-----------------------------------------------------------------------------------------------------------------------
  First Bank of Highland Park                             023145          7/11/2003       Equipment lease
-----------------------------------------------------------------------------------------------------------------------
                                                          024133          7/28/2003
-----------------------------------------------------------------------------------------------------------------------
  Nextiraone LLC                                          025114          8/25/2003       Equipment lease
-----------------------------------------------------------------------------------------------------------------------
  IBM Credit LLC                                          20030075467     9/29/2003       Computer equipment lease (software)
                                                          0
-----------------------------------------------------------------------------------------------------------------------
  Fleet Capital Corporation                               027044          10/23/2003      US Patents
-----------------------------------------------------------------------------------------------------------------------
  Fleet Capital Corporation                               027045          10/23/2003      US Trademarks
-----------------------------------------------------------------------------------------------------------------------
  KBA North America Inc.,                                 20030075652     10/27/2003      Equipment lease
  Sheetfed Division                                       0
-----------------------------------------------------------------------------------------------------------------------
  Winthrop Resources Corporation                          2001-176-0287   6/25/01         Leased equipment
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                    Page 150
<Page>

 DEBTOR: WIZARDS OF THE COAST, INC.

<Table>
<S>                                      <C>              <C>              <C>            <C>
  Secured Party                          Jurisdiction     File Number      Date Filed     Collateral
-----------------------------------------------------------------------------------------------------------------------
  Panasonic                              SOS, CA          0018860593       6/29/00        Specific leased equipment (copy machine)
  Communications
  Assignee: Fleet Leasing
  Corporation
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation            SOS, TX          98-143791        7/14/98        Specific equipment
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             98-207543        10/15/98       Specific equipment (forklift)
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             98-236230        11/30/98       Specific equipment
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             99-120357        6/14/99        Specific equipment
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             00-447675        3/6/00         Specific lease equipment (filed for
                                                                                          precautionary purposes only)
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             00-618915        11/2/00        Specific lease equipment (filed for
                                                                                          precautionary purposes only)
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             00-632274        11/27/00       Specific equipment
-----------------------------------------------------------------------------------------------------------------------
  A.C.S.S. Dallas Industrial, Inc                         01-034797        2/22/01        Goods, inventory, equipment, fixtures
                                                                                          situated on or related to Tenants use
                                                                                          of the Premises
-----------------------------------------------------------------------------------------------------------------------
  A.C.S.S. Dallas Industrial, Inc                         01-034857        2/22/01        Goods, inventory, equipment, fixtures
                                                                                          situated on or related to Tenants use
                                                                                          of the Premises
-----------------------------------------------------------------------------------------------------------------------
  Fuji Photo Film USA, Inc.              DOL, WA          95-181-0133      6/30/95        Specific equipment
-----------------------------------------------------------------------------------------------------------------------
                                                          2000-014-0141    1/14/00
-----------------------------------------------------------------------------------------------------------------------
  Xerox Corp.                                             98-030-0115      1/30/98        Specific equipment (copier)
-----------------------------------------------------------------------------------------------------------------------
  Dana Commercial Credit Corporation                      98-131-0129      5/11/98        Specific leased equipment
-----------------------------------------------------------------------------------------------------------------------
  Fuji Photo Film USA, Inc.                               98-348-0149      12/14/98       Laminator
-----------------------------------------------------------------------------------------------------------------------
  Pitney Bowes Credit Corporation                         99-074-0324      3/15/99        All equipment manufactured, sold or
                                                                                          distributed by Pitney Bowes Credit Inc.,
                                                                                          Monarch Marketing Systems, Inc, Pitney
                                                                                          Bowes Credit Corp, and Dictaphone Corp.,
                                                                                          subject to lease dated 12/16/98 between
                                                                                          debtor and secured party
-----------------------------------------------------------------------------------------------------------------------
  Dupont Color Proofing                                   99-203-0082      7/22/99        Waterproof Washoff Unit, Waterproof
                                                                                          laminator
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                    Page 151
<Page>

<Table>
<S>                                                       <C>              <C>            <C>
-----------------------------------------------------------------------------------------------------------------------
  West Coast Retail                                       2001-036-0148    2/25/01        Specific equipment
-----------------------------------------------------------------------------------------------------------------------
  Kodak Polychrome Graphics                               2001-127-0028    5/7/01         Laminator
-----------------------------------------------------------------------------------------------------------------------
  Fleet National Bank, as Agent                           2002-092-6427    3/22/2002      All Assets
-----------------------------------------------------------------------------------------------------------------------
  THE CIT                                                 2002-207-6584    7/26/2002      All present and future accounts arising
  Group/Commercial Services, Inc.                                                         from debtors sales of goods or performance
                                                                                          of services to KMART Corporation and
                                                                                          related instruments documents and chattel
                                                                                          paper...
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             2003-100-0374    4/7/2003       (2) Raymond Reach with batteries and
                                                                                          chargers
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             2003-175-3628    6/20/2003      Exides Lease
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             2003-175-3723    6/20/2003      Exides Lease
-----------------------------------------------------------------------------------------------------------------------
  Raymond Leasing Corporation                             2003-175-3724    6/20/2003      Exides Lease
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                    Page 152
<Page>

  DEBTOR:  ODDZON, INC.

<Table>
<Caption>
  Secured Party                          Jurisdiction     File Number      Date Filed     Collateral
-----------------------------------------------------------------------------------------------------------------------
  <S>                                    <C>              <C>              <C>            <C>
                                         SOS, CA          0027061080       9/19/00        state tax lien $133,719.34-Employment
                                                                                          Development department
-----------------------------------------------------------------------------------------------------------------------
  THE CIT                                                 2184763-5        7/26/2002      All present and future accounts arising
  Group/Commercial                                                                        from debtors sales of goods or performance
  Services, Inc.                                                                          of services to WART Corporation and
                                                                                          related instruments documents and chattel
                                                                                          paper...
-----------------------------------------------------------------------------------------------------------------------
</Table>

DEBTOR: TIGER ELECTRONICS, LTD.

<Table>
<Caption>
  Secured Party                          Jurisdiction     File Number      Date Filed     Collateral
-----------------------------------------------------------------------------------------------------------------------
  <S>                                    <C>              <C>              <C>            <C>
  MBS Business Systems                   SOS, IL          4302675          11/30/00       Specific equipment (copy machine)
-----------------------------------------------------------------------------------------------------------------------
                                         SOSs, RI
-----------------------------------------------------------------------------------------------------------------------
                                         SOS, WA
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                    Page 153
<Page>

                                 SCHEDULE 10.12

                        RESTRICTIONS ON NEGATIVE PLEDGES

1.       The Company, Hasbro Internet Holdings, Inc. and Hasbro U.K. Limited
         (together the "Sellers") entered into a Settlement Agreement with
         Infogrames Entertainment SA ("Infogrames") effective as of December 20,
         2001 (the "Settlement Agreement"). The Settlement Agreement provides
         Infogrames with a right of first refusal on any sale or other transfer
         by the Sellers of any Retained Shares (as defined in the Settlement
         Agreement) of Infogrames stock to a non-Affiliate of Hasbro.

2.       Two indentures of the Company provide, with certain exceptions and
         subject to a basket equal to the greater of 10% of consolidated net
         tangible assets (as defined in the indentures) or $100,000,000, that
         neither the Company nor any subsidiary may create, incur, assume or
         guarantee any Secured Debt without equally and ratably securing the
         outstanding securities under the indentures. In both indentures,
         Secured Debt is defined as follows:

         "Secured Debt" means indebtedness for money borrowed by the Company or
         its Subsidiaries (other than indebtedness owed by a Subsidiary to the
         Company, by a Subsidiary to another Subsidiary or by the Company to a
         Subsidiary), which in any case is secured, whether by operation of law
         or otherwise, by a mortgage, security interest, pledge, lien or other
         encumbrance on Principal Property or on any shares of stock or
         evidences of indebtedness of a Subsidiary. If any amount of such
         indebtedness described in the parenthetical in the preceding sentence
         and held by the Company or a Subsidiary is transferred in any manner to
         any Person other than the Company or a Subsidiary, such amount shall be
         deemed to be Secured Debt issued on the date of transfer.

         In both indentures, "Principal Property" is defined as follows:

         "Principal Property" means any real property, any manufacturing, plant,
         warehouse, office building or other physical facility or other like
         depreciable physical asset of the Company or of any Subsidiary whether
         owned on the date hereof or hereafter acquired having a net book value
         at the time of determination in excess of the greater of 5% of
         Consolidated Net Tangible Assets or $50 million, other than, in each
         case, any of the same which in the good faith opinion of the Board of
         Directors is not of material importance to the total business conducted
         by the Company and its Subsidiaries, as a whole.

                                    Page 154

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]