Exhibit 10.1

EXECUTION COPY

 

 

 

$50,000,000

CREDIT AGREEMENT

Dated as of January 5, 2017

Among

CLAIRE’S (GIBRALTAR) INTERMEDIATE HOLDINGS LIMITED

and CLAIRE’S GERMANY GMBH

as Borrowers,

CLAIRE’S SWITZERLAND GMBH

CLAIRE’S FRANCE S.A.S.

CLAIRE’S ACCESSORIES UK LTD

CLAIRE’S ACCESSORIES SPAIN, S.L.

CLAIRE’S HOLDINGS S.A. R.L.

CLAIRE’S HOLDING GMBH

CLAIRE’S LUXEMBOURG S.A. R.L.

CLAIRE’S EUROPEAN DISTRIBUTION LIMITED

CLAIRE’S EUROPEAN SERVICES LIMITED

CSI LUXEMBOURG S.A. R.L.

and CLAIRE’S FASHION PROPERTY CORP.

as Guarantors,

THE LENDERS PARTY HERETO,

BOTTICELLI LLC,

as Administrative Agent

and

CORTLAND CAPITAL MARKET SERVICES LLC,

as Collateral Agent

 

 

 

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TABLE OF CONTENTS

 

     Page  

ARTICLE I. Definitions

     2   

SECTION 1.01

 

Defined Terms

     2   

SECTION 1.02

 

Terms Generally

     37   

SECTION 1.03

 

Luxembourg Terms

     38   

SECTION 1.04

 

French Terms

     39   

ARTICLE II. The Credits

     39   

SECTION 2.01

 

Commitments

     39   

SECTION 2.02

 

[Reserved]

     39   

SECTION 2.03

 

[Reserved]

     40   

SECTION 2.04

 

Procedure for Borrowing

     40   

SECTION 2.05

 

[Reserved]

     40   

SECTION 2.06

 

[Reserved]

     40   

SECTION 2.07

 

[Reserved]

     40   

SECTION 2.08

 

[Reserved]

     40   

SECTION 2.09

 

Repayment of Loans; Evidence of Debt

     40   

SECTION 2.10

 

Fees

     41   

SECTION 2.11

 

Prepayment of Loans

     41   

SECTION 2.12

 

Additional Interest

     42   

SECTION 2.13

 

Interest

     42   

SECTION 2.14

 

[Reserved]

     43   

SECTION 2.15

 

[Reserved]

     43   

SECTION 2.16

 

[Reserved]

     43   

SECTION 2.17

 

Taxes

     43   

SECTION 2.18

 

Payments Generally; Pro Rata Treatment; Sharing of Setoffs

     46   

SECTION 2.19

 

Mitigation Obligations; Replacement of Lenders

     47   

ARTICLE III. Representations and Warranties

     48   

SECTION 3.01

 

Organization; Powers

     48   

SECTION 3.02

 

Authorization

     49   

SECTION 3.03

 

Enforceability

     49   

 

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TABLE OF CONTENTS

(continued)

 

     Page  

SECTION 3.04

 

Governmental Approvals

     49   

SECTION 3.05

 

Financial Statements

     50   

SECTION 3.06

 

Subsidiaries

     50   

SECTION 3.07

 

Litigation; Compliance with Laws

     50   

SECTION 3.08

 

Investment Company Act

     51   

SECTION 3.09

 

Use of Proceeds

     51   

SECTION 3.10

 

Tax Returns

     51   

SECTION 3.11

 

Employee Benefit Plans

     51   

SECTION 3.12

 

Labor Matters

     51   

SECTION 3.13

 

Insurance

     52   

SECTION 3.14

 

No Default

     52   

SECTION 3.15

 

Intellectual Property; Licenses, Etc.

     52   

SECTION 3.16

 

Anti-Money Laundering and Economic Sanctions Laws

     52   

SECTION 3.17

 

Anti-corruption Laws

     53   

SECTION 3.18

 

Federal Reserve Regulations

     53   

SECTION 3.19

 

Solvency

     54   

SECTION 3.20

 

Disclosure

     54   

SECTION 3.21

 

Security Interest in Collateral

     54   

SECTION 3.22

 

Compliance with Swiss Non-Bank Rules

     55   

SECTION 3.23

 

Financial Assistance

     55   

SECTION 3.24

 

Centre of Main Establishments

     55   

ARTICLE IV. Conditions of Lending

     56   

SECTION 4.01

 

Closing Date

     56   

ARTICLE V. Affirmative Covenants

     59   

SECTION 5.01

 

Existence; Businesses and Properties

     59   

SECTION 5.02

 

Insurance

     60   

SECTION 5.03

 

Taxes

     60   

SECTION 5.04

 

Financial Statements, Reports, etc.

     60   

SECTION 5.05

 

Litigation and Other Notices

     62   

SECTION 5.06

 

Compliance with Laws

     62   

 

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TABLE OF CONTENTS

(continued)

 

     Page  

SECTION 5.07

 

Maintaining Records; Access to Properties and Inspections

     62   

SECTION 5.08

 

Use of Proceeds

     62   

SECTION 5.09

 

Fiscal Year; Accounting

     62   

SECTION 5.10

 

Further Assurances; Additional Security

     63   

SECTION 5.11

 

Post Closing Covenant

     64   

SECTION 5.12

 

Cash at CGHL

     64   

SECTION 5.13

 

Compliance with Swiss Non-Bank Rules

     65   

ARTICLE VI. Negative Covenants

     65   

SECTION 6.01

 

Indebtedness

     65   

SECTION 6.02

 

Liens

     69   

SECTION 6.03

 

Sale and Lease Back Transactions

     72   

SECTION 6.04

 

Investments, Loans and Advances

     72   

SECTION 6.05

 

Mergers, Consolidations, Sales of Assets and Acquisitions

     75   

SECTION 6.06

 

Restricted Payments

     78   

SECTION 6.07

 

Transactions with Affiliates

     78   

SECTION 6.08

 

Business of the Borrowers and the Subsidiaries

     80   

SECTION 6.09

 

Limitation on Payments and Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements; etc.

     81   

SECTION 6.10

 

Minimum Cash Balance

     83   

SECTION 6.11

 

Guarantor Coverage; Collateral Coverage

     83   

ARTICLE VII. Events of Default

     84   

SECTION 7.01

 

Events of Default

     84   

ARTICLE VIII. The Administrative Agent

     88   

SECTION 8.01

 

Appointment

     88   

SECTION 8.02

 

Delegation of Duties

     92   

SECTION 8.03

 

Exculpatory Provisions

     92   

SECTION 8.04

 

Reliance by Agents

     93   

SECTION 8.05

 

Notice of Default

     94   

SECTION 8.06

 

Non-Reliance on Agents and Other Lenders

     94   

 

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TABLE OF CONTENTS

(continued)

 

     Page  

SECTION 8.07

 

Indemnification

     95   

SECTION 8.08

 

Agent in Its Individual Capacity

     95   

SECTION 8.09

 

Successor Administrative Agent

     95   

SECTION 8.10

 

Parallel Debt

     96   

SECTION 8.11

 

Withholding Taxes

     97   

ARTICLE IX. Miscellaneous

     97   

SECTION 9.01

 

Notices; Communications

     97   

SECTION 9.02

 

Survival of Agreement

     99   

SECTION 9.03

 

Binding Effect

     99   

SECTION 9.04

 

Successors and Assigns

     99   

SECTION 9.05

 

Expenses; Indemnity

     104   

SECTION 9.06

 

Right of Setoff

     106   

SECTION 9.07

 

Applicable Law

     106   

SECTION 9.08

 

Waivers; Amendment

     106   

SECTION 9.09

 

Interest Rate Limitation

     108   

SECTION 9.10

 

Entire Agreement

     108   

SECTION 9.11

 

WAIVER OF JURY TRIAL

     108   

SECTION 9.12

 

Severability

     108   

SECTION 9.13

 

Counterparts

     108   

SECTION 9.14

 

Headings

     109   

SECTION 9.15

 

Jurisdiction; Consent to Service of Process

     109   

SECTION 9.16

 

Confidentiality

     110   

SECTION 9.17

 

Platform; Borrower Materials

     111   

SECTION 9.18

 

Release of Liens and Guarantees

     112   

SECTION 9.19

 

Judgment Currency

     112   

SECTION 9.20

 

USA PATRIOT Act Notice

     113   

SECTION 9.21

 

Borrower Representative

     113   

SECTION 9.22

 

No Advisory or Fiduciary Responsibility

     113   

SECTION 9.23

 

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     114   

 

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TABLE OF CONTENTS

(continued)

 

     Page  

SECTION 9.24

 

Affiliate Lenders

     114   

SECTION 9.25

 

Appointment for Perfection; Disclosure

     116   

SECTION 9.26

 

Conflicts; German Loan Parties

     116   

 

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Exhibits and Schedules

Exhibit A

  

Form of Assignment and Acceptance

Exhibit B-1

  

Form of Guarantee Agreement

Exhibit B-2

  

Form of Security Agreement

Exhibit C

  

Form of Note

Schedule 1.01A

  

Immaterial Subsidiaries

Schedule 1.01B

  

Mortgaged Properties

Schedule 1.01C

  

Excluded Subsidiaries

Schedule 1.01D

  

Security Documents

Schedule 1.01E

  

Agreed Security Principles

Schedule 2.01

  

Commitments

Schedule 3.01

  

Organization and Good Standing

Schedule 3.04

  

Governmental Approvals

Schedule 3.06(a)

  

Subsidiaries

Schedule 3.06(b)

  

Subscriptions

Schedule 3.10

  

Taxes

Schedule 3.15

  

Intellectual Property

Schedule 3.16

  

Anti-Money Laundering Laws

Schedule 4.01

  

Closing Deliverables

Schedule 5.11

  

Post-Closing Deliverables

Schedule 6.01

  

Indebtedness

Schedule 6.02(a)

  

Liens

Schedule 6.04

  

Investments

Schedule 6.07

  

Transactions with Affiliates

Schedule 9.01

  

Notice Information

 

vi

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CREDIT AGREEMENT, dated as of January 5, 2017 (this “Agreement”), among CLAIRE’S
(GIBRALTAR) INTERMEDIATE HOLDINGS LIMITED (“CGIH” or “Holdings”) and CLAIRE’S
GERMANY GMBH, as borrowers (together with Holdings, each a “Borrower” and
together, the “Borrowers”), CLAIRE’S SWITZERLAND GMBH, a limited liability
company incorporated under the laws of Switzerland with registered office at c/o
Curator & Horwath AG, Badenerstrasse 141, 8004 Zurich, Switzerland, CLAIRE’S
FRANCE S.A.S., a société par actions simplifiée (joint-stock company)
incorporated under the laws of France and having its registered office at 82,
rue Beaubourg, 75003 Paris, France, registered with the Paris Trade and
Companies Register (RCS) under the number 342 837 416, CLAIRE’S ACCESSORIES UK
LTD, CLAIRE’S ACCESSORIES SPAIN, S.L., CLAIRE’S HOLDINGS S.A. R.L., a société à
responsabilité limitée (private limited liability company) incorporated under
the laws of the Grand Duchy of Luxembourg and having its registered office at
412F, Route d’Esch, 1030, Luxembourg, registered with the Luxembourg Trade and
Companies Register (RCS) under the number B133878 (“Luxco 1”), CLAIRE’S
LUXEMBOURG S.A. R.L., a société à responsabilité limitée (private limited
liability company) incorporated under the laws of the Grand Duchy of Luxembourg
and having its registered office at 17 , rue de Glesener, L-1631, Luxembourg,
registered with the Luxembourg Trade and Companies Register (RCS) under the
number B172269 (“Luxco 2”), CLAIRE’S EUROPEAN DISTRIBUTION LIMITED, CLAIRE’S
EUROPEAN SERVICES LIMITED, CSI LUXEMBOURG S.A. R.L., a société à responsabilité
limitée (private limited liability company) incorporated under the laws of the
Grand Duchy of Luxembourg and having its registered office at 17, rue de
Glesener, L-1631, Luxembourg, registered with the Luxembourg Trade and Companies
Register (RCS) under the number B 75751 (“Luxco 3”), CLAIRE’S FASHION PROPERTY
CORP. and CLAIRE’S HOLDING GMBH, a limited liability company incorporated under
the laws of Switzerland with registered office at Rhypark / Rheinweg 4, 8200
Schaffhausen, Switzerland, as guarantors (together with each other Person that
becomes a party to a Security Document pursuant to Section 5.10(d), each, a
“Guarantor” and collectively, the “Guarantors”), solely with respect to
Section 5.12, CLAIRE’S (GIBRALTAR) HOLDINGS LIMITED (“CGHL”), as a party, the
LENDERS party hereto from time to time (the “Lenders”), BOTTICELLI LLC, as
administrative agent (in such capacity, the “Administrative Agent”) and CORTLAND
CAPITAL MARKET SERVICES LLC, as collateral agent (in such capacity, the
“Collateral Agent”) for the Lenders.

WHEREAS, CGIH is a wholly owned subsidiary of CGHL, and CGHL is a wholly owned
subsidiary of Claire’s Stores, Inc., a Florida corporation (“Claire’s Stores”);

WHEREAS, the Borrowers are party to that certain Amended and Restated
Multicurrency Revolving Facility Agreement dated as of September 20, 2016 among
the Borrowers and HSBC Bank PLC, as lender (the “Existing Revolving Credit
Facility”);

WHEREAS, the Borrowers, the Lenders and the Agents (as defined below) have
agreed to enter into this Agreement providing for, among other things, a
$50 million term loan (the “Term Loan”) to be funded by the Lenders on the
Closing Date (as defined below); and

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WHEREAS, the proceeds of the Term Loan shall be used to repay the outstanding
indebtedness of the Borrowers under the Existing Revolving Credit Facility in
full and for other purposes set forth herein.

NOW, THEREFORE, subject to the conditions set forth herein, the parties hereto
hereby agree as follows:

ARTICLE I.

Definitions

SECTION 1.01    Defined Terms. As used in this Agreement (including the recitals
hereto), the following terms shall have the meanings specified below:

“ABL Credit Agreement” shall mean that certain ABL Credit Agreement, dated as of
August 12, 2016, among the Parent, Claire’s Stores, as borrower, the lenders
party thereto from time to time and Credit Suisse AG, Cayman Islands Branch, as
administrative agent.

“Additional Interest” shall have the meaning assigned to such term in
Section 2.12.

“Additional Mortgage” shall have the meaning assigned to such term in Section
5.10(c).

“Administrative Agent” shall mean, initially, the Initial Lender (acting on
behalf of itself) and if at any time there is more than one Lender (following an
assignment by the Initial Lender of all or any portion of its Loans pursuant to
Section 9.04), each Person appointed as a successor agent on behalf of the
Lenders pursuant to Section 8.09.

“Administrative Questionnaire” shall mean an Administrative Questionnaire in a
form supplied by the Administrative Agent.

“Affiliate” shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified.

“Affiliate Lender” shall have the meaning assigned to such term in Section
9.24(a).

“Agents” shall mean, collectively, the Administrative Agent and the Collateral
Agent.

“Agreed Security Principles” shall have the meaning set forth on Schedule 1.01E.

“Agreement” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.

 

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“Anti-Money Laundering Laws” means any and all laws, judgments, orders,
executive orders, decrees, ordinances, rules, regulations, statutes, case law or
treaties applicable to Holdings, the Subsidiaries or their respective Affiliates
related to terrorism financing or money laundering, including any applicable
provision of Title III of the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT
Act) of 2001 (Title III of Pub. L. 107-56) and The Currency and Foreign
Transactions Reporting Act (also known as the “Bank Secrecy Act”, 31 U.S.C. §§
5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).

“Applicable Prepayment Premium” shall mean, as of any date of determination, an
amount equal to: (a) during the period from and after the Closing Date up to and
including the first anniversary of the Closing Date, the Make-Whole Premium,
(b) during the period after the first anniversary of the Closing Date up to and
including the date that is 18 months after the Closing Date, 4.0% times the
outstanding principal balance of the Loans being prepaid or repaid, and
(c) during any period after the date that is 18 months after the Closing Date,
0%.

“Approved Fund” shall have the meaning assigned to such term in Section 9.04(b).

“Approved Jurisdiction” shall mean a member state of the European Union, Turkey,
Iceland, Lichtenstein, Albania, Serbia, Montenegro, Switzerland, Norway, Belarus
and Georgia.

“Asset Sale” shall mean any loss, damage, destruction or condemnation of, or any
sale, transfer or other disposition (including any sale and leaseback of assets
and any mortgage or lease of Real Property) to any person of any asset or assets
of Holdings or any Subsidiary.

“Assignee” shall have the meaning assigned to such term in Section 9.04(b).

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an Assignee, and accepted by the Administrative Agent and
Holdings (if required by Section 9.04), in the form of Exhibit A to this
Agreement or such other form as shall be approved by the Administrative Agent
and reasonably satisfactory to Holdings.

“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers
by the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” shall mean, with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
of the Council of the European Union, the implementing law for such EEA Member
Country from time to time which is described in the EU Bail-In Legislation
Schedule.

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States of America.

 

3

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“Board of Directors” shall mean, as to any person, the board of directors or
other governing body of such person, or if such person is owned or managed by a
single entity, the board of directors or other governing body of such entity.

“Borrower” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.

“Business Day” shall mean any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed.

“Capital Lease Obligations” of any person shall mean the obligations of such
person to pay rent or other amounts under any lease of (or other similar
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for purposes hereof, the amount of such obligations at any time shall be
the capitalized amount thereof accounted for as a liability at such time
determined in accordance with GAAP.

“Cash Pooling Agreements” shall mean separately and together

 

  (a) the cash concentration and pooling service operated by HSBC Bank PLC
pursuant to a cross border cash concentration and pooling services agreement
dated 18 May 2010; and

 

  (b) the collective sterling net overdraft facilities provided by HSBC Bank PLC
to the Borrowers (as defined therein) pursuant to facilities agreements dated
12 July 2012, 4 December 2012, 10 April 2014 and 1 July 2015 and each made
between (1) HSBC Bank PLC and (2) the Borrowers (as defined therein) with a
combined limit of GBP £100; and

 

  (c) the collective sterling net overdraft facilities provided by HSBC Bank PLC
to the Borrowers (as defined therein), pursuant to facilities agreements dated
17 August 2012 and 15 May 2015 and each made between (1) HSBC Bank PLC and
(2) the Borrowers (as defined therein) with a combined limit of EUR 100,

under which the accounts collectively operate at a net credit position in each
case and which do not, as part of the cash pooling arrangement, permit transfers
between accounts of amounts in excess of the amount required to achieve a zero
balance with respect to any account with a net debit position, such
arrangements, “Cash Pooling Arrangements”, as in effect on the date hereof, as
such agreements may be amended, supplemented, restated, replaced or otherwise
modified; provided that such agreements shall (i) only give effect to Cash
Pooling Arrangements as part of the ordinary course business operation of CGHL
and its Subsidiaries, (ii) not provide for any overdraft facilities with a
combined limit in excess of the amounts described in clauses (b) and (c) above
and (iii) not provide for the incurrence of any Indebtedness by CGHL or any of
its Subsidiaries other than Cash Pooling Arrangements.

 

4

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“Cash Pooling Arrangements” shall have the meaning assigned to such term in the
definition of “Cash Pooling Agreements.”

“CGHL” shall have the meaning assigned to such term in the recitals to this
Agreement.

“CGHL Default” shall mean any “default” or “event of default” under any
Indebtedness of CGHL or any of its subsidiaries (other than Holdings and the
Subsidiaries) with a principal amount in excess of $5,000,000, which default
either (i) results in such Indebtedness becoming due prior to its stated
maturity date or (ii) enables or permits the holders or lenders thereof to cause
such Indebtedness to become due or to require the prepayment, repurchase,
redemption or defeasance thereof prior to its scheduled maturity date, in each
case, with all applicable cure and grace periods having expired.

“CGHL Pledge Agreement” shall mean the Pledge Agreement dated as of the date
hereof (as amended, supplemented or otherwise modified from time to time), by
and between CGHL and the Collateral Agent in form and substance reasonably
satisfactory to the Administrative Agent.

“CGIH” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.

A “Change in Control” shall be deemed to occur if:

(a)    at any time, (i) Claire’s Stores shall fail to own, directly or
indirectly, beneficially and of record, 100% of the issued and outstanding
Equity Interests of CGIH, (ii) a majority of the seats (other than vacant seats)
on the Board of Directors of CGIH at any time be occupied by persons who were
neither (A) nominated or approved by the Board of Directors of Claire’s Stores,
CGHL or CGIH or a Permitted Holder, (B) appointed by directors so nominated or
approved nor (C) appointed by a Permitted Holder, (iii) a “change of control”
(or similar event) shall occur under any Material Indebtedness or any Permitted
Refinancing Indebtedness in respect of any of the foregoing or any Disqualified
Stock (to the extent the aggregate amount of the applicable Disqualified Stock
exceeds $35 million) or (iv) CGHL shall fail to own directly, beneficially and
of record, 100% of the issued and outstanding Equity Interests of CGIH; or

(b)    any combination of Permitted Holders shall fail to own beneficially
(within the meaning of Rule 13d-5 of the Exchange Act as in effect on the
Closing Date), directly or indirectly, in the aggregate Equity Interests
representing at least a majority of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of CGIH.

“Charges” shall have the meaning assigned to such term in Section 9.09.

 

5

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“Claire’s Stores” shall have the meaning assigned to such term in the preamble
to this Agreement.

“Closing Date” shall mean the date on which the conditions precedent set forth
in Article IV have been satisfied (or waived), which date shall be no later than
January 5, 2017.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time and the regulations promulgated and rulings issued thereunder.

“Collateral” shall mean the “Collateral” as defined in any Security Document and
shall also include the Mortgaged Properties and all other property that is
subject to any Lien in favor of the Collateral Agent or any subagent for the
benefit of the Lenders pursuant to any of the Security Documents.

“Collateral Agent” shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.

“Collateral Agent Fee Letter” means that certain fee letter, dated as of
January 5, 2017, by and among the Collateral Agent and Holdings.

“Collateral Agreement” shall mean each of (i) the Guarantee Agreement and
(ii) the Security Agreement.

“Collateral and Guarantee Requirement” shall mean the requirement that, subject,
in each case, to the Agreed Security Principles and Section 5.11:

(a)    on or prior to the Closing Date (or such later date as the Administrative
Agent may agree), the Collateral Agent shall have received (i) from each Loan
Party, a counterpart of each Collateral Agreement in the form of Exhibits B-1
and B-2 to this Agreement, duly executed and delivered on behalf of such person
and (ii) an acknowledgment and consent in form and substance satisfactory to the
Administrative Agent, executed and delivered by each issuer of Pledged
Collateral (as defined in the Security Agreement), if any, that is a Subsidiary
of a Loan Party but is not a Loan Party;

(b)    on or prior to the Closing Date (or such later date as the Administrative
Agent may agree), (A) the Collateral Agent shall have received a pledge of all
the issued and outstanding Equity Interests of each Subsidiary of the Loan
Parties (other than Excluded Subsidiaries), and (B) the Collateral Agent (or a
bailee on behalf of the Collateral Agent) shall have received all certificates
or other instruments (if any) representing such Equity Interests, together with
stock powers or other instruments of transfer with respect thereto endorsed in
blank;

(c)    on or prior to the Closing Date (or such later date as the Administrative
Agent may agree), the Collateral Agent shall have received from each Loan Party
each of the Security Documents and each other document, filing or deliverable
set forth on Schedule 1.01D, each in form and substance reasonably satisfactory
to the Administrative Agent and the Collateral Agent;

 

6

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(d)    in the case of any person that becomes a Wholly Owned Subsidiary of
Holdings (other than an Excluded Subsidiary or an Immaterial Subsidiary) after
the Closing Date, within fifteen (15) Business Days of the formation or
acquisition thereof (or such later date as the Administrative Agent may agree),
the Collateral Agent shall have received a supplement to each Collateral
Agreement, in the form specified therein, duly executed and delivered on behalf
of such Wholly Owned Subsidiary;

(e)    after the Closing Date, within fifteen (15) Business Days after the date
of acquisition or formation thereof (or such later date as the Administrative
Agent may agree), (i)(A) all the outstanding Equity Interests of any person that
becomes a Subsidiary after the Closing Date (other than an Immaterial
Subsidiary) and (B) all the Equity Interests (other than in respect of an
Immaterial Subsidiary) that are acquired by a Loan Party after the Closing Date,
shall have been pledged pursuant to a Security Document governed by the law of
the jurisdiction of organization of such Subsidiary or the Subsidiary thereof,
as applicable and (ii) the Collateral Agent (or a bailee on behalf of the
Collateral Agent) shall have received all certificates or other instruments (if
any) representing such Equity Interests, together with stock powers or other
instruments of transfer with respect thereto endorsed in blank;

(f)    except as otherwise contemplated by any Security Document or as set forth
on Schedule 5.11, on or before the Closing Date (or such later date as the
Administrative Agent may agree), all documents and instruments required by law
or reasonably requested by the Collateral Agent to be filed, registered or
recorded to create the Liens intended to be created by the Security Documents
(in each case, including any supplements thereto) and perfect such Liens to the
extent required by, and with the priority required by, the Security Documents,
shall have been filed, registered or recorded or delivered to the Collateral
Agent for filing, registration or the recording concurrently with, or promptly
following, the execution and delivery of each such Security Document;

(g)    on or before the date that is sixty (60) days after the Closing Date (or
such later date as the Administrative Agent may agree), the Administrative Agent
shall have received evidence of the insurance required by the terms of this
Agreement and the Mortgages (if any); and

(h)    after the Closing Date, the Collateral Agent shall have received (i) such
other Security Documents as may be required to be delivered pursuant to
Section 5.10, and (ii) upon reasonable request by the Administrative Agent,
evidence of compliance with any other requirements of Section 5.10.

“Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make a Loan on the Closing Date pursuant to Section 2.01. The amount
of each Lender’s Commitment is set forth on Schedule 2.01. The aggregate amount
of the Lenders’ Commitments is $50,000,000.

 

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“Conduit Lender” shall mean any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
provided, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender; provided,
further, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.17 or 9.05 than the designating Lender would have
been entitled to receive in respect of the extensions of credit made by such
Conduit Lender or (b) be deemed to have any Commitment.

“Consolidated Debt” at any date shall mean the sum of (without duplication) the
principal or face amount, regardless of whether GAAP would require a different
amount to be recited on the balance sheet of Holdings and the Subsidiaries, of
all Indebtedness (other than letters of credit or bank guarantees, to the extent
undrawn) consisting of Capital Lease Obligations, Indebtedness for borrowed
money, Disqualified Stock and Indebtedness in respect of the deferred purchase
price of property or services of Holdings and the Subsidiaries, in each case, as
determined on a consolidated basis on such date.

“Consolidated Net Income” shall mean, with respect to any person for any period,
the aggregate of the Net Income of such person and its subsidiaries for such
period, on a consolidated basis; provided, however, that, without duplication,

(i)    any net after tax extraordinary gains or losses or income or expense or
charge (less all fees and expenses relating thereto) including, without
limitation, any severance, relocation or other restructuring expenses, any
expenses related to any reconstruction, decommissioning, recommissioning or
reconfiguration of fixed assets for alternative uses, fees, expenses or charges
relating to new product lines, plant shutdown costs, curtailments or
modifications to pension and post retirement employee benefit plans, excess
pension charges, acquisition integration costs, facilities opening costs, and
expenses or charges related to any offering of Equity Interests or debt
securities of Claire’s Stores or any Parent Entity, any Investment, acquisition,
disposition, recapitalization or issuance, repayment, refinancing, amendment or
modification of Indebtedness (in each case, whether or not successful), in each
case, shall be excluded,

(ii)    any net after tax income or loss from abandoned, closed or discontinued
operations and any net after tax gain or loss on disposal of disposed,
abandoned, transferred, closed or discontinued operations shall be excluded,

(iii)    any net after tax gain or loss (less all fees and expenses or charges
relating thereto) attributable to business dispositions or asset dispositions
other than in the ordinary course of business (as determined in good faith by
the Borrowers) shall be excluded,

 

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(iv)    any net after tax income or loss (less all fees and expenses or charges
relating thereto) attributable to the early extinguishment of indebtedness, Swap
Agreements or other derivative instruments resulting from fair-value accounting
required by the applicable standards under GAAP shall be excluded,

(v)    (A) the equity interest in the Net Income for such period of any person
that is not a subsidiary of such person or that is accounted for by the equity
method of accounting, shall be included only to the extent of the amount of
dividends or distributions or other payments paid in cash (or to the extent
converted into cash) to the referent person or a subsidiary thereof in respect
of such period and (B) the Net Income for such period shall include any ordinary
course dividend, distribution or other payment in cash received from any person
in excess of the amounts included in clause (A),

(vi)    Consolidated Net Income for such period shall not include the cumulative
effect of a change in accounting principles during such period,

(vii)    effects of purchase accounting adjustments (including the effects of
such adjustments pushed down to such person and its subsidiaries) in component
amounts required or permitted by GAAP, resulting from the application of
purchase accounting in relation to any acquisition consummated after the Closing
Date or the amortization or write-off of any amounts thereof, net of taxes,
shall be excluded,

(viii)    any non-cash impairment charges or asset write-offs, in each case
pursuant to GAAP, and the amortization of intangibles, including key money
amortization, arising pursuant to GAAP shall be excluded;

(ix)    any non-cash expenses realized or resulting from stock option plans,
employee benefit plans or post-employment benefit plans, or grants or sales of
stock, stock appreciation or similar rights, stock options, restricted stock,
preferred stock or other rights shall be excluded,

(x)    expenses associated with additional accruals and reserves that were
established or adjusted within twelve months after February 28, 2012 and that
are so required to be established or adjusted in accordance with GAAP or as a
result of adoption or modification of accounting policies shall be excluded,

(xi)    non-cash gains, losses, income and expenses resulting from fair value
accounting required by the applicable standards under GAAP and related
interpretations shall be excluded,

(xii)    to the extent otherwise included in Consolidated Net Income any
currency translation gains and losses related to currency remeasurements of
Indebtedness, and any net loss or gain resulting from Swap Agreements for
currency exchange risk, shall be excluded,

 

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(xiii)    (i) the non-cash portion of “straight-line” rent expense shall be
excluded, (ii) the cash portion of “straight-line” rent expense which exceeds
the amount expensed in respect of such rent expense shall be included, (iii) the
non-cash amortization of tenant allowances shall be excluded and (iv) cash
received from landlords for tenant allowances shall be included,

(xiv)    an amount equal to the amount of any Restricted Payments actually made
to any parent or equity holder of such person in respect of such period shall be
included as though such amounts had been paid as income taxes directly by such
person for such period, and

(xv)    any (a) one-time non-cash compensation charges, (b) costs and expenses
after February 28, 2012 related to employment of terminated employees (including
but not limited to change of control payments, “gross up” payments under Code
Sections 280G and 4999 and the acceleration of options) or (c) costs or expenses
realized in connection with or resulting from stock appreciation or similar
rights, stock options or other rights existing on February 28, 2012 of officers,
directors and employees, in each case of such person or any of its Subsidiaries,
shall be excluded.

“Consolidated Total Assets” shall mean, as of any date, the consolidated total
assets of Holdings and the Subsidiaries, determined in accordance with GAAP, as
set forth on the consolidated balance sheet of Holdings as of such date.

“Constituent Document” means with respect to any Person, collectively and, in
each case, together with any modification of any term thereof, (a) the charter,
articles of incorporation, certificate of incorporation, constitution, articles
of formation, deed of foundation, memorandum, certificate of formation or
certificate of limited partnership of such Person, (b) the bylaws, articles of
association, operating agreement, partnership agreement, joint venture agreement
or governing agreement of such Person, (c) any other constitutive,
organizational or governing document of such Person, whether or not equivalent,
and (d) any other document setting forth the manner of election or duties of the
directors, officers or managing members of such Person or the designation,
amount or relative rights, limitations and preferences of any Equity Interests
of such Person.

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person, whether
through the ownership of voting securities, by contract or otherwise, and
“Controlling” and “Controlled” shall have meanings correlative thereto.

“Debt Fund Affiliate Lender” shall mean entities managed by the Fund or funds
advised by its affiliated management companies that are primarily engaged in, or
advises funds or other investment vehicles that are engaged in, making,
purchasing, holding or otherwise investing in commercial loans, bonds and
similar extensions of credit or securities in the ordinary course and for which
no personnel making investment decisions in respect of any equity fund which has
a direct or indirect equity investment in any Parent Entity, CGHL, the Borrowers
or the Subsidiaries has the right to make any investment decisions.

 

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“Debtor Relief Laws” shall mean the U.S. Bankruptcy Code and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
scheme of arrangement or similar debtor relief Laws of the United States or
other applicable jurisdictions (including without limitation Gibraltar, England
and Wales, Germany, Switzerland, France, Luxembourg and the Cayman Islands),
from time to time in effect.

“Deed of Postponement” means that certain Deed of Postponement, dated as of the
date hereof, by and among inter alios Holdings as an “Original Obligor” and HSBC
Bank PLC as the “Account Bank.”

“Deed of Release” means that certain Deed of Release, dated as of the date
hereof, by and among inter alios the Borrowers as “Released Parties” and HSBC
Bank PLC as the “Secured Party.”

“Default” shall mean any event or condition which, but for the giving of notice,
lapse of time or both would constitute an Event of Default.

“Disinterested Director” shall mean, with respect to any person and transaction,
a member of the Board of Directors of such person who does not have any material
direct or indirect financial interest in or with respect to such transaction.

“Disqualified Stock” shall mean, with respect to any person, any Equity
Interests of such person that, by its terms (or by the terms of any security or
other Equity Interests into which it is convertible or for which it is
redeemable or exchangeable), or upon the happening of any event or condition
(a) matures or is mandatorily redeemable (other than solely for Qualified Equity
Interests), pursuant to a sinking fund obligation or otherwise (except as a
result of a change of control or asset sale so long as any rights of the holders
thereof upon the occurrence of a change of control or asset sale event shall be
subject to the prior repayment in full of the Loans and all other Obligations
that are accrued and payable), (b) is redeemable at the option of the holder
thereof (other than solely for Qualified Equity Interests), in whole or in part,
(c) provides for the scheduled payments of dividends in cash or (d) either
mandatorily or at the option of the holders thereof, is or becomes convertible
into or exchangeable for Indebtedness or any other Equity Interests that would
constitute Disqualified Stock, in each case, prior to the date that is
ninety-one (91) days after the earlier of (x) the Final Maturity Date and
(y) the date on which the Loans and all other Obligations that are accrued and
payable are repaid in full; provided, however, that only the portion of the
Equity Interests that so mature or are mandatorily redeemable, are so
convertible or exchangeable or are so redeemable at the option of the holder
thereof prior to such date shall be deemed to be Disqualified Stock; provided
further, however, that if such Equity Interests are issued to any employee or to
any plan for the benefit of employees of Holdings or the Subsidiaries or by any
such plan to such employees, such Equity Interests shall not constitute
Disqualified Stock solely because they may be required to be repurchased by
Holdings in order to satisfy applicable statutory or regulatory obligations or
as a result of such employee’s termination, death or disability; provided
further, however, that any class of Equity Interests of such person that by its
terms authorizes such person to satisfy its obligations thereunder by delivery
of Equity Interests that are not Disqualified Stock shall not be deemed to be
Disqualified Stock.

 

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“Dollars” or “$” shall mean lawful money of the United States of America.

“EBITDA” shall mean, with respect to Holdings and the Subsidiaries on a
consolidated basis for any period, the Consolidated Net Income of Holdings and
the Subsidiaries for such period plus (a) the sum of (in each case without
duplication and to the extent the respective amounts described in subclauses
(i) through (xiii) of this clause (a) reduced such Consolidated Net Income (and
were not excluded therefrom) for the respective period for which EBITDA is being
determined):

(i)    provision for Taxes based on income, profits or capital of Holdings and
the Subsidiaries for such period, including, without limitation, state,
franchise and similar Taxes and foreign withholding Taxes (including any
penalties and interest related to such Taxes or arising from Tax examinations),

(ii)    Interest Expense (and to the extent not included in Interest Expense,
(x) all cash dividend payments (excluding items eliminated in consolidation) on
any series of preferred stock or Disqualified Stock and (y) costs of surety
bonds in connection with financing activities) of Holdings and the Subsidiaries
for such period (net of interest income of Holdings and the Subsidiaries for
such period),

(iii)    depreciation and amortization expenses of Holdings and the Subsidiaries
for such period including the amortization of intangible assets, key money
expense, deferred financing fees and capitalized software expenditures and
amortization of unrecognized prior service costs and actuarial gains and losses
related to pensions and other post-employment benefits,

(iv)    any expenses or charges (other than depreciation or amortization expense
as described in the preceding clause (iii)) related to any issuance of Equity
Interests, Investment, acquisition, disposition, recapitalization or the
incurrence, modification or repayment of Indebtedness permitted to be incurred
by this Agreement (including a refinancing thereof) (whether or not successful),
including (x) such fees, expenses or charges related to the Obligations and
(y) any amendment or other modification of the Obligations or other
Indebtedness,

(v)    [reserved],

(vi)    restructuring charges or reserves,

(vii)    any other non-cash charges; provided, that, for purposes of this
subclause (vii) of this clause (a), any non-cash charges or losses shall be
treated as cash charges or losses in any subsequent period during which cash
disbursements attributable thereto are made (but excluding, for the avoidance of
doubt, amortization of a prepaid cash item that was paid in a prior period and
any other item specifically identified in the definition of “Consolidated Net
Income” or in this definition of “EBITDA”),

 

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(viii)    [reserved],

(ix)    any costs or expense incurred pursuant to any management equity plan or
stock option plan or any other management or employee benefit plan or agreement,
to the extent that such cost or expenses are funded with cash proceeds
contributed to the capital of the Loan Parties,

(x)    the amount of management, consulting, monitoring, transaction and
advisory fees and related expenses paid to the Fund or any Fund Affiliate (or
any accruals related to such fees and related expenses) during such period;
provided, that such amount shall not exceed in any four quarter period the sum
of (i) the greater of $6 million and 2.0% of EBITDA for such four quarter
period, plus any reasonable out of pocket costs and expenses in connection
therewith and unpaid amounts accrued for prior periods, plus (ii) the amount of
deferred fees (to the extent such fees would otherwise have been permitted to be
included in clause (i) if paid, but were not included in such clause (i)), plus
(iii) 2.0% of the value of transactions permitted hereunder and entered into by
the Parent and its subsidiaries with respect to which the Fund or any Fund
Affiliate provides any of the aforementioned types of services, plus (iv) the
payment of the present value of all amounts payable pursuant to any agreement
described in this subclause (x) of this clause (a) in connection with the
termination of such agreement,

(xi)    non-cash stock compensation expense including GAAP charges associated
with any long-term incentive plan now in effect or later established,

(xii)    any non-cash charges associated with any income or loss from disposed,
abandoned, discontinued operations or store closures to the extent not already
captured in clause (ii) of the definition of “Consolidated Net Income”, and

(xiii)    (i) fees and expenses incurred or paid by the Loan Parties directly or
indirectly in connection with this Agreement, the other Loan Documents and the
transactions contemplated hereby and thereby, including all fees and expenses
incurred in connection with the refinancing of the Existing Revolving Credit
Facility and (ii) Exchange Transaction Expenses,

minus (b) the sum of (without duplication and to the extent the amounts
described in this clause (b) increased such Consolidated Net Income for the
respective period for which EBITDA is being determined) non-cash items
increasing Consolidated Net Income of Holdings and the Subsidiaries for such
period (but excluding any such items (A) in respect of which cash was received
in a prior period or will be received in a future period or (B) which represent
the reversal of any accrual of, or cash reserve for, anticipated cash charges
that reduced EBITDA in any prior period).

 

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“EEA Financial Institution” shall mean (a) any credit institution or investment
firm established in any EEA Member Country which is subject to the supervision
of an EEA Resolution Authority, (b) any entity established in an EEA Member
Country which is a parent of an institution described in clause (a) of this
definition, or (c) any financial institution established in an EEA Member
Country which is a subsidiary of an institution described in clauses (a) or (b)
of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” shall mean any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” shall mean any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Embargoed Person” shall mean (i) any country or territory that is the subject
of a sanctions program administered by the U.S. Treasury Department’s Office of
Foreign Assets Control (“OFAC”) or (ii) any party that (w) is publicly
identified on the most current list of “Specially Designated Nationals and
Blocked Persons” published by OFAC, (x) is a “designated national” pursuant to
OFAC’s Cuban Assets Control Regulations (31 C.F.R. 515.305), (y) resides, is
organized or chartered, or has a place of business in a country or territory
that is the subject of a sanctions program administered by OFAC or (z) is
publicly identified as prohibited from doing business with the United States
under the International Emergency Economic Powers Act, the Trading With the
Enemy Act, or any other requirement of law.

“environment” shall mean ambient and indoor air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, natural resources such as flora and fauna, the workplace or
as otherwise defined in any applicable law (including common law), rules,
regulations, codes, ordinances, orders, decrees or judgments, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the generation,
management, release or threatened release of, or exposure to, any hazardous
material or to occupational health and safety matters (to the extent relating to
the environment or hazardous materials).

“Equity Interests” of any person shall mean any and all shares, interests,
rights to purchase or otherwise acquire, warrants, options, participations or
other equivalents of or interests in (however designated) equity or ownership of
such person, including any preferred stock, any limited or general partnership
interest and any limited liability company membership interest, and any
securities or other rights or interests convertible into or exchangeable for any
of the foregoing.

“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Event of Default” shall have the meaning assigned to such term in Section 7.01.

 

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“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Exchange Offer” shall mean, collectively, (x) the exchange of Senior Secured
Second Lien Notes, Senior Unsecured Notes and Senior Subordinated Notes for new
five-year term loans of Claire’s Stores and certain of its subsidiaries, senior
secured term loans of CLSIP LLC, an indirect wholly-owned subsidiary of Claire’s
Stores, and senior term loans of CGHL, (y) entry into the definitive loan
documentation for the Existing Revolving Credit Facility and (z) entry into
definitive loan documentation for (i) the Second Amended and Restated Credit
Agreement of Claire’s Stores and certain of its subsidiaries, dated as of
August 12, 2016 and effective as of September 20, 2016, with Credit Suisse AG,
Cayman Islands Branch, as administrative agent thereunder, (ii) the ABL Credit
Agreement of Claire’s Stores and certain of its subsidiaries, dated as of
August 12, 2016 and effective as of September 20, 2016, with Credit Suisse AG,
Cayman Islands Branch, as administrative agent thereunder and (iii) the
$40,000,000 Credit Agreement of CGHL, dated as of August 12, 2016 and effective
as of September 20, 2016, with Credit Suisse AG, Cayman Islands Branch, as
administrative agent thereunder.

“Exchange Transactions” shall mean, collectively, the transactions consummated
in connection with the Exchange Offer.

“Exchange Transaction Expenses” shall mean any fees or expenses incurred or paid
by Holdings or any of the Subsidiaries, or any direct or indirect Parent Entity,
directly or indirectly in connection with the Exchange Transactions and the
transactions contemplated thereby including, without limitation, any payments
which are accelerated or increased by reason of the consummation of the
transactions.

“Excluded Subsidiary” means each Subsidiary listed on Schedule 1.01C.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of any Loan Party under any Loan Document, (a) any income Taxes
imposed on (or measured by) its net income (however denominated or franchise
Taxes imposed in lieu of net income Taxes) by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is located
or any other jurisdiction as a result of such recipient engaging in a trade or
business in such jurisdiction for tax purposes, (b) any branch profits Tax or
any similar Tax that is imposed by any jurisdiction described in clause
(a) above, (c) in the case of a Lender making a Loan, (x) except in the case of
a Lender that is an assignee pursuant to a request by Holdings under
Section 2.19, any withholding Tax that is in effect and would apply to amounts
payable hereunder to such Lender at the time such Lender becomes a party to such
Loan (or designates a new lending office) except to the extent that such Lender
(or its assignor, if any) was entitled, immediately before the designation of a
new lending office (or assignment), to receive additional amounts from any Loan
Party with respect to any withholding Tax pursuant to Section 2.17(a) or Section
2.17(c) or (y) any withholding Tax that is attributable to such Lender’s failure
to comply with Section 2.17(e), Section 2.17(f) or Section 9.04(i) with respect
to such Loan, and (d) any Taxes imposed under FATCA.

 

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“Existing Revolving Credit Facility” shall have the meaning assigned to such
term in the recitals to this Agreement.

“Extraordinary Receipts” shall mean any cash received by Holdings or any of its
Subsidiaries (and not consisting of proceeds described in Section 2.11(a) or
(b) or other debt issuances permitted hereunder) consisting of proceeds of
property and casualty insurance (other than proceeds from business interruption
insurance) and condemnation awards (and payments in lieu thereof).

“Fair Market Value” shall mean, with respect to any asset or property, the price
which could be negotiated in an arms’-length transaction, for cash, between a
willing seller and a willing and able buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.

“FATCA” shall mean Sections 1471 through 1474 of the Code (including, for the
avoidance of doubt, any agreements entered into pursuant to Section 1471(b)(1)
of the Code) as of the date of this Agreement (or any amended or successor
version that is substantively comparable and not materially more onerous to
comply with) and any current or future regulations or official interpretations
thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code
and any fiscal or regulatory legislation rules or practices adopted pursuant to
any intergovernmental agreement entered into in connection with the
implementation of such Sections of the Code.

“FCPA” shall mean the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

“Federal Funds Rate” shall mean, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day.

“Financial Officer” of any person shall mean the Chief Financial Officer,
principal accounting officer, Treasurer, Assistant Treasurer or Controller (or
the equivalents in the relevant jurisdictions) of such person.

“Final Maturity Date” shall mean January 31, 2019.

“Foreign Plan Event” shall mean, with respect to any Foreign Pension Plan of any
Loan Party or any of their respective subsidiaries located within Gibraltar,
Germany, Switzerland, France, the United Kingdom, the Cayman Islands or
Luxembourg, (a) the existence of unfunded liabilities in excess of the amount
permitted under any applicable law, or in excess of the amount that would be
permitted absent a waiver from a Governmental Authority, (b) the failure to
timely make or, if applicable, accrue in accordance with normal accounting
practices, any material amount of employer or employee contributions required by
applicable law or by the terms of such Foreign Pension Plan, (c) the receipt of
a notice by a Governmental Authority to terminate any such Foreign Pension Plan
or giving notice to appoint a trustee or similar official to administer any such
Foreign Pension Plan, or giving notice of insolvency in respect of such

 

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Foreign Pension Plan, in each case, as would be material to the Loan Parties and
the subsidiaries, (d) the incurrence of any liability, individually or in the
aggregate, has had or could reasonably be expected to result in a Material
Adverse Effect resulting from the complete or partial termination of such
Foreign Pension Plan or the complete or partial withdrawal of any participating
employer therein, (e) the occurrence of any transaction that is prohibited under
any applicable law and that could reasonably be expected to result in the
incurrence of any material liability by any Loan Party or any of their
respective subsidiaries, or the imposition on any Loan Party or any of their
respective subsidiaries of any material fine, excise tax or penalty resulting
from any noncompliance with any applicable law or (f) a final determination that
any Loan Party or any of their respective subsidiaries are responsible for a
material deficit or funding shortfall in a Foreign Pension Plan.

“Foreign Pension Plan” shall mean any employee pension benefit plan that is
required to be funded and maintained under applicable law or any mandatory or
non-mandatory insurances or contractual agreements regarding any payments or
fringe benefits in addition to the salary.

“French Security Documents” means all Security Documents governed by French law
and “French Security Document” means any of them.

“French Transaction Security” means any security assumed and accepted by or
through the Collateral Agent or the Secured Parties, as the case may be,
pursuant to any French Security Document and held or administered by the
Collateral Agent on behalf of or in trust for the Secured Parties hereunder and
any addition or replacement or substitution thereof.

“Fund” shall mean Apollo Management VI, L.P. and other affiliated co-investment
partnerships.

“Fund Affiliate” shall mean (i) each Affiliate of the Fund and (ii) any
individual who is a partner or employee of Apollo Management, L.P. or the Fund.

“GAAP” shall mean generally accepted accounting principles in effect from time
to time in the United States, applied on a consistent basis, subject to the
provisions of Section 1.02; provided that any reference to the application of
GAAP in Sections 3.10(b), 3.12, 5.03, 5.07 and 6.02(e) to a Subsidiary (and not
as a consolidated Subsidiary of Holdings) shall mean generally accepted
accounting principles in effect from time to time in the jurisdiction of
organization of such Subsidiary.

“German Security Documents” means all Security Documents governed by German law
and “German Security Document” means any of them.

“German Tax Code” means Abgabenordnung as of January 1, 1977.

“German Transaction Security” means any security assumed and accepted by or
through the Collateral Agent or the Secured Parties, as the case may be,
pursuant to any German Security Document and held or administered by the
Collateral Agent on behalf of or in trust for the Secured Parties hereunder and
any addition or replacement or substitution thereof.

 

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“Governmental Authority” shall mean any federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory or legislative
body.

“Guarantee” of or by any person (the “guarantor”) shall mean (a) any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation payable or
performable by another person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep well, to purchase assets, goods,
securities or services, to take or pay or otherwise) or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness or other obligations, (ii) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, (iv) entered into for the purpose of assuring
in any other manner the holders of such Indebtedness or other obligation of the
payment thereof or to protect such holders against loss in respect thereof (in
whole or in part) or (v) as an account party in respect of any letter of credit,
bank guarantee or other letter of guaranty issued to support such Indebtedness
or other obligation, or (b) any Lien on any assets of the guarantor securing any
Indebtedness (or any existing right, contingent or otherwise, of the holder of
Indebtedness to be secured by such a Lien) of any other person, whether or not
such Indebtedness or other obligation is assumed by the guarantor; provided,
however, the term “Guarantee” shall not include endorsements for deposit or
collection in the ordinary course of business or customary and reasonable
indemnity obligations in effect on the Closing Date or entered into in
connection with any acquisition or disposition of assets permitted by this
Agreement (other than such obligations with respect to Indebtedness). The amount
of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the Indebtedness in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.

“Guarantee Agreement” shall mean the Guarantee Agreement, dated as of the date
hereof (as amended, supplemented or otherwise modified from time to time), among
each Loan Party and the Collateral Agent in the form of Exhibit B-1.

“Guarantor” shall have the meaning assigned to such term in the preamble to this
Agreement.

“Holdings” shall mean CGIH.

“Immaterial Subsidiary” shall mean any Subsidiary that (a) did not, as of the
last day of the fiscal quarter of Holdings most recently ended, have assets with
a value in excess of

 

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2.5% of the Consolidated Total Assets or revenues representing in excess of 2.5%
of total revenues of Holdings and the Subsidiaries on a consolidated basis for
the applicable Test Period, and (b) taken together with all Immaterial
Subsidiaries as of the last day of the fiscal quarter of Holdings’ most recently
ended, did not have assets with a value in excess of 5.0% of Consolidated Total
Assets or revenues representing in excess of 5.0% of total revenues of Holdings
and the Subsidiaries on a consolidated basis for the applicable Test Period.
Each Immaterial Subsidiary as of the Closing Date shall be set forth in
Schedule 1.01A.

“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person under conditional sale or title retention agreements
relating to property or assets purchased by such person, (d) all obligations of
such person issued or assumed as the deferred purchase price of property or
services, to the extent the same would be required to be shown as a long-term
liability on a balance sheet prepared in accordance with GAAP, (e) all Capital
Lease Obligations of such person, (f) all net payments that such person would
have to make in the event of an early termination, on the date Indebtedness of
such person is being determined, in respect of outstanding Swap Agreements,
(g) the principal component of all obligations, contingent or otherwise, of such
person as an account party in respect of letters of credit and bank guarantees,
(h) the principal component of all obligations of such person in respect of
bankers’ acceptances, (i) all Guarantees by such person of Indebtedness
described in clauses (a) to (h) above) and (j) the amount of all obligations of
such person with respect to the redemption, repayment or other repurchase of any
Disqualified Stock (excluding accrued dividends that have not increased the
liquidation preference of such Disqualified Stock); provided, that Indebtedness
shall not include (A) trade payables, accrued expenses and intercompany
liabilities (i) with a term not exceeding 364 days arising in the ordinary
course of business and consistent with past practice or (ii) that would not
constitute indebtedness on a balance sheet prepared in accordance with GAAP,
(B) prepaid or deferred revenue arising in the ordinary course of business,
(C) purchase price holdbacks arising in the ordinary course of business in
respect of a portion of the purchase prices of an asset to satisfy unperformed
obligations of the seller of such asset, (D) earn-out obligations until such
obligations become a liability on the balance sheet of such person in accordance
with GAAP or (E) deferred rent expense. The Indebtedness of any person shall
include the Indebtedness of any partnership or joint venture in which such
person is a general partner or joint venture partner, other than to the extent
that the instrument or agreement evidencing such Indebtedness expressly limits
the liability of such person in respect thereof.

“Indemnified Taxes” shall mean all Taxes other than Excluded Taxes and Other
Taxes.

“Indemnitee” shall have the meaning assigned to such term in Section 9.05(b).

“Ineligible Institution” shall mean (i) the persons identified in writing to,
and acceptable to (in its sole discretion), the Administrative Agent by Holdings
prior to the Closing Date, and (ii) bona fide competitors of Holdings and the
Subsidiaries as may be identified in writing to the Administrative Agent by
Holdings from time to time thereafter in order to update

 

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such list, with the written consent of the Administrative Agent, by delivery of
a notice thereof to the Administrative Agent setting forth such person or
persons (or the person or persons previously identified to the Administrative
Agent that are to be no longer considered “Ineligible Institutions”).

“Initial Lender” shall have the meaning assigned to such term in the preamble
hereto.

“Interest Expense” shall mean, with respect to any person for any period, the
sum of (a) gross interest expense of such person for such period on a
consolidated basis, including (i) the amortization of debt discounts, (ii) the
amortization of all fees (including fees with respect to Swap Agreements)
payable in connection with the incurrence of Indebtedness to the extent included
in interest expense and (iii) the portion of any payments or accruals with
respect to Capital Lease Obligations allocable to interest expense and
(b) capitalized interest of such person. For purposes of the foregoing, gross
interest expense shall be determined after giving effect to any net payments
made or received and costs incurred by Holdings and the Subsidiaries with
respect to Swap Agreements, and interest on a Capital Lease Obligation shall be
deemed to accrue at an interest rate reasonably determined by Holdings to be the
rate of interest implicit in such Capital Lease Obligation in accordance with
GAAP.

“Interest Payment Date” shall mean each January 15, April 15, July 15 and
October 15, provided, that if any such date is not a Business Day, the Interest
Payment Date shall be the next Business Day after such date.

“Investment” shall have the meaning assigned to such term in Section 6.04.

“Junior Financing” shall have the meaning assigned to such term in
Section 6.09(b).

“Lender” shall mean each financial institution listed on Schedule 2.01 (other
than any such person that has ceased to be a party hereto pursuant to an
Assignment and Acceptance in accordance with Section 9.04), as well as any
person that becomes a “Lender” hereunder pursuant to Section 9.04.

“lending office” shall mean, as to any Lender, the applicable branch, office or
Affiliate of such Lender designated by such Lender to make Loans.

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, hypothecation, pledge, charge, security interest or similar encumbrance in
or on such asset and (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset; provided that in no event shall an operating
lease or an agreement to sell be deemed to constitute a Lien.

 

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“Loan Documents” shall mean this Agreement, the Guarantee Agreement, the
Security Documents, the Collateral Agent Fee Letter, the Deed of Postponement,
the Deed of Release and any Note issued under Section 2.09(d).

“Loan Parties” shall mean, collectively, the Borrowers and the Guarantors.

“Loans” shall mean, collectively, the Term Loans made by the Lenders pursuant to
Section 2.01.

“Local Time” shall mean New York City time.

“Luxembourg Loan Parties” shall mean Luxco 1, Luxco 2 and Luxco 3 (each as
defined in the Preamble).

“Luxembourg Security Agreements”: shall mean, collectively, (i) the Luxembourg
Accounts Pledge Agreement; (ii) the Luxembourg Receivables Pledge Agreement; and
(iii) the Luxembourg Share Pledge Agreement.

“Luxembourg Accounts Pledge Agreement” means each Luxembourg law accounts pledge
agreement entered in connection with this Agreement between: (i) a Luxembourg
Loan Party as pledgor and (ii) the Administration Agent as administrative agent
and pledgee, creating a first-ranking accounts pledge (gage de premier rang)
over all bank accounts of the Luxembourg Loan Party opened with the banks (or
other financial institutions) incorporated in Luxembourg, together with the
acknowledgement of the relevant Luxembourg account bank of the pledge created
thereunder.

“Luxembourg Receivables Pledge Agreement” means a Luxembourg law receivables
pledge agreement entered in connection with this Agreement between:
(i) Luxembourg Loan Parties as pledgors; and (ii) the Administration Agent as
administrative agent and pledgee, creating a first-ranking pledge (gage de
premier rang) over all accounts receivable of the Luxembourg Loan Parties.

“Luxembourg Share Pledge Agreement” means each Luxembourg law share pledge
agreement entered in connection with this Agreement between: (i) the immediate
parent of each Luxembourg Loan Party as pledgor; and (ii) the Administration
Agent as administrative agent and pledgee; and (iii) such Luxembourg Loan Party,
creating a first-ranking pledge (gage de premier rang) over 100% of shares in
such Luxembourg Loan Party.

“Make-Whole Premium” shall mean, as of any date of determination, an amount
equal to the excess of:

(a)    the “present value” as of the date of such payment of (i) 104% of the
principal amount of the Loans being prepaid on such date (including, without
limitation, the amount of the Financing Fee that is capitalized as interest),
plus (ii) all interest payments which would have accrued, from the date of such
payment through the Final Maturity Date, on the principal amount of the Loans
being repaid on such date, such interest to be calculated on such amount at a
rate of 12.00% per annum, over

 

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(b)    the principal amount of the Loans (including, without limitation, the
amount of the Financing Fee that is capitalized as interest) being prepaid;

provided that the Make-Whole Premium may in no event be less than zero. For
purposes of this definition “present value” with respect to clause (a)(i) and
(a)(ii) shall be computed using a discount rate, applied quarterly, equal to the
Treasury Rate as of such prepayment date plus 50 basis points.

“Management Group” shall mean the group consisting of the directors, executive
officers and other management personnel of Claire’s Stores, Holdings and the
Subsidiaries, as the case may be, on the Closing Date together with (x) any new
directors whose election by such boards of directors or whose nomination for
election by the shareholders of Claire’s Stores or Holdings, as the case may be,
was approved by a vote of a majority of the directors of Claire’s Stores or
Holdings, as the case may be, then still in office who were either directors on
the Closing Date or whose election or nomination was previously so approved and
(y) executive officers and other management personnel of Claire’s Stores,
Holdings and the Subsidiaries, as the case may be, hired at a time when the
directors on the Closing Date together with the directors so approved
constituted a majority of the directors of Holdings, such Subsidiary or Claire’s
Stores, as the case may be.

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

“Material Adverse Effect” shall mean a material adverse effect on the business,
property, operations or condition of Holdings and the Subsidiaries, taken as a
whole, or the validity or enforceability of any of the material Loan Documents
or the rights and remedies of the Administrative Agent and the Lenders
thereunder.

“Material Contract” shall mean any contract with a member of the NA Group that
is material to the business or operations of Holdings or any Subsidiary and to
which Holdings or any Subsidiary is a party, including, without limitation,
licenses of intellectual property.

“Material Indebtedness” shall mean Indebtedness (other than Loans or
intercompany Indebtedness among any of Holdings and any of the Subsidiaries) of
CGHL or any of its subsidiaries or Holdings or any Subsidiary in an aggregate
principal amount exceeding $5 million.

“Material Subsidiary” shall mean any Subsidiary other than Immaterial
Subsidiaries.

“Maturity Date” shall mean the earliest of (a) the date on which the outstanding
Loans and accrued and unpaid Obligations with respect thereto become due and
payable pursuant to Section 7.01 or any other provision of this Agreement and
(b) the Final Maturity Date.

 

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“Maximum Rate” shall have the meaning assigned to such term in Section 9.09.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgaged Properties” shall mean, collectively, each Real Property owned in fee
by any Loan Party that is set forth on Schedule 1.01B and each additional Real
Property encumbered by a Mortgage pursuant to Section 5.10.

“Mortgages” shall mean, collectively, the mortgages, trust deeds, deeds of
trust, deeds to secure debt, assignments of leases and rents, and other security
documents delivered with respect to any Mortgaged Property, each in form
reasonably satisfactory to the Administrative Agent, as amended, restated,
supplemented or otherwise modified from time to time.

“NA Group” shall mean Claire’s Stores and each subsidiary of Claire’s Stores
other than CGHL, Holdings and the Subsidiaries.

“NA Group Default” shall mean any “default” under any Indebtedness of Claire’s
Stores or any of its subsidiaries (other than CGHL, Holdings and the
Subsidiaries) with a principal amount in excess of $25,000,000, which default
either (i) results in such Indebtedness becoming due prior to its stated
maturity date or (ii) enables or permits the holder or lenders thereof to cause
such Indebtedness to become due or to require the prepayment, repurchase,
redemption or defeasance thereof prior to its scheduled maturity date, in each
case, with all applicable cure and grace periods having expired.

“Net Cash Proceeds” shall mean (i) with respect to any Asset Sale by, or any
Extraordinary Receipt received by, Holdings or any of its Subsidiaries, the
amount of cash received (directly or indirectly) from time to time (whether as
initial consideration or through the payment or disposition of deferred
consideration) by or on behalf of Holdings or such Subsidiary, in connection
therewith after deducting therefrom only (A) the amount of any Indebtedness
secured by any Lien permitted by Section 6.02 on any asset (other than
Indebtedness assumed by the purchaser of such asset) which is required to be,
and is, repaid in connection with such Asset Sale (other than Indebtedness under
this Agreement), (B) customary out-of-pocket fees and expenses related thereto
incurred by Holdings or such Subsidiary in connection therewith, (C) transfer
taxes paid or payable to any taxing authorities by Holdings or such Subsidiary
in connection therewith, and (D) other taxes paid or reasonably estimated to be
paid in connection with such Asset Sale (after taking into account any tax
credits or deductions and any tax sharing arrangements) in connection therewith;
and (ii) with respect to the issuance or incurrence of any Indebtedness by
Holdings or any of its Subsidiaries, or the sale or issuance by Holdings or any
of its Subsidiaries of any shares of its Equity Interests, the aggregate amount
of cash received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred consideration)
by or on behalf of Holdings or such Subsidiary in connection therewith, after
deducting therefrom only (A) customary out-of-pocket fees and expenses related
thereto incurred by Holdings or such Subsidiary in connection therewith, and
(B) taxes paid or payable by Holdings or such Subsidiary in connection
therewith; in each case of clause (i) and (ii) to the extent, but only to the
extent, that the expenses or taxes

 

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so deducted are (1) actually paid to a person that, except in the case of
reasonable out-of-pocket expenses, is not an Affiliate of Holdings or any of its
Subsidiaries, (2) paid within the first anniversary of such transaction,
(3) reduced by any and all refunds of such taxes (and amounts credited against
such taxes), and (4) properly attributable to such transaction or to the asset
that is the subject thereof.

“Net Income” shall mean, with respect to any person, the net income (loss) of
such person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends.

“Non-Consenting Lender” shall have the meaning assigned to such term in Section
2.19(c).

“Note” shall mean a promissory note of the Borrowers in substantially the form
of Exhibit C.

“Notes Offering Memorandum” shall mean the Offering Memorandum, dated
September 6, 2012, in respect of additional Senior Secured First Lien Notes.

“Obligations” shall mean (a) the due and punctual payment by the Loan Parties of
(i) the unpaid principal of and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans made to the Borrowers, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise and
(ii) all other monetary obligations of the Loan Parties to any of the Agents or
Lenders under this Agreement and each of the other Loan Documents, including the
Applicable Prepayment Premium to the extent applicable, obligations to pay fees,
expense and reimbursement obligations and indemnification obligations, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) and (b) the due and punctual performance of all
other obligations of the Loan Parties under or pursuant to this Agreement and
each of the other Loan Documents, and shall include the obligations under
Section 8.10.

“Other Connection Taxes” means, with respect to any Lender or Agent, Taxes
imposed as a result of a present or former connection between such Lender or
Agent and the jurisdiction imposing such Tax (other than connections arising
from such Lender or Agent having executed, delivered, become a party to,
performed its obligations under, received payments under, received or perfected
a security interest under, engaged in any other transaction pursuant to or
enforced any Loan Document, or sold or assigned an interest in any Loan or Loan
Document).

“Other Taxes” shall mean any and all present or future stamp, court or
documentary, intangible, recording, filing or similar Taxes that arise from any
payment made hereunder, from the execution, delivery, performance, enforcement
or registration of, from the receipt or perfection of a security interest under,
or otherwise with respect to, any Loan Document, except any such Taxes that are
Other Connection Taxes imposed with respect to an assignment (other than an
assignment made pursuant to Section 2.19).

 

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“Overhead Expenses” shall have the meaning assigned to such term in the
definition of “Permitted Foreign Cash Transfer”.

“Parallel Obligations” shall have the meaning assigned to such term in
Section 8.10.

“Parent” shall mean Claire’s, Inc., a Delaware corporation.

“Parent Entity” shall mean any direct or indirect parent of Holdings.

“Participant” shall have the meaning assigned to such term in Section 9.04(d).

“Permitted Business Acquisition” shall mean any acquisition in the ordinary
course of the Loan Parties’ business (including the acquisitions of stores,
leases for stores or other operating assets) of all or substantially all the
assets of, or all the Equity Interests (other than directors’ qualifying shares)
in, or merger, consolidation or amalgamation with, a person or division or line
of business of a person (or any subsequent investment made in a person, division
or line of business previously acquired in a Permitted Business Acquisition), if
immediately after giving effect thereto: (i) no Event of Default shall have
occurred and be continuing or would result therefrom; (ii) all transactions
related thereto shall be consummated in accordance with applicable laws;
(iii) any acquired or newly formed Subsidiary shall not be liable for any
Indebtedness except for Indebtedness permitted by Section 6.01; (iv) to the
extent required by Section 5.10, any person acquired in such acquisition shall
be merged into a Loan Party or become, upon consummation of such acquisition, a
Loan Party; (v) such acquired business, assets or Persons are located or
organized in an Approved Jurisdiction; (vi) the aggregate amount of such
acquisitions and investments (x) made for cash consideration following the
Closing Date shall not exceed $5,000,000 or (y) made for non-cash consideration
following the Closing Date shall not exceed $15,000,000.

“Permitted Foreign Cash Transfer” shall mean any payment or other transfer of
cash by Holdings:

 

  (a)

to any member of the NA Group (collectively, “Permitted Transferees” and each a
“Permitted Transferee”) in respect of (i) (x) overhead, legal, accounting and
other professional fees and expenses (collectively, “Overhead Expenses”) of any
Permitted Transferee and (y) fees and expenses (other than Overhead Expenses) in
connection with the maintenance of any Permitted Transferee’s existence or any
Permitted Transferee’s indirect ownership of Holdings and the Subsidiaries, in
an aggregate amount for all such amounts in clauses (x) and (y) not to exceed
(A) $250,000 in any fiscal month plus (B) the aggregate amount of the unused
portion of the aggregate amounts set forth in clause (A) with respect to all
prior fiscal months after the Closing Date, provided, that any such payments
pursuant to this clause (a)(i) shall not exceed $1,000,000 in any fiscal month,
and (ii) Taxes

 

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  then due and owing (or that will be due and owing promptly following receipt
of the payment or transfer) of (x) Holdings and the Subsidiaries or (y) any
Permitted Transferee; provided, that, in the case of subclauses (i) and (ii), no
Default, Event of Default or NA Group Default shall have occurred and be
continuing;

 

  (b) to CGHL in respect of, or to pay, regularly scheduled non-default
interest, fees and expenses then due and owing under Indebtedness of CGHL
existing as of the Closing Date and any Permitted Refinancing Indebtedness in
respect thereof (collectively with the items described in clause (b) of
Section 6.06, “CGHL Expenses”); provided, that, with respect to such payments
under this clause (b), (i) no Default, Event of Default or CGHL Default shall
have occurred and be continuing and (ii) such payments shall be made solely by
way of an intercompany loan; or

 

  (c) (i) to any Permitted Transferee or to CGHL for distribution by CGHL to any
Permitted Transferee (including, without limitation, for payments of principal
and interest then due and owing under Indebtedness of the NA Group, payments of
other fees and expenses of the NA Group and other general corporate purposes) or
(ii)(A) to CGHL in respect of, or to pay, regularly scheduled non-default
interest, fees and expenses then due and owing under Indebtedness of CGHL
incurred after the Closing Date and any Permitted Refinancing Indebtedness in
respect thereof and (B) to CGHL for payments of principal then due and owing
under Indebtedness of CGHL; provided, that (x)(A) in the case of payments
pursuant to subclause (c)(i), no Default, Event of Default, CGHL Default or NA
Group Default shall have occurred and be continuing and (B) in the case of
payments pursuant to subclause (c)(ii), no Default, Event of Default or CGHL
Default shall have occurred and be continuing, (y) both before and after giving
effect to such transfer (A) Holdings and the Subsidiaries shall have
Unrestricted Cash of at least $7,000,000 and (B) the Loan Parties shall have
Unrestricted Cash Collateral of at least $2,000,000 and (z) the Total Net
Secured Leverage Ratio of Holdings and the Subsidiaries on a Pro Forma Basis
after giving effect to such transfer shall be less than or equal to 2.00:1.00;
provided, further, that payments pursuant to this clause (c) shall be made
solely by way of an intercompany loan.

“Permitted Holder” shall mean each of (i) the Fund and the Fund Affiliates, and
(ii) the Management Group.

“Permitted Investments” shall mean:

(a)    direct obligations of the United States of America or any member of the
European Union or any agency thereof or obligations guaranteed by the United
States of America or any member of the European Union or any agency thereof, in
each case with maturities not exceeding two years;

(b)    time deposit accounts, certificates of deposit and money market deposits
maturing within 180 days of the date of acquisition thereof issued by a bank or
trust

 

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company that is organized under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
having capital, surplus and undivided profits in excess of $250.0 million and
whose long term debt, or whose parent holding company’s long term debt, is rated
A by S&P or A by Moody’s;

(c)    repurchase obligations with a term of not more than 180 days for
underlying securities of the types described in clause (a) above entered into
with a bank meeting the qualifications described in clause (b) above;

(d)    commercial paper, maturing not more than one year after the date of
acquisition, issued by a corporation (other than an Affiliate of the Borrowers)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of P 1 (or higher) according to
Moody’s, or A 1 (or higher) according to S&P;

(e)    securities with maturities of two years or less from the date of
acquisition issued or fully guaranteed by any State, commonwealth or territory
of the United States of America, or by any political subdivision or taxing
authority thereof, and rated at least A by S&P or A by Moody’s;

(f)    shares of mutual funds whose investment guidelines restrict 95% of such
funds’ investments to those satisfying the provisions of clauses (a) through (e)
above;

(g)    money market funds that (i) comply with the criteria set forth in Rule 2a
7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by
Moody’s and (iii) have portfolio assets of at least $5 billion;

(h)    time deposit accounts, certificates of deposit and money market deposits
in an aggregate face amount not in excess of 0.5% of the total assets of the
Borrowers and the Subsidiaries, on a consolidated basis, as of the end of the
Borrowers’ most recently completed fiscal year; and

(i)    instruments equivalent to those referred to in clauses (a) through (h)
above denominated in any foreign currency comparable in credit quality and tenor
to those referred to above and commonly used by corporations for cash management
purposes in any jurisdiction outside the United States to the extent reasonably
required in connection with any business conducted by any Subsidiary organized
in such jurisdiction.

“Permitted Liens” shall have the meaning assigned to such term in Section 6.02.

“Permitted Refinancing Indebtedness” shall mean any Indebtedness issued in
exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund (collectively, to “Refinance”), the Indebtedness
being Refinanced (or previous refinancings thereof constituting Permitted
Refinancing Indebtedness); provided, that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing Indebtedness

 

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does not exceed the principal amount (or accreted value, if applicable) of the
Indebtedness so Refinanced (plus unpaid accrued interest and premium (including
tender premiums) thereon and underwriting discounts, defeasance costs, fees,
commissions and expenses), (b) except with respect to Section 6.01(i), the
weighted average life to maturity of such Permitted Refinancing Indebtedness is
greater than or equal to the shorter of (i) the weighted average life to
maturity of the Indebtedness being Refinanced and (ii) the weighted average life
to maturity that would result if all payments of principal on the Indebtedness
being Refinanced that were due on or after the date that is one year following
the Final Maturity Date were instead due on the date that is one year following
the Final Maturity Date, (c) the stated final maturity of such Permitted
Refinancing Indebtedness is not earlier than the earlier of (x) the final stated
maturity of the Indebtedness being Refinanced or (y) 91 days following the Final
Maturity Date; (d) if the Indebtedness being Refinanced is subordinated in right
of payment to the Obligations, such Permitted Refinancing Indebtedness shall be
subordinated in right of payment to such Obligations on terms at least as
favorable to the Lenders as those contained in the documentation governing the
Indebtedness being Refinanced and (e) no Permitted Refinancing Indebtedness
shall have different obligors, or greater guarantees or security, than the
Indebtedness being Refinanced; provided further, that such Permitted Refinancing
Indebtedness shall be (i) on terms not materially less favorable to the Lenders
than those contained in the documentation governing the Indebtedness being
Refinanced or (ii) on terms which are consistent with market terms at such time
for such Indebtedness.

“Permitted Transferee” shall have the meaning assigned to such term in the
definition of “Permitted Foreign Cash Transfer”.

“person” shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership, limited liability company or
government, individual or family trusts, or any agency or political subdivision
thereof.

“Platform” shall have the meaning assigned to such term in Section 9.17(a).

“Pledged Collateral” shall have the meaning assigned to such term in the
Security Agreement and the CGHL Pledge Agreement.

“Preferred Stock” shall mean any Equity Interest with preferential right of
payment of dividends or upon liquidation, dissolution or winding up.

“primary obligor” shall have the meaning given such term in the definition of
the term “Guarantee.”

“Pro Forma Basis” shall mean, as to any person, for any events as described
below that occur subsequent to the commencement of a period for which the
financial effect of such events is being calculated, and giving effect to the
events for which such calculation is being made, such calculation as will give
pro forma effect to such events as if such events occurred on the first day of
the four consecutive fiscal quarter period ended on or before the occurrence of
such event (the “Reference Period”): (i) in making any determination of EBITDA,
effect shall be given to any Asset Sale, any acquisition, Investment,
disposition, merger,

 

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amalgamation, consolidation (or any similar transaction or transactions not
otherwise permitted under Section 6.04 or 6.05 that require a waiver or consent
of the Required Lenders and such waiver or consent has been obtained), any
dividend, distribution or other similar payment, and any restructurings of the
business of Holdings or any of the Subsidiaries (the foregoing, together with
any transactions related thereto or in connection therewith, the “relevant
transactions”), in each case that occurred during the Reference Period, (ii) in
making any determination on a Pro Forma Basis, (x) all Indebtedness (including
Indebtedness issued, incurred or assumed as a result of, or to finance, any
relevant transactions and for which the financial effect is being calculated,
whether incurred under this Agreement or otherwise, but excluding normal
fluctuations in revolving Indebtedness incurred for working capital purposes and
amounts outstanding under any Permitted Receivables Financing, in each case not
to finance any acquisition) issued, incurred, assumed or permanently repaid
during the Reference Period shall be deemed to have been issued, incurred,
assumed or permanently repaid at the beginning of such period and (y) Interest
Expense of such person attributable to interest on any Indebtedness, for which
pro forma effect is being given as provided in preceding clause (x), bearing
floating interest rates shall be computed on a pro forma basis as if the rates
that would have been in effect during the period for which pro forma effect is
being given had been actually in effect during such periods.

Pro forma calculations made pursuant to the definition of the term “Pro Forma
Basis” shall be determined in good faith by a Responsible Officer of Holdings
and may include, for the applicable Reference Period, adjustments to reflect
operating expense reductions and other operating improvements, synergies or cost
savings reasonably expected to result from the relevant pro forma event and
projected by Holdings in good faith to be realized within 12 months after such
pro forma event (including, to the extent applicable, the Exchange
Transactions). Holdings shall deliver to the Administrative Agent a certificate
of a Financial Officer of Holdings setting forth such demonstrable or additional
operating expense reductions and other operating improvements, synergies or cost
savings and information and calculations supporting them in reasonable detail.

For purposes of this definition, any amount in a currency other than Dollars
will be converted to Dollars based on the average exchange rate for such
currency for the most recent twelve month period immediately prior to the date
of determination in a manner consistent with that used in calculating EBITDA for
the applicable period.

“PSC Register” means “PSC Register” within the meaning of section 790C(10) of
the Companies Act 2006.

“Qualified Equity Interests” shall mean any Equity Interests other than
Disqualified Stock.

“Real Property” shall mean, collectively, all right, title and interest
(including any leasehold estate) in and to any and all parcels of or interests
in real property owned in fee or leased by Holdings or any of the Subsidiaries,
together with, in each case, all easements, hereditaments and appurtenances
relating thereto, and all improvements and appurtenant fixtures incidental to
the ownership or lease thereof.

 

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“Reference Period” shall have the meaning assigned to such term in the
definition of the term “Pro Forma Basis.”

“Refinance” shall have the meaning assigned to such term in the definition of
the term “Permitted Refinancing Indebtedness,” and “Refinanced” shall have a
meaning correlative thereto.

“Register” shall have the meaning assigned to such term in Section 9.04(b).

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

“Related Fund” shall mean, with respect to any Lender that is a fund that
invests in bank or commercial loans and similar extensions of credit, any other
fund that invests in bank or commercial loans and similar extensions of credit
and is advised or managed by (a) such Lender, (b) an Affiliate of such Lender or
(c) an entity (or an Affiliate of such entity) that administers, advises or
manages such Lender.

“Related Parties” shall mean, with respect to any specified person, such
person’s Affiliates and the respective directors, trustees, officers, employees,
agents and advisors of such person and such person’s Affiliates.

“Remaining Present Value” shall mean, as of any date with respect to any lease,
the present value as of such date of the scheduled future lease payments with
respect to such lease, determined with a discount rate equal to a market rate of
interest for such lease reasonably determined at the time such lease was entered
into.

“Required Lenders” shall mean, at any time, Lenders having a majority in
aggregate principal amount of outstanding Loans under this Agreement.

“Responsible Officer” of any person shall mean director or any executive officer
or Financial Officer of such person and any other officer or similar official
thereof in each case responsible for the administration of the obligations of
such person in respect of this Agreement.

“Restricted Payment” shall have the meaning assigned to such term in
Section 6.06.

“S&P” shall mean Standard & Poor’s Ratings Group, Inc.

“Sale and Lease Back Transaction” shall have the meaning assigned to such term
in Section 6.03.

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

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“Secured Parties” shall mean the “Secured Parties” as defined in the Security
Agreement.

“Security Agreement” shall mean the Security Agreement dated as of the date
hereof (as amended, supplemented or otherwise modified from time to time), among
each Loan Party and the Collateral Agent in the form of Exhibit B-2.

“Security Documents” shall mean the Mortgages, each Collateral Agreement, the
CGHL Pledge Agreement, the Swiss Collateral Documents, the German Security
Documents, the Luxembourg Security Agreements, the French Security Documents,
each of the security agreements and other instruments and documents listed on
Schedule 1.01D and each of the security agreements and other instruments and
documents executed and delivered pursuant to any of the foregoing or pursuant to
Section 5.10 or Section 5.11.

“Senior Secured Debt” at any date shall mean (i) the aggregate principal amount
of Consolidated Debt of Holdings and the Subsidiaries outstanding at such date
that consists of, without duplication, (A) Indebtedness that in each case is
then secured by a Lien and (B) other Indebtedness of the Subsidiaries referenced
in Consolidated Debt, less (ii) the aggregate amount of Unrestricted Cash and
Permitted Investments of Holdings and the Subsidiaries on such date.

“Senior Secured First Lien Notes” shall mean up to $1,125 million aggregate
principal amount of Claire’s Stores’ 9.00% Senior Secured First Lien Notes due
2019 issued pursuant to the Senior Secured First Lien Notes Indenture and
outstanding on the Closing Date.

“Senior Secured First Lien Notes Indenture” shall mean the Indenture dated as of
February 28, 2012 under which the Senior Secured First Lien Notes were issued,
among Claire’s Stores and certain of its subsidiaries party thereto and the
trustee named therein from time to time, as amended, restated, supplemented or
otherwise modified from time to time in accordance with the requirements
thereof.

“Specified Collateral Value” shall mean, as of any date of determination, the
sum of (i) the aggregate book value of accounts receivable (including any bills
of exchange) owned by the Loan Parties or any Subsidiary (excluding receivables
owing from a member of the NA Group, CGHL or an Affiliate to such Loan Party or
Subsidiary) plus (ii) the aggregate book value of Inventory owned by the Loan
Parties and the Subsidiaries plus (iii) the aggregate amount of prepaid expenses
of the Loan Parties and the Subsidiaries, in an amount not to exceed $10,000,000
at such time plus (iv) the aggregate amount of Unrestricted Cash and Permitted
Investments of Holdings and the Subsidiaries.

“Subordinated Intercompany Debt” shall have the meaning assigned to such term in
Section 6.01(e).

“subsidiary” shall mean, with respect to any person (herein referred to as the
“parent”), any corporation, partnership, association or other business entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or more than 50% of
the general partnership interests are, at

 

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the time any determination is being made, directly or indirectly, owned,
Controlled or held, or (b) that is, at the time any determination is made,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

“Subsidiary” shall mean, unless the context otherwise requires, a subsidiary of
Holdings (which, for the avoidance of doubt, includes each Loan Party other than
Holdings).

“Subsidiary Loan Parties” shall mean (a) each Wholly Owned Subsidiary of
Holdings (other than any Excluded Subsidiary) and (b) each Wholly Owned
Subsidiary of Holdings that becomes, or is required to become, a Guarantor after
the Closing Date pursuant to Section 5.10(d).

“Swap Agreement” shall mean any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided, that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
Claire’s Stores, the Borrowers or any of the Subsidiaries shall be a Swap
Agreement.

“Swiss Account Pledge Agreements” means, collectively, the Swiss Claire’s
Switzerland Account Pledge Agreement, Swiss Claire’s Holding Account Pledge
Agreement and the Swiss CSI Luxembourg Account Pledge Agreement.

“Swiss Assigned Claims” means, collectively, the Swiss Claire’s Switzerland
Assigned Claims and the Swiss Claire’s Holding Assigned Claims.

“Swiss Bank Accounts” means, collectively, the Swiss Claire’s Switzerland Bank
Accounts, the Swiss Claire’s Holding Bank Accounts and the Swiss CSI Luxembourg
Bank Accounts.

“Swiss Borrower” means any Borrower organized under the laws of Switzerland or,
if different, deemed resident in Switzerland for Swiss Withholding Tax purposes.

“Swiss Claire’s Holding Account Pledge Agreement” means that certain Bank
Account Pledge Agreement, dated as of the date hereof, between Claire’s Holding
GmbH, as pledgor, and the Collateral Agent, acting for itself (including as
creditor of the Parallel Obligations) and as direct representative (direkter
Stellvertreter) in the name and for the account of the other Lenders as secured
parties, in form and substance acceptable to the Lenders, as amended, amended
and restated, supplemented or otherwise modified from time to time, regarding
the Swiss Claire’s Holding Bank Accounts.

“Swiss Claire’s Holding Assigned Claims” means the Assigned Claims (as defined
in the Swiss Claire’s Holding Receivables Assignment Agreement).

 

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“Swiss Claire’s Holding Bank Accounts” means the Pledged Assets (as defined in
the Swiss Claire’s Holding Account Pledge Agreement).

“Swiss Claire’s Holding Pledged Equity Interests” means the Pledged Assets (as
defined in the Swiss Claire’s Holding Share Pledge Agreement).

“Swiss Claire’s Holding Receivables Assignment Agreement” means that certain
Receivables Assignment Agreement, dated as of the date hereof, between Claire’s
Holding GmbH, as pledgor, and the Collateral Agent, as secured party acting for
itself and for the account of the Lenders as beneficiaries, in form and
substance acceptable to the Lenders, as amended, amended and restated,
supplemented or otherwise modified from time to time, regarding the Swiss
Claire’s Holding Assigned Claims.

“Swiss Claire’s Holding Share Pledge Agreement” means that certain Share Pledge
Agreement, dated as of the date hereof, between Claire’s Holdings S.à r.l., as
pledgor, and the Collateral Agent, acting for itself (including as creditor of
the Parallel Obligations) and as direct representative (direkter Stellvertreter)
in the name and for the account of the other Lenders as secured parties, in form
and substance acceptable to the Lenders, as amended, amended and restated,
supplemented or otherwise modified from time to time, regarding the Swiss
Claire’s Holding Pledged Equity Interests.

“Swiss Claire’s Switzerland Account Pledge Agreement” means that certain Bank
Account Pledge Agreement, dated as of the date hereof, between Claire’s
Switzerland GmbH, as pledgor, and the Collateral Agent, acting for itself
(including as creditor of the Parallel Obligations) and as direct representative
(direkter Stellvertreter) in the name and for the account of the other Lenders
as secured parties, in form and substance acceptable to the Lenders, as amended,
amended and restated, supplemented or otherwise modified from time to time,
regarding the Swiss Claire’s Switzerland Bank Accounts.

“Swiss Claire’s Switzerland Assigned Claims” means the Assigned Claims (as
defined in the Swiss Claire’s Switzerland Receivables Assignment Agreement).

“Swiss Claire’s Switzerland Bank Accounts” means the Pledged Assets (as defined
in the Swiss Claire’s Switzerland Account Pledge Agreement).

“Swiss Claire’s Switzerland Pledged Equity Interests” means the Pledged Assets
(as defined in the Swiss Claire’s Switzerland Share Pledge Agreement).

“Swiss Claire’s Switzerland Receivables Assignment Agreement” means that certain
Receivables Assignment Agreement, dated as of the date hereof, between Claire’s
Switzerland GmbH, as pledgor, and the Collateral Agent, as secured party acting
for itself and for the account of the Lenders as beneficiaries, in form and
substance acceptable to the Lenders, as amended, amended and restated,
supplemented or otherwise modified from time to time, regarding the Swiss
Claire’s Switzerland Assigned Claims.

 

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“Swiss Claire’s Switzerland Share Pledge Agreement” means that certain Share
Pledge Agreement, dated as of the date hereof, between Claire’s Holding GmbH, as
pledgor, and the Collateral Agent, acting for itself (including as creditor of
the Parallel Obligations) and as direct representative (direkter Stellvertreter)
in the name and for the account of the other Lenders as secured parties, in form
and substance acceptable to the Lenders, as amended, amended and restated,
supplemented or otherwise modified from time to time, regarding the Swiss
Claire’s Switzerland Pledged Equity Interests.

“Swiss CSI Luxembourg Account Pledge Agreement” means that certain Bank Account
Pledge Agreement, dated as of the date hereof, between CSI Luxembourg S.à r.l.,
as pledgor, and the Collateral Agent, acting for itself (including as creditor
of the Parallel Obligations) and as direct representative (direkter
Stellvertreter) in the name and for the account of the other Lenders as secured
parties, in form and substance acceptable to the Lenders, as amended, amended
and restated, supplemented or otherwise modified from time to time, regarding
the Swiss CSI Luxembourg Bank Accounts.

“Swiss CSI Luxembourg Bank Accounts” means the Pledged Assets (as defined in the
Swiss CSI Luxembourg Account Pledge Agreement).

“Swiss Code of Obligations” means the Swiss Code of Obligations of 30 March
1911, as amended and restated from time to time.

“Swiss Collateral” means, collectively, the Swiss Pledged Equity Interests, the
Swiss Bank Accounts and the Swiss Assigned Claims.

“Swiss Collateral Documents” means, collectively, the Swiss Share Pledge
Agreements, the Swiss Account Pledge Agreements and the Swiss Receivables
Assignment Agreements.

“Swiss Guarantor” means any Guarantor organized under the laws of Switzerland
or, if different, deemed resident in Switzerland for Swiss Withholding Tax
purposes.

“Swiss Guidelines” means, together, the guideline “Interbank Loans” of
22 September 1986 (S-02.123) (Merkblatt “Verrechnungssteuer auf Zinsen von
Bankguthaben, deren Gläubiger Banken sind (Interbankguthaben)” vom 22. September
1986), the guideline “Syndicated Loans” of January 2000 (S-02.128) (Merkblatt
“Steuerliche Behandlung von Konsortialdarlehen, Schuldscheindarlehen, Wechseln
und Unterbeteiligungen” vom Januar 2000), the guideline S-02.130.1 in relation
to money market instruments and book claims of April 1999 (Merkblatt vom April
1999 betreffend Geldmarktpapiere und Buchforderungen inländischer Schuldner),
the guideline “Bonds” of April 1999 (S-02.122.1) (Merkblatt “Obligationen” vom
April 1999), the circular letter No. 34 “Customer Credit Balances” of 26 July
2011 (1-034-V-2011) (Kreisschreiben Nr. 34 “Kundenguthaben” vom 26. Juli 2011),
the circular letter No. 15 of 7 February 2007 (1-015-DVS-2007) in relation to
bonds and derivative financial instruments as subject matter of taxation of
Swiss federal income tax, Swiss Federal Withholding Tax and Swiss Federal Stamp
Taxes (Kreisschreiben Nr. 15 “Obligationen und derivative Finanzinstrumente als
Gegenstand der direkten Bundessteuer, der

 

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Verrechnungssteuer und der Stempelabgaben” vom 7. February 2007); all as issued,
and as amended or replaced from time to time, by the Swiss Federal Tax
Administration (SFTA) or as substituted or superseded and overruled by any law,
statute, ordinance, court decision, regulation or the like as in force from time
to time.

“Swiss Non-Bank Rules” means the Swiss Ten Non-Bank Rule, the Swiss Twenty
Non-Bank Rule, as well as any similar rule which is to be complied with in order
to avoid that the Loans may be classified as bonds or other instruments bearing
interest that is subject to Swiss Withholding Tax or in order to avoid that a
Swiss Obligor be assimilated to a bank for Swiss Withholding Tax purposes.

“Swiss Obligor” means a Swiss Borrower or a Swiss Guarantor.

“Swiss Pledged Equity Interests” means, collectively, the Swiss Claire’s
Switzerland Pledged Equity Interests and the Swiss Claire’s Holding Pledged
Equity Interests.

“Swiss Qualifying Bank” means (i) any bank as defined in the Swiss Federal Code
for Banks and Savings Banks dated 8 November 1934 (Bundesgesetz über die Banken
und Sparkassen) as amended from time to time; or (ii) any person or entity
acting on its own account which is licensed as a bank by the banking laws in
force in its jurisdiction of incorporation and any branch of a legal entity,
which is licensed as a bank by the banking laws in force in the jurisdiction
where such branch is situated, and which, in each case, exercises as its main
purpose a true banking activity, having bank personnel, premises, communication
devices of its own and authority of decision making, all within the meaning of
the Swiss Guidelines.

“Swiss Receivables Assignment Agreements” means, collectively, the Swiss
Claire’s Switzerland Receivables Assignment Agreement and the Swiss Claire’s
Holding Receivables Assignment Agreement.

“Swiss Share Pledge Agreements” means, collectively, the Swiss Claire’s
Switzerland Share Pledge Agreement and the Swiss Claire’s Holding Share Pledge
Agreement.

“Swiss Ten Non-Bank Rule” means the rule that the aggregate number of creditors
(within the meaning of the Swiss Guidelines or the applicable legislation or
explanatory notes addressing the same issues that are in force at such time)
under this Agreement which are not Swiss Qualifying Banks must not, at any time,
exceed ten (10), if and as long as a violation of this rule results in Swiss
Withholding Tax consequences for a Swiss Obligor, in each case in accordance
with the meaning of the Swiss Guidelines.

“Swiss Twenty Non-Bank Rule” means the rule that (without duplication) the
aggregate number of creditors (including the Lenders), other than Swiss
Qualifying Banks, of a Swiss Obligor under all outstanding debts relevant for
classification as debenture (Kassenobligation) (including debt arising under
this Agreement and intra-group loans (if and to the extent intra-group loans are
not exempt in accordance with art. 14a of the Swiss Federal Ordinance on
withholding tax dated 19 December 1966), loans, facilities and/or private
placements (including under this Agreement) must not, at any time, exceed twenty
(20), if and as

 

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long as a violation of this rule results in Swiss Withholding Tax consequences
for the Swiss Obligor; in each case in accordance with the meaning of the Swiss
Guidelines or the applicable legislation or explanatory notes addressing the
same issues that are in force at such time.

“Swiss Withholding Tax” means the tax imposed based on the Swiss Federal Act on
Withholding Tax of 13 October 1965 (Bundesgesetz über die Verrechnungssteuer) as
amended from time to time together with the related ordinances, regulations and
guidelines.

“Switzerland” means the Swiss Confederation.]

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties
(including stamp duties), deductions, withholdings or similar charges (including
ad valorem charges) imposed by any Governmental Authority and any and all
interest, penalties and additions related thereto, including, without
limitation, taxes as defined in Section 3 of the German Tax Code
(Abgabenordnung).

“Term Loan” shall have the meaning assigned to such term in the recitals to this
Agreement.

“Test Period” shall mean, on any date of determination, the period of four
consecutive fiscal quarters of the Loan Parties then most recently ended (taken
as one accounting period).

“Total Net Secured Leverage Ratio” shall mean, on any date, the ratio of
(a) Senior Secured Debt as of such date to (b) EBITDA for the period of four
consecutive fiscal quarters of Holdings and the Subsidiaries most recently ended
as of such date; provided, that EBITDA shall be determined for the relevant Test
Period on a Pro Forma Basis.

“Treasury Rate” shall mean as of any prepayment date, the yield to maturity as
of such prepayment date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
(2) Business Days prior to the prepayment date (or, if such Statistical Release
is no longer published, any publicly available source of similar market data))
most nearly equal to the period from the prepayment date to the Final Maturity
Date; provided, however, that if the period from the prepayment date to the
Final Maturity Date is not equal to the constant maturity of a United States
Treasury security for which a weekly average yield is given, the Treasury Rate
shall be obtained by linear interpolation (calculated to the nearest one-
twelfth of a year) from the weekly average yields of United States Treasury
securities for which such yields are given.

“U.K. Debenture” shall mean the Debenture, dated as of the date hereof, by and
between Claire’s Accessories UK Ltd and the Collateral Agent.

“U.S. Bankruptcy Code” shall mean Title 11 of the United States Code, as
amended, or any similar federal or state law for the relief of debtors.

 

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“Uniform Commercial Code” shall mean the Uniform Commercial Code as the same may
from time to time be in effect in the State of New York or the Uniform
Commercial Code.

“Unrestricted Cash” shall mean cash and cash equivalents of Holdings or any of
the Subsidiaries that would not appear as “restricted” on a balance sheet of
Holdings or any of the Subsidiaries.

“Unrestricted Cash Collateral” shall mean cash held in deposit accounts of the
Loan Parties that would not appear as “restricted” on a balance sheet of
Holdings or such Loan Party and that is subject to a first priority or first
ranking perfected security interest in favor of the Collateral Agent for the
benefit of the Secured Parties; provided, that cash held in deposit accounts of
the Loan Parties shall be deemed for the purposes of calculating “Unrestricted
Cash Collateral” to be subject to a first priority or first ranking perfected
security interest prior to being so granted and/or perfected to the extent such
deposit accounts are intended to be subject to a first priority or first ranking
perfected security interest in favor of the Collateral Agent for the benefit of
the Secured Parties in accordance with Section 5.10 or Section 5.11 hereof until
the expiration of the period of time contemplated by Section 5.10 or
Section 5.11, as applicable.

“USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

“VAT” means any tax imposed by Switzerland’s Federal Law of June 12, 2009
concerning Value Added Tax (SR 641.20), and any national legislation
implementing that directive, together with any legislation supplemental thereto,
and any other tax of a similar nature and all penalties, cost and interest
related thereto.

“Wholly Owned Subsidiary” of any person shall mean a subsidiary of such person,
all of the Equity Interests of which (other than directors’ qualifying shares or
nominee or other similar shares required pursuant to applicable law) are owned
by such person or another Wholly Owned Subsidiary of such person.

“Write-Down and Conversion Powers” shall mean, with respect to any EEA
Resolution Authority, the write-down and conversion powers of such EEA
Resolution Authority from time to time under the Bail-In Legislation for the
applicable EEA Member Country, which write-down and conversion powers are
described in the EU Bail-In Legislation Schedule.

SECTION 1.02    Terms Generally. The definitions set forth or referred to in
Section 1.01 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require. Except
as otherwise expressly provided herein, any reference in this Agreement to any
Loan Document shall mean

 

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such document as amended, restated, supplemented or otherwise modified from time
to time in accordance with the requirements hereof and thereof. Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, that, if Holdings notifies the Administrative Agent that
Holdings requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the Closing Date in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies Holdings that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith. Without limitation of the immediately preceding sentence, any lease
arrangements that are not (or, if entered into after the Closing Date, would not
have been) Capital Lease Obligations as of the Closing Date but subsequently
become Capital Lease Obligations whether as a result of (x) any changes in GAAP
or (y) any changes in the terms of such arrangements required in connection with
the ordinary course renewal or extension thereof, shall not constitute Capital
Lease Obligations under any provision or for any other purposes of this
Agreement. Notwithstanding anything in this Agreement, to the extent any Loan
Party determines in good faith that any notice, certificate or other deliverable
hereunder shall contain or constitute “material non-public information”
(“MNPI”), Holdings shall so advise the Administrative Agent and if elected in
writing by the Administrative Agent shall either redact or not deliver any such
information determined to be MNPI (and the Loan Parties shall be deemed to be in
compliance with any operative provision of this Agreement in relation thereto).

SECTION 1.03 Luxembourg terms. In this Agreement, where it relates to a company
incorporated under the laws of Luxembourg, a reference to: (i) a “winding-up”,
“administration”, “dissolution” or “receivership” includes, without limitation,
bankruptcy (faillite), insolvency, voluntary or judicial liquidation
(liquidation volontaire ou judiciaire), composition with creditors (concordat
préventif de la faillite), reprieve from payment (sursis de paiement),
controlled management (gestion contrôlée), general settlement with creditors,
reorganisation or similar laws affecting the rights of creditors generally; (ii)
a “receiver”, “administrative receiver”, “administrator” or the like includes,
without limitation, a juge délégué, commissaire, juge-commissaire, liquidateur
or curateur; (iii) a “security interest” includes any hypothèque, nantissement,
gage, privilège, sûreté réelle, droit de rétention and any type of real security
or agreement or arrangement having a similar effect and any transfer of title by
way of security; (iv) a person being “unable to pay its debts” includes that
person being in a state of cessation of payments (cessation de paiements); (v)
by-laws or constitutional documents includes its up-to-date (restated) articles
of association (statuts coordonnés); and (iv) a director includes an
administrateur.

 

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SECTION 1.04    French Terms. In this Agreement, with respect to a Loan Party
incorporated in France, a reference to:

(a)    a “composition”, “compromise”, “assignment” or similar “arrangement with
any creditor” includes a “procédure de conciliation” and “mandate ad hoc” under
articles L. 611-3 et seq. of the French Commercial Code (Code de commerce);

(b)    “compulsory manager”, “liquidator”, “receiver”, “administrator”,
“administrative receiver”, includes an “administrateur judiciaire”, “mandataire
ad hoc”, “conciliateur”, “liquidateur” or other similar officer;

(c)    a “guarantee” includes any “cautionnement”, “aval” or any “garantie”
which is independent from the debt for which it relates;

(d)    a “lease” includes any “bail” or an “opération de crédit-bail”;

(e)    a “reorganisation” includes any contribution of part of its business in
consideration of shares (“apport partiel d’actifs”), any demerger (“scission”)
implemented in accordance with articles L. 236-1 to L. 236-24 of the French
Commercial Code (Code de commerce) or any merger which includes any “fusion”
implemented in accordance with articles L. 236-1 to L. 236-24 of the French
Commercial Code (Code de commerce) or any operation of “transfert universel de
patrimoine”;

(f)    a “Security” includes any type of security (“sûreté réelle”), transfer by
way of security, trust (“fiducie”) or any other agreement or arrangement having
a similar effect;

(g)    a person being “unable to pay its debts” includes that person being in a
state of “cessation des paiements”; and

(h)    a “wind-up”, “dissolution”, “administration” or “bankruptcy” includes a
“redressement judiciaire”, “cession totale ou partielle de l’entreprise”,
“liquidation judiciaire”, “procédure de sauvegarde financière accélérée”,
“procédure de sauvegarde accélérée” or “procédure de sauvegarde” under articles
L. 620-1 et seq. of the French Commercial Code (Code de commerce).

ARTICLE II.

The Credits

SECTION 2.01    Commitments. Upon the terms and subject to the conditions set
forth herein, each Lender agrees to make a Loan in Dollars to the Borrowers on
the Closing Date in an amount equal to such Lender’s Commitment. Once repaid,
the Term Loan may not be reborrowed. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided, that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender’s failure to make Loans as
required.

SECTION 2.02    [Reserved].

 

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SECTION 2.03    [Reserved].

SECTION 2.04    Procedure for Borrowing. On the Closing Date, each Lender shall
make available to the account of the Administrative Agent, an amount in
immediately available funds equal to its Commitment. Upon receipt of the funds
to be made available by the Lenders, the Administrative Agent shall disburse
such funds by depositing the requested amounts into the account(s) specified by
Holdings to the Administrative Agent.

SECTION 2.05    [Reserved].

SECTION 2.06    [Reserved].

SECTION 2.07    [Reserved].

SECTION 2.08    [Reserved].

SECTION 2.09    Repayment of Loans; Evidence of Debt.

(a)    Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

(b)    The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) any amount received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

(c)    The entries made in the accounts maintained pursuant to paragraph (a) or
(b) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided, that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.

(d)    Any Lender may request that Loans made by it be evidenced by a Note. In
such event, each Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in substantially the form
of Exhibit C. Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).

(e)    The outstanding unpaid principal balance and all accrued and unpaid
interest on the Loans shall be due and payable on the Maturity Date.

 

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SECTION 2.10    Fees. The Borrowers shall pay to the Collateral Agent, for its
own account, the fees described in the Collateral Agent Fee Letter, on the
terms, in the amount and at the times set forth therein.

SECTION 2.11    Prepayment of Loans.

(a)    Immediately upon any Asset Sale by Holdings or any of its Subsidiaries
pursuant to Section 6.05 (a), (f) or (i), but, if applicable, subject to the
reinvestment right set out in clause (d) below, the Borrowers shall prepay the
outstanding principal amount of the Loans in an amount equal to 100% of the Net
Cash Proceeds received by Holdings or such Subsidiary in connection with such
Asset Sale to the extent that the aggregate amount of such Net Cash Proceeds
received by all Loan Parties and the Subsidiaries (and not otherwise paid to the
Administrative Agent as a prepayment of the Loans) shall exceed, for all such
Asset Sales in any fiscal year of the Borrowers, $5,000,000.

(b)    Upon the issuance or incurrence by Holdings or any of its Subsidiaries of
any Indebtedness (other than Indebtedness permitted pursuant to Section 6.01),
the Borrowers shall prepay the outstanding amount of the Loans in an amount
equal to 100% of the Net Cash Proceeds received by such Person in connection
therewith.

(c)    Upon the receipt by Holdings or any of its Subsidiaries of any
Extraordinary Receipts, but subject to the reinvestment right set out in clause
(d) below, the Borrowers shall prepay the outstanding principal amount of the
Loans in an amount equal to 100% of the Net Cash Proceeds received by Holdings
or such Subsidiary, in connection with such Extraordinary Receipt to the extent
that the aggregate amount of the Net Cash Proceeds received by all Loan Parties
and the Subsidiaries (and not otherwise paid to the Administrative Agent as a
prepayment of the Loans) shall exceed, for all such Extraordinary Receipts in
any fiscal year of Holdings and the Subsidiaries, $5,000,000.

(d)    Notwithstanding the foregoing, in connection with the receipt of Net Cash
Proceeds from (A) Extraordinary Receipts and (B) Asset Sales pursuant to Section
6.05(f) or (i) (but, for the avoidance of doubt, not Section 6.05(a)), such Net
Cash Proceeds shall not be required to be applied to the prepayment of the Loans
on such date to the extent Holdings notifies the Administrative Agent promptly
following receipt of any such proceeds setting forth the Borrowers’ intention to
use any portion of such proceeds, within 365 days of such receipt, to acquire,
maintain, develop, construct, improve, upgrade or repair assets useful in the
business of the Subsidiaries (and with respect to Net Cash Proceeds received by
a Loan Party, useful in the business of such Loan Party) or to make Permitted
Business Acquisitions and other Investments permitted hereunder (excluding
Permitted Investments or intercompany Investments in Subsidiaries) or to
reimburse the cost of any of the foregoing incurred on or after the date on
which the Asset Sale or Extraordinary Receipt giving rise to such proceeds was
contractually committed, such portion of such proceeds shall not constitute Net
Cash Proceeds except to the extent not, within 365 days of such receipt, so used
or contractually committed to be so used (it being understood that if any
portion of such proceeds are not so used within such 365 days period but within
such 365 days period are contractually committed to be used, then such remaining
portion if not so used within 180 days following the end of such 365 days period
shall constitute Net Cash Proceeds as of such date without giving effect to this
proviso).

 

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(e)    The Borrowers shall have the right at any time and from time to time to
prepay the Loans in whole or in part, in an aggregate principal amount that is
an integral multiple of $500,000 and not less than $1,000,000.

(f)    Prior to any prepayment of the Loans, Holdings shall notify the
Administrative Agent in writing not later than 2:00 p.m., Local Time, one
(1) Business Day before the scheduled date of such prepayment, which notice
shall be irrevocable except to the extent conditioned on a refinancing of all or
any portion of the Loans. Each prepayment of Loans shall be applied to the Loans
such that each Lender receives its ratable share of such prepayment (based upon
the respective Loans held by the Lenders at the time of such prepayment).
Prepayments of Loans shall be accompanied by accrued interest on the amount
repaid and, as liquidated damages and compensation for the costs of makeup funds
available hereunder solely with respect to prepayments of Loans pursuant to
Sections 2.11(b) and 2.11(e), the Applicable Prepayment Premium. The Borrowers
agree that the amount of the Applicable Prepayment Premium is a reasonable
calculation of the Lenders’ lost profits in view of the difficulties and
impracticalities of determining actual damages resulting from an early
prepayment of the Loans.

SECTION 2.12    Additional Interest. The Borrowers agree to pay additional
interest to each Lender until the first anniversary of the Closing Date (the
“Additional Interest”) in an aggregate amount equal to 3.00% per annum of the
aggregate principal amount of such Lender’s ratable share of Loans outstanding
as of the Closing Date. The Additional Interest shall be paid as capitalized
interest quarterly to the Lenders (in quarterly amounts equal to 0.75% of the
aggregate principal amount of such Lender’s ratable share of Loans outstanding
as of the Closing Date) and added to the principal balance of the Loans on the
Interest Payment Dates occurring on April 15, 2017, July 15, 2017, October 15,
2017 and January 15, 2018.

SECTION 2.13    Interest.

(a)    The Loans shall bear interest at a rate per annum equal to 12.00% per
annum. Accrued interest on the Loans shall be payable in arrears on each
Interest Payment Date, commencing with the Interest Payment Date occurring on
April 15, 2017, and upon the Maturity Date; provided, that (x) interest accrued
pursuant to paragraph (b) of this Section shall be payable on demand and (y) in
the event of any repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment.

(b)    Automatically and for so long as any Event of Default shall have occurred
and be continuing under Section 7.01(b), (c), (h) or (i) (or at the election,
after notice to Holdings, of the Administrative Agent or Required Lenders for so
long as any other Event of Default shall have occurred and be continuing) (i)
all Loans shall bear interest after as well as before judgment, at a rate per
annum equal to 2% plus the rate otherwise applicable to such Loan as provided in
the preceding paragraph of this Section or (ii) in the case of any other amount

 

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(including, but not limited to, fees to be paid under the Loan Documents), such
amount shall bear interest at a rate per annum equal to 2% plus the rate
applicable to Loans as provided in paragraph (a) of this Section.

(c)    All interest hereunder shall be computed on the basis of a year of 365
days or 366, as applicable, and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

(d)    Minimum Interest.

(i)    By entering into this Agreement, the Parties have assumed in good faith
that the interest payable hereunder is not and will not become subject to any
deduction on account of Swiss Withholding Tax. Nevertheless, in the event that
Swiss Withholding Tax should be imposed on any interest payable under this
Agreement or another Loan Document and should it be unlawful for a Swiss Obligor
to comply with Section 2.17(a) for any reason (where this would otherwise be
required by the terms of Section 2.17(a)) then:

(a)    the applicable interest rate in relation to that interest payment shall
be (1) the interest rate which would have applied to that interest payment (as
provided for in this Section 2.13) in the absence of this paragraph (d), divided
by (2) one (1) minus the rate at which the relevant deduction on account of
Swiss Withholding Tax is required to be made (where the rate at which such
deduction is required to be made is for this purpose expressed as a fraction of
(1) rather than as a percentage);

(b)    that Swiss Obligor shall: (i) pay the relevant interest at the adjusted
rate in accordance with paragraph (A) above and (ii) make the deduction on
account of Swiss Withholding Tax on the interest so recalculated and remit such
amount to the applicable Governmental Authority; and

(c)    all references to a rate of interest payable by a Swiss Obligor in
respect of each relevant Loan shall be construed accordingly.

SECTION 2.14    [Reserved].

SECTION 2.15    [Reserved].

SECTION 2.16    [Reserved].

SECTION 2.17    Taxes.

(a)    Any and all payments by or on account of any obligation of any Loan Party
under any Loan Document shall be made free and clear of and without deduction
for any Taxes, except where required by applicable law. If any applicable
withholding agent shall be

 

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required by applicable law to deduct any Taxes from such payments, then (i) to
the extent the deduction is an account of Indemnified Taxes or Other Taxes, the
sum payable by the Loan Parties shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.17) the Administrative Agent or any Lender, as
applicable, receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the applicable withholding agent shall make such
deductions and (iii) the applicable withholding agent shall timely pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.

(b)    In addition, the Loan Parties shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

(c)    Each Loan Party shall indemnify the Administrative Agent and each Lender
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes payable by the Administrative Agent or such Lender, as
applicable, on or with respect to any payment by or on account of any obligation
of such Loan Party under any Loan Document and any Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section 2.17 and Section 2.13(d)(i)(b)(ii)) and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to such Loan Party by a Lender, or by the
Administrative Agent on its own behalf, on behalf of another Agent or on behalf
of a Lender shall be conclusive absent manifest error.

(d)    As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by a Loan Party to a Governmental Authority and as soon as practicable
following the making of any payment pursuant to Section 2.13(d)(i)(b)(ii), such
Loan Party shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(e)    Any Lender that is entitled to an exemption from or reduction of
withholding Tax or backup withholding Tax with respect to payments under any
Loan Document shall deliver to Holdings (with a copy to the Agents), to the
extent such Lender is legally eligible to do so, at the time or times prescribed
by applicable law, such properly completed and executed documentation prescribed
by applicable law, or as may reasonably be requested by Holdings or the
Administrative Agent to permit such payments to be made without such withholding
tax or at a reduced rate. In addition, each Lender shall deliver such forms, if
legally eligible to deliver such forms, promptly upon the obsolescence,
expiration or invalidity of any form previously delivered by such Lender. Each
Lender shall promptly notify Holdings and the Administrative Agent at any time
it determines that it is no longer in a position to provide any previously
delivered certificate (or any other form of certification adopted by the United
States of America or other taxing authorities for such purpose).

 

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(f)    Without limiting the generality of Section 2.17(e) above:

(A)    If a payment made to a Lender under any Loan Document would be subject
withholding Tax imposed by FATCA if such Lender were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in Section
1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to
Holdings and the Agents at the time or times prescribed by law and at such time
or times reasonably requested by Holdings or the Administrative Agent such
documentation prescribed by applicable law (including as prescribed by Section
1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by Holdings or the Administrative Agent as may be necessary for
Holdings and the Administrative Agent to comply with their obligations under
FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment. Solely for purposes of this Section 2.17(f), “FATCA” shall include
any amendments made to FATCA after the date of this Agreement.

(B)    Each Lender that is a United States Person shall deliver to Holdings and
the Administrative Agent two executed originals of Internal Revenue Service Form
W-9 (or any subsequent versions thereof or successors thereto) on or before the
date such Lender becomes a party and upon the expiration of any form previously
delivered by such Lender.

(C)    Notwithstanding any other provision of this Section 2.17, a Lender shall
not be required to deliver any form pursuant to this paragraph that such Lender
is not legally eligible to deliver.

(g)    If the Agents or Lender has received a refund (in cash or as an offset
against other Taxes payable) of any Indemnified Taxes or Other Taxes as to which
it has been indemnified by any Loan Party or with respect to which a Loan Party
has paid additional amounts pursuant to this Section 2.17 or pursuant to Section
2.13(d)(i)(b)(ii), it shall pay over such refund to such Loan Party (but only to
the extent of indemnity payments made, or additional amounts paid, by such Loan
Party under this Section 2.17 or pursuant to Section 2.13(d)(i)(b)(ii)with
respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net
of all out of pocket expenses of the Agents, such Lender (including any Taxes
imposed with respect to such refund) as is determined by the Administrative
Agent, such Lender in good faith and in its sole discretion, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that such Loan Party, upon the request
of the Administrative Agent, such Lender, agrees to repay as soon as reasonably
practicable the amount paid over to such Loan Party (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender in the event the Administrative Agent, such
Lender is required to repay such refund to such Governmental Authority. This
Section 2.17 shall not be construed to require the Administrative Agent or any
Lender to make available its Tax returns (or any other information relating to
its Taxes which it deems in good faith to be confidential) to the Loan Parties
or any other person.

(h)    Any payments by any Loan Party under any Loan Document which (in whole or
in part) constitute consideration for a supply or otherwise serve for VAT
purposes shall

 

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be deemed to be exclusive of any VAT which is chargeable in connection
therewith. If, in connection with any payments by any Loan Party under any Loan
Document, VAT is chargeable to the Lender, such Loan Party shall promptly pay to
the Lender, an amount equal to the amount of such VAT (and the Lender shall,
promptly following a request therefore by the Borrower, provide an appropriate
VAT invoice to the Borrower). For the avoidance of doubt and without
duplication, where any Loan Party is required under any Loan Document to
reimburse the Lender for any costs or expenses, that Loan Party shall also at
the same time pay and indemnify the Lender against all VAT and any stamp duty,
registration or other similar tax payables, in each case incurred in connection
with the entry into, performance or enforcement of any Loan Document.

SECTION 2.18    Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

(a)    Unless otherwise specified, the Borrowers shall make each payment
required to be made by them hereunder (whether of principal, interest, fees, or
of amounts payable under Section 2.17, or otherwise) prior to 2:00 p.m., Local
Time. The Borrowers shall make each such payment on the date when due, in
immediately available funds, without condition or deduction for any defense,
recoupment, set off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent or
the Collateral Agent, as applicable, to the applicable account designated to
Holdings by the Administrative Agent or the Collateral Agent, as applicable,
except that payments pursuant to Sections 2.17 and 9.05 shall be made directly
to the persons entitled thereto. The Administrative Agent shall distribute any
such payments received by it for the account of any other person to the
appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, then unless
otherwise provided with respect to such payment, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments under the Loan Documents shall be made in Dollars. Any
payment required to be made by the Administrative Agent hereunder shall be
deemed to have been made by the time required if the Administrative Agent shall,
at or before such time, have taken the necessary steps to make such payment in
accordance with the regulations or operating procedures of the clearing or
settlement system used by the Administrative Agent to make such payment.

(b)    If at any time insufficient funds are received by and available to the
Administrative Agent from the Borrowers to pay fully all amounts of principal,
interest and fees then due from the Borrowers hereunder, such funds shall be
applied first, to all fees and expenses then due and payable to the Agents,
second, to all fees and expenses then due and payable to the Lenders, third, to
accrued and unpaid interest on the Loans until paid in full, fourth, to the
aggregate outstanding principal amount of the Loans until paid in full, fifth,
to all other outstanding Obligations until paid in full, and sixth, to the
Borrowers or otherwise in accordance with applicable law.

 

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(c)    If any Lender shall, by exercising any right of set off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Loans resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans; provided, that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph (c) shall not be construed
to apply to any payment made by the Borrowers pursuant to and in accordance with
the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to any Loan Party or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
(c) shall apply). Each Borrower consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of set off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.

(d)    [Reserved].

(e)    If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.18(d), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.

SECTION 2.19    Mitigation Obligations; Replacement of Lenders.

(a)    If any Loan Party is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender with respect to
Indemnified Taxes pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or Affiliates, if, in the reasonable judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.17 in the future and (ii) would not
subject such Lender to any material unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender in any material respect. The
Borrowers hereby agree to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

(b)    If the Loan Parties are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender with respect
to Indemnified Taxes pursuant to Section 2.17, then the Borrowers may, at their
sole expense and effort, upon notice by Holdings to such Lender and the
Administrative Agent, require such

 

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Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided, that (i) Holdings shall have received the prior written
consent of the Administrative Agent, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, Applicable
Prepayment Premium accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Loan Parties (in the case of all other amounts
including, without limitation, the Applicable Prepayment Premium) and (iii) in
the case of any such assignment resulting from a claim for payments required to
be made with respect to Indemnified Taxes pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments.

(c)    If any Lender (such Lender, a “Non-Consenting Lender”) has failed to
consent to a proposed amendment, waiver, discharge or termination which pursuant
to the terms of Section 9.08 requires the consent of all of the Lenders affected
and with respect to which the Required Lenders shall have granted their consent,
then the Borrowers shall have the right (unless such Non-Consenting Lender
grants such consent) at their sole expense (including with respect to the
processing and recordation fee referred to in Section 9.04(b)(ii)(B)) to replace
such Non-Consenting Lender by deeming such Non-Consenting Lender to have
assigned its Loans to one or more assignees reasonably acceptable to the
Administrative Agent; provided, that: (a) all Obligations of the Borrowers owing
to such Non-Consenting Lender being replaced including, without limitation, any
Applicable Prepayment Premiums, fees and expenses, shall be paid in full to such
Non-Consenting Lender concurrently with such assignment and (b) the replacement
Lender shall purchase the foregoing by paying to such Non-Consenting Lender a
price equal to the principal amount thereof plus accrued and unpaid interest
thereon. No action by or consent of the Non-Consenting Lender shall be necessary
in connection with such assignment, which shall be immediately and automatically
effective upon payment of such purchase price. In connection with any such
assignment, the Borrowers, the Administrative Agent, such Non-Consenting Lender
and the replacement Lender shall otherwise comply with Section 9.04; provided,
that if such Non-Consenting Lender does not comply with Section 9.04 within
three Business Days after Borrower Representative’s request, compliance with
Section 9.04 shall not be required to effect such assignment.

ARTICLE III.

Representations and Warranties

On the Closing Date, each Borrower represents and warrants to each of the
Lenders that:

SECTION 3.01    Organization; Powers. Except as set forth on Schedule 3.01, each
of the Loan Parties and each of the Material Subsidiaries (a) is a partnership,
limited liability company or corporation duly organized, validly existing and in
good standing (or

 

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in any foreign jurisdiction where an equivalent status exists, enjoys the
equivalent status under the laws of such foreign jurisdiction of organization
outside of the United States) under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted, (c) is qualified to do
business in each jurisdiction where such qualification is required, except where
the failure so to qualify would not reasonably be expected to have a Material
Adverse Effect, and (d) in the case of the Loan Parties, has the power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents and each other agreement or instrument contemplated thereby to which
it is or will be a party and, in the case of the Borrowers, to borrow and
otherwise obtain credit hereunder.

SECTION 3.02    Authorization. The execution, delivery and performance by each
Loan Party of each of the Loan Documents to which it is a party, and the
borrowings hereunder and the transactions contemplated hereby (a) have been duly
authorized by all corporate, stockholder, partnership or limited liability
company action required to be obtained by such Loan Party and (b) will not
(i) violate (A) the certificate or articles of incorporation or other
constitutive documents (including any partnership, limited liability company or
operating agreements) or by laws of any such Loan Party, (B) any provision of
law, statute, rule or regulation, any applicable order of any court or any rule,
regulation or order of any Governmental Authority, except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or (C) any provision of any Material Indebtedness to which any
such Loan Party is a party or by which any of them or any of their property is
or may be bound, (ii) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under, give rise to a
right of or result in any cancellation or acceleration of any right or
obligation (including any payment) or to a loss of a material benefit under any
Material Indebtedness, or (iii) result in the creation or imposition of any Lien
upon or with respect to any property or assets now owned or hereafter acquired
by any such Loan Party, other than the Liens created by the Loan Documents and
Permitted Liens.

SECTION 3.03    Enforceability. This Agreement has been duly executed and
delivered by Holdings and each Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party that is a party thereto
will constitute, a legal, valid and binding obligation of such Loan Party
enforceable against each such Loan Party in accordance with its terms (except
with respect to the U.K. Debenture as it relates to any security interest
therein taken over Equity Interests in any Subsidiary that is not organized
under the laws of England and Wales), subject to (i) the effects of bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or other similar
laws affecting creditors’ rights generally, (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (iii) implied covenants of good faith and fair dealing.

SECTION 3.04    Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with this Agreement, except for (a) such as
have been made or obtained and are in full force and effect, (b) such actions,
consents and approvals the failure of which to be obtained or made would not
reasonably be expected to have a Material Adverse Effect and (c) filings or
other actions listed on Schedule 3.04.

 

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SECTION 3.05    Financial Statements. (a) (i) The summary condensed consolidated
financial information of CGIH (a) as of and for the fiscal year ended,
January 31, 2016, and (ii) as of and for the three months ended October 29,
2016, which in each case has been derived from consolidating schedules to
Claire’s Stores’ consolidated financial statements as of the same date and for
the same period, copies of which have heretofore been furnished to each Lender,
were prepared in accordance with GAAP consistently applied throughout the period
covered thereby and present fairly in all material respects the consolidated
financial position of CGIH and its Subsidiaries as at such date and the
consolidated results of operations and cash flows of CGIH and its Subsidiaries
for the fiscal period then ended (subject, in the case of clause (ii), to normal
year-end audit adjustments and the absence of footnotes).

(b)    Since October 29, 2016 there have been no events, developments or
circumstances that have had, or could reasonably be expected to have, neither
individually or in the aggregate, a Material Adverse Effect.

SECTION 3.06    Subsidiaries.

(a)    Schedule 3.06(a) sets forth as of the Closing Date the name and
jurisdiction of incorporation, formation or organization of each subsidiary of
Holdings other than Immaterial Subsidiaries and, as to each such subsidiary, the
percentage of each class of Equity Interests owned by Holdings or by any such
subsidiary.

(b)    As of the Closing Date, there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than
directors’ qualifying shares) of any nature relating to any Equity Interests of
Holdings or any of the Subsidiaries.

SECTION 3.07    Litigation; Compliance with Laws.

(a)    There are no actions, suits or proceedings at law or in equity or by or
on behalf of any Governmental Authority or in arbitration now pending, or, to
the knowledge of the Borrowers, threatened in writing against or affecting the
Loan Parties or the Subsidiaries or any business, property or rights of any such
person which would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

(b)    None of the Loan Parties or the Subsidiaries or their respective
properties or assets is in violation of (nor will the continued operation of
their material properties and assets as currently conducted violate), any law,
rule or regulation (including any zoning, building, ordinance, code or approval,
or any building permit) or any restriction of record or agreement affecting any
Mortgaged Property, or is in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority, where such violation or
default would reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.

 

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SECTION 3.08    Investment Company Act. None of the Loan Parties or the
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended.

SECTION 3.09    Use of Proceeds. The Borrowers will use the proceeds of the
Loans (a) to repay outstanding indebtedness and any other obligation due and
arising under the Existing Revolving Credit Facility in full, (b) to pay fees,
costs and expenses incurred in connection with this Agreement and (c) for
general corporate purposes.

SECTION 3.10    Tax Returns. Except as set forth on Schedule 3.10:

(a)    Each of the Loan Parties and the Subsidiaries has filed or caused to be
filed all material Tax returns required to have been filed by it and each such
material Tax return is true and correct in all material respects;

(b)    Each of the Loan Parties and the Subsidiaries has timely paid or caused
to be timely paid all material Taxes shown to be due and payable by it on the
returns referred to in clause (a) and all other material Taxes or assessments
(or made adequate provision (in accordance with GAAP) for the payment of all
material Taxes due) with respect to all periods or portions thereof ending on or
before the Closing Date (except Taxes or assessments that are being contested in
good faith by appropriate proceedings in accordance with Section 5.03 and for
which such Loan Party or any of such Subsidiaries (as the case may be) has set
aside on its books adequate reserves in accordance with GAAP); and

(c)    As of the Closing Date, with respect to Holdings and each of the
Subsidiaries, there are no claims being asserted in writing with respect to any
material Taxes.

SECTION 3.11    Employee Benefit Plans. The Loan Parties and the Subsidiaries
are in compliance with (i) all applicable provisions of law and all applicable
regulations and published interpretations thereunder with respect to any
employee pension benefit plan or other employee benefit plan governed by the
laws of the jurisdiction of such entity and (ii) with the terms of any such
plan, except, in each case, for such noncompliance that would not reasonably be
expected to have a Material Adverse Effect.

SECTION 3.12    Labor Matters. Except as, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect: (a) there
are no strikes or other labor disputes pending or threatened against any of the
Loan Parties or any of the Subsidiaries; (b) the hours worked and payments made
to employees of the Loan Parties and the Subsidiaries have not been in violation
of applicable labor law dealing with fair labor standards; and (c) all payments
due from any of the Loan Parties or any of the Subsidiaries or for which any
claim may be made against any of the Loan Parties or any of the Subsidiaries on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued as a liability on the books of such Loan Party or such
Subsidiary to the extent required by GAAP. Except as, individually or in the
aggregate, would not reasonably be expected to have a

 

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Material Adverse Effect, the making of the Loans will not give rise to a right
of termination or right of renegotiation on the part of any union under any
material collective bargaining agreement to which any of the Loan Parties or any
of the Subsidiaries (or any predecessor) is a party or by which any of the Loan
Parties or any of the Subsidiaries is bound.

SECTION 3.13    Insurance. As of the Closing Date, all material insurance
maintained by or on behalf of the Loan Parties and the Subsidiaries is in full
force and effect.

SECTION 3.14    No Default. No Default or Event of Default has occurred and is
continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

SECTION 3.15    Intellectual Property; Licenses, Etc. Except as would not
reasonably be expected to have a Material Adverse Effect and as set forth in
Schedule 3.15, (a) each of the Loan Parties and each of the Subsidiaries owns,
or possesses the right to use, all of the patents, registered trademarks,
registered service marks or trade names, registered copyrights or mask works,
domain names, applications and registrations for any of the foregoing that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other person.

SECTION 3.16    Anti-Money Laundering and Economic Sanctions Laws. None of the
Loan Parties, the Subsidiaries or any of their respective Affiliates and none of
the respective officers, directors or agents of such Loan Party, Subsidiary or
Affiliate has violated or is in violation of any applicable Anti-Money
Laundering Laws. No Loan Party nor any of its Subsidiaries or its Affiliates nor
any director, officer, employee, agent, Affiliate or representative of such Loan
Party, Subsidiary or Affiliate (each, a “Specified Person”) is an individual or
entity currently the subject of any sanctions administered or enforced by OFAC,
the United Nations Security Council, the European Union, Her Majesty’s Treasury
or other relevant sanctions authority (collectively, “Sanctions”), nor is any
Loan Party, any Subsidiary nor any of their respective Affiliates located,
organized or resident in a country or territory that is the subject of
Sanctions.

No Specified Person will use any proceeds of the Loans or lend, contribute or
otherwise make available such proceeds to any Person for the purpose of
financing the activities of or with any Person or in any country or territory
that, at the time of funding, is an Embargoed Person.

Except to the extent conducted in accordance with applicable Law, no Loan Party
any Subsidiary nor any of their respective Affiliates and none of the respective
officers, directors, brokers or agents of such Loan Party, such Subsidiary or
such Affiliate acting or benefiting in any capacity in connection with the Loans
(i) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Embargoed Person,
(ii) deals in, or otherwise engages in any transaction related to, any property
or interests in property blocked pursuant to any Sanctions or (iii) engages in
or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the applicable
prohibitions set forth in any Economic Sanctions Laws.

 

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Except as otherwise disclosed in Schedule 3.16, to the Borrowers’ knowledge,
within the past five years, each of the Loan Parties and the Subsidiaries is in
compliance in all respects with and has not committed any violation of
applicable law or regulation, permit, order or other decision or requirement
having the force or effect of law or regulation of any governmental entity
concerning the importation of products, the exportation or re-exportation of
products (including technology and services), the terms and conduct of
international transactions and the making or receiving of international
payments, including, as applicable, the Tariff Act of 1930, as amended, and
other laws, regulations and programs administered or enforced by U.S. Customs
and Border Protection and U.S. Immigration and Customs Enforcement, and their
predecessor agencies, the Export Administration Act of 1979, as amended, the
Export Administration Regulations, the International Emergency Economic Powers
Act, as amended, the Trading With the Enemy Act, as amended, the Arms Export
Control Act, as amended, the International Traffic in Arms Regulations,
Executive Orders of the President regarding embargoes and restrictions on
transactions with designated entities, the embargoes and restrictions
administered by the U.S. Office of Foreign Assets Control, the anti-boycott laws
administered by the U.S. Department of Commerce and the anti-boycott laws
administered by the U.S. Department of the Treasury.

SECTION 3.17    Anti-corruption Laws. None of the Loan Parties, the Subsidiaries
nor any director, officer, agent, employee or Affiliate of such Loan Party or
such Subsidiary is aware of or has taken any action, directly or indirectly,
that would result in a violation by such persons of the FCPA or any other
applicable anti-corruption laws, including, without limitation, making use of
the mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization or approval of
the payment of any money, or other property, gift, promise to give or
authorization of the giving of anything of value, directly or indirectly, to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office in contravention of the FCPA or any other applicable anti-corruption
laws. The Loan Parties, the Subsidiaries and their respective Affiliates have
conducted their businesses in compliance with applicable anti-corruption laws
and the FCPA and will maintain policies and procedures designed to promote and
achieve compliance with such laws and with the representation and warranty
contained herein.

SECTION 3.18    Federal Reserve Regulations.

(a)    Neither the Loan Parties nor any of the Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.

(b)    No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to purchase
or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose that entails a violation of,
or that is inconsistent with, the provisions of the Regulations of the Board,
including Regulation U or Regulation X.

 

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SECTION 3.19    Solvency.

(a)    As of the Closing Date, immediately after giving effect to the making of
the Loans on the Closing Date, (i) the fair value of the assets of the Loan
Parties and the Subsidiaries on a consolidated basis, exceeds the debts and
liabilities, direct, subordinated, contingent or otherwise, of the Loan Parties
and the Subsidiaries on a consolidated basis, (ii) the present fair saleable
value of the property of the Loan Parties and the Subsidiaries on a consolidated
basis is greater than the amount that will be required to pay the probable
liability of the Loan Parties and the Subsidiaries on a consolidated basis,
respectively, on their debts and other liabilities, direct, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured, (iii) the Loan Parties and the Subsidiaries on a consolidated basis
will be able to pay their debts and liabilities, direct, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured and (iv) the Loan Parties and the Subsidiaries on a consolidated basis
do not have unreasonably small capital with which to conduct the businesses in
which they are engaged as such businesses are now conducted and are proposed to
be conducted following the Closing Date.

(b)    Holdings and the Borrowers do not intend to, nor does Holdings or any
Borrower believe that it or any of the Subsidiaries will incur debts beyond its
ability to pay such debts as they mature, taking into account the timing and
amounts of cash to be received by it or any such subsidiary and the timing and
amounts of cash to be payable on or in respect of their Indebtedness or the
Indebtedness of any such Subsidiary.

SECTION 3.20    Disclosure.

(a)    All written information concerning the Loan Parties and the Subsidiaries
(other than information of a general economic or industry nature) that was made
available to the Lenders or the Administrative Agent by or on behalf of Holdings
and the Subsidiaries in connection with the Transactions or this Agreement on or
before the Closing Date, or that will be made available in connection with the
Transactions or this Agreement following the Closing Date, when taken as a
whole, did not (or will not), when furnished, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances under which such statements are made (after giving effect to all
supplements and updates thereto from time to time).

SECTION 3.21    Security Interest in Collateral. Subject to the Agreed Security
Principles, the agreed periods set forth in the Collateral and Guarantee
Requirement and Section 5.11 hereof, the Collateral Documents create legal,
valid and enforceable Liens on all of the Collateral in favor of the
Administrative Agent for the benefit of itself and the other Secured Parties
(except with respect to the U.K. Debenture as it relates to any security
interest therein taken over Equity Interests in any Subsidiary that is not
organized under the laws of England and Wales), and such Liens constitute (or
shall constitute, within such applicable time periods) first priority perfected
Liens on the Collateral (subject to Permitted Liens) securing the Obligations,
in each case, as and to the extent set forth therein.

 

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SECTION 3.22    Compliance with Swiss Non-Bank Rules. Each Swiss Obligor is in
compliance with the Swiss Non-Bank Rules, provided that a Swiss Obligor shall
not be in breach of this representation and warranty if its number of creditors
is exceeded solely by reason of a failure by one or more Lenders to comply with
the transfer requirements set forth in Section 9.04(i). For the purpose of its
compliance with this Section 3.22, each Swiss Obligor shall assume that the
number of Lenders under this Agreement which are not Swiss Qualifying Banks is
at any time ten (10) (even if such number is effectively less at any time).

SECTION 3.23    Financial Assistance. The Loan Parties shall comply in all
respects with section 678 and 679 of the Companies Act 2006 and any equivalent
legislation in other jurisdictions including in relation to the Security
Documents and payment of amounts due under this Agreement.

SECTION 3.24    Centre of Main Establishments. For the purposes of the Council
of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the
“Regulation”), the centre of main interest (as that term is used in Article 3(1)
of the Regulation of each Loan Party, is in its jurisdiction of incorporation.

SECTION 3.25    PSC Register. Each Loan Party incorporated in England and Wales
shall:

(a)    notify the Collateral Agent if it has issued any warning notice or
restrictions notice under Schedule 1B of the Companies Act 2006 in respect of
any shares which are subject to the Security Documents which has not been
withdrawn and, if available provide to the Administrative Agent and Collateral
Agent a copy of any such warning notice or restrictions notice; and

(b)    following an Event of Default:

(i)    promptly notify the Administrative Agent and the Collateral Agent of its
intention to issue, or its receipt of, any warning notice or restrictions notice
under Schedule 1B of the Companies Act 2006 in respect of any shares which are
subject to the Security Documents; and

(ii)    promptly provide to the Administrative Agent and Collateral Agent a copy
of any such warning notice or restrictions notice,

in each case before it issues, or after it receives, any such notice.

For the purposes of withdrawing any restrictions notice or for any application
(or similar) to the court under Schedule 1B of the Companies Act 2006, each Loan
Party shall provide such assistance as the Collateral Agent may reasonably
request in respect of any shares which are subject to the Security Documents and
provide the Collateral Agent with all the information, documents and evidence
that it may reasonable request in connection with the same, in each case to the
extent it is able to do under applicable law and without any Responsible Officer
being required to act contrary to its legal duties.

 

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ARTICLE IV.

Conditions of Lending

SECTION 4.01    Closing Date. The obligations of the Lenders to make Loans shall
become effective on the first date on which:

(a)    The Administrative Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf of each
party or (ii) written evidence reasonably satisfactory to the Administrative
Agent (which may include electronic transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement.

(b)    The Administrative Agent shall have received, on behalf of itself and the
Lenders on the Closing Date, a favorable written opinion (or opinions) of each
of Morgan, Lewis & Bockius LLP, special New York counsel, Hassans International
Law Firm, special Gibraltar counsel, and local counsel in each other
jurisdiction of organization of each Loan Party, in each case, in form and
substance reasonably satisfactory to the Administrative Agent and the Lenders
(A) dated the Closing Date, (B) addressed to the Administrative Agent and the
Lenders and (C) covering such matters relating to the Loan Documents as the
Lenders shall reasonably request.

(c)    The Administrative Agent shall have received from each Loan Party each of
the items referred to in clauses (i) through (iii) below:

(i)    a certificate of a Responsible Officer of such person dated as of the
Closing Date and certifying:

(A)    as to the accuracy and completeness of each of the corporate and
organizational documents set forth for such Loan Party on Schedule 4.01, dated
as of a recent date (where applicable under applicable foreign law) and attached
to such certificate, including, as applicable (and where available under
applicable local law), each such Loan Party’s (1) Constituent Document as on
file with any Governmental Authority in its jurisdiction of organization or
formation, as applicable, certified as of a recent date by such Governmental
Authority, together with, if applicable (and where available under applicable
local law), certificates from such Governmental Authority attesting to the good
standing and/or tax status of such Loan Party in such jurisdiction, (2) by-laws,
articles of association or equivalent governing agreement and (3) authorizing
resolutions or written consents of such Loan Party’s board of directors,
managers or other appropriate governing body approving and authorizing the
execution, delivery and performance of each Loan Document to which such Loan
Party is a party, in each case certified by such Responsible Officer as being
complete and correct copies of such documents as in effect on the date of such
certification and on the date on which the resolutions or written consents
referred to in clause (3) were adopted,

 

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(B)    as to the incumbency and specimen signature of each Responsible Officer
executing any Loan Document or any other document delivered in connection
herewith on behalf of such Loan Party, and

(C)    as to the absence of any pending proceeding for the dissolution or
liquidation of such person;

(ii)    a certificate of the secretary or equivalent Responsible Officer of such
Loan Party as to the incumbency and specimen signature of each Responsible
Officer executing the certificate pursuant to clause (i)(B) above; and

(iii)    such other documents as the Administrative Agent or the Lenders on the
Closing Date may reasonably request (including without limitation, tax
identification numbers and addresses).

(d)    No later than three business days in advance of the Closing Date, the
Agents shall have received all documentation and other information required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation, the USA PATRIOT
Act, requested by it in writing at least five business days in advance of the
Closing Date.

(e)    The representations and warranties set forth in the Loan Documents shall
be true and correct in all material respects as of such date, as applicable,
with the same effect as though made on and as of such date, except to the extent
such representations and warranties expressly relate to an earlier date (in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date).

(f)    Subject to the Agreed Security Principles, the limitations in the
Collateral and Guarantee Requirement and Section 5.11, the conditions in the
Collateral and Guarantee Requirement to be satisfied on the Closing Date shall
have been satisfied and the Agents shall have received from each Loan Party
(i) a counterpart of each Security Document required to be delivered by such
Loan Party on the Closing Date, signed on behalf of such Loan Party or, if
appropriate, (ii) written evidence reasonably satisfactory to the Administrative
Agent (which may include electronic transmission of a signed signature page of
this Agreement) that such Loan Party has signed a counterpart of each such
Security Document, together with copies of, in each jurisdiction in which such
are available, Lien, intellectual property and other appropriate search reports
and of all effective prior filings listed therein, together with evidence of the
termination of such prior filings, in each case as may be reasonably requested
by the Administrative Agent and (iii) a copy of all notices or documents
required (in accordance with the Agreed Security Principles) related to a pledge
of Equity Interests, together with all share certificates, share registers, bond
registers, stock transfer forms (or the equivalent) duly endorsed in blank and
other documents of title, if any, in each case only if required to be executed
or given on the Closing Date by a Loan Party under the terms of the Security
Documents.

(g)    No Event of Default or Default shall have occurred and be continuing.

 

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(h)    The Administrative Agent shall have received (i) a written borrowing
request from a Responsible Officer of each applicable Borrower specifying
(A) the aggregate amount of the requested Borrowing, (B) the date of such
Borrowing, which shall be a Business Day and (C) the location and number of the
Borrowers’ accounts or any other designated account(s) to which funds are to be
disbursed.

(i)    Since October 29, 2016, no Material Adverse Effect shall have occurred.

(j)    On the Closing Date, the Existing Credit Agreement shall have been, or
substantially concurrently with the initial funding of the Loans shall be,
repaid in full and all obligations thereunder shall have been terminated and all
Liens relating to the Existing Credit Agreement shall have been terminated or
released, subject to any filing or registration made as part of such termination
or release, in each case pursuant to documentation reasonably satisfactory to
the Administrative Agent.

(k)    The Administrative Agent shall have received a certificate from a
Financial Officer of Holdings certifying as to each of the matters set forth in
Section 3.19.

(l)    The Administrative Agent shall have received a certificate from a
Responsible Officer of each Borrower certifying as to the accuracy of the
conditions set forth in clauses (e), (g), (i) and (j) of this Section 4.01.

(m)    The Administrative Agent shall have received the financial statements
(i) required by Section 5.04(a), for the three most recently completed fiscal
years ended at least 90 days prior to the Closing Date and (ii) required by
Section 5.04(b), for each fiscal quarter ending after January 31, 2016 and at
least 45 days prior to the Closing Date (and the corresponding period for the
prior fiscal year), it being understood that the filing with the SEC of annual,
quarterly or current reports on Form 10-K, 10-Q or 8-K, as applicable, of
Claire’s Stores and its consolidated subsidiaries, or delivery by Holdings of
such reports, shall satisfy the requirements of this condition.

(n)    The Agents shall have received all fees and expenses required to be paid
or reimbursed by any Loan Party on the Closing Date including, without
limitation, pursuant to the terms of the Collateral Agent Fee Letter and, in the
case of expenses, to the extent invoiced at least three Business Days prior to
the Closing Date, or such later date as Holdings may agree (which amounts may be
offset against and excluded from the proceeds of the Loans made on the Closing
Date).

(o)    The Administrative Agent shall have received a perfection certificate
duly executed by each Loan Party, in form and substance reasonably satisfactory
to the Administrative Agent.

(p)    The Administrative Agent shall have received evidence reasonably
satisfactory to the Administrative Agent that each license of intellectual
property rights owned, held or used by any Subsidiary has been amended to the
extent required to have a perpetual term and, if applicable, to ensure such
Subsidiaries have all rights necessary to use or exploit or sublicense, as
applicable) such intellectual property rights exclusively in their licensed
territories.

 

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(q)    The Administrative Agent shall have received each of the documents and
other evidence set forth on Schedule 4.01.

For purposes of determining compliance with the conditions specified in this
Article IV, each Lender shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lenders unless a Responsible Officer of the Administrative Agent shall have
received notice from such Lender prior to the Closing Date specifying its
objection thereto.

ARTICLE V.

Affirmative Covenants

Each Loan Party covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until all Obligations (other than in
respect of contingent indemnification and expense reimbursement obligations for
which no claim has been made) shall have been paid in full, unless the Required
Lenders shall otherwise consent in writing, that it will, and will cause each of
the Subsidiaries to:

SECTION 5.01    Existence; Businesses and Properties.

(a)    Do or cause to be done all things necessary to preserve, renew and keep
in full force and effect its legal existence, except, in the case of an
Immaterial Subsidiary, where the failure to do so could not reasonably be
expected to have a Material Adverse Effect and except as otherwise expressly
permitted under Section 6.05; provided that the Loan Parties may liquidate or
dissolve one or more Subsidiary that is not a Loan Party, if the assets of such
Subsidiary to the extent they exceed estimated liabilities are acquired by a
Loan Party or a Wholly Owned Subsidiary of a Loan Party in such liquidation or
dissolution.

(b)    Except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect, do or cause to be done all things necessary to
(i) lawfully obtain, preserve, renew, extend and keep in full force and effect
the permits, franchises, authorizations, patents, trademarks, service marks,
trade names, copyrights, licenses and rights with respect thereto necessary to
the normal conduct of its business, and (ii) at all times maintain and preserve
all property necessary to the normal conduct of its business and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith, if any, may be properly conducted at all
times (in each case except as expressly permitted by this Agreement).

 

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SECTION 5.02    Insurance.

(a)    Maintain, with financially sound and reputable insurance companies,
insurance in such amounts and against such risks as are customarily maintained
by similarly situated companies engaged in the same or similar businesses
operating in the same or similar locations.

SECTION 5.03    Taxes. Pay and discharge promptly when due all material Taxes
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims which, if unpaid, might give rise to a Lien (other than a Permitted Lien)
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such Tax so long as it
is being contested in good faith by appropriate proceedings so long as
(a) Holdings or the affected Subsidiary, as applicable, shall have set aside on
its books adequate reserves as are required in conformity with GAAP, with
respect thereto and (ii) in the case of a Tax which has resulted or may result
in the creation of a Lien on any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such Tax.

SECTION 5.04    Financial Statements, Reports, etc. Furnish to the
Administrative Agent (which will promptly furnish such information to the
Lenders):

(a)    Within 90 days (or such other time period as specified in the SEC’s rules
and regulations with respect to non-accelerated filers for the filing of annual
reports on Form 10-K), for each fiscal year (commencing with the fiscal year
ending January 31, 2017), a condensed consolidated balance sheet and related
statements of operations, comprehensive income and stockholder’s equity which in
each case has been derived from consolidating schedules to Claire’s Stores’
consolidated financial statements as of the same date and for the same fiscal
year showing the financial position of CGIH and the Subsidiaries as of the close
of such fiscal year and the condensed consolidated results of their operations
during such year, which condensed consolidated balance sheet and related
statements of operations, comprehensive income and stockholder’s equity shall
be, as derived from consolidating schedules to Claire’s Stores’ consolidated
financial statements as of the same date and for the same fiscal year, audited
by independent public accountants of recognized national standing and
accompanied by an opinion of such accountants (which shall not be qualified as
to scope of audit or as to the status of any Borrower or any Material Subsidiary
as a going concern) to the effect that such condensed consolidated financial
statements fairly present, in all material respects, the financial position and
results of operations of CGIH and the Subsidiaries on a condensed consolidated
basis in accordance with GAAP, subject to exceptions consistent with the
presentation of financial information contained in the Notes Offering Memorandum
(it being understood that the filing with the SEC of annual reports on Form 10-K
of Claire’s Stores and its consolidated subsidiaries, or delivery by Claire’s
Stores of such reports, shall satisfy the requirements of this Section 5.04(a)
to the extent such annual reports include the information specified herein);

(b)    Within 45 days (or such other time period as specified in the SEC’s rules
and regulations with respect to non-accelerated filers for the filing of
quarterly reports on

 

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Form 10-Q), for each of the first three fiscal quarters of each fiscal year, a
condensed consolidated balance sheet and related statements of operations and
comprehensive income showing the financial position of the CGIH and the
Subsidiaries as of the close of such fiscal quarter and the condensed
consolidated results of their operations during such fiscal quarter and the
then-elapsed portion of the fiscal year, all of which shall be in reasonable
detail and which condensed consolidated balance sheet and related statements of
operations and comprehensive income shall be certified by a Financial Officer of
Holdings on behalf of the Borrowers as fairly presenting, in all material
respects, the financial position and results of operations of the CGIH and the
Subsidiaries on a condensed consolidated basis in accordance with GAAP (subject
to normal year-end audit adjustments and the absence of footnotes), and to
exceptions consistent with the presentation of financial information contained
in the Notes Offering Memorandum (it being understood that the filing with the
SEC of quarterly reports on Form 10-Q or other current reports on Form 8-K, as
applicable of Claire’s Stores and its subsidiaries, or the delivery by Claire’s
Stores of such reports, shall satisfy the requirements of this Section 5.04(b)
to the extent such quarterly reports include the information specified herein);

(c)    (x) concurrently with any delivery of financial statements under
paragraphs (a) or (b) above, a certificate of a Financial Officer of Holdings
(i) (A) certifying that no Event of Default or Default has occurred or, if such
an Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto, (ii) certifying the Loan Parties’ compliance with Section 6.11, and
(iii) certifying a list of names of all Immaterial Subsidiaries, that each
Subsidiary set forth on such list individually qualifies as an Immaterial
Subsidiary and that all such Subsidiaries in the aggregate do not exceed the
limitation set forth in clause (b) of the definition of the term “Immaterial
Subsidiary”, (y) concurrently with any delivery of financial statements under
paragraph (a) above, if the accounting firm is not restricted from providing
such a certificate by its policies, a certificate of the accounting firm opining
on or certifying such statements stating whether they obtained knowledge during
the course of their examination of such statements of any Default or Event of
Default (which certificate may be limited to accounting matters and disclaim
responsibility for legal interpretations) and (z) (1) within 30 days of the end
of each fiscal month of each fiscal year, a certificate of a Financial Officer
of Holdings certifying the Loan Parties’ compliance with Section 6.10(a) and
(2) within 10 days of the end of each fiscal month of each fiscal year, a
certificate of a Financial Officer of Holdings certifying the Loan Parties’
compliance with Section 6.10(b); and

(d)    promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Loan Parties or any
of the Subsidiaries, or compliance with the terms of any Loan Document, as in
each case the Administrative Agent may reasonably request (for itself or on
behalf of any Lender).

 

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SECTION 5.05    Litigation and Other Notices. Furnish to the Administrative
Agent (which will promptly thereafter furnish to the Collateral Agent and the
Lenders) written notice of the following promptly after any Responsible Officer
of a Loan Party obtains knowledge thereof:

(a)    any Event of Default or Default, specifying the nature and extent thereof
and the corrective action (if any) proposed to be taken with respect thereto;

(b)    the filing or commencement of, or any written threat or notice of
intention of any person to file or commence, any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Authority or in
arbitration, against the Loan Parties or any of the Subsidiaries as to which an
adverse determination is reasonably probable and which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect;

(c)    the occurrence of a Foreign Plan Event; and

(d)    the occurrence of any event, development or circumstance that has had, or
could reasonably be expected to have, a Material Adverse Effect.

SECTION 5.06    Compliance with Laws. Comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect; provided, that
this Section 5.06 shall not apply to laws related to Taxes, which are the
subject of Section 5.03.

SECTION 5.07    Maintaining Records; Access to Properties and Inspections.
Maintain all financial records in accordance with GAAP and permit any persons
designated by the Administrative Agent or, upon the occurrence and during the
continuance of an Event of Default, any Lender to visit and inspect the
financial records and the properties of the Loan Parties or any of the
Subsidiaries at reasonable times, upon reasonable prior notice to Holdings, and
as often as reasonably requested and to make extracts from and copies of such
financial records, and permit any persons designated by the Administrative Agent
or, upon the occurrence and during the continuance of an Event of Default, any
Lender upon reasonable prior notice to Holdings to discuss the affairs, finances
and condition of the Loan Parties or any of the Subsidiaries with the officers
thereof and independent accountants therefor (subject to reasonable requirements
of confidentiality, including requirements imposed by law or by contract).

SECTION 5.08    Use of Proceeds. Use the proceeds of the Loans (a) to repay
outstanding Indebtedness and any other obligation due and arising under the
Existing Revolving Credit Facility in full, (b) to pay fees, costs and expenses
incurred in connection with this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby and (c) for general corporate
purposes.

SECTION 5.09    Fiscal Year; Accounting. Cause its fiscal year to end on the
Saturday closest to January 31, unless prior written notice of a change is given
to the Administrative Agent.

 

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SECTION 5.10    Further Assurances; Additional Security.

(a)    Subject, in each case, to the Agreed Security Principles, and the
limitations set forth in the Collateral and Guarantee Requirement, execute any
and all further documents, financing statements, agreements and instruments, and
take all such further actions (including without limitation the filing and
recording of financing statements, fixture filings, Mortgages and other
documents and recordings of Liens in stock registries), that may be required
under any applicable law, or that the Administrative Agent may reasonably
request, to satisfy the Collateral and Guarantee Requirement and to cause the
Collateral and Guarantee Requirement to be and remain satisfied, all at the
expense of the Loan Parties and provide to the Administrative Agent, from time
to time upon reasonable request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.

(b)    Subject, in each case, to the Agreed Security Principles, and the
limitations set forth in the Collateral and Guarantee Requirement, if any
property other than Real Property is acquired by any Loan Party after the
Closing Date or owned by an entity at the time it becomes a Loan Party (in each
case other than (x) assets constituting Collateral under a Security Document
that automatically become subject to the Lien of such Security Document
immediately upon acquisition thereof and (y) assets that are not required to
become subject to Liens in favor of the Collateral Agent pursuant to the
Security Documents) (A) notify the Agents thereof and (B) promptly (but in no
event later than 30 days after acquisition thereof) cause such asset to be
subjected to a Lien securing the Obligations and take, and cause the Loan
Parties to take, such actions as shall be necessary or reasonably requested by
the Administrative Agent in order to create a first priority perfected security
interest therein in favor of the Collateral Agent, subject only to Permitted
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties.

(c)    Subject, in each case, to the Agreed Security Principles, and the
limitations set forth in the Collateral and Guarantee Requirement, promptly but
in no event later than 30 days following the acquisition thereof, notify the
Agents of the acquisition of, grant and cause each of the Loan Parties to grant
to the Collateral Agent security interests and mortgages in any owned Real
Property of the Loan Parties as are not covered by the then existing Mortgages,
to the extent acquired after the Closing Date and having a fair market value at
the time of acquisition in excess of $2,000,000 pursuant to Mortgages (each, an
“Additional Mortgage”) and constituting valid and enforceable Liens subject to
no other Liens except Permitted Liens at the time of perfection thereof, record
or file, and cause each such Subsidiary to record or file, the Additional
Mortgage or instruments related thereto in such manner and in such places as is
required by law to establish, perfect, preserve and protect the Liens in favor
of the Collateral Agent required to be granted pursuant to the Additional
Mortgages and pay, and cause each such Loan Party to pay, in full, all Taxes,
fees and other charges payable in connection therewith. Unless otherwise waived
by the Administrative Agent, with respect to each such Additional Mortgage, the
applicable Loan Party shall deliver to the Collateral Agent contemporaneously
therewith a title insurance policy, and a survey.

(d)    If any additional direct or indirect Subsidiary (other than an Immaterial
Subsidiary) of Holdings is formed or acquired after the Closing Date, within
five Business Days

 

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after the date such Subsidiary (other than an Immaterial Subsidiary) is formed
or acquired, Holdings shall notify the Agents and the Lenders thereof and,
within 15 Business Days after the date such Subsidiary (other than an Immaterial
Subsidiary) is formed or acquired or such longer period as the Administrative
Agent shall agree, cause the Collateral and Guarantee Requirement to be
satisfied with respect to such Subsidiary (other than an Immaterial Subsidiary)
and with respect to any Equity Interest in or Indebtedness of such Subsidiary
(other than an Immaterial Subsidiary) owned by or on behalf of any Loan Party,
subject to the Agreed Security Principles.

(e)    (i) Furnish to the Agents prompt written notice of any change (A) in any
Loan Party’s corporate or organization name, (B) in any Loan Party’s identity or
organizational structure or (C) in any Loan Party’s organizational
identification number (or equivalent under applicable foreign law); provided,
that the Borrowers shall not effect or permit any such change unless all filings
have been made, or will have been made within any statutory period, that are
required in order for the Collateral Agent to continue at all times following
such change to have a valid, legal and perfected security interest in all the
Collateral for the benefit of the Secured Parties and (ii) promptly notify the
Agents if any material portion of the Collateral is damaged or destroyed.

(f)    If following the Closing Date any Loan Party acquires or owns any deposit
account or securities account, such Loan Party shall (i) promptly notify the
Agents thereof and (ii) other than any such deposit account or securities
account constituting Collateral under a Security Document that automatically
becomes subject to the Lien of such Security Document immediately upon
acquisition thereof, promptly (but in no event later than 30 days after
acquisition thereof) cause such deposit account or securities account to be
subjected to a Lien securing the Obligations and take such actions as shall be
necessary or reasonably requested by the Administrative Agent in order to create
a first priority perfected security interest therein (subject only to Permitted
Liens) in favor of the Collateral Agent, subject in all respects to the Agreed
Security Principles.

SECTION 5.11    Post Closing Covenant. Take all necessary actions to satisfy the
items described on Schedule 5.11 within the applicable period of time specified
in such Schedule (or such longer period as the Administrative Agent may agree in
its sole discretion).

SECTION 5.12    Cash at CGHL. Upon receipt by CGHL of any proceeds of any
Permitted Foreign Cash Transfer from Holdings, CGHL shall, within two
(2) Business Days of receipt, and subject to the continued satisfaction of the
relevant conditions to such Permitted Foreign Cash Transfer, as applicable,
distribute 100% of the proceeds thereof to a Permitted Transferee, less such
portion thereof that is allocated to pay CGHL Expenses or to pay interest on or
principal under Indebtedness of CGHL in accordance with clauses (b) or (c) of
the defined term “Permitted Foreign Cash Transfer” or Section 6.06. Within two
(2) Business Days of receipt by CGHL of any payment or contribution by a
Permitted Transferee, CGHL shall promptly pay or contribute 100% of the proceeds
thereof to Holdings, less such portion thereof that is allocated to pay CGHL
Expenses or to pay interest on or principal under Indebtedness of CGHL in
accordance with clauses (b) or (c) of the defined term “Permitted Foreign Cash
Transfer” or Section 6.06.

 

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SECTION 5.13    Compliance with Swiss Non-Bank Rules. Each Swiss Obligor shall
be in compliance with the Swiss Non-Bank Rules, provided that a Swiss Obligor
shall not be in breach of this covenant if its number of creditors is exceeded
solely by reason of a failure by one or more Lenders to comply with the transfer
requirements set forth in Section 9.04(i). For the purpose of its compliance
with this Section 5.13 , each Swiss Obligor shall assume that the number of
Lenders under this Agreement which are not Swiss Qualifying Banks is at any time
ten (10) (even if such number is effectively less at any time).

ARTICLE VI.

Negative Covenants

Each Loan Party covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until all Obligations (other than in
respect of contingent indemnification and expense reimbursement obligations for
which no claim has been made) have been paid in full, unless the Required
Lenders shall otherwise consent in writing, it will not, and will not permit any
of the Subsidiaries to:

SECTION 6.01    Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:

(a)    Indebtedness existing on the Closing Date and set forth on Schedule 6.01
(other than Capital Lease Obligations) and any Permitted Refinancing
Indebtedness incurred to Refinance such Indebtedness (other than intercompany
indebtedness Refinanced with Indebtedness owed to a person not affiliated with
any Borrower or any Subsidiary);

(b)    Indebtedness created hereunder and under the other Loan Documents;

(c)    Intercompany Indebtedness existing on the Closing Date and disclosed to
the Administrative Agent in writing prior to the Closing Date (other than
Capital Lease Obligations) and any Permitted Refinancing Indebtedness incurred
to Refinance such Indebtedness (other than intercompany indebtedness Refinanced
with Indebtedness owed to a person not affiliated with any Borrower or any
Subsidiary);

(d)    Indebtedness owed to (including obligations in respect of letters of
credit or bank guarantees or similar instruments for the benefit of) any person
providing workers’ compensation, health, disability or other employee benefits
or property, casualty or liability insurance to Holdings or any Subsidiary,
pursuant to reimbursement or indemnification obligations to such person, in each
case in the ordinary course of business; provided, that upon the incurrence of
Indebtedness with respect to reimbursement obligations regarding workers’
compensation claims, such obligations are reimbursed not later than 30 days
following such incurrence;

 

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(e)    Indebtedness of the Loan Parties to any Subsidiary and of any Subsidiary
to the Loan Parties or any Subsidiary; provided, that (i) Indebtedness of any
Subsidiary that is not a Loan Party owing to the Loan Parties shall be subject
to Section 6.04(b) and (ii) Indebtedness of the Loan Parties owing to any
Subsidiary that is not a Loan Party (the “Subordinated Intercompany Debt”) to
the greatest extent permitted by applicable law (with Holdings to advise the
Administrative Agent in reasonable detail of any limitations under applicable
law), (A) shall be subordinated to the Obligations on terms reasonably
satisfactory to the Administrative Agent, and (B) such Indebtedness (and all
interest thereon and all fees, expenses, and other amounts payable in respect
thereof) shall only be payable in kind;

(f)    Indebtedness in respect of performance bonds, bid bonds, appeal bonds,
surety bonds and completion guarantees and similar obligations, in each case
provided in the ordinary course of business, including those incurred to secure
health, safety and environmental obligations in the ordinary course of business;

(g)    Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business or other cash management services in
the ordinary course of business; provided, that (x) such Indebtedness (other
than credit or purchase cards) is extinguished within ten Business Days of
notification to Holdings or a Subsidiary of its incurrence and (y) such
Indebtedness in respect of credit or purchase cards is extinguished within 60
days from its incurrence;

(h)    Capital Lease Obligations or other obligations incurred by any Subsidiary
in respect of any Sale and Lease Back Transaction that is permitted under
Section 6.03, and any Permitted Refinancing Indebtedness in respect thereof;
provided that, the amount of Indebtedness incurred pursuant to this Section
6.01(h), when combined with the aggregate principal amount of Indebtedness
incurred pursuant to (i) Section 6.01(i) below and Sections 6.01(i) and 6.01(j)
of the ABL Credit Agreement, and (ii) the Remaining Present Value of outstanding
leases permitted under Section 6.03 and Section 6.03(b) of the ABL Credit
Agreement, shall not exceed an aggregate principal amount equal to $37,000,000
at any time outstanding;

(i)    Capital Lease Obligations, mortgage financings and purchase money
Indebtedness incurred by any Subsidiary prior to or within 270 days after the
acquisition, lease or improvement of the respective property (real or personal,
and whether through the direct purchase of property or the Equity Interests of
any person owning such property) permitted under this Agreement in order to
finance such acquisition, lease or improvement, and any Permitted Refinancing
Indebtedness in respect thereof; provided that, the amount of Indebtedness
incurred pursuant to this Section 6.01(i), when combined with the aggregate
principal amount of Indebtedness incurred pursuant to (i) Section 6.01(h) and
Sections 6.01(i) and 6.01(j) of the ABL Credit Agreement, and (ii) the Remaining
Present Value of outstanding leases permitted under Section 6.03 and Section
6.03(b) of the ABL Credit Agreement, shall not exceed an aggregate principal
amount equal to $37,000,000 at any time outstanding;

 

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(j)    [reserved];

(k)    funded intercompany loans and advances from CGHL and members of the NA
Group to the Loan Parties and the Subsidiaries entered into or made after the
Closing Date; provided, that such Indebtedness to the greatest extent permitted
by applicable law (with Holdings to advise the Administrative Agent in
reasonable detail of any limitations under applicable law), (i) shall be
subordinated to the Obligations on terms reasonably satisfactory to the
Administrative Agent, and (ii) such Indebtedness (and all interest thereon and
all fees, expenses, and other amounts payable in respect thereof) shall only be
payable in kind, except that the terms of such subordination shall permit the
making of Permitted Foreign Cash Transfers;

(l)    Guarantees (i) by any Loan Party of any Indebtedness or obligations of
any Loan Party permitted to be incurred under this Agreement and (ii) by any
Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that
is not a Loan Party to the extent such Guarantees are permitted by Section 6.04
(other than Section 6.04(v)); provided, that Guarantees by any Loan Party under
this Section 6.01(l) of any other Indebtedness of a person that is subordinated
to other Indebtedness of such person shall be expressly subordinated to the
Obligations;

(m)    Indebtedness arising from agreements of Holdings or any Subsidiary
providing for indemnification, adjustment of purchase or acquisition price or
similar obligations, in each case, incurred or assumed in connection with any
Permitted Business Acquisition or the disposition of any business, assets or a
Subsidiary not prohibited by this Agreement, other than Guarantees of
Indebtedness incurred by any person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such acquisition;
provided, that the aggregate amount at any time outstanding under this Section
6.01(m) shall not exceed $5,000,000;

(n)    Indebtedness in respect of letters of credit, bank guarantees, warehouse
receipts or similar instruments issued to support performance obligations and
trade letters of credit (other than obligations in respect of other
Indebtedness) in the ordinary course of business;

(o)    Indebtedness consisting of (i) the financing of insurance premiums or
(ii) take or pay obligations contained in supply arrangements, in each case, in
the ordinary course of business;

(p)    unsecured Indebtedness in respect of obligations of any Subsidiary to pay
the deferred purchase price of goods or services or progress payments in
connection with such goods and services; provided, that such obligations are
incurred in connection with open accounts extended by suppliers on customary
trade terms (which require that all such payments be made within 60 days after
the incurrence of the related obligations) in the ordinary course of business
and not in connection with the borrowing of money or any Swap Agreements;

 

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(q)    Indebtedness representing deferred compensation to employees of Holdings
or any Subsidiary incurred in the ordinary course of business;

(r)    [reserved];

(s)    [reserved];

(t)    Indebtedness incurred on behalf of, or representing Guarantees of
Indebtedness of, joint ventures in an amount not in excess at any one time
outstanding, when combined with the total amount of any Investments in joint
ventures made pursuant to Section 6.04(bb) and Indebtedness incurred and
Investments made pursuant to Sections 6.01(w) and 6.04(cc) of the ABL Credit
Agreement, of the greater of $10,000,000 or 1.0% of Consolidated Total Assets as
of the end of the fiscal quarter immediately prior to the date of such
incurrence for which financial statements have been delivered pursuant to
Section 5.04;

(u)    [reserved]

(v)    Indebtedness consisting of obligations of Holdings or any Subsidiary
under deferred compensation or other similar arrangements incurred by such
person in connection with Permitted Business Acquisitions or any other
Investment permitted hereunder; and

(w)    all premium (if any, including tender premiums), defeasance costs,
interest (including post-petition interest), fees, expenses, charges and
additional or contingent interest on obligations described in paragraphs
(a) through (v) above.

For purposes of determining compliance with this Section 6.01:

(i)    in the event that an item of Indebtedness, Disqualified Stock or
Preferred Stock (or any portion thereof) meets the criteria of one or more of
the categories of permitted Indebtedness described in clauses (a) through (w)
above, the Borrowers shall, in their sole discretion, classify or reclassify, or
later divide, classify or reclassify, such item of Indebtedness, Disqualified
Stock or Preferred Stock (or any portion thereof) in any manner and at any time
that complies with this Section 6.01; and

(ii)    the amount of any Indebtedness denominated in any currency other than
Dollars shall be calculated based on customary currency exchange rates in
effect, in the case of such Indebtedness incurred (in respect of term
Indebtedness) or committed (in respect of revolving Indebtedness) on or prior to
the Closing Date, on the Closing Date and, in the case of such Indebtedness
incurred (in respect of term Indebtedness) or committed (in respect of revolving
Indebtedness) after the Closing Date, on the date that such Indebtedness was
incurred (in respect of term Indebtedness) or committed (in

 

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respect of revolving Indebtedness); provided that if such Indebtedness is
incurred to refinance other Indebtedness denominated in a currency other than
Dollars (or in a different currency from the Indebtedness being refinanced), and
such refinancing would cause the applicable Dollar-denominated restriction to be
exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such Dollar-denominated restriction shall be deemed
not to have been exceeded so long as the principal amount of such refinancing
Indebtedness does not exceed (i) the outstanding or committed principal amount,
as applicable, of such Indebtedness being refinanced plus (ii) the aggregate
amount of fees, underwriting discounts, premiums (including tender premiums),
defeasance costs and other costs and expenses incurred in connection with such
refinancing.

SECTION 6.02    Liens. Create, incur, assume or permit to exist any Lien on any
property or assets (including stock or other securities of any person, including
the Borrowers and any Subsidiary) at the time owned by it or on any income or
revenues or rights in respect of any thereof, except the following
(collectively, “Permitted Liens”):

(a) Liens on property or assets of Holdings and the Subsidiaries existing on the
Closing Date securing Indebtedness of Holdings and the Subsidiaries set forth on
Schedule 6.02(a) and any modifications, replacements, renewals or extensions
thereof; provided, that Liens securing Indebtedness set forth on Schedule
6.02(a) shall not subsequently apply to any other property or assets of Holdings
or any Subsidiary other than (A) after-acquired property that is affixed or
incorporated into the property covered by such Lien and (B) proceeds and
products thereof;

(b) any Lien created under the Loan Documents;

(c) any Lien on any property or asset of any Subsidiary securing Indebtedness or
Permitted Refinancing Indebtedness permitted by Section 6.01(h); provided, that
such Lien (i) does not apply to any other property or assets the Subsidiaries
not securing such Indebtedness at the date of the acquisition of such property
or asset (other than after-acquired property subjected to a Lien securing
Indebtedness and other obligations incurred prior to such date and which
Indebtedness and other obligations are permitted hereunder that require a pledge
of after acquired property, it being understood that such requirement shall not
be permitted to apply to any property to which such requirement would not have
applied but for such acquisition), (ii) such Lien is not created in
contemplation of or in connection with such acquisition and (iii) in the case of
a Lien securing Permitted Refinancing Indebtedness, any such Lien is permitted,
subject to compliance with clause (d) of the definition of the term “Permitted
Refinancing Indebtedness”;

(d) Liens for Taxes, assessments or other governmental charges or levies not yet
delinquent or that are being contested in compliance with Section 5.03;

(e) Liens imposed by law, including landlord’s, carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s, construction or other like Liens arising
in the

 

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ordinary course of business, securing obligations that are not overdue by more
than 30 days or that are being contested in good faith by appropriate
proceedings and in respect of which, if applicable, Holdings or any Subsidiary
shall have set aside on its books reserves in accordance with GAAP;

(f) (i) pledges and deposits and other Liens made in the ordinary course of
business in compliance with any workers’ compensation, unemployment insurance
and other social security laws or regulations and deposits securing liability to
insurance carriers under insurance or self-insurance arrangements in respect of
such obligations and (ii) pledges and deposits and other Liens securing
liability for reimbursement or indemnification obligations of (including
obligations in respect of letters of credit or bank guarantees for the benefit
of) insurance carriers providing property, casualty or liability insurance to
Holdings or any Subsidiary;

(g) deposits and other Liens to secure the performance of bids, trade contracts
(other than for Indebtedness), leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds, performance and return of money
bonds, bids, leases, government contracts, trade contracts, agreements with
utilities, and other obligations of a like nature (including letters of credit
in lieu of any such bonds or to support the issuance thereof) incurred by
Holdings or any Subsidiary in the ordinary course of business, including those
incurred to secure health, safety and environmental obligations in the ordinary
course of business;

(h) restrictions, survey exceptions and such matters as an accurate survey would
disclose, easements, trackage rights, leases (other than Capital Lease
Obligations), licenses, special assessments, rights of way, covenants,
conditions, restrictions and declarations on or with respect to the use of Real
Property, servicing agreements, development agreements, site plan agreements and
other similar encumbrances incurred in the ordinary course of business and title
defects or irregularities that are of a minor nature and that, in the aggregate,
do not interfere in any material respect with the ordinary conduct of the
business of Holdings or any Subsidiary;

(i) Liens securing Indebtedness permitted by Section 6.01(i) (limited to the
assets subject to such Indebtedness);

(j) Liens arising out of capitalized lease transactions permitted under
Section 6.03 and not otherwise permitted pursuant to clause (c) of this
Section 6.02, so long as such Liens attach only to the property sold and being
leased in such transaction and any accessions thereto or proceeds thereof and
related property;

(k) Liens securing judgments that do not constitute an Event of Default under
Section 7.01(j);

(l) [reserved];

 

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(m) any interest or title of a lessor or sublessor under any leases or subleases
entered into by any Holdings or any Subsidiary in the ordinary course of
business;

(n) Liens that are contractual rights of set off (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts
of Holdings or any Subsidiary to permit satisfaction of overdraft or similar
obligations incurred in the ordinary course of business of Holdings or any
Subsidiary or (iii) relating to purchase orders and other agreements entered
into with customers of Holdings or any Subsidiary in the ordinary course of
business;

(o) Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of set off or similar rights;

(p) Liens securing obligations in respect of trade related letters of credit,
bank guarantees or similar obligations permitted under Section 6.01(f), (g), (h)
or (l) and covering the property (or the documents of title in respect of such
property) financed by such letters of credit, bank guarantees or similar
obligations and the proceeds and products thereof;

(q) leases or subleases, licenses or sublicenses (including with respect to
intellectual property and software) granted to others in the ordinary course of
business not interfering in any material respect with the business of Holdings
and the Subsidiaries, taken as a whole;

(r) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods;

(s) Liens solely on any cash earnest money deposits made by Holdings or any of
the Subsidiaries in connection with any letter of intent or purchase agreement
in respect of any Investment permitted hereunder;

(t) [reserved];

(u) [reserved];

(v) the prior rights of consignees and their lenders under consignment
arrangements entered into in the ordinary course of business;

(w) Liens arising from precautionary Uniform Commercial Code financing
statements or consignments entered into in connection with any transaction
otherwise permitted under this Agreement;

(x) Liens on Equity Interests in joint ventures securing obligations of such
joint venture;

 

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(y) Liens on securities that are the subject of repurchase agreements
constituting Permitted Investments under clause (c) of the definition thereof;

(z) [reserved];

(aa) Liens on goods or inventory the purchase, shipment or storage price of
which is financed by a documentary letter of credit, bank guarantee or bankers’
acceptance issued or created for the account of Holdings or any Subsidiary in
the ordinary course of business; provided, that such Lien secures only the
obligations of Holdings or such Subsidiaries in respect of such letter of
credit, bank guarantee or banker’s acceptance to the extent permitted under
Section 6.01; and

(bb) Liens securing insurance premiums financing arrangements, provided, that
such Liens are limited to the applicable unearned insurance premiums.

SECTION 6.03    Sale and Lease Back Transactions. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property being sold or transferred, in each case, whether or not treated as a
“sale-leaseback” under GAAP (a “Sale and Lease Back Transaction”); provided,
that a Sale and Lease Back Transaction shall be permitted (a) with respect to
property owned by any Subsidiary that is acquired after the Closing Date so long
as such Sale and Lease Back Transaction is consummated within 270 days of the
acquisition of such property, and (b) with respect to any property owned by any
Subsidiary, if at the time the lease in connection therewith is entered into,
and after giving effect to the entering into of such lease, the Remaining
Present Value of such lease, together with Indebtedness outstanding pursuant to
(i) Sections 6.01(h) and 6.01(i) and Sections 6.01(i) and 6.01(j) of the ABL
Credit Agreement, and (ii) the Remaining Present Value of outstanding leases
previously entered into under this Section 6.03(b) and Section 6.03(b) of the
ABL Credit Agreement, would not exceed an aggregate principal amount equal to
$37,000,000 at any time outstanding.

SECTION 6.04    Investments, Loans and Advances. Purchase, hold or acquire
(including pursuant to any merger, consolidation or amalgamation with a person
that is not a Wholly Owned Subsidiary immediately prior to such merger,
consolidation or amalgamation) any Equity Interests, evidences of Indebtedness
or other securities of, make or permit to exist any loans or advances to or
Guarantees of the obligations of, or make or permit to exist any investment or
any other interest in (each, an “Investment”), any other person, except:

(a)    intercompany loans and advances from the Loan Parties constituting
Permitted Foreign Cash Transfers;

(b)    (i) Investments by Holdings or any Subsidiary in the Equity Interests of
any Subsidiary; (ii) intercompany loans from Holdings or any Subsidiary to
Holdings or any Subsidiary provided that any intercompany loan by any Subsidiary
that is not a Loan Party to a Loan Party shall be in the form of Subordinated
Intercompany Debt; and (iii)

 

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Guarantees by any Loan Party of Indebtedness otherwise expressly permitted
hereunder of any Loan Party or any Subsidiary; provided, that the sum of
(A) Investments (valued at the time of the making thereof and without giving
effect to any write downs or write offs thereof) made after the Closing Date by
the Loan Parties pursuant to clause (i) in Subsidiaries that are not Loan
Parties plus (B) net intercompany loans made after the Closing Date to
Subsidiaries that are not Loan Parties pursuant to clause (ii), plus
(C) Guarantees of Indebtedness after the Closing Date of Subsidiaries that are
not Loan Parties pursuant to clause (iii), shall not exceed an aggregate net
amount equal to $4,000,000 (plus any return of capital actually received by the
respective investors in respect of Investments theretofore made by them pursuant
to this Section 6.04(b)) at any time outstanding;

(c)    Permitted Investments and Investments that were Permitted Investments
when made;

(d)    Investments arising out of the receipt by Holdings or any Subsidiary of
noncash consideration for the sale of assets permitted under Section 6.05;

(e)    loans and advances to officers, directors, employees or consultants of
the Loan Parties or any Subsidiary (i) in the ordinary course of business not to
exceed $500,000 in the aggregate at any time outstanding (calculated without
regard to write downs or write offs thereof) and (ii) in respect of payroll
payments and expenses in the ordinary course of business and consistent with
past practice;

(f)    accounts receivable, security deposits and prepayments arising and trade
credit granted in the ordinary course of business and any assets or securities
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss and any prepayments and other credits to suppliers made in the
ordinary course of business;

(g)    Investments in Holdings or any Subsidiary arising in the ordinary course
of business in connection with cash management operations of Holdings and its
Subsidiaries consistent with past practice pursuant to the Cash Pooling
Agreements, the Deed of Postponement and the guarantees contemplated by the Deed
of Postponement, each as in effect with HSBC Bank PLC on the Closing Date (and
amendments thereto or replacements thereof (copies of which shall be provided to
the Administrative Agent promptly after the effectiveness thereof), that are not
adverse, taken as a whole, to the interests of the Lenders in comparison to the
Cash Pooling Agreements, the Deed of Postponement and the guarantees
contemplated by the Deed of Postponement each in effect as of the Closing Date);

(h)    Investments existing on, or contractually committed as of, the Closing
Date and set forth on Schedule 6.04 and any extensions, renewals or
reinvestments thereof, so long as the aggregate amount of all Investments
pursuant to this clause (h) is not increased at any time above the amount of
such Investment existing or committed on the Closing Date (other than pursuant
to an increase as required by the terms of any such Investment as in existence
on the Closing Date);

 

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(i)    Investments resulting from pledges and deposits under Sections 6.02(f),
(g), (r) and (s);

(j)    other Investments by Holdings or any Subsidiary in an aggregate amount
(valued at the time of the making thereof, and without giving effect to any
write downs or write offs thereof) not to exceed $5,000,000 in the aggregate
(plus the amount of cash actually received by Holdings or such Subsidiary in
respect of, and which shall not exceed the original amount of, such Investments
theretofore made by it pursuant to this Section 6.04(j));

(k)    Investments constituting Permitted Business Acquisitions;

(l)    [reserved];

(m)    Investments received in connection with the bankruptcy or reorganization
of, or settlement of delinquent accounts and disputes with or judgments against,
customers and suppliers, in each case in the ordinary course of business or
Investments acquired by the Loan Parties or any of the Subsidiaries as a result
of a foreclosure by the Loan Parties or any of the Subsidiaries with respect to
any secured Investments or other transfer of title with respect to any secured
Investment in default;

(n)    Investments of a Subsidiary acquired after the Closing Date or of an
entity merged into, or consolidated or amalgamated with, a Loan Party or merged
into or consolidated or amalgamated with a Subsidiary after the Closing Date, in
each case, (i) to the extent permitted under this Section 6.04 and, (ii) in the
case of any acquisition, merger, consolidation or amalgamation, in accordance
with Section 6.05 and (iii) to the extent that such Investments were not made in
contemplation of or in connection with such acquisition, merger, consolidation
or amalgamation and were in existence on the date of such acquisition, merger,
consolidation or amalgamation;

(o)    [reserved];

(p)    Guarantees by Holdings or any Subsidiary of operating leases (other than
Capital Lease Obligations) or of other obligations that do not constitute
Indebtedness, in each case entered into by Holdings or any Subsidiary in the
ordinary course of business;

(q)    Investments to the extent that payment for such Investments is made with
Equity Interests of Claire’s Stores (or any Parent Entity) that have been
contributed to Holdings;

(r)    [reserved];

(s)    [reserved];

 

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(t)    Investments in the ordinary course of business consisting of Uniform
Commercial Code Article 3 endorsements for collection or deposit and Uniform
Commercial Code Article 4 customary trade arrangements with customers consistent
with past practices;

(u)    [reserved];

(v)    Guarantees permitted under Section 6.01 (except to the extent such
Guarantee is expressly subject to Section 6.04);

(w)    advances in the form of a prepayment of expenses, so long as such
expenses are being paid in accordance with customary trade terms of such
Borrower or such Subsidiary;

(x)    [reserved];

(y)    [reserved];

(z)    Investments consisting of the licensing or contribution of intellectual
property in the ordinary course of business and consistent with past practice
pursuant to joint marketing arrangements with other persons;

(aa)    purchases and acquisitions of inventory, supplies, materials and
equipment or purchases of contract rights or licenses or leases of intellectual
property in each case in the ordinary course of business, to the extent such
purchases and acquisitions constitute Investments; and

(bb)    Investments in joint ventures in an amount, not in excess at any one
time outstanding, when combined with the total amount of Indebtedness incurred
in connection with joint ventures pursuant to Section 6.01(t) and Indebtedness
incurred and Investments made pursuant to Sections 6.01(w) and 6.04(cc) of the
ABL Credit Agreement, of the greater of $10,000,000 and 1.00% of Consolidated
Total Assets as of the end of the fiscal quarter immediately prior to the date
of such incurrence or Investment for which financial statements have been
delivered pursuant to Section 5.04.

The amount of Investments that may be made at any time pursuant to Section
6.04(b) may, at the election of Holdings, be increased by the amount of
Investments that could be made at such time under Section 6.04(j); provided that
the amount of each such increase shall be treated as having been used under
Section 6.04(j).

SECTION 6.05    Mergers, Consolidations, Sales of Assets and Acquisitions. Merge
into, or consolidate or amalgamate with any other person, or permit any other
person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any part of its assets (whether now owned or hereafter acquired), or issue,
sell, transfer or otherwise dispose of any Equity Interests of Holdings or any
Subsidiary, or purchase, lease or otherwise acquire (in one transaction or a

 

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series of transactions) all or any substantial part of the assets of any other
person or any division or business unit of any other person; provided that this
Section 6.05 shall not prohibit:

(a)    any Asset Sale in which (i) a Loan Party or any of its Subsidiaries, as
the case may be, receives consideration at the time of the Asset Sale of at
least equal to the Fair Market Value (as determined in good faith by the Loan
Parties) of the assets sold or otherwise disposed of, and (ii) at least 75% of
the consideration therefor received by such Loan Party or such Subsidiary, as
the case may be, is in the form of Unrestricted Cash or Permitted Investments;
provided that (x) the aggregate amount of consideration received by Holdings and
the Subsidiaries for Asset Sales pursuant to this Section 6.05(a) shall not
exceed $30,000,000 in any fiscal year and (y) all Net Cash Proceeds thereof in
excess of $5,000,000 in any fiscal year shall be applied for prepayment of the
Loan in accordance with Section 2.11(a);

(b)    (i) the purchase and sale of inventory in the ordinary course of business
by any Subsidiary, (ii) the acquisition or lease (pursuant to an operating
lease) of any other asset in the ordinary course of business by Holdings or any
Subsidiary, (iii) the sale of surplus, obsolete, damaged or worn out equipment
or other property in the ordinary course of business by Holdings or any
Subsidiary or (iv) the sale of Permitted Investments in the ordinary course of
business;

(c)    if at the time thereof and immediately after giving effect thereto no
Event of Default shall have occurred and be continuing or would result
therefrom, (i) the merger, consolidation or amalgamation of any Subsidiary of a
Borrower into or with such Borrower in a transaction in which a Borrower is the
survivor, (ii) the merger, consolidation or amalgamation of any Subsidiary into
or with any Subsidiary that is a Loan Party in a transaction in which the
surviving or resulting entity is a Loan Party and, in the case of each of
clauses (i) and (ii), no person other than a Loan Party receives any
consideration, (iii) the merger, consolidation or amalgamation of any Subsidiary
that is not a Loan Party into or with any other Subsidiary that is not a Loan
Party, (iv) the liquidation or dissolution or change in form of entity of any
Subsidiary (other than a Borrower) if the Borrowers determine in good faith that
such liquidation, dissolution or change in form is in the best interests of the
Borrowers and is not materially disadvantageous to the Lenders or (v) any
Subsidiary may merge, consolidate or amalgamate into or with any other person in
order to effect an Investment permitted pursuant to Section 6.04 so long as the
continuing or surviving person shall be a Subsidiary, which shall be a Loan
Party if the merging, consolidating or amalgamating Subsidiary was a Loan Party
and which together with each of the Subsidiaries shall have complied with the
requirements of Section 5.10;

(d)    sales, transfers, leases or other dispositions to a Subsidiary (upon
voluntary liquidation or otherwise); provided, that any sales, transfers, leases
or other dispositions by a Loan Party to a Subsidiary that is not a Loan Party
in reliance on this paragraph (c) shall be made in compliance with Section 6.07;

(e)    [reserved];

 

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(f)    Sale and Lease Back Transactions permitted by Section 6.03;

(g)    Investments permitted by Section 6.04, Permitted Liens and Restricted
Payments permitted by Section 6.06;

(h)    the sale of defaulted receivables in the ordinary course of business and
not as part of an accounts receivables financing transaction;

(i)    sales, transfers, leases, licenses or other dispositions of assets not
otherwise permitted by this Section 6.05 (or required to be included in this
Section 6.05(i) pursuant to Section 6.05(c)); provided, that (i) the aggregate
gross proceeds (including noncash proceeds) of any or all assets, sold,
transferred, leased or otherwise disposed of in reliance under this Section
6.05(i) shall not exceed, in any fiscal year of the Borrowers, when combined
with the total amount of gross proceeds of any asset sales made pursuant to
Section 6.05(i) of the ABL Credit Agreement since the Closing Date, $10,000,000
and (ii) no Default or Event of Default exists or would result therefrom;

(j)    Permitted Business Acquisitions (including any merger, consolidation or
amalgamation in order to effect a Permitted Business Acquisition); provided,
that following any such merger, consolidation or amalgamation (i) involving a
Loan Party, a Loan Party is the surviving corporation and (ii) involving a
Subsidiary, the surviving or resulting entity shall be a Wholly Owned
Subsidiary;

(k)    leases, licenses, or subleases or sublicenses of any real or personal
property in the ordinary course of business;

(l)    sales, leases or other dispositions of inventory of the Loan Parties and
the Subsidiaries determined by the management of the Loan Parties to be no
longer useful or necessary in the operation of the business of the Loan Parties
or any of the Subsidiaries;

(m)    [reserved];

(n)    [reserved];

(o)    [reserved]; and

(p)    any disposition of Equity Interests of a Subsidiary pursuant to an
agreement or other obligation with or to a person (other than the Loan Parties
and the Subsidiaries) from whom such Subsidiary was acquired or from whom such
Subsidiary acquired its business and assets (having been newly formed in
connection with such acquisition), made as part of such acquisition and in each
case comprising all or a portion of the consideration in respect of such sale or
acquisition; provided, that the net investment in the Equity Interests of the
Subsidiary would be permitted by Section 6.04 if made on the date of such
disposition.

 

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SECTION 6.06    Restricted Payments. Declare or pay any dividend or make any
other distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, with respect to any of its Equity
Interests (other than dividends and distributions on Equity Interests payable
solely by the issuance of additional Equity Interests (other than Disqualified
Stock) of the person paying such dividends or distributions) or directly or
indirectly redeem, purchase, retire or otherwise acquire for value (or permit
any Subsidiary to purchase or acquire) any of its Equity Interests or set aside
any amount for any such purpose (other than through the issuance of additional
Equity Interests (other than Disqualified Stock) of the person redeeming,
purchasing, retiring or acquiring such shares) (the foregoing, “Restricted
Payments”); provided, however, that :

(a)    any Subsidiary of a Loan Party may make Restricted Payments to the Loan
Parties or to any Wholly Owned Subsidiary of the Loan Parties (or, in the case
of non-Wholly Owned Subsidiaries, to a Loan Party or any Subsidiary that is a
direct or indirect parent of such Subsidiary and to each other owner of Equity
Interests of such Subsidiary on a pro rata basis (or more favorable basis from
the perspective of a Loan Party or such Subsidiary) based on their relative
ownership interests so long as any repurchase of its Equity Interests from a
person that is not a Borrower or a Subsidiary is permitted under Section 6.04);

(b)    the Loan Parties and their Subsidiaries may make Restricted Payments to
CGHL (or to CGHL for distribution to any Permitted Transferee) in respect of
(i) Overhead Expenses of CGHL, (ii) fees and expenses (other than Overhead
Expenses) in connection with the maintenance of its (or any Permitted
Transferee’s) existence and its (or any Permitted Transferee’s indirect)
ownership of Holdings and the Subsidiaries and (iii) Taxes then due and owing
(or that will be due and owing promptly following receipt of such Restricted
Payment) of (x) Holdings and the Subsidiaries or (y) CGHL and its subsidiaries;
and

(c)    (i) the Loan Parties and the Subsidiaries may make Restricted Payments to
Holdings for purposes of Holdings making Permitted Foreign Cash Transfers and
(ii) Holdings may make Restricted Payments constituting Permitted Foreign Cash
Transfers.

SECTION 6.07    Transactions with Affiliates.

(a)    Sell or transfer any property or assets to, or purchase or acquire any
property or assets from, or otherwise engage in any other transaction with, any
of its Affiliates or any known direct or indirect holder of 10% or more of any
class of Equity Interests of the Borrowers in a transaction (or series of
related transactions) involving aggregate consideration in excess of $2,000,000,
unless such transaction (or series of related transactions) is (i) otherwise
permitted (or required) under this Agreement, (ii) upon terms no less favorable
to Holdings or such Subsidiary, as applicable, than would be obtained in a
comparable arm’s length transaction with a person that is not an Affiliate and
(iii) with respect to any Affiliate transaction or series of related Affiliate
transactions involving aggregate consideration in excess of $25,000,000 entered
into after the Closing Date, Holdings or such Subsidiary delivers to the
Administrative Agent (for delivery to the Lenders) a letter addressed to the
Board of Directors of Holdings or such Subsidiary from an accounting, appraisal
or investment banking firm, in each case of nationally recognized standing that
is (A) in the good faith determination of Holdings or such Subsidiary qualified
to render such letter and (B) reasonably satisfactory to the Administrative
Agent, which letter states that such transaction complies with clause (ii) of
this Section 6.07(a).

 

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(b)    The foregoing paragraph (a) shall not prohibit, to the extent otherwise
permitted under this Agreement:

(i)    any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
equity purchase agreements, stock options and stock ownership plans approved by
the Board of Directors of Holdings or such Subsidiary,

(ii)    loans or advances to employees or consultants of the Loan Parties or any
of the Subsidiaries in accordance with Section 6.04(e),

(iii)    transactions among the Loan Parties or any Subsidiary or any entity
that becomes a Subsidiary as a result of such transaction (including via merger,
consolidation or amalgamation in which a Subsidiary is the surviving entity),

(iv)    the payment of fees, reasonable out-of-pocket costs and indemnities to
directors, officers, consultants and employees of the Loan Parties and the
Subsidiaries in the ordinary course of business,

(v)    permitted transactions, agreements and arrangements in existence on the
Closing Date and set forth on Schedule 6.07 or any amendment thereto (to the
extent such amendment is not adverse to the Lenders in any material respect, as
determined in good faith by the Loan Parties) or transaction contemplated
thereby,

(vi)    (A) any employment agreements entered into by the Loan Parties or any of
the Subsidiaries in the ordinary course of business, (B) any subscription
agreement or similar agreement pertaining to the repurchase of Equity Interests
pursuant to put/call rights or similar rights with employees, officers or
directors, and (C) any employee compensation, benefit plan or arrangement, any
health, disability or similar insurance plan which covers employees, and any
reasonable employment contract and transactions pursuant thereto,

(vii)    payments to Claire’s Stores or CGHL that are otherwise permitted
pursuant to Section 6.04 or Section 6.06,

(viii)    any purchase by the Loan Parties of the Equity Interests of the
Subsidiaries,

(ix)    [reserved],

(x)    transactions with Claire’s Stores, subsidiaries of Claire’s Stores or
Wholly Owned Subsidiaries for the purchase or sale of goods, products, parts and
services entered into in the ordinary course of business in a manner consistent
with past practice,

 

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(xi)    any transaction in respect of which Holdings or any Subsidiary delivers
to the Administrative Agent (for delivery to the Lenders) a letter addressed to
the Board of Directors of Holdings or any Subsidiary from an accounting,
appraisal or investment banking firm, in each case of nationally recognized
standing that is (A) in the good faith determination of Holdings qualified to
render such letter and (B) reasonably satisfactory to the Administrative Agent,
which letter states that such transaction is on terms that are no less favorable
to Holdings or such Subsidiary, as applicable, than would be obtained in a
comparable arm’s length transaction with a person that is not an Affiliate,

(xii)    [reserved],

(xiii)    transactions with joint ventures for the purchase or sale of goods,
equipment and services entered into in the ordinary course of business and in a
manner consistent with past practice,

(xiv)    [reserved],

(xv)    [reserved],

(xvi)    payments by Claire’s Stores (and any Parent Entity), CGHL and/or the
Loan Parties and the Subsidiaries (in the case of any payment by Holdings or any
of the Subsidiaries, to the extent such payment is permitted pursuant to
Section 6.06) pursuant to tax sharing agreements among Claire’s Stores (and any
such Parent Entity), CGHL, the Loan Parties and the Subsidiaries on customary
terms that require each party to make payments when such taxes are due or
refunds received of amounts equal to the income tax liabilities and refunds
generated by each such party calculated on a separate return basis and payments
to the party generating tax benefits and credits of amounts equal to the value
of such tax benefits and credits made available to the group by such party,

(xvii)    [reserved],

(xviii)    [reserved],

(xix)    transactions with customers, clients, suppliers, or purchasers or
sellers of goods or services, in each case in the ordinary course of business
and consistent with past practice and otherwise in compliance with the terms of
this Agreement that are fair to the Loan Parties or the Subsidiaries, and

(xx)    intercompany transactions undertaken in good faith (as certified by a
Responsible Officer of Holdings) for the purpose of improving the consolidated
tax efficiency of the Loan Parties and the Subsidiaries and not for the purpose
of circumventing any covenant set forth herein.

SECTION 6.08    Business of the Borrowers and the Subsidiaries. Notwithstanding
any other provisions hereof, engage at any time in any business or business
activity other than any business or business activity conducted by any of them
on the Closing

 

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Date and any business or business activities incidental or related thereto, or
any business or activity that is reasonably similar or complementary thereto or
a reasonable extension, development or expansion thereof or ancillary thereto.

SECTION 6.09    Limitation on Payments and Modifications of Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and Certain Other
Agreements; etc. Amend or modify in any manner materially adverse to the
Lenders, or grant any waiver or release under or terminate in any manner (if
such granting or termination shall be materially adverse to the Lenders), the
articles or certificate of incorporation, by laws, limited liability company
operating agreement, partnership agreement or other organizational documents of
Holdings or any of the Subsidiaries.

(a)    (i) Make, or agree or offer to pay or make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property) of
or in respect of principal or interest of (x) any Subordinated Intercompany Debt
or (y) any other Indebtedness which is contractually subordinated to the Loans
or any Permitted Refinancing Indebtedness in respect of the foregoing or any
Preferred Stock or any Disqualified Stock (each of clauses (x) and (y), a
“Junior Financing”), or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination in respect of any Junior Financing except for (A) payments of
regularly scheduled interest, and, to the extent this Agreement is then in
effect, principal on the scheduled maturity date of any Junior Financing,
(B) payments of regularly scheduled principal of Subordinated Intercompany Debt,
(C) the conversion of any Junior Financing to Equity Interests of Claire’s
Stores or CGHL or any of its direct or indirect parents or subsidiaries (other
than Holdings or the Subsidiaries); or

(ii)    Amend or modify, or permit the amendment or modification of, any
provision of Junior Financing or any agreement, document or instrument
evidencing or relating thereto, other than amendments or modifications that
(A) are not in any manner adverse to Lenders and that do not affect the
subordination or payment provisions thereof (if any) in a manner adverse to the
Lenders or (B) otherwise comply with the definition of “Permitted Refinancing
Indebtedness”.

(b)    Permit any Subsidiary to enter into any agreement or instrument that by
its terms restricts (i) the payment of dividends or distributions or the making
of cash advances to the Loan Parties or any Subsidiary that is a direct or
indirect parent of such Subsidiary or (ii) the granting of Liens by the Loan
Parties or such Subsidiary pursuant to the Security Documents, in each case
other than those arising under any Loan Document, except, in each case,
restrictions existing by reason of:

(A)    restrictions imposed by applicable law;

(B)    contractual encumbrances or restrictions in effect on the Closing Date
under Indebtedness existing on the Closing Date and set forth on Schedule 6.01
or any agreements related to any Permitted Refinancing Indebtedness in respect
of any such Indebtedness that does not expand the scope of any such encumbrance
or restriction;

 

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(C)    any restriction on a Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of the Equity Interests or assets of a
Subsidiary;

(D)    customary provisions in joint venture agreements, similar agreements
applicable to joint ventures and other similar agreements entered into in the
ordinary course of business;

(E)    any restrictions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement to the extent that such restrictions
apply only to the property or assets securing such Indebtedness;

(F)    any restrictions imposed by any agreement relating to Indebtedness
incurred pursuant to Section 6.01(q) or Permitted Refinancing Indebtedness in
respect thereof;

(G)    customary provisions contained in leases or licenses of intellectual
property and other similar agreements entered into in the ordinary course of
business;

(H)    customary provisions restricting subletting or assignment of any lease
governing a leasehold interest;

(I)    customary provisions restricting assignment of any agreement entered into
in the ordinary course of business;

(J)    customary restrictions and conditions contained in any agreement relating
to the sale, transfer, lease or other disposition of any asset permitted under
Section 6.05 pending the consummation of such sale, transfer, lease or other
disposition;

(K)    customary restrictions and conditions contained in the document relating
to any Lien, so long as (1) such Lien is a Permitted Lien and such restrictions
or conditions relate only to the specific asset subject to such Lien, and
(2) such restrictions and conditions are not created for the purpose of avoiding
the restrictions imposed by this Section 6.09;

(L)    customary net worth provisions contained in Real Property leases entered
into by Holdings and the Subsidiaries, so long as Holdings or such Subsidiary
has determined in good faith that such net worth provisions would not reasonably
be expected to impair the ability of Holdings or such Subsidiary to meet their
ongoing obligations;

(M)    any agreement in effect at the time such subsidiary becomes a Subsidiary,
so long as such agreement was not entered into in contemplation of such person
becoming a Subsidiary;

(N)    restrictions in agreements representing Indebtedness permitted under
Section 6.01 of a Subsidiary that is not a Loan Party;

 

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(O)    customary restrictions on leases, subleases, licenses or Equity Interests
or asset sale agreements otherwise permitted hereby as long as such restrictions
relate to the Equity Interests and assets subject thereto;

(P)    restrictions on cash or other deposits imposed by customers under
contracts entered into in the ordinary course of business;

(Q)    [reserved];

(R)    [reserved]; or

(S)    any encumbrances or restrictions of the type referred to in Sections
6.09(b)(i) and 6.09(b)(ii) above imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations referred to in clauses
(A) through (R) above; provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are, in the good faith judgment of the Loan Parties, no more
restrictive with respect to such dividend and other payment restrictions than
those contained in the dividend or other payment restrictions prior to such
amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.

SECTION 6.10    Minimum Cash Balance. Permit, as of the last day of any fiscal
month, (a) the aggregate amount of Unrestricted Cash to be less than $7,000,000
or (b) the aggregate amount of Unrestricted Cash Collateral to be less than
$2,000,000.

SECTION 6.11    Guarantor Coverage; Collateral Coverage.

(a)    Permit the Specified Collateral Value as of the last day of any fiscal
quarter to be less than $50,000,000.

(b)    Permit the aggregate amount of Consolidated Total Assets and EBITDA of or
that may be allocated to the Loan Parties (in each case calculated on an
unconsolidated basis and excluding intra-group items and Investments in
Subsidiaries that are not Loan Parties and excluding any purchase accounting
adjustments not allocated to any of the Subsidiaries) to represent less than (i)
60% of EBITDA and (ii) 75% of Consolidated Total Assets of Holdings and the
Subsidiaries as of the last day of any fiscal quarter.

 

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ARTICLE VII.

Events of Default

SECTION 7.01    Events of Default. In case of the happening of any of the
following events (each, an “Event of Default”):

(a)    any representation or warranty made or deemed made by any Loan Party
herein or in any other Loan Document or any certificate or document delivered
pursuant hereto or thereto shall prove to have been false or misleading in any
material respect when so made or deemed made;

(b)    default shall be made in the payment of any principal of any Loan or any
Applicable Prepayment Premium when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;

(c)    default shall be made in the payment of any interest on any Loan or in
the payment of any Fee or any other amount (other than an amount referred to in
(b) above) due under any Loan Document, when and as the same shall become due
and payable, and such default shall continue unremedied for a period of five
Business Days;

(d)    default shall be made in the due observance or performance by
(i) Holdings, the Loan Parties or any of the Subsidiaries of any covenant,
condition or agreement contained in Sections 5.01, 5.05(a), 5.08, 5.11 or 5.12
or in Article VI or (ii) by CGHL of Section 5.12;

(e)    default shall be made in the due observance or performance by Holdings,
the Loan Parties or any of the Subsidiaries of (i) Sections 5.04, or 5.10, and
such default shall continue unremedied for a period of 5 days, or (ii) any
covenant, condition or agreement contained in any Loan Document (other than
those specified in paragraphs (b), (c) and (d) above) and such default shall
continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to Holdings;

(f)    (i) any event or condition occurs that (A) results in any Material
Indebtedness becoming due prior to its scheduled maturity or (B) enables or
permits (with all applicable grace periods having expired) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf
shall cause such Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity as a result of an event of default thereunder or (ii) CGHL, Holdings or
any of the Subsidiaries shall fail to pay the principal of any Material
Indebtedness at the stated final maturity thereof; provided, that this clause
(f) shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness
if such sale or transfer is permitted hereunder and under the documents
providing for such Indebtedness;

(g)    there shall have occurred a Change in Control;

(h)    any step or procedure is taken towards the commencement of an involuntary
proceeding or the filing of an involuntary petition in a court of competent
jurisdiction seeking (i) relief in respect of CGHL or any of its subsidiaries or
Holdings or any of the Subsidiaries, or of a substantial part of the property or
assets of CGHL or any

 

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of its subsidiaries or Holdings or any Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, any Debtor Relief Law or
any other federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, administrator, liquidator,
administrative receiver, compulsory manager, trustee, custodian, sequestrator,
conservator or similar official for CGHL or any of its subsidiaries or Holdings
or any of the Subsidiaries or for a substantial part of the property or assets
of Holdings or any of the Subsidiaries; (iii) the winding up, dissolution,
liquidation, the suspension of payments, a moratorium of any indebtedness,
bankruptcy, administration or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) (including any procédure de sauvegarde,
procédure de sauvegarde accélérée, procédure de sauvegarde financière accélérée,
redressement judiciaire (including by way of plan de cession or plan de
continuation) or liquidation judiciaire or mandat ad hoc or conciliation) of
CGHL or any of its subsidiaries or Holdings or any Subsidiary (except, in the
case of any Subsidiary, in a transaction permitted by Section 6.05); and such
proceeding or petition shall continue undismissed for 60 days (or with respect
to any Loan Party incorporated in England or Wales, 20 calendar days) or an
order or decree approving or ordering any of the foregoing shall be entered; or
(iv) a composition, compromise, assignment or arrangement with any creditor of
any Loan Party in connection with or as a result of any financial difficulty on
the part of that Loan Party, other than those proceedings which if capable of
remedy are discharged, stayed or dismissed within 20 Business Days of
commencement or, if earlier, the date on which it is advertised (or such other
period as agreed between Holdings and the Lenders); or (in the case of an
application to appoint an administrator or commence proceedings) any proceedings
which the Administrative Agent is satisfied (acting on the instructions of the
Lenders) will be withdrawn before it is heard or will be unsuccessful;

(i)    CGHL or any of its subsidiaries or Holdings or any Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, any Debtor Relief Law or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in paragraph (h) above, (iii)
apply for or consent to the appointment of a receiver, administrator,
liquidator, administrative receiver, compulsory manager, trustee, custodian,
sequestrator, conservator or similar official for CGHL or any of its
subsidiaries or Holdings or any of the Subsidiaries or for a substantial part of
the property or assets of CGHL or any of its subsidiaries or Holdings or any
Subsidiary, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable or admit in writing its inability or
fail generally to pay its debts as they become due (including, in the case of a
Loan Party incorporated in England and Wales, as defined in Section 123(1) of
the UK Insolvency Act 1986), (vii) in the case of a Loan Party incorporated in
Germany it is or becomes not able to pay its debts (zahlungsunfähig), subject to
imminent inability to pay (drohende Zahlungsunfähigkeit), over-indebted
(überschuldet) (all within the meaning of sections 17 through 19 German
Insolvency Code (InsO)), or subject to any insolvency proceedings (viii) in the
case of a

 

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Loan Party incorporated in Switzerland, become unable or admit in writing its
inability or fail generally to pay its debts as they become due, suspend making
payments, become subject to bankruptcy, debt moratorium or any similar
insolvency procedure, or become over-indebted in the sense of article 725 of the
Swiss Code of Obligations, unless, in the case of over-indebtedness, creditors
of such Loan Party subordinate their claims to those of all other creditors of
such Loan Party to the extent of the insufficient coverage and to the extent the
subordination of such claims is sufficient to discharge the board of such Loan
Party from its duty to notify the court pursuant to article 725(2) of the Swiss
Code of Obligations, or (ix) in the case of a Loan Party incorporated in France,
(a) it ceases or suspends making payment on any of its debts or announces an
intention to do so; (b) by reason of actual or anticipated financial
difficulties commences negotiations with any one or more of its creditors (other
than negotiations with the Loan Parties) with a view to rescheduling any of its
indebtedness or (c) a moratorium is declared in respect of the indebtedness of
any Loan Party;

(j)    the failure by Holdings or any Subsidiary to pay one or more final
judgments aggregating in excess of $5,000,000 million (to the extent not covered
by insurance), which judgments are not discharged or effectively waived or
stayed for a period of 45 consecutive days, or any action shall be legally taken
by a judgment creditor to levy upon assets or properties of Holdings or any
Subsidiary to enforce any such judgment;

(k)    any material provision of any Loan Document shall for any reason cease to
be in full force and effect or be asserted in writing by CGHL or any of its
subsidiaries or by Holdings or any Subsidiary not to be a legal, valid and
binding obligation of any party thereto; or any Security Document shall cease to
create a valid and perfected first priority Lien (subject to the Agreed Security
Principles, Permitted Liens, the time periods set forth in the Collateral and
Guarantee Requirement and Section 5.11) on any material portion of the
Collateral purported to be covered thereby (except with respect to the U.K.
Debenture as it relates to any security interest therein taken over Equity
Interests in any Subsidiary that is not organized under the laws of England and
Wales); or

(l)    any Material Contract with any member of the NA Group shall be terminated
prior to its stated term, rejected, or materially breached by Holdings, any
Subsidiary or member of the NA Group.

then, and in every such event (other than an event described in paragraph (h) or
(i) above), and at any time thereafter during the continuance of such event, the
Administrative Agent, at the request of the Required Lenders, shall, by notice
to Holdings, take any or all of the following actions, at the same or different
times: (i) declare the Loans then outstanding to be forthwith due and payable in
whole or in part, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon the Applicable Prepayment
Premium and any unpaid accrued Fees and all other liabilities of the Loan
Parties accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the

 

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Borrowers, anything contained herein or in any other Loan Document to the
contrary notwithstanding; and in any event described in paragraph (h) or (i)
above, the principal of the Loans then outstanding, together with accrued
interest thereon the Applicable Prepayment Premium and any unpaid accrued Fees
and all other liabilities of the Borrowers accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrowers, anything contained herein or in any other
Loan Document to the contrary notwithstanding.

SECTION 7.02 Acceleration.

(a)    Without limiting the generality of the foregoing, it is understood and
agreed that if the Loans are accelerated or otherwise become due prior to the
Final Maturity Date, in each case, in respect of any Event of Default
(including, but not limited to, upon the occurrence of a bankruptcy or
insolvency event (including the acceleration of claims by operation of law)),
the Applicable Prepayment Premium with respect to a prepayment of the Loans will
also be due and payable, in cash, as though the Loans were prepaid pursuant to
Section 2.11 and shall constitute part of the Obligations, in view of the
impracticability and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of each Lender’s
lost profits as a result thereof. The Applicable Prepayment Premium payable
above shall be presumed to be the liquidated damages sustained by each Lender as
the result of the early prepayment and the Borrowers agree that it is reasonable
under the circumstances currently existing.

(b)    The Applicable Prepayment Premium shall also be payable in the event the
Obligations are satisfied or released by foreclosure (whether by power of
judicial proceeding), deed in lieu of foreclosure or by any other means. THE
BORROWERS EXPRESSLY WAIVE (TO THE FULLEST EXTENT THEY MAY LAWFULLY DO SO) THE
PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY
PROHIBIT THE COLLECTION OF THE APPLICABLE PREPAYMENT PREMIUM IN CONNECTION WITH
ANY SUCH ACCELERATION. The Borrowers expressly agree (to the fullest extent it
may lawfully do so) that: (i) the Applicable Prepayment Premium is reasonable
and is the product of an arm’s length transaction between sophisticated business
people, ably represented by counsel; (ii) the Applicable Prepayment Premium
shall be payable notwithstanding the then prevailing market rates at the time
payment is made; (iii) there has been a course of conduct between the Lenders
and the Borrowers giving specific consideration in this transaction for such
agreement to pay the Applicable Prepayment Premium; and (iv) the Borrowers shall
be estopped hereafter from claiming differently than as agreed to in this
paragraph. The Borrowers expressly acknowledge that their agreement to pay the
Applicable Prepayment Premium to the Lenders as herein described is a material
inducement to the Lenders to make the Loans.

SECTION 7.03 Exclusion of Immaterial Subsidiaries. Solely for the purposes of
determining whether an Event of Default has occurred under clause (h), (i) or
(j) of Section 7.01, any reference in any such clause to any Subsidiary shall be
deemed not to include any Immaterial Subsidiary affected by any event or
circumstance referred to in any such clause.

 

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ARTICLE VIII.

The Administrative Agent

SECTION 8.01    Appointment.

(a)    Each Lender (in its capacity as a Lender) hereby irrevocably designates
and appoints each of the Administrative Agent and the Collateral Agent as an
agent of such Lender under this Agreement and the other Loan Documents and each
such Lender irrevocably authorizes each of the Administrative Agent and the
Collateral Agent, in such respective capacities, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent or the Collateral Agent, as applicable, by the terms of
this Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, neither the Administrative Agent nor the Collateral
Agent shall have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent or the Collateral Agent, as applicable.

(b)    In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Borrowers, (i) the Administrative Agent
(irrespective of whether the principal of any Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrowers)
shall be entitled and empowered, by intervention in such proceeding or otherwise
(A) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of any or all of the 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 Lenders and the Administrative Agent, and (B) to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same, and (ii) any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Lender to make such
payments to the Administrative Agent and, if the Administrative Agent shall
consent to the making of such payments directly to the Lenders, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent, the Collateral Agent and
their respective agents and counsel, and any other amounts due the
Administrative Agent or the Collateral Agent, as applicable, under the Loan
Documents. Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

 

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(c)    Without limiting the generality of clauses (a) and (b) above, (i) the
Administrative Agent shall have the sole and exclusive right and authority (to
the exclusion of the Lenders), and is hereby authorized, to (A) act as the
disbursing and collecting agent for the Lenders with respect to all payments and
collections arising in connection with the Loan Documents (including in any
proceeding described in Section 7.01(h) or (i) or any other bankruptcy,
insolvency or similar proceeding), and each Person making any payment in
connection with any Loan Document to any Secured Party is hereby authorized to
make such payment to the Administrative Agent, (B) file and prove claims and
file other documents necessary or desirable to allow the claims of the Secured
Parties with respect to any Obligation in any proceeding described in Section
7.01(h) or (i) or any other bankruptcy, insolvency or similar proceeding (but
not to vote, consent or otherwise act on behalf of such Secured Party), (C)
except as may be otherwise specified in any Loan Document, exercise all remedies
given to the Administrative Agent and/or the Collateral Agent and the other
Secured Parties with respect to the Collateral, whether under the Loan
Documents, applicable requirements of law or otherwise and (D) execute any
amendment, consent or waiver under the Loan Documents on behalf of any Lender
that has consented in writing to such amendment, consent or waiver and (ii) the
Collateral Agent shall have the sole and exclusive right and authority (to the
exclusion of the Lenders), and is hereby authorized, to (A) act as collateral
agent for each Secured Party for purposes of the perfection of all Liens created
by such agreements and all other purposes stated therein, (B) manage, supervise
and otherwise deal with the Collateral, (C) take such other action as is
necessary or desirable to maintain the perfection and priority of the Liens
created or purported to be created by the Loan Documents in accordance with the
Loan Documents, and (D) except as may be otherwise specified in any Loan
Document, exercise all remedies given to the Collateral Agent and the other
Secured Parties with respect to the Collateral, whether under the Loan
Documents, applicable requirements of law or otherwise.

(d)    Each of the Lenders hereby appoints, in relation to any Security
Document, the Collateral Agent to act as agent under the Security Documents and
authorizes the Collateral Agent to hold any Collateral for the benefit of each
Lender, take all actions and exercise all powers specifically provided for
therein or under any other agreement, document or instrument pertaining to any
of the Collateral, as well as all actions and powers reasonably incidental
thereto and authorizes (and directs the Collateral Agent to act on the
instruction of the Required Lenders where applicable). Each Lender (in its
capacity as a Lender) hereby authorizes and directs the Collateral Agent to
execute and deliver the Security Documents to which the Collateral Agent is or
becomes a party. As to any matters not expressly provided for by the Loan
Documents (including enforcement or collection of the Obligations of the Loan
Parties), the Collateral Agent shall not be required to exercise any discretion
or take any action, or refrain from taking any action, but shall be required to
act or to refrain from acing (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Collateral Agent shall not be required to take any
action that exposes it to personal liability or that is, in the opinion of the
Collateral Agent or its counsel, contrary to any Loan Document or applicable
law.

 

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(e)    Swiss Collateral.

(i)    In relation to any Swiss Collateral Document under which security of an
accessory (akzessorische) nature is granted (including, without limitation, the
Swiss Account Pledge Agreement and the Swiss Share Pledge Agreement) each
present and future Lender hereby appoints and authorizes the Collateral Agent to
do all acts in the name and for the account of such Lender as its direct
representative (direkter Stellvertreter), including, without limitation, (i) to
accept and execute and hold, administer and, if necessary, enforce the security
granted under any such Swiss Collateral Documents, (ii) to agree to amendments,
restatements and other alterations of such Swiss Collateral Documents, (iii) to
effect any release of the security under, and the termination of, any such Swiss
Collateral Document, and (iv) to exercise such other rights powers, authorities
and discretions granted to the Collateral Agent hereunder or under the relevant
Swiss Collateral Document.

(ii)    Without limitation of the foregoing, the parties agree that it is
possible that in the handling of the Swiss Collateral, the Collateral Agent will
be required to take actions not specifically covered herein and in all such
instances the Collateral Agent is hereby authorized to act in such manner as the
Collateral Agent would act in similar transactions for its own accounts.

(f)    German Collateral.

(i)    Each of the Secured Parties (other than the Collateral Agent) hereby
appoints the Collateral Agent as trustee (Treuhänder) and administrator for the
purpose of accepting and administering the German Transaction Security for and
on behalf of the other Secured Parties. The Collateral Agent shall: (i) hold and
administer any German Transaction Security which is security assigned
(Sicherungseigentum/Sicherungsabtretung) or otherwise transferred under a
non-accessory security right (nichtakzessorische Sicherheit) to it as trustee
(treuhänderisch) for the benefit of the Secured Parties; and (ii) administer any
German Transaction Security which is pledged (Verpfändung) or otherwise
transferred to any Secured Party under an accessory security right
(akzessorische Sicherheit) as agent. Each Secured Party hereby authorizes the
Collateral Agent (whether or not by or through employees or agents): (i) to
exercise such rights, remedies, powers and discretions as are specifically
delegated to or conferred upon the Collateral Agent under the German Security
Documents together with such powers and discretions as are reasonably incidental
thereto; (ii) to take such action on its behalf as may from time to time be
authorized under or in accordance with the German Security Documents; and
(iii) to accept as its representative (Stellvertreter) any pledge or other
creation of any accessory security right granted in favor of such Secured Party
in connection with the Secured Debt Documents and to agree to and execute on its
behalf as its representative (Stellvertreter) any amendments and/or alterations
to any German Security Document which creates a pledge

 

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or any other accessory security right (akzessorische Sicherheit) including the
release or confirmation of release of such Security. Each Secured Party hereby
ratifies and approves all acts and declarations previously done by the
Collateral Agent on such Secured Party’s behalf.

(ii)    For the purpose of the exercise of all rights, claims, powers and
authorizations as well as the performance of all duties and obligations of the
Collateral Agent under this Agreement and under or in connection with the
Security Documents, the Collateral Agent shall be released by each Secured Party
(to the extent legally possible) from any restrictions on representing several
persons and self-dealing under any applicable law, and in particular from the
restrictions of Section 181 of the German Civil Code (Bürgerliches Gesetzbuch).

(g)    French Collateral.

(i)    Each Secured Party (other than the Collateral Agent) (as mandant):

(a)    irrevocably and unconditionally appoints the Collateral Agent to act as
agent (mandataire), pursuant to article 1984 of the French Civil Code (with full
power to appoint and to substitute and to delegate) on its behalf to execute any
French Security Document in its name and do anything upon the terms and
conditions set out in this Agreement under or in connection with the French
Security Documents, including, if need be, the appointment of a custodian which
shall hold assets on its behalf (including, as may be the case, share
certificates or share registries relating to shares in the capital of any
debtor) in custody under any French Security Document, and the Collateral Agent
accepts such appointment;

(b)    confirms its approval of the French Security Documents creating or
expressed to create French Transaction Security benefiting it and any French
Transaction Security created or to be created pursuant thereto and irrevocably
authorizes (with power of delegation), empowers and directs the Collateral Agent
(by itself or by such person(s) as it may nominate) to execute and deliver for
and on its behalf each French Security Document, to perform the duties and to
exercise the rights, powers and discretions that are specifically delegated to
the Collateral Agent or any Secured Party under or in connection with the French
Security Documents, together with any other rights, powers and discretions which
are incidental thereto and to give a good discharge for any moneys payable under
the Security Documents; and

(c)    acknowledges that the Collateral Agent has been appointed by it to
constitute, register, manage and enforce all French Transaction Security created
in its favour by any French Security Documents, and agrees that the French
Transaction Security to its nomination in accordance with applicable law from
time to time.

(ii)    The Collateral Agent will act solely for itself (as Secured Party) and
as agent for the other Secured Parties in carrying out its functions as
collateral agent under the relevant French Security Documents and this
Agreement.

 

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(iii)    In relation to French Security Documents, the relationship between the
Secured Parties (other than the Collateral Agent) and the Collateral Agent is
that of principal and agent only. The Collateral Agent shall not have, or be
deemed to have, assumed any obligations to or fiduciary relationship with, any
Party other than those for which specific provision is made by the French
Security Documents and this Agreement.

(iv)    The Collateral Agent shall not be liable to any person for any breach by
any Secured Party of this Agreement or be liable to any Secured Party for any
breach by any other person of this Agreement or any other Debt Document.

(v)    In furtherance of this Section 8.01, each of the Secured Parties hereby
undertakes to the Collateral Agent that, promptly upon request, such Secured
Party will ratify and confirm all transactions entered into and other actions by
the Collateral Agent (or any of its substitutes or delegates) in the proper
exercise of the power granted to it hereunder.

SECTION 8.02    Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
Neither the Administrative Agent nor the Collateral Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.

SECTION 8.03    Exculpatory Provisions. Neither any Agent or its Affiliates nor
any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such person under or in connection with
this Agreement or any other Loan Document (except to the extent that any of the
foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its or such person’s own gross
negligence or willful misconduct) or (b) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by the
Borrowers or any officer thereof contained in this Agreement or any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by any Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrowers to perform their obligations
hereunder or thereunder. Neither the Administrative Agent nor the Collateral
Agent shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrowers. Neither the Administrative Agent
nor the Collateral Agent shall have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting the
generality of the foregoing, (a) neither the Administrative Agent nor the
Collateral Agent shall be subject to any fiduciary or other implied duties,
regardless of whether a Default or Event of Default has occurred and is
continuing, and (b) neither the Administrative Agent nor the Collateral Agent
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herein and in the other Loan Documents, have any duty to disclose, and shall be
liable for the failure to disclose, any information relating to any Borrower or
any of its Affiliates that is communicated to or obtained by the person serving
as the Administrative Agent, the Collateral Agent or any of their respective
Affiliates in any capacity. Neither the Administrative Agent nor the Collateral
Agent shall be deemed to have knowledge of any Default or Event of Default
unless and until notice describing such Default or Event of Default is given to
the Administrative Agent or the Collateral Agent, as applicable, in writing by
Holdings, or a Lender. Neither the Administrative Agent nor the Collateral Agent
shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or the creation,
perfection or priority of any Lien purported to be created by the Security
Documents, (v) the value or sufficiency of the Collateral or (vi) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent or the Collateral Agent, as applicable.

SECTION 8.04    Reliance by Agents. Each of the Administrative Agent and the
Collateral Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) or
conversation believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper person. Each of the Administrative Agent
and the Collateral Agent also may rely upon any statement made to it orally or
by telephone and believed by it to have been made by the proper person, and
shall not incur any liability for relying thereon. In determining compliance
with any condition hereunder to the Closing Date, that by its terms must be
fulfilled to the satisfaction of a Lender, the Administrative Agent and the
Collateral Agent may presume that such condition is satisfactory to such Lender
unless the Administrative Agent shall have received notice to the contrary from
such Lender prior to the Closing Date. Any Agent may consult with legal counsel
(including counsel to the Borrowers), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts. The
Administrative Agent and the Collateral Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. Each of the Administrative Agent and the Collateral Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all or other Lenders) as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action. Each of the Administrative Agent and the Collateral Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
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Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all or other Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans. The Collateral Agent may rely upon
the last provided Register in making a determination with respect to the
Required Lenders.

SECTION 8.05    Notice of Default. Neither the Administrative Agent nor the
Collateral Agent shall be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default unless the Administrative Agent or the
Collateral Agent, as applicable, has received written notice from a Lender or
Holdings referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default.” In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. Each of the Administrative Agent and the
Collateral Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders (or, if so
specified by this Agreement, all or other Lenders); provided, that unless and
until the Administrative Agent or the Collateral Agent, as applicable, shall
have received such directions, each of the Administrative Agent and the
Collateral Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

SECTION 8.06    Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of the Loan Parties or any affiliate
of the Loan Parties, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of, and investigation into, the business, operations,
property, financial and other condition and creditworthiness of the Loan Parties
and their affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
any Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

 

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SECTION 8.07    Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrowers and without
limiting the obligation of the Borrowers to do so), in the amount of its pro
rata share (based on its Loans hereunder) (determined at the time such indemnity
is sought), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (whether before or after the payment
of the Loans) be imposed on, incurred by or asserted against such Agent in any
way relating to or arising out this Agreement, 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 any action taken or omitted by
such Agent under or in connection with any of the foregoing; provided, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent’s gross
negligence or willful misconduct. The failure of any Lender to reimburse any
Agent promptly upon demand for its ratable share of any amount required to be
paid by the Lenders to such Agent as provided herein shall not relieve any other
Lender of its obligation hereunder to reimburse such Agent for its ratable share
of such amount, but no Lender shall be responsible for the failure of any other
Lender to reimburse such Agent for such other Lender’s ratable share of such
amount. The agreements in this Section shall survive the payment of the Loans
and all other amounts payable hereunder.

SECTION 8.08    Agent in Its Individual Capacity. Each Agent and its affiliates
may make loans to, accept deposits from, and generally engage in any kind of
business with the Borrowers as though such Agent were not an Agent. With respect
to its Loans made or renewed by it, each Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Agent, and the terms “Lender” and
“Lenders” shall include each Agent in its individual capacity.

SECTION 8.09    Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days’ notice to the Lenders and Holdings.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 7.01(b), (c), (h) or (i) shall
have occurred and be continuing) be subject to approval by Holdings (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective, and the
retiring Administrative Agent shall, on behalf of the Lenders, appoint a
successor agent which shall (unless an Event of Default under Section 7.01(b),
(c), (h) or (i) shall have occurred and be

 

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continuing) be subject to approval by Holdings (which approval shall not be
unreasonably withheld or delayed). After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Section 8.09 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
The foregoing provisions shall also be applicable with respect to the
resignation of the Collateral Agent and appointment of any successor Collateral
Agent. Notwithstanding the foregoing, upon any assignment of the Loans by the
Initial Lender to any person other than an Affiliate or Approved Fund of the
Initial Lender who becomes a Lender hereunder pursuant to Section 9.04, the
Initial Lender may on or prior to the effectiveness of such assignment, appoint
any person as a successor agent (who may be any of the Collateral Agent, a
Lender or such other person reasonably acceptable to the Initial Lender and,
unless an Event of Default under Section 7.01(b), (c), (h) or (i) shall have
occurred and be continuing, Holdings), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent and the
term “Administrative Agent” shall mean such successor agent effective upon such
appointment and approval, and the Initial Lender’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of the Initial Lender or any of the parties to this Agreement
or any holders of the Loans.

SECTION 8.10    Parallel Debt. Notwithstanding any other provision of any Loan
Document, each Guarantor organized in any jurisdiction listed in Schedule 8.10
(as such schedule may be amended or supplemented from time to time by mutual
agreement of the Administrative Agent and the Company) (each, a “Relevant Loan
Party”), hereby unconditionally and irrevocably agrees and covenants with the
Collateral Agent by way of an acknowledgement of independent payment obligation
that such Relevant Loan Party shall pay to the Collateral Agent as creditor in
its own right and not as representative or agent of the other Secured Parties
sums equal to, and in the currency of, the aggregate amount of the obligations
owing by such Relevant Loan Party under the Loan Documents at any given time
(the “Principal Obligations”) as and when the same fall due for payment under
the Loan Documents (the aforesaid sums being the “Parallel Obligations”).

The Collateral Agent shall have its own independent right to demand payment of
the Parallel Obligations from the Relevant Loan Party (such demand to be made in
accordance with, and only in the circumstances permitted under the Loan
Documents). The rights of the Secured Parties (other than the Collateral Agent)
to receive payment of the Principal Obligations are several, separate and
independent from the rights of the Collateral Agent to receive payment of the
Parallel Obligations and shall not in any way limit or affect each Relevant Loan
Party’s Principal Obligations nor shall the amounts for which each Relevant Loan
Party is liable under it Parallel Obligations be limited or affected in any way
by its Principal Obligations provided that the payment by the Relevant Loan
Party of its Parallel Obligations to the Collateral Agent in accordance with
this Section 8.10 shall be an effective discharge of the corresponding Principal
Obligations and the payment by the Relevant Loan Party of its Principal
Obligations in accordance with the provisions of the Loan Documents shall be an
effective discharge of the corresponding Parallel Obligations.

 

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In the event of an effective discharge of any Principal Obligations, the
Collateral Agent shall not be entitled to demand payment of the corresponding
Parallel Obligations and such Parallel Obligations shall be discharged to the
same extent. In the event of an effective discharge of any Parallel Obligations
the Loan Parties shall not be entitled to demand payment of the corresponding
Principal Obligations and such Principal Obligations shall be discharged to the
same extent. In the event of any conflict between the provisions contained in
this Section 8.10 and Section 9.22 hereof, this Section 8.10 shall control.

The Collateral Agent acts in its own name and not as trustee and it shall have
its own independent right to demand payment of the amounts payable by each
Relevant Loan Party pursuant to the Parallel Obligations.

SECTION 8.11    Withholding Taxes. To the extent required by any applicable
laws, the Administrative Agent may withhold from any payment to any Lender an
amount equivalent to any applicable withholding Tax. Without limiting or
expanding the provisions of Section 2.09, each Lender shall indemnify and hold
harmless the Administrative Agent against, within 10 days after written demand
therefor, any and all Taxes and any and all related losses, claims, liabilities
and expenses (including fees, charges and disbursements of any counsel for the
Administrative Agent) incurred by or asserted against the Administrative Agent
by the Internal Revenue Service or any other Governmental Authority as a result
of the failure of the Administrative Agent to properly withhold Tax from amounts
paid to or for the account of any Lender for any reason (including, without
limitation, because the appropriate form was not delivered or not properly
executed, or because such Lender failed to notify the Administrative Agent of a
change in circumstance that rendered the exemption from, or reduction of,
withholding Tax ineffective). A certificate as to the amount of such payment or
liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under this Agreement or any other Loan Document against any
amount due the Administrative Agent under this Section 8.11. The agreements in
this Section 8.11 shall survive the resignation and/or replacement of the
Administrative Agent, any assignment of rights by, or the replacement of, a
Lender and the repayment, satisfaction or discharge of all other Obligations.

ARTICLE IX.

Miscellaneous

SECTION 9.01    Notices; Communications.

(a)    Except in the case of notices and other communications expressly
permitted to be given by telephone, except as provided in Section 9.01(b) below
and notwithstanding anything to the contrary in any other Loan Document, all
notices and other communications provided for herein and in any other Loan
Document shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier or
electronic mail as follows, all notices and other communications expressly

 

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permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:

(i)    if to a Loan Party, the Administrative Agent or the Collateral Agent, to
the address, telecopier number, electronic mail address or telephone number
specified for such person on Schedule 9.01; and

(ii)    if to any other Lender, to the address, telecopier number, electronic
mail address or telephone number specified in its Administrative Questionnaire.

(b)    Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender, as applicable, has notified
the Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or Holdings may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.

(c)    Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received. Notices
sent by telecopier shall be deemed to have been given when sent (except that, if
not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in Section 9.01(b) above (i) sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement); provided that if not given
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient, and (ii) posted to an Internet or Intranet
website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (c)(i) of
notification that such notice or communication is available and identifying the
website address therefor.

(d)    Any party hereto may change its address or telecopy number for notices
and other communications hereunder by notice to the other parties hereto.

(e)    Documents required to be delivered pursuant to Section 5.04 (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically (including as set forth in Section 9.17)
and if so delivered, shall be deemed to have been delivered on the date (i) on
which Holdings posts such documents, or provides a link thereto on Holdings’s
website on the Internet at the website address listed on Schedule 9.01, or
(ii) on which such documents are posted on Holdings’s behalf on an Internet or
intranet website, if any, to which each Lender and the Agents have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided, that (A) Holdings shall

 

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deliver paper copies of such documents to the Agents or any Lender that requests
Holdings to deliver such paper copies until a written request to cease
delivering paper copies is given by the applicable Agent or such Lender, and
(B) Holdings shall notify the Agents and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the Agents
by electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance Holdings shall be
required to provide paper copies of the certificates required by Section 5.04(c)
to the Administrative Agent. Except for such certificates required by Section
5.04(c), the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by Holdings with any
such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.

SECTION 9.02    Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties herein, in the other
Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and shall
survive the making by the Lenders of the Loans and the execution and delivery of
the Loan Documents, regardless of any investigation made by such persons or on
their behalf and notwithstanding that the Administrative Agent may have had
notice or knowledge of any Default or Event of Default or incorrect
representation or warranty at the time any Loan is extended hereunder, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loan or any Fee or any other amount payable under this Agreement
or any other Loan Document is outstanding and unpaid. Without prejudice to the
survival of any other agreements contained herein, indemnification and
reimbursement obligations contained herein (including, without limitation,
pursuant to Sections 2.17 and 9.05) and the provisions of Article VIII shall
survive the payment in full of the principal and interest hereunder or the
termination of this Agreement.

SECTION 9.03    Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrowers and the Agents and when the Agents
shall have received copies hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the Borrowers, the Agents and each Lender and
their respective permitted successors and assigns.

SECTION 9.04    Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that (i) the
Borrowers may not assign or otherwise transfer any of their rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrowers without such consent shall be
null and void), and (ii) no Lender may assign or otherwise transfer its rights
or obligations hereunder except in accordance with this Section 9.04. Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (d) of this
Section 9.04), and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement or the other Loan
Documents.

 

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(b)    (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees other than any Borrowers or any of
their Affiliates (each, an “Assignee”) all or a portion of its rights and
obligations under this Agreement (including all or a portion of the Loans at the
time owing to it) with the prior written consent (such consent not to be
unreasonably withheld or delayed) of:

(A)    Holdings (provided, that the consent of Holdings shall not be required if
an Event of Default shall have occurred and be continuing and provided, further,
that no consent of Holdings shall be required for an assignment to another
Lender, an Affiliate of a Lender or an Approved Fund); and

(B)    the Administrative Agent; provided, that, no such consent shall be
required for an assignment to another Lender, an Affiliate of a Lender, an
Approved Fund.

(ii)    Assignments shall be subject to the following additional conditions:

(A)    except in the case of an assignment to a Lender, an affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Loans, the principal amount of the Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $1.0 million, unless the
Administrative Agent otherwise consents; provided, that (such amounts shall be
aggregated in respect of each Lender and its Affiliates or Approved Funds (with
simultaneous assignments to or by two or more Approved Funds shall be treated as
one assignment), if any;

(B)    the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance via an electronic settlement
system acceptable to the Administrative Agent (or, if previously agreed with the
Administrative Agent, manually), and shall pay to the Administrative Agent a
processing and recordation fee of $3,500 (which fee may be waived or reduced in
the sole discretion of the Administrative Agent); provided that only one such
fee shall be due in respect of a simultaneous assignment to more than one
Affiliate of a Lender or Approved Fund; and

(C)    the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent on or prior to the effective date of such assignment an
Administrative Questionnaire and any tax forms required to be delivered pursuant
to Section 2.17.

For the purposes of this Section 9.04, “Approved Fund” means any person (other
than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
and that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

 

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(iii)    Subject to acceptance and recording thereof pursuant to paragraph
(b)(v) below, from and after the effective date specified in each Assignment and
Acceptance the Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.17
and 9.05). Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 9.04 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (d) of this Section 9.04.

(iv)    The Administrative Agent, acting for this purpose as a non-fiduciary
agent of the Borrowers, shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and principal amount of the Loans owing
to each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive, and the Borrowers, the Agents
and the Lenders shall treat each person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. Failure to make any such
recordation, or any error in such recordation, shall not affect the Borrowers’
obligations in respect of such Loans. The Register shall be available for
inspection by the Borrowers, the Collateral Agent and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

(v)    Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an Assignee, the Assignee’s completed Administrative
Questionnaire (unless the Assignee shall already be a Lender hereunder), all
applicable tax forms, the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent promptly
shall accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment, whether or not evidenced by a promissory
note, shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph (b)(v).

(c)    By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse

 

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claim and that the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in clause
(i) above, such assigning Lender makes no representation or warranty 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,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrowers or any Subsidiary or the
performance or observance by the Borrowers or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) the Assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) the Assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 3.05 (or delivered pursuant to Section 5.04), 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; (v) the
Assignee will independently and without reliance upon the Administrative Agent,
such assigning Lender or any other Lender 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; (vi) the
Assignee appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms of this Agreement, together
with such powers as are reasonably incidental thereto; and (vii) the Assignee
agrees that it will perform in accordance with their terms all the obligations
which by the terms of this Agreement are required to be performed by it as a
Lender.

(d)    (i) Any Lender may, with the prior written consent, not to be
unreasonably withheld or delayed of Holdings (provided, that the consent of
Holdings shall not be required if an Event of Default shall have occurred and be
continuing), sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of the Loans owing to it); provided,
that (A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (C) the Borrowers, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and the other Loan Documents and to approve any amendment,
modification or waiver of any provision of this Agreement and the other Loan
Documents; provided, that (x) such agreement may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver that (1) requires the consent of each Lender directly
affected thereby pursuant to Section 9.04(a)(i) or clauses (i), (ii), (iii) or
(iv) of the first proviso to Section 9.08(b) and (2) directly affects such
Participant and (y) no other agreement with respect to amendment, modification
or waiver may exist between such Lender and such Participant. Subject to
paragraph (c)(ii) of this Section 9.04, each Borrower agrees that each
Participant shall be entitled to the benefits of Section 2.17 (subject to the
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Sections) to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section 9.04. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 9.06 as though it were a Lender, provided such Participant shall be
subject to Section 2.18(c) as though it were a Lender.

(ii)    A Participant shall not be entitled to receive any greater payment under
Section 2.17 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrowers’ prior written
consent (not to be unreasonably withheld or delayed) or the entitlement to
receive a greater payment results from a change in law that occurs after the
Participant acquires the participation. Each Lender that sells a participation
shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and interest amounts) of each Participant’s interest
in the Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any loans
or its other obligations under any Loan Document) to any Person. The entries in
the Participant Register shall be conclusive absent manifest error.

(e)    Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank or any other central bank and in the case of any Lender that is an
Approved Fund, any pledge or assignment to any holders of obligations owed, or
securities issued, by such Lender, including to any trustee for, or any other
representative of, such holders, and this Section 9.04 shall not apply to any
such pledge or assignment of a security interest; provided, that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or Assignee for such Lender
as a party hereto.

(f)    Each Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (d) above.

(g)    Notwithstanding the foregoing, any Conduit Lender may assign any or all
of the Loans it may have funded hereunder to its designating Lender without the
consent of the Borrowers or the Administrative Agent. Each of the Loan Parties,
each Lender and the Administrative Agent hereby confirms that it will not
institute against a Conduit Lender or join any other person in instituting
against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding under any state bankruptcy or similar law, for one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto and the Borrowers for any loss, cost, damage or
expense arising out of its inability to institute such a proceeding against such
Conduit Lender during such period of forbearance.

 

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(h)    [Reserved].

(i)    Notwithstanding the foregoing, no assignment may be made or participation
sold to an Ineligible Institution without the prior written consent of the
Borrowers. Further, notwithstanding the foregoing, no assignment or pledge may
be made or participation sold in a way that would result in non-compliance with
the Swiss Non-Bank Rules and any such assignment, pledge or participation shall
be rendered nul and void ab initio if it would result in non-compliance with the
Swiss Non-Bank Rules. Notwithstanding anything to the contrary in this
Agreement, the Borrowers and the Lenders acknowledge and agree that the
Administrative Agent shall have no responsibility to monitor whether assignments
or participations are made to Ineligible Institutions, and that none of the
Borrowers or any of its Subsidiaries shall bring a claim to such effect.

(j)    For the avoidance of doubt, in the event that a transfer or an assignment
by an existing Lender of its rights and/or obligations under this Agreement (and
any relevant Loan Document) occurs or is deemed to occur by way of novation or
otherwise, the existing Lender explicitly reserves the preservation of all
securities and guarantees (if any) created under any Loan Document for the
benefit of the new Lender and the other beneficiaries of such security Parties
in accordance with any applicable law, including, in respect of Luxembourg law,
the provisions of article 1278 of the Luxembourg Civil Code.

SECTION 9.05    Expenses; Indemnity.

(a)    Subject in each case to the occurrence of the Closing Date, the Borrowers
agree to pay (i) all reasonable out of pocket expenses incurred by each Agent
prior to the Closing Date in connection with the preparation of this Agreement
and the other Loan Documents (including in connection with due diligence and the
reasonable fees, disbursements of charges of counsel to the Agents), (ii) all
reasonable out of pocket expenses (including Other Taxes) incurred by the Agents
in connection with the administration of this Agreement and any amendments,
modifications or waivers of the provisions hereof or thereof, including the
reasonable fees, charges and disbursements of Weil, Gotshal & Manges LLP,
counsel for the Agents, and, if necessary, the reasonable fees, charges and
disbursements of such additional counsel as the Administrative Agent or the
Collateral Agent may require (and, in the case of an actual or potential
conflict of interest, one addition counsel for the Collateral Agent), and
(iii) all out of pocket expenses (including Other Taxes) incurred by the
Administrative Agent, the Collateral Agent or any Lender or any of their
respective Affiliates in connection with the enforcement, collection or
protection of their rights in connection with this Agreement and the other Loan
Documents or in connection with the Loans made hereunder, including the fees,
charges and disbursements of counsel (including any special and local counsel).

(b)    The Borrowers agree to indemnify the Agents, each Lender, each of their
respective Affiliates and each of their respective directors, trustees,
officers, employees, agents, trustees and advisors (each such person being
called an “Indemnitee”) against, and to hold each

 

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Indemnitee harmless from, any and all losses, claims, damages, obligations,
liabilities, penalties, actions, judgments, suits, costs and related expenses or
disbursements of any kind, including reasonable counsel fees, charges and
disbursements (except the allocated costs of in-house counsel), imposed or
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto and thereto of their
respective obligations thereunder or the consummation of the transactions
contemplated hereby, (ii) the use of the proceeds of the Loans or (iii) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto and regardless of whether such
matter is initiated by a third party or by any Borrower or any of their
subsidiaries or Affiliates; provided, that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a final, non-appealable
judgment of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee (for purposes of this
proviso only, each of the Administrative Agent, the Collateral Agent and/or any
Lender shall be treated as several and separate Indemnitees, but each of them
together with its respective Related Parties shall be treated as a single
Indemnitee). None of the Indemnitees (or any of their respective affiliates)
shall be responsible or liable to the Fund, any Borrower or any of their
respective subsidiaries, Affiliates or stockholders or any other person or
entity for any special, indirect, consequential or punitive damages. The
provisions of this Section 9.05 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the resignation or removal
of any Agent, the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent,
the Collateral Agent or any Lender.

(c)    Except as expressly provided in Section 9.05(a) with respect to Other
Taxes, which shall not be duplicative with any amounts paid pursuant to
Section 2.17, this Section 9.05 shall not apply to Taxes other than Taxes that
represent losses, claims, damages, liabilities and expenses with respect to a
non-Tax claim.

(d)    To the fullest extent permitted by applicable law, the Borrowers shall
not assert, and hereby waive, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or the use of the proceeds thereof. No Indemnitee shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby.

(e)    The agreements in this Section 9.05 shall survive the resignation of the
Administrative Agent or the Collateral Agent, as applicable, the replacement of
any Lender and the repayment, satisfaction or discharge of all the other
Obligations and the termination of this Agreement.

 

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SECTION 9.06    Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Borrower or any Subsidiary against any of and all
the obligations of the Borrowers now or hereafter existing under this Agreement
or any other Loan Document held by such Lender, irrespective of whether or not
such Lender shall have made any demand under this Agreement or such other Loan
Document and although the obligations may be unmatured. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) that such Lender may have.

SECTION 9.07    Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 9.08    Waivers; Amendment.

(a)    No failure or delay of the Administrative Agent or any Lender in
exercising any right or power hereunder or under any Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent and
the Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or any other Loan Document or consent
to any departure by the Borrowers or any other Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on the Borrowers or any
other Loan Party in any case shall entitle such person to any other or further
notice or demand in similar or other circumstances.

(b)    Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except (x) in the case of
this Agreement, pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Required Lenders, and (y) in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by each
party thereto and the Administrative Agent and consented to by the Required
Lenders; provided, however, that no such agreement shall

(i)    decrease or forgive the principal amount of, or extend the final maturity
of, or decrease the rate of interest on any Loan without the prior written
consent of each Lender directly affected thereby,

 

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(ii)    decrease the fees of any Lender or any Agent without the prior written
consent of such Lender or Agent, as applicable,

(iii)    extend any date on which payment of interest on any Loan or any fees is
due, without the prior written consent of each Lender adversely affected
thereby,

(iv)    amend the provisions of Section 5.02 of the Security Agreement, or any
analogous provision of any other Security Document, in a manner that would by
its terms alter the pro rata sharing of payments required thereby, without the
prior written consent of each Lender adversely affected thereby,

(v)    amend or modify the provisions of this Section 9.08 or the definition of
the terms “Required Lenders” or any other provision hereof specifying the number
or percentage of Lenders required to waive, amend or modify any rights hereunder
or make any determination or grant any consent hereunder, without the prior
written consent of each Lender adversely affected thereby, or

(vi)    release all or substantially all of the Collateral or release any of the
Borrowers or all or substantially all of the Subsidiary Loan Parties from their
respective Guarantees under the Guarantee Agreement, unless, in the case of a
Subsidiary Loan Party, all or substantially all of the Equity Interests of such
Subsidiary Loan Party are sold or otherwise disposed of in a transaction
permitted by this Agreement, without the prior written consent of each Lender;

provided, further, that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder without the
prior written consent of the Administrative Agent acting as such at the
effective date of such agreement, as applicable, and notice of and a copy of any
such agreements shall be provided to the Collateral Agent by the Borrowers. Each
Lender shall be bound by any waiver, amendment or modification authorized by
this Section 9.08 and any consent by any Lender pursuant to this Section 9.08
shall bind any assignee of such Lender.

(c)    (i) Guarantees, collateral security agreements, pledge agreements and
related documents (if any) executed by the Loan Parties in connection with this
Agreement may be in a form reasonably determined by the Administrative Agent and
may be amended, supplemented and/or waived with the consent of the
Administrative Agent at the request of the Borrower without the input or need to
obtain the consent of any other Lenders if such amendment or waiver is delivered
in order (x) to comply with local law or advice of local counsel, (y) to cure
ambiguities, omissions or defects or (z) to cause such guarantees, collateral
security agreements, pledge agreement or other document to be consistent with
this Agreement and the other Loan Documents, and (ii) if the Administrative
Agent and the Borrower have jointly identified any obvious error or any error or
omission of a technical nature or any necessary or desirable technical change,
in each case, in any provision of the Loan Documents, then the Administrative
Agent and the Borrower shall be permitted to amend such provision.

 

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SECTION 9.09    Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the applicable interest rate, together with all fees
and charges that are treated as interest under applicable law (collectively, the
“Charges”), as provided for herein or in any other document executed in
connection herewith, or otherwise contracted for, charged, received, taken or
reserved by any Lender, shall exceed the maximum lawful rate (the “Maximum
Rate”) that may be contracted for, charged, taken, received or reserved by such
Lender in accordance with applicable law, the rate of interest payable
hereunder, together with all Charges payable to such Lender, shall be limited to
the Maximum Rate; provided, that such excess amount shall be paid to such Lender
on subsequent payment dates to the extent not exceeding the legal limitation.

SECTION 9.10    Entire Agreement. This Agreement, the other Loan Documents and
the agreements regarding certain fees referred to herein constitute the entire
contract between the parties relative to the subject matter hereof. Any previous
agreement among or representations from the parties or their Affiliates with
respect to the subject matter hereof is superseded by this Agreement and the
other Loan Documents. Notwithstanding the foregoing, the Collateral Agent Fee
Letter shall survive the execution and delivery of this Agreement and remain in
full force and effect. Nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any party other than the
parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.

SECTION 9.11    WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

SECTION 9.12    Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

SECTION 9.13    Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which, when
taken

 

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together, shall constitute but one contract, and shall become effective as
provided in Section 9.03. Delivery of an executed counterpart to this Agreement
by facsimile transmission (or other electronic transmission pursuant to
procedures approved by the Administrative Agent) shall be as effective as
delivery of a manually signed original.

SECTION 9.14    Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 9.15    Jurisdiction; Consent to Service of Process. Each party hereto
hereby irrevocably and unconditionally:

(a)    submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
general and exclusive jurisdiction of the Supreme Court of the State of New York
for the County of New York (the “New York Supreme Court”), and the United States
District Court for the Southern District of New York (the “Federal District
Court”, and together with the New York Supreme Court, the “New York Courts”),
and appellate courts from either of them;

(b)    consents that any such action or proceeding may be brought in such courts
and waives, to the maximum extent not prohibited by law, any objection that it
may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient
forum and agrees not to plead or claim the same;

(c)    agrees that the New York Courts and appellate courts from either of them
shall be the exclusive forum for any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, and that it shall
not initiate (or collusively assist in the initiation or prosecution of) any
such action or proceeding in any court other than the New York Courts and
appellate courts from either of them; provided that

(i)    if all such New York Courts decline jurisdiction over any Person, or
decline (or in the case of the Federal District Court, lack) jurisdiction over
the subject matter of such action or proceeding, a legal action or proceeding
may be brought with respect thereto in another court having such jurisdiction;

(ii)    in the event that a legal action or proceeding is brought against any
party hereto or involving any of its property or assets in another court
(without any collusive assistance by such party or any of its Subsidiaries or
Affiliates), such party shall be entitled to assert any claim or defense
(including any claim or defense that this Section 9.15(c) would otherwise
require to be asserted in a legal action or proceeding in a New York Court) in
any such action or proceeding;

 

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(iii)    any party hereto may bring any legal action or proceeding in any
jurisdiction for the recognition and enforcement of any judgment;

(d)    agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to Holdings, the
applicable Lender or the applicable Agent, as the case may be, at the address
specified in Section 9.01 or at such other address of which the applicable
Agent, any such Lender and Holdings shall have been notified pursuant thereto;
and

(e)    agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or (subject to the preceding clause
(c)) shall limit the right to sue in any other jurisdiction.

(f)    Notwithstanding the foregoing, each party hereto agrees that the Agents
and the Lenders retain the right to bring proceedings against any loan party in
the courts of any other jurisdiction solely in connection with the exercise of
any rights under any Security Document.

(g)    Each Loan Party and each Subsidiary that is not located in the U.S.
hereby irrevocably designates, appoints and empowers Corporation Service Company
(whose current address is: 80 State Street, Albany, New York 12207-2543, U.S.A.)
(including any replacement agent as provided below, the “Process Agent”), in the
case of any suit, action or proceeding brought in the United States of America
as its designee, appointee and agent to receive, accept and acknowledge for and
on its behalf, and in respect of its property, service of any and all legal
process, summons, notices and documents that may be served in any action or
proceeding arising out of or in connection with this Agreement or any other Loan
Document. Such service may be made by mailing (by registered or certified mail,
postage prepaid) or delivering a copy of such process to such Person in care of
the Process Agent at the Process Agent’s above address, and each such non-U.S.
Loan Party and Subsidiary hereby irrevocably authorizes and directs the Process
Agent to accept such service on its behalf. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law. In the event of service of process in Switzerland, each
Swiss Obligor hereby designates as its domicile to receive service of process
the domicile indicated in Section 9.01 and hereby waives any other jurisdiction
that may be corresponding to it by reason of its present or future domiciles.

SECTION 9.16    Confidentiality. Each of the Lenders and the Agents agrees that
it shall maintain in confidence any information relating the Borrowers and any
Subsidiary furnished to it by or on behalf of the Borrowers or any Subsidiary
(other than information that (a) has become generally available to the public
other than as a result of a disclosure by such party in violation of this
Section 9.16, (b) has been independently developed by such Lender or such Agent
without violating this Section 9.16, (c) was available to such Lender or such
Agent from a third party having, to such person’s knowledge, no obligations of
confidentiality to the Borrowers or (d) is available to the Agents or any Lender
on a non-confidential basis prior to

 

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disclosure by any Loan Party) and shall not reveal the same other than to its
and its Affiliates’ directors (or equivalent managers), trustees, officers,
employees, accountants, auditors, attorneys, advisors, and any numbering,
administration or settlement service providers with a need to know or to any
person that approves or administers the Loans on behalf of such Lender (so long
as each such person shall have been instructed to keep the same confidential in
accordance with this Section 9.16), except: (A) to the extent necessary to
comply with law or any legal process or the requirements of any Governmental
Authority, the National Association of Insurance Commissioners or of any
securities exchange on which securities of the disclosing party or any Affiliate
of the disclosing party are listed or traded, (B) as part of normal reporting or
review procedures to, or examinations by, Governmental Authorities or
self-regulatory authorities, including the National Association of Insurance
Commissioners or the National Association of Securities Dealers, Inc., (C) to
its parent companies, Affiliates or auditors (so long as each such person shall
have been instructed to keep the same confidential in accordance with this
Section 9.16), (D) in order to enforce its rights under any Loan Document in a
legal proceeding, (E) to other Lenders and to any pledgee under Section 9.04(d)
or any other prospective assignee of, or prospective Participant in, any of its
rights under this Agreement (so long as such person is subject to this
Section 9.16 or shall have been instructed to keep the same confidential in
accordance with this Section 9.16), (F) to any direct or indirect actual or
prospective contractual counterparty in Swap Agreements or similar products
relating to the Loan Parties and their obligations, or such contractual
counterparty’s professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this Section 9.16), (G) with the prior written consent of the
Borrower or (H) to the extent applicable and reasonably necessary or advisable,
for purposes of establishing a “due diligence” defense.

SECTION 9.17    Platform; Borrower Materials. The Borrowers and each Lender
hereby acknowledge and agree the Administrative Agent may, but shall not be
obligated to, make available to the Lenders materials and/or information
provided by or on behalf of the Borrowers hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”). Any Platform used by the Administrative
Agent is provided “as is” and “as available”. Neither the Administrative Agent
nor any of its Related Parties (collectively, the “Agent Parties”) warrants the
accuracy or completeness of the Borrower Materials, or the adequacy of the
platform and they expressly disclaim liability for errors or omissions in the
Borrower Materials. No warranty of any kind, express, implied or statutory,
including any warranty of merchantability, fitness for a particular purpose,
non-infringement of third party rights or freedom from viruses or other code
defects, is made by the Agent Parties in connection with the Borrower Materials
or the Platform. In no event shall the Agent Parties have any liability to any
Loan Party, any Lender or any other Person or entity for damages of any kind
including direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of any
Loan Party’s or the Administrative Agent’s transmission of Borrower Materials
through the internet, except to the extent the liability of any Agent Party is
found in a final non-appealable judgment by a court of competent jurisdiction to
have resulted primarily from such Agent Party’s gross negligence or willful
misconduct; provided, however, that in no event shall any agent have any
liability to any Loan Party, any Lender or any other Person for indirect,
special, incidental,

 

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consequential or punitive damages (as opposed to direct or actual damages).
Certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not
wish to receive material non public information with respect to any Borrower or
its securities) (each, a “Public Lender”). Each Borrower hereby agrees that it
will use commercially reasonable efforts to identify that portion of the
Borrower Materials that may be distributed to the Public Lenders and that
(i) all such Borrower Materials shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof, (ii) by marking Borrower Materials
“PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative
Agent and the Lenders to treat such Borrower Materials as either publicly
available information or not material information (although it may be sensitive
and proprietary) with respect to any Borrower or its securities for purposes of
United States Federal and state securities laws, (iii) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (iv) the Administrative Agent shall
be entitled to treat any Borrower Materials that are not marked “PUBLIC” as
being suitable only for posting on a portion of the Platform not designated
“Public Investor.” Notwithstanding the foregoing, the following Borrower
Materials shall be deemed to be marked “PUBLIC,” unless Holdings notifies the
Administrative Agent promptly that any such document contains material nonpublic
information: (1) the Loan Documents, (2) any notification of changes in the
terms of the credit facilities and (3) all information delivered pursuant to
Section 5.04.

SECTION 9.18    Release of Liens and Guarantees. In the event that any Loan
Party conveys, sells, leases, assigns, transfers or otherwise disposes of all or
any portion of any of the Equity Interests or assets of any Subsidiary Loan
Party to a person that is not (and is not required to become) a Loan Party in a
transaction not prohibited by Section 6.05, any Liens created by any Loan
Document in respect of such Equity Interests or assets shall be automatically
released and the Collateral Agent shall promptly (and the Lenders hereby
authorize the Collateral Agent to) take such action and execute any such
documents as may be reasonably requested by the Borrowers and at the Borrowers’
expense in connection with the release of any Liens created by any Loan Document
in respect of such Equity Interests or assets, and, in the case of a disposition
of the Equity Interests of any Subsidiary Loan Party in a transaction permitted
by Section 6.05 (including through merger, consolidation, amalgamation or
otherwise) and as a result of which such Subsidiary Loan Party would cease to be
a Subsidiary, such Subsidiary Loan Party’s obligations under its Guarantee shall
be automatically terminated and the Collateral Agent shall promptly (and the
Lenders hereby authorize the Collateral Agent to) take such action and execute
any such documents as may be reasonably requested by the Borrowers to terminate
such Subsidiary Loan Party’s obligations under its Guarantee. In addition, the
Collateral Agent agrees to take such actions as are reasonably requested by the
Borrowers and at the Borrowers’ expense to terminate the Liens and security
interests created by the Loan Documents when all the Obligations (other than
contingent indemnification Obligations and expense reimbursement claims to the
extent no claim therefor has been made) are paid in full and this Agreement is
terminated.

SECTION 9.19    Judgment Currency. If, for the purposes of obtaining judgment in
any court, it is necessary to convert a sum due hereunder or any other Loan

 

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Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the Administrative
Agent could purchase the first currency with such other currency on the Business
Day preceding that on which final judgment is given. The obligations of the
Borrowers in respect of any such sum due from it to the Administrative Agent or
the Lenders hereunder or under the other Loan Documents shall, notwithstanding
any judgment in a currency (the “Judgment Currency”) other than that in which
such sum is denominated in accordance with the applicable provisions of this
Agreement (the “Agreement Currency”), be discharged only to the extent that on
the Business Day following receipt by the Administrative Agent of any sum
adjudged to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency. If the amount of the Agreement Currency so purchased is
less than the sum originally due to the Administrative Agent from the Borrowers
in the Agreement Currency, each Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or the
person to whom such obligation was owing against such loss. If the amount of the
Agreement Currency so purchased is greater than the sum originally due to the
Administrative Agent in such currency, the Administrative Agent agrees to return
the amount of any excess to the Borrowers (or to any other person who may be
entitled thereto under applicable law).

SECTION 9.20    USA PATRIOT Act Notice. Each Lender that is subject to the Act
(as hereinafter defined) and each of the Agents (for itself and not on behalf of
any Lender) hereby notifies the Borrowers that consistent with the requirements
of the USA PATRIOT Act, it may be required to obtain, verify and record
information that identifies the Borrowers, which information includes the name
and address of the Borrowers and other information that will allow such Lender
or the Agents, as applicable, to identify the Borrowers in accordance with the
USA PATRIOT Act.

SECTION 9.21    Borrower Representative. Each Borrower hereby irrevocably
designates Borrower Representative to be its attorney and agent and in such
capacity to borrow, sign and endorse notes, and execute and deliver all
instruments, documents, writings and further assurances now or hereafter
required hereunder, on behalf of such Borrower, and hereby authorizes Agent to
pay over or credit all loan proceeds hereunder in accordance with the request of
Borrowing Representative.

SECTION 9.22    No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), each Borrower acknowledges (on its own behalf and on behalf of its
Affiliates) and agrees that (i) (A) the arranging and other services regarding
this Agreement provided by the Agents and the Lenders are arm’s-length
commercial transactions between the Borrowers and their respective Affiliates,
on the one hand, and the Agents and the Lenders, on the other hand, (B) each of
the Borrowers has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (C) each of the Borrowers
is capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) each of the Agents and the Lenders is and has been acting
solely

 

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as a principal and has not been, is not and will not be acting as an advisor,
agent or fiduciary for the Borrowers, any of their respective Affiliates or any
other Person and (B) none of the Agents or the Lenders has any obligation to the
Borrowers or any of their respective Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and (iii) the Agents or the Lenders and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrowers and their Affiliates,
and none of the Agents or the Lenders has any obligation to disclose any of such
interests to any Borrower or any of its Affiliates. To the fullest extent
permitted by applicable law, the Borrowers hereby waive and release any claims
that they may have against the Agents or the Lenders with respect to any breach
or alleged breach of agency or fiduciary duty in connection with any aspect of
any transaction contemplated hereby.

SECTION 9.23    Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any Lender that is an EEA
Financial Institution arising under any Loan Document, to the extent such
liability is unsecured, may be subject to the write-down and conversion powers
of an EEA Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any Lender that is an EEA Financial Institution; and

(b)    the effects of any Bail-in Action on any such liability, including, if
applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

SECTION 9.24    Affiliate Lenders.

(a)    Each Lender who is an Affiliate of Holdings, excluding (x) CGHL, the
Borrowers and their respective Subsidiaries and (y) any Debt Fund Affiliate
Lender (each, an “Affiliate Lender”; it being understood that (x) neither CGHL,
the Borrowers, nor any of the Subsidiaries may be Affiliate Lenders and (y) Debt
Fund Affiliate Lenders and Affiliate Lenders may be Lenders hereunder in
accordance with Section 9.04, subject in the case of Affiliate

 

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Lenders, to this Section 9.24), in connection with any (i) consent (or decision
not to consent) to any amendment, modification, waiver, consent or other action
with respect to any of the terms of any Loan Document, (ii) other action on any
matter related to any Loan Document or (iii) direction to the Administrative
Agent, the Collateral Agent or any Lender to undertake any action (or refrain
from taking any action) with respect to or under any Loan Document, agrees that,
except with respect to any amendment, modification, waiver, consent or other
action (1) described in clauses (i), (ii) or (iii) of the first proviso of
Section 9.08(b) or (2) that adversely affects such Affiliate Lender (in its
capacity as a Lender) in a disproportionately adverse manner as compared to
other Lenders, such Affiliate Lender shall be deemed to have voted its interest
as a Lender without discretion in such proportion as the allocation of voting
with respect to such matter by Lenders who are not Affiliate Lenders. Each
Affiliate Lender hereby irrevocably appoints the Administrative Agent (such
appointment being coupled with an interest) as such Affiliate Lender’s
attorney-in-fact, with full authority in the place and stead of such Affiliate
Lender and in the name of such Affiliate Lender, from time to time in the
Administrative Agent’s discretion to take any action and to execute any
instrument that the Administrative Agent may deem reasonably necessary to carry
out the provisions of this clause (a).

(b)    Notwithstanding anything to the contrary in this Agreement, no Affiliate
Lender shall have any right to (1) attend (including by telephone) any meeting
or discussions (or portion thereof) among the Administrative Agent or any Lender
to which representatives of the Borrowers are not then present, (2) receive any
information or material prepared by Administrative Agent or any Lender or any
communication by or among Administrative Agent and/or one or more Lenders,
except to the extent such information or materials have been made available to
Holdings or its representatives, (3) make or bring (or participate in, other
than as a passive participant in or recipient of its pro rata benefits of) any
claim, in its capacity as a Lender, against Administrative Agent, the Collateral
Agent or any other Lender with respect to any duties or obligations or alleged
duties or obligations of such Agent or any other such Lender under the Loan
Documents, or (4) purchase any Term Loan if, immediately after giving effect to
such purchase, Affiliate Lenders in the aggregate would own Term Loans with an
aggregate principal amount in excess of 30% of the aggregate principal amount of
all Term Loans then outstanding. It shall be a condition precedent to each
assignment to an Affiliate Lender that such Affiliate Lender shall have
(x) represented to the assigning Lender in the applicable Assignment and
Acceptance, and notified the Administrative Agent, that it is (or will be,
following the consummation of such assignment) an Affiliate Lender and that the
aggregate amount of Term Loans held by it giving effect to such assignments
shall not exceed the amount permitted by clause (d) of the preceding sentence
and (y) represented in the applicable Assignment and Acceptance that it is not
in possession of material non-public information (within the meaning of United
States federal and state securities laws) with respect to each Parent Entity,
CGHL, the Borrowers, the Subsidiaries or their respective securities (or, if
neither any Parent Company nor CGHL is not at the time a public reporting
company, material information of a type that would not be reasonably expected to
be publicly available if any Parent Entity or CGHL were a public reporting
company) that (A) has not been disclosed to the assigning Lender or the Lenders
generally (other than because any such Lender does not wish to receive material
non-public information with respect to any Parent Entity, CGHL, the Borrowers or
the Subsidiaries) and (B) could reasonably be expected to have a material effect
upon, or otherwise be material to, the assigning Lender’s decision make such
assignment.

 

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SECTION 9.25    Appointment for Perfection; Disclosure.

Each Lender hereby appoints each other Lender as its agent for the purpose of
perfecting Liens, for the benefit of the Collateral Agent and the Lenders, in
assets which, in accordance with Article 9 of the UCC or any other applicable
law can be perfected only by possession. Should any Lender (other than the
Collateral Agent) obtain possession of any such Collateral, such Lender shall
notify the Collateral Agent thereof and, promptly upon the Collateral Agent’s
request therefor shall deliver such Collateral to the Collateral Agent or
otherwise deal with such Collateral in accordance with the Collateral Agent’s
instructions. Each Loan Party and each Lender hereby acknowledges and agrees
that each Agent and/or its Affiliates from time to time may hold investments in,
make other loans to or have other relationships with any of the Loan Parties and
their respective Affiliates.

SECTION 9.26    Conflicts; German Loan Parties.

(a)    Notwithstanding anything to the contrary contained herein or in any other
Loan Document, in the event of any conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall govern
and control.

(b)    In respect of any liability of a Loan Party incorporated under German law
(or any of its direct or indirect Subsidiaries) under this Agreement as a result
of any joint and several liability or similar liability for amounts (including
fees, interest and other payment obligations attributable to such amounts)
borrowed by any other Loan Party, Section 1.11(d) of the Guarantee Agreement
shall apply mutatis mutandis.

(c)    In respect of any secondary liability (i.e. resulting from a joint and
several liability, guarantee or indemnity under this Agreement) of a Loan Party
incorporated under German law, Section 1.11 (d) of the Guarantee Agreement shall
apply mutatis mutandis.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

--------------------------------------------------------------------------------

This document has been executed as a deed by Claire’s (Gibraltar) Intermediate
Holdings Limited and is delivered and takes effect on the date stated at the
beginning of it.

 

         EXECUTED and DELIVERED as a DEED by CLAIRE’S (GIBRALTAR) INTERMEDIATE
HOLDINGS LIMITED Acting by   )     )     )    

/s/ Scott Huckins

  Name:   Scott Huckins   Director   in the presence of   Signature of witness  
/s/ Hristo Bankov   Name of witness   Hristo Bankov  

Address of witness

  450 E. Waterside Apt 407, Chicago, IL 60601   Occupation of witness   Attorney

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

CLAIRE’S GERMANY GMBH By:  

/s/ Scott Huckins

Name:   Scott Huckins Title:   Director CLAIRE’S HOLDINGS S.À R.L. By:  

/s/ Stuart Brown

Name:   Stuart Brown Title:   Director CLAIRE’S HOLDING GMBH By:  

/s/ Stuart Brown

Name:   Stuart Brown Title:   Director CLAIRE’S EUROPEAN SERVICES LIMITED By:  

/s/ Scott Huckins

Name:   Scott Huckins Title:   Director CLAIRE’S EUROPEAN DISTRIBUTION LIMITED
By:  

/s/ Scott Huckins

Name:   Scott Huckins Title:   Director CLAIRE’S LUXEMBOURG S.A R.L. By:  

/s/ Paul A. Barker

Name:   Paul A. Barker Title:   Manager CLAIRE’S ACCESSORIES UK LTD. By:  

/s/ Scott Huckins

Name:   Scott Huckins Title:   Director

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

CLAIRE’S SWITZERLAND GMBH By:  

/s/ Stuart Brown

Name:   Stuart Brown Title:   Director CLAIRE’S ACCESSORIES SPAIN, S.L. By:  

/s/ Scott Huckins

Name:   Scott Huckins Title:   Director CLAIRE’S FRANCE S.A.S. By:  

/s/ Scott Huckins

Name:   Scott Huckins Title:   Director CSI LUXEMBOURG S.A R.L. By:  

/s/ Scott Huckins

Name:   Scott Huckins Title:   Director CLAIRE’S FASHION PROPERTY CORP. By:  

/s/ Scott Huckins

Name:   Scott Huckins Title:   Director

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

BOTTICELLI LLC, as Administrative Agent and as a Lender By:   Angelo, Gordon &
Co., L.P., its Manager By:  

/s/ Gavin Baiera

Name:   Gavin Baiera Title:   Authorized Signatory

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

CORTLAND CAPITAL MARKET SERVICES LLC, as Collateral Agent By:  

/s/ Matthew Trybula

Name:   Matthew Trybula Title:   Associate Counsel

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

SCHEDULE 1.01A

Immaterial Subsidiaries

 

1. Claire’s Netherlands B.V.

 

2. Claire’s Poland Sp. Z o.o.

 

3. Claire’s Czech Republic s.r.o.

 

4. BMS Fashion Corp.

 

5. Claire’s Stores (Shanghai Limited)

 

6. Claire’s Stores Hong Kong Limited

 

1

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SCHEDULE 1.01B

Mortgaged Properties

None.

 

2

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SCHEDULE 1.01C

Excluded Subsidiaries

 

1. Claire’s Hungary Kft.

 

2. WhiteClaire’s Acessorios Portugal, Unipessoal LDA

 

3. Claire’s Netherlands B.V.

 

4. Claire’s Austria GmbH

 

5. Claire’s Italy S.R.L.

 

6. Claire’s Belgium B.V.B.A.

 

7. Claire’s Poland Sp. z.o.o.

 

8. Claire’s Czech Republic s.r.o.

 

9. Claire’s China Services

 

10. RSI International Limited

 

 

3

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SCHEDULE 1.01D

Security Documents1

 

Governing Law

of Security

Documents

  

Security Document

  

Grantors

US   

•       Collateral Agreement

 

•       Guarantee Agreement

 

•       Perfection Certificate

 

•       UCC-1 filings to be filed for each Loan Party in the District of
Columbia

   Each Loan Party Gibraltar   

•       Debenture

   Claire’s (Gibraltar) Intermediate Holdings Limited   

•       Mortgage of Shares (of Claire’s (Gibraltar) Intermediate Holdings
Limited granted by Claire’s (Gibraltar) Holdings Limited (and related
acknowledgment thereof))

  

Claire’s (Gibraltar) Holdings Limited

 

Claire’s (Gibraltar) Intermediate Holdings Limited

England and Wales   

•       All Assets Debenture

  

Claire’s Accessories UK Ltd

 

Claire’s European Services Limited

 

Claire’s European Distribution Limited

  

•       Bank Account Charge

  

Claire’s France

 

Claire’s Germany GmbH

 

CSI Luxembourg S.à r.l.

 

Claire’s Accessories Spain, S.L.

  

•       Share Charge (over shares of Claire’s Accessories UK Ltd)

   Claire’s Holding GmbH   

•       Share Charge (over shares of Claire’s European Distributions Limited and
Claire’s European Services Limited)

   Claire’s Holdings S.à r.l.

 

 

1  Expressly subject to the Agreed Security Principles

 

4

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Governing Law

of Security

Documents

  

Security Document

  

Grantors

Switzerland   

•       Bank Account Pledge Agreement

   Claire’s Switzerland GmbH   

•       Bank Account Pledge Agreement

   Claire’s Holding GmbH   

•       Bank Account Pledge Agreement

   CSI Luxembourg S.à r.l.   

•       Receivables Assignment Agreement (including trade receivables,
intra-group receivables and Swiss insurance claims)

   Claire’s Switzerland GmbH   

•       Receivables Assignment Agreement (including trade receivables,
intra-group receivables and Swiss insurance claims)

   Claire’s Holding GmbH   

•       Share Pledge Agreement (over shares of Claire’s Switzerland GmbH (and
related acknowledgment thereof))

  

Claire’s Holding GmbH

 

Claire’s Switzerland GmbH

  

•       Share Pledge Agreement (over shares of Claire’s Holding GmbH)

 

  

Claire’s Holdings S.à r.l.

 

Claire’s Holding GmbH

Germany   

•       Account Pledge Agreement

   Claire’s Germany GmbH   

•       Security Assignment Agreement relating to receivables arising under a
concession agreement, present and future accounts, receivables, insurance
receivables and intercompany receivables

   Claire’s Germany GmbH France   

•       Pledge of Receivables Agreement

   Claire’s France   

•       Bank Accounts Pledge Agreement

   Claire’s France   

•       Securities Account Pledge Agreement

   Claire’s Accessories UK Ltd

 

5

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Governing Law

of Security

Documents

  

Security Document

  

Grantors

Spain   

•       Security Agreement (pledge over receivables, bank accounts and shares)

  

Claire’s Accessories UK Ltd

 

Claire’s Accessories Spain, S.L.

  

•       Execution of a copy of the Credit Agreement under a Spanish Public Deed

     

•       Execution of a copy of the Guarantee Agreement under a Spanish Public
Deed

   Luxembourg   

•       Luxembourg Receivables Pledge Agreement

  

CSI Luxembourg S.à r.l.

 

Claire’s Holdings S.à r.l.

 

Claire’s Luxembourg S.à r.l.

  

•       Luxembourg Accounts Pledge Agreement

   Claire’s Holdings S.à r.l.   

•       Luxembourg Accounts Pledge Agreement

   CSI Luxembourg S.à r.l.   

•       Luxembourg Accounts Pledge Agreement

   Claire’s Luxembourg S.à r.l.   

•       Luxembourg Share Pledge Agreement (over shares of Claire’s Holdings S.a
r.l. (and related acknowledgment thereof))

  

Claire’s (Gibraltar) Intermediate Holdings Limited

 

Claire’s Holdings S.à r.l.

  

•       Luxembourg Share Pledge Agreement (over shares of Claire’s Luxembourg
S.a r.l. (and related acknowledgment thereof)

  

Claire’s Holdings S.à r.l.

 

Claire’s Luxembourg S.à r.l.

  

•       Luxembourg Share Pledge Agreement (over shares of CSI Luxembourg S.a r.
l. (and related acknowledgment thereof)

  

Claire’s Holding GmbH

 

CSI Luxembourg S.à r.l.

Cayman Islands   

•       Equitable Share Mortgage in Respect of Shares of Claire’s Fashion
Property Corp. (and related acknowledgment thereof)

   CSI Luxembourg S.à r.l.

 

6

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SCHEDULE 1.01E

Agreed Security Principles

 

1. Considerations

In determining what Liens over any asset will be provided in support of the
Obligations and all rights and obligations associated with such giving or taking
of Liens over any asset, the following matters will be taken into account. Liens
over any asset shall not be created or perfected to the extent that it would:

 

  (a) result in any breach of applicable general law and statutory limitation,
corporate benefit, capital maintenance, financial assistance, fraudulent
preference, retention of title claims or “thin capitalisation” laws or
regulations (or analogous restrictions) of any applicable jurisdiction;

 

  (b) result in a significant risk to the officers of the relevant Loan Party of
contravention of their fiduciary duties and/or of civil or criminal liability;
or

 

  (c) result in costs that, in the opinion of the Collateral Agent (acting
reasonably), are disproportionate to the benefit obtained by the beneficiaries
of that Collateral. For the avoidance of doubt, in these Agreed Security
Principles, “cost” includes, but is not limited to, income tax cost,
registration taxes payable on the creation or enforcement or for the continuance
of any Lien, stamp duties, out-of-pocket expenses, and other fees and expenses
directly incurred by the relevant Loan Party or any of its direct or indirect
owners, subsidiaries or Affiliates.

All Collateral (other than share security) shall be governed by the law of and
secure assets located in the jurisdiction of incorporation of that Loan Party.

The giving of a guarantee, the granting of security or the perfection of the
security granted will not be required if:

 

  (a) a Loan Party is prohibited by or lacks legal capacity as a result of, any
applicable law, rule or legal principle (including financial assistance and
corporate benefit regulations or prohibitions, fraudulent preference, “thin
capitalization,” capital maintenance, liquidity maintenance or similar rules or
legal principles); or

 

  (b) it has or is reasonably likely to have a material adverse effect on the
tax arrangements of the Loan Parties or any Loan Party; provided that the
relevant Loan Party shall use reasonable endeavours to overcome such obstacle.

The Secured Obligations will be limited where necessary to prevent any material
additional tax liability of any Loan Party.

In the case of any security granted by any Loan Party located in England and
Wales, no fixed security will be given over bank accounts subject to pooling
arrangements, inventory, receivables or non-material intellectual property
rights which instead in each case shall be subject to floating security.

 

7

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If a Loan Party grants security over any asset it shall, subject to the terms of
the Loan Documents, be free to deal with that asset in the ordinary course of
its business until the occurrence and continuation of an Event of Default. For
the avoidance of doubt, an Event of Default shall be continuing until such time
as it may be waived by the Lenders in accordance with the terms and conditions
of the Credit Agreement.

 

2. Obligations to be Secured

Subject to paragraph 1 above and except where the Lender’s own template security
documentation is used, the obligations to be secured are the Secured Obligations
(as defined below).

The Collateral is to be granted in favor of the Collateral Agent (for the
benefit of the Lenders).

For ease of reference, the following definitions should, to the extent legally
possible and to the extent appropriate, be incorporated into each Security
Document:

“Charged Property” means all of the assets which from time to time are, or are
expressed to be, the subject of the Collateral.

“Delegate” means any delegate, agent, attorney or co-trustee appointed by the
Collateral Agent.

“Group” means Claire’s Stores Inc. and its subsidiaries.

“Receiver” means a receiver or receiver and manager or administrative receiver
of the whole.

“Secured Obligations” means all present and future liabilities and obligations
at any time due, owing or incurred by any member of the Group and by each Loan
Party to any Secured Party under the Loan Documents, both actual and contingent
and whether incurred solely or jointly and as principal or surety or in any
other capacity.

“Secured Parties” means the Agents, any Receiver or Delegate and the Lenders.

All other capitalized terms used but not defined herein shall have the meanings
assigned to them in the Agreement.

 

3. General

Where appropriate, defined terms in the Security Documents should mirror those
in this Agreement.

Any guaranty required pursuant to this Agreement shall be limited to the extent
(i) required to be limited under applicable local law and (ii) providing such a
guaranty could reasonably be expected to (a) conflict with the fiduciary duties
of the directors and managers of the relevant

 

8

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entity or (b) result in a risk of personal or criminal liability for such
Guarantor or any of its officers, employees, members of management, consultants,
directors or managers, and the Security Documents relating to any Guarantor
shall reflect any such limitations.

To the extent possible under applicable laws:

 

  (a) the Collateral shall be enforceable on and from the occurrence and
continuation of an Event of Default;

 

  (b) any Liens over Collateral will be first ranking, to the extent possible
and subject to any security interest over the relevant asset which is expressly
permitted by the terms of this Agreement and which is already expressed to be
first ranking; and

 

  (c) to the extent possible and subject to any other legal requirement, the
documentation in respect of any Liens granted by any Loan Parties following the
Closing Date shall mirror the documentation in respect of Liens granted by the
Loan Parties on the Closing Date.

The granting of security, perfection of Liens, when required, and other legal
formalities will be completed as soon as practicable and, in any event, within
the time periods specified in the relevant Loan Documents or (if earlier or to
the extent no such time periods are specified in the Loan Documents) within the
time periods specified by applicable law in order to ensure due perfection.

Information, such as lists of assets, will be provided promptly upon the
Collateral Agent’s reasonable request, in each case unless applicable local law
or any applicable Loan Document requires more frequent information.

A reference in a Security Document to an asset being “material” will mean an
asset that is material in the context of the business of the Loan Parties as a
whole.

To the extent possible, all Collateral shall be granted in favour of the
Collateral Agent acting on behalf of the Agents and Lenders individually.
“Trust”, “parallel debt” or “joint and several creditorship” provisions will be
used where necessary; such provisions will be contained in the Credit Agreement
unless required otherwise under applicable laws. To the maximum extent possible,
no action shall be required in relation to the security when any Lender
transfers any of its participation in the Facilities to a new Lender. If any
action is required upon a transfer of participation, the transferring Lender
will bear all related costs and expenses (including stamp duties, taxes,
registration costs).

Collateral, will where possible and practical, automatically create security
over future assets of the same type as those already secured. Where local law
requires supplemental pledges to be delivered in respect of future acquired
assets in order for effective security to be created over that class of assets,
supplemental pledges shall be provided no more frequently than annually (unless
expressly required more frequently under local law).

Security Documents will not accrue interest on any amount in respect of which
interest is accruing under this Agreement.

 

9

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Any rights of set off will not be exercisable until the occurrence and during
the continuation of an Event of Default. Such rights shall apply only to matured
obligations due and payable to the Agents and Lenders by a Loan Party under a
Loan Document.

Where a Loan Party acquires assets (including real property) of material value
or significance for the business of such Loan Party after the date on which it
initially grants security, such Loan Party shall (unless existing Collateral
automatically creates valid security over such assets) enter into security
arrangements in accordance with Section 5.10 of the Credit Agreement.

Shares

Liens shall be granted over shares in the Loan Parties and Subsidiaries. The
company providing the relevant Collateral will be permitted to retain and to
exercise voting rights appertaining to any shares charged by it until the
occurrence and during the continuation of an Event of Default.

The Collateral Agent may only exercise the voting rights to the extent permitted
under applicable law and provided:

 

  (a) an Event of Default has occurred and is continuing; and

 

  (b) the Collateral Agent notifies the provider of the relevant share security
and the company whose shares are subject to the relevant share security that it
seeks to exercise those voting rights.

Until an Event of Default has occurred and is continuing the company whose
shares are subject to that security will be permitted to pay dividends upstream
in respect of its shares to the extent permitted under the Loan Documents.

Receivables

To the extent that notification of a third party is required in order to perfect
a security interest in receivables (other than in respect of intercompany
receivables or where notification is required by applicable law to create such
security interest), such notification will not be required until the occurrence
and during the continuation of an Event of Default. If such notification is
required, it will be delivered within five Business Days of the security being
granted and the applicable Loan Party shall use its reasonable efforts to obtain
an acknowledgement of that notice within twenty Business Days of service. If the
Loan Party has used its best efforts but has not been able to obtain
acknowledgement, its obligation to obtain acknowledgement shall cease on the
expiry of that twenty Business Day period.

Until the occurrence and during the continuation of Event of Default the Loan
Party providing the Collateral is permitted to receive any payment under its
receivables to the extent permitted under the Loan Documents.

Any receivables subject to third party arrangements (excluding, for the
avoidance of doubt, receivables owing from any Affiliate of any Loan Party)
which are permitted by the Loan Documents which would prevent or prohibit such
receivables from being subject to legal, valid, binding and enforceable security
(but only to the extent such prohibition was not created in

 

10

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contemplation hereof and is consistent with the business practice of Holdings
and the Subsidiaries) will be excluded from the security created by any relevant
security document, provided that the relevant Loan Party has used reasonable
endeavours to obtain any necessary consent or waiver if the asset is material,
it being acknowledged that reasonable endeavours shall not require the payment
by any Loan Party of any monetary consent or waiver.

Bank accounts (including bank account receivables)

Until the occurrence and during the continuation of an Event of Default or as
expressly agreed otherwise (for example in relation to an account used for cash
cover purpose) the Loan Party providing the Collateral is permitted to withdraw
and transfer monies from the accounts to the extent permitted or not expressly
restricted under the Loan Documents.

If required by or customary under local law to perfect the Lien, notice of the
Lien will be served on the account bank within five Business Days of the Lien
granted and the Loan Party shall use its reasonable endeavours (not involving
the payment of money or incurrence of any external expenses) to obtain an
acknowledgement of that within twenty Business Days of service.

Any obligation on the Loan Party to use such reasonable endeavours to obtain an
acknowledgement from such bank of the notification shall cease on the expiry of
the above mentioned twenty Business Days period.

Irrespective of whether notice of the Lien is required for perfection, if the
service of notice would prevent the Loan Party from using a bank account in the
ordinary course of its business consistent with past practice, no notice of the
Lien shall be served until the occurrence of an Event of Default.

If consent of the account bank is required under applicable local law to perfect
the Lien thereon, the applicable Loan Party shall use its commercially
reasonable endeavours to obtain such consent within sixty days of the opening of
the account, it being acknowledged that reasonable endeavours shall not require
the payment by any Loan Party of any material monetary consent fee or
administrative fee.

Any Lien over bank accounts shall be subject to any prior security interests in
favour of the account bank which are created either by law or in the standard
terms and conditions of the account bank or as part of the Group’s cash
management arrangements (provided such arrangements constitute Permitted Liens).

The notice of the Lien shall request such prior security interests in favour of
the account bank to be waived by the account bank but the Loan Party shall not
be required to change its banking arrangements if these security interests are
not waived or only partially waived.

Material Contracts

Where a Loan Party grants security over Material Contracts, such security shall
be subject to these Agreed Security Principles. Where required by local law to
perfect the Collateral, notice will be served on the relevant counterparty
within five Business Days of the Collateral being granted and the Loan Party
shall use its reasonable endeavours to obtain an acknowledgement of that notice
within twenty Business Days of service.

 

11

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Any Material Contracts subject to third party arrangements (excluding, for the
avoidance of doubt, any Material Contract with any Affiliate of any Loan Party)
which are permitted by the Loan Documents which would prevent or prohibit those
assets from being subject to legal, valid, binding and enforceable security (but
only to the extent such prohibition was not created in contemplation hereof)
will be excluded from the security created by any relevant security document,
provided that the relevant Loan Party has used reasonable endeavours to obtain
any necessary consent or waiver if the asset is material, it being acknowledged
that reasonable endeavours shall not require the payment by any Loan Party of
any monetary consent or waiver.

Insurance policies

Where a Loan Party grants security over insurance policies, such security shall
be subject to these Agreed Security Principles. Where required by local law to
perfect the Collateral, notice will be served on the insurance provider within
five Business Days of the Collateral being granted and the Loan Party. Any
obligation on the Loan Party to use reasonable endeavours to obtain an
acknowledgement from such insurance provider of such notification shall cease on
the expiry of the twenty Business Days period.

Moveables

Until the occurrence and during the continuation of an Event of Default and to
the extent permitted under the Loan Documents the Loan Party providing the
Collateral is permitted to dispose and use its moveable assets.

If the granting of effective security over moveable assets gives rise to
registration rights or similar taxes or costs calculated on the secured amount,
the secured amount under such security will be proportionate to the value of the
underlying moveable asset, and ‘mandates’ to grant security will be granted
where customary.

Intellectual property

Where a Loan Party grants security over its intellectual property it shall be
free to deal with those assets in the ordinary course of its business and in
accordance with the Loan Documents until an Event of Default has occurred and is
continuing. No notice shall be prepared or given to any third party (other than
any Affiliate of Holdings) from whom intellectual property is licenced until an
Event of Default has occurred and is continuing.

If required under local law security over intellectual property will be
registered under the law of that security document or at a relevant
supra-national registry (such as the European Union) or otherwise at any
national registry subject to the general principles set out in these Agreed
Security Principles.

Real property

A security interest in real property shall be created including market standard
terms and conditions for a financing of this nature, but subject to the
underlying principles agreed in these Agreed Security Principles; provided that
a security interest shall not be required in leased real property.

 

12

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If the granting of effective real property security gives rise to registration
rights or similar taxes or costs calculated on the secured amount, the secured
amount under such security will be proportionate to the value of the underlying
real estate, and “mandates” to grant security will be granted where customary.

There will be no obligation to investigate title, provide surveys or other
insurance or environmental due diligence, except to the extent reasonably
available and to the extent commercially reasonable to be so provided.

Fixed Assets

Where a Loan Party grants security over material fixed assets, such security
shall be subject to these Agreed Security Principles.

No notice whether to third parties or by attaching a notice to the fixed assets
shall be prepared or given until an Event of Default has occurred and is
continuing, unless, in the case of attachment of a notice, this is required by
local law to create or maintain the existence of Collateral.

If required under local law, Collateral over fixed assets will be registered
subject to the general principles set out in these Agreed Security Principles.

 

4. Undertakings/Representations and Warranties

The Security Documents shall only include representations, warranties or
undertakings to the extent required under the governing law of that Security
Document or to protect or preserve the Liens in the applicable Collateral
created under that Security Document.

Any representations, warranties or undertakings which are required to be
included in any Security Document shall reflect (to the extent to which the
subject matter of such representation, warranty and undertaking is the same as
the corresponding representation, warranty and undertaking in this Agreement)
the commercial deal set out in this Agreement (save to the extent that Secured
Parties’ local counsel reasonably deem it necessary to include any further
provisions (or deviate from those contained in this Agreement) solely in order
to protect or preserve the security interest in and Liens on the Collateral
granted to the Secured Parties).

 

13

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SCHEDULE 2.01

Commitments

 

Lender

 

Commitment

Botticelli LLC

  $50,000,000.00

 

14

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SCHEDULE 3.01

Organization and Good Standing

None.

 

15

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SCHEDULE 3.04

Governmental Approvals

None.

 

16

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SCHEDULE 3.06(a)

Subsidiaries*

 

Name

  

Jurisdiction

  

Owner of Equity Interests

Claire’s Fashion Property Corp.

  

Cayman

  

100% CSI Luxembourg S.a.r.l.

Claire’s Holding Gmbh

  

Switzerland

  

100% Claire’s Holdings S.a.r.l.

Claire’s Accessories UK Ltd

  

United Kingdom

  

100% Claire’s Holding Gmbh

CSI Luxembourg S.a.r.l.

  

Luxembourg

  

100% Claire’s Holding Gmbh

Claire’s Switzerland Gmbh

  

Switzerland

  

100% Claire’s Holding Gmbh

Claire’s Accessories Spain, S.L.

  

Spain

  

100% Claire’s Accessories UK Ltd

Claire’s France S.A.S.

  

France

  

100% Claire’s Accessories UK Ltd

Claire’s (Gibraltar) Intermediate Holdings Limited

  

Gibraltar

  

100% Claire’s (Gibraltar) Holdings Limited

Claire’s Holdings S.a.r.l.

  

Luxembourg

  

100% Claire’s (Gibraltar) Intermediate Holdings Limited

Claire’s Germany GmbH

  

Germany

  

100% Claire’s Holding Gmbh

Claire’s Italy S.R.L.

  

Italy

  

100% Claire’s Accessories UK, Ltd.

Claire’s Belgium B.V.B.A.

  

Austria

  

100% Claire’s Accessories UK, Ltd.

Claire’s Austria Gmbh

  

Belgium

  

100% Claire’s Holding Gmbh

Claire’s Hungary Kft.

  

Hungary

  

100% Claire’s Holdings S.a.r.l.

Claire’s European Services Limited

  

United Kingdom

  

100% Claire’s Holdings S.a.r.l.

Claire’s European Distribution Limited

  

United Kingdom

  

100% Claire’s Holdings S.a.r.l.

Claire’s China Services

  

China

  

100% BMS Fashion Corp.

RSI International Limited

  

Hong Kong

  

100% Claire’s China Services

* This list excludes Immaterial Subsidiaries listed on Schedule 1.01A

 

17

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SCHEDULE 3.10

Taxes

None.

 

18

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SCHEDULE 3.15

Intellectual Property

None.

 

19

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SCHEDULE 3.16

Anti-Money Laundering Laws

None.

 

20

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SCHEDULE 4.01(d)

Closing Deliverables1

The Administrative Agent shall have received each of the Security Documents
listed on Schedule 1.01D.

Gibraltar

The Administrative Agent shall have received from each Loan Party organized
under the laws of Gibraltar, each of the following items:

 

1. a certificate signed by one director and dated as of the Closing Date,
certifying:

 

  (a) as to the accuracy and completeness of each of the corporate and
organizational documents of such Loan Party described in this Schedule and
attached to such certificate and that they are each true and complete copies,

 

  (i) that attached thereto is a true and complete copy of the resolutions of
(1) the board of directors of such Loan Party: (a) approving the terms of and
the transactions contemplated by, the Loan Documents to which the applicable
Loan Party is a party; (b) certifying authorizing a specified person or persons
to execute the Loan Documents to which such applicable Loan Party is a party;
and (c) authorizing a specified person or persons, on its behalf, to sign and/or
dispatch all documents and noticed to be signed and/or dispatched in connection
with the Loan Documents to which it is a party, and (2) all holders of the
issued shares in each applicable Loan Party approving entry into and performance
of the Loan Documents to which the applicable Loan Party is a party,

 

  (ii) that attached thereto is a true and complete copy of (1) a certificate of
good standing of such Loan Party dated as at the closing date, (2) a true and
complete copy of the register of members of such Loan Party, (3) a true and
complete copy of the register of directors of such Loan Party, (4) a true and
complete copy of the register of charges of such Loan Party

 

  (iii) that each such copy document relating to it is correct, complete and in
full force and has not been superseded as at the Closing Date,

 

  (iv) that the borrowing, guaranteeing or securing as appropriate contemplated
in the relevant Loan Documents would not cause any borrowing, guaranteeing or
securing or similar limit binding on each applicable Guarantor to be exceeded,

 

 

1  Expressly subject to the Agreed Security Principles

 

21

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  (v) that such Loan Party is Solvent within the meaning of the Insolvency Act
2011 of Gibraltar and will not become insolvent as a result of entering into any
of the transactions contemplated by any of the Loan Documents,

 

  (vi) as to the absence of any pending proceeding for the dissolution or
liquidation of such Loan Party;

 

  (vii) confirming that such Loan Party is not entitled to claim immunity from
any suit, execution, attachment or other legal action in Gibraltar;

 

  (viii) confirming that such Loan Party has filed all documents and returns
required to be filed with the Registrar of Companies in Gibraltar;

 

  (ix) confirming that there are no mortgages, charges (whether fixed or
floating), liens, pledges, options, rights of pre-emption, rights of retention
of title, guarantees or other encumbrances or any other form of security
interest or any obligation (at the date of Closing against any such Loan Party
and no security interest is registered as unsatisfied at Companies House in
Gibraltar or in any other jurisdiction; and

 

  (x) as to the incumbency and specimen signature of each director or other
signatory executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party.

 

2. the following customary legal opinions, each addressed to the Administrative
Agent, Collateral Agent and Lenders in respect of the Loan Documents:

 

  (a) a legal opinion of Hassans, as legal advisers to the Loan Parties as to
Gibraltar law, on the existence, capacity and the authorization of each Loan
Party as regards the Loan Documents and on execution and enforceability of the
Loan Documents subject to Gibraltar law.

England and Wales

The Administrative Agent shall have received from each Loan Party organized
under the laws of England and Wales, each of the following items:

 

  1. a copy of the constitutional documents;

 

  2. a copy of the resolutions of the board of directors of each applicable Loan
Party:

 

  (i) approving the terms of, and the transactions contemplated by, the Loan
Documents to which it is a party and resolving that it execute the Loan
Documents to which it is a party;

 

  (ii) authorizing a specified person or persons to execute the Loan Documents
to which it is a party on its behalf; and

 

22

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  (iii) authorizing a specified person or persons, on its behalf, to sign and/or
dispatch all documents and notices to be signed and/or dispatched by it under or
in connection with the Loan Documents to which it is a party;

 

  3. a copy of a resolution signed by all the holders of all the issued shares
of each applicable Loan Party approving the terms of, and the transactions
contemplated by, the Loan Documents to which it is a party;

 

  4. a specimen signature of each person authorised by the resolutions referred
to in paragraph 2 above in relation to the Loan Documents and related documents;

 

  5. a certificate of each applicable Loan Party organized under the laws of
England and Wales signed by one director and dated as of the Closing Date:

 

  (i) certifying that each of the above documents is correct, complete and in
full force and effect and has not been amended or superseded as at a date no
earlier than the date of this Agreement; and

 

  (ii) confirming that the amounts to be borrowed, guaranteed or secured by it
under the Loan Documents would not cause any borrowing, guarantee or security or
similar binding limit on it to be exceeded,

 

  6. the following customary legal opinions, each addressed to the
Administrative Agent, Collateral Agent and Lenders in respect of the Loan
Documents:

 

  (i) a legal opinion of Weil, Gotshal & Manges, as legal advisers to the
Lenders as to English law, on legality, validity and enforceability of the Loan
Documents subject to English law;

 

  (ii) a legal opinion of Morgan, Lewis & Bockius UK LLP, as legal advisers to
the Loan Parties as to English law, on the existence, capacity and the
authorization of each Loan Party as regards the Loan Documents;

 

  7. a copy of all notices or documents required (in accordance with the Agreed
Security Principles), together with all share certificates, share registers,
bond registers, stock transfer forms (or the equivalent) duly endorsed in blank
and other documents of title, if any, in each case only if required to be
executed or given on the Closing Date by a Loan Party under the terms of the
Security Documents; and

 

  8. the PSC Register of each Loan Party whose shares are subject to the
Security under the Security Documents.

Luxembourg

The Administrative Agent shall have received from each Loan Party organized
under the laws of Luxembourg, each of the following items:

 

  1. A certificate of each Luxembourg Loan Party (signed by a director) and
dated the closing date

 

23

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  (i) attaching:

 

  a. the up-to-date copies of the coordinated articles of association;

 

  b. an extract from the Luxembourg trade and companies register in respect of
such Luxembourg Loan Party dated the Closing Date;

 

  c. an negative certificate (certificat de non-inscription d’une décision
judiciaire) issued by the Luxembourg trade and companies register in respect of
such Luxembourg Loan Party dated the Closing Date;

 

  (ii) setting out a specimen of the signature of each person who is authorised
on behalf of such Luxembourg Loan Party to enter into the Loan Documents to
which such Luxembourg Loan Party is a party or to sign or send any document or
notice in connection with the Loan Documents to which it is a party;

 

  (iii) (A) confirming that it is not subject to bankruptcy (faillite),
voluntary or judicial liquidation (liquidation volontaire ou judiciaire),
controlled management (gestion contrôlée), suspension of payments (sursis de
paiement), arrangement with creditors (concordat préventif de faillite)
proceedings, fraudulent conveyance (actio pauliana), general settlement with
creditors, reorganisation or similar laws affecting the rights of creditors
generally, (B) that no petition for the opening of such proceedings has been
presented by it and to the best of its knowledge, no petition for the opening of
such proceedings has been presented by any other person, (C) no event has
occurred or is likely to occur as a result of which it could be in a state of
cessation of payments (cessation de paiements) or lose its creditworthiness
(ébranlement de crédit) and (D) no application has been made by it or, as far as
it is aware, by any other person for the appointment of a commissaire, juge
commissaire, liquidateur, curateur or similar officer pursuant to any insolvency
or similar proceedings; and

 

  (iv) attaching a copy of its shareholders’ register evidencing that all its
shares are held by its parent.

 

  2. the following customary legal opinions, each addressed to the
Administrative Agent, Collateral Agent and Lenders in respect of the Loan
Documents:

 

  (i) a legal opinion of Bonn Steichen & Partners, as legal advisers to the
Lenders as to Luxembourg law, on legality, validity and enforceability of the
Loan Documents subject to Luxembourg law; and

 

  (ii) a legal opinion of Arendt &Medernach SA, as legal advisers to the Loan
Parties as to Luxembourg law, on the existence, capacity and the authorization
of each Loan Party as regards the Loan Documents.

 

24

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France

The Administrative Agent shall have received from each Loan Party organized
under the laws of France, each of the following items:

 

  1. a certificate of each applicable Loan Party organized under the laws of
France signed by one director and dated as of the Closing Date certifying the
following documents:

 

  (a) A copy of its articles of association (Statuts);

 

  (b) An original company registry extract (K-bis), an original non-insolvency
certificate (Certificat de non-faillite) and an original encumbrances
certificate (Etat des inscriptions), each dated no more than 15 days prior to
the Closing Date;

 

  (c) A copy of the resolution of its board of directors, board of managers
and/or shareholder(s) or equivalent body of each applicable Loan Party:

 

  (i) approving the terms of, and the transactions contemplated by, the Loan
Documents to which it is a party and resolving that it execute the Loan
Documents to which it is a party;

 

  (ii) authorising a specified person or persons to execute the Loan Documents
to which it is a party on its behalf; and

 

  (iii) authorising a specified person or persons, on its behalf, to sign and/or
despatch all documents and notices to be signed and/or despatched by it under or
in connection with the Loan Documents to which it is a party;

 

  (d) If required under applicable law or by its constitutional documents, a
copy of a resolution signed by all the holders of all the issued shares of each
applicable Loan Party approving the terms of, and the transactions contemplated
by, the Loan Documents to which it is a party;

 

  (e) a specimen signature of each person authorised by the resolutions referred
to in paragraph (c) or (d) above in relation to the Loan Documents and related
documents;

 

  (f) a certificate confirming that the amounts to be borrowed, guaranteed or
secured by it under the Loan Documents would not cause any borrowing, guarantee
or security or similar binding limit on it to be exceeded; and

 

  (g) a certificate certifying that each of the above documents is correct,
complete and in full force and effect and has not been amended or superseded as
at a date no earlier than the date of this Agreement.

 

25

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  2. the following customary legal opinions, each addressed to the
Administrative Agent, Collateral Agent and Lenders in respect of the Loan
Documents:

 

  (i) a legal opinion of Weil, Gotshal & Manges LLP, as legal advisers to the
Lenders as to French law, on legality, validity and enforceability of the Loan
Documents subject to French law; and

 

  (ii) a legal opinion of MBA Avocats, as legal advisers to the Loan Parties as
to French law, on the existence, capacity and the authorization of each Loan
Party as regards the Loan Documents

Spain

The Administrative Agent shall have received from each Loan Party organized
under the laws of Spain, each of the following items:

 

1. A copy of the constitutional documents of the relevant Spanish Loan Party
understood as either (a) a certificate issued by the relevant Commercial
Registry certifying due incorporation and existence, lack of causes of
liquidation, winding up or insolvency, its up to date articles of association
and composition of its governing body or (b) a copy of the incorporation deed of
the company and all deeds under which the by-laws of the company have been
amended or any directors have been removed or designated together with an online
registry excerpt (nota simple online informativa) issued by the Commercial
Registry and with a certificate of the directors of the Company declaring that
there are no other public deeds amending the articles of association of the
Company or appointing or removing directors.

 

2. A copy of a resolution of the joint and several directors of the Spanish Loan
Party notarised before a Spanish notary:

 

  (i) approving the terms of, and the transactions contemplated by, the Loan
Documents to which it is a party and resolving that it execute, deliver and
perform the Loan Documents to which it is a party;

 

  (ii) authorising a specified person or persons to execute the Loan Documents
to which it is a party on its behalf (including, for the avoidance of doubt, all
the powers of attorney, certificates and notices included therein); and

 

  (iii) authorising a specified person or persons, on its behalf, to sign and/or
despatch all documents and notices to be signed and/or despatched by it under or
in connection with the Loan Documents to which it is a party.

 

  (b) A copy of a resolution signed by all the holders of the issued shares in
the Spanish Loan Party, approving the terms of, and the transactions
contemplated by, the Loan Documents to which the Spanish Loan Party is a party
among others, for the purposes of complying with article 160 (f) of the Spanish
Companies Law.

 

26

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3. The following customary legal opinions, each addressed to the Administrative
Agent, Collateral Agent and Lenders in respect of the Loan Documents:

 

  (i) a legal opinion of Uría Menéndez, as legal advisers to the Lenders as to
Spanish law, on legality, validity and enforceability of the Loan Documents
subject to Spanish law; and

 

  (ii) a legal opinion of Garrigues as legal advisers to the Loan Parties as to
Spanish law, on the existence, capacity and the authorization of the Spanish
Loan Party as regards the Loan Documents

 

4. a copy of all notices or documents required (in accordance with the Agreed
Security Principles) to be sent or annotated on the Closing Date by the Spanish
Loan Party under the terms of the Security Documents together with property
titles of the shares of the Spanish Loan Party as well as copy of the
registry-book of shareholders with the pledge over the shares of the Spanish
Loan Party duly recorded therein; and

 

5. a copy of the cancellation deed of all the existing security granted over the
assets of the Spanish Loan Party or the shares of its share capital.

Cayman Islands

The Administrative Agent shall have received from each Loan Party organized
under the laws of the Cayman Islands, each of the following items:

 

  1. a certificate of each applicable Loan Party organized under the laws of the
Cayman Islands signed by one director and dated as of the Closing Date
certifying the following documents:

 

  (h) A copy of its certificate of incorporation;

 

  (i) A copy of its memorandum and articles of association;

 

  (j) A certificate of good standing dated no more than 30 days prior to the
Closing Date;

 

  (k) A copy of its register of directors and officers, register of mortgages
and charges, and register of members;

 

  (l) A copy of the resolution of its board of directors of each applicable Loan
Party approving the terms of, and the transactions contemplated by, the Loan
Documents to which it is a party and resolving that any one of its directors
execute the Loan Documents to which it is a party or any schedules thereto, as
applicable;

 

  (m) a specimen signature of each person authorised by the resolutions referred
to in paragraph (e) above in relation to the Loan Documents and related
documents;

 

  (n) a certificate certifying that each of the above documents is correct,
complete and in full force and effect and has not been amended or superseded as
at a date no earlier than the date of this Agreement.

 

27

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  2. the following customary legal opinion addressed to the Administrative
Agent, Collateral Agent and Lenders in respect of the Loan Documents:

 

  (i) a legal opinion of Walkers, as legal advisers to the Lenders as to Cayman
Islands law, on the existence, capacity and the authorization of each Loan Party
as regards the Loan Documents and on execution and enforceability of the Loan
Documents subject to Cayman Islands law

Germany

The Administrative Agent shall have received from Claire´s Germany GmbH
organized under the laws of Germany, each of the following items:

 

1. German security agreements.

 

2. A copy of the following constitutional documents:

 

  (a) articles of association (Satzung);

 

  (b) shareholders list (Gesellschafterliste);

 

  (c) commercial register excerpt (Handelsregisterauszug) dated not earlier than
the date before the signing of the Loan Documents by the German Loan Party.

 

3. A copy of the shareholders resolution signed by the shareholders of Claire´s
Germany GmbH covering the following:

 

  (a) approving the terms of, and the transactions contemplated by, the Loan
Documents to which it is a party and resolving that it execute, deliver and
perform the Loan Documents to which it is a party;

 

  (b) authorising a specified person or persons to execute the Loan Documents to
which it is a party on its behalf (including, for the avoidance of doubt, all
the powers of attorney, certificates and notices included therein) and releasing
it for such purposes from all restrictions of sec. 181 German Civil Code (BGB);
and

 

  (c) authorising a specified person or persons, on its behalf, to sign and/or
despatch all documents and notices to be signed and/or despatched by it under or
in connection with the Loan Documents to which it is a party.

 

4. Director Certificate dated no earlier than the date of the Loan Documents
signed by the German Loan Party signed by a managing director with sole power of
representation or the required number of managing directors with joint power of
representation certifying that each copy document relating to it specified in
the Director Certificate is correct, complete and in full force and effect and
containing a specimen of the signature of each authorized signatory of Claire´s
Germany GmbH.

 

28

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5. Power of attorney of the German Loan Party (if applicable due to execution of
Loan Documents under power of attorney) regarding the Loan Documents entered
into by the German Loan Party.

 

6. The following customary legal opinions, each addressed to the Administrative
Agent, Collateral Agent and Lenders in respect of the Loan Documents:

 

  (i) a legal opinion of Weil, Gotshal & Manges LLP, as legal advisers to the
Lenders as to German law, on legality, validity and enforceability of the Loan
Documents subject to Germany law; and

 

  (ii) a legal opinion of CMS Hasche Sigle as legal advisers to the Loan Parties
as to German law, on the existence, capacity and the authorization of the German
Loan Party as regards the Loan Documents.

Switzerland

The Administrative Agent shall have received from each Loan Party organized
under the laws of Switzerland, each of the following items:

 

  1. a certificate of each applicable Loan Party organized under the laws of
Switzerland signed by one director and dated as of the Closing Date, certifying:

 

  (i) that the certified copy of the excerpt from the commercial register of
such Loan Party attached thereto is true, complete, correct and up-to-date;

 

  (ii) that the certified copy of the articles of incorporation and of the
organizational regulations of such Loan Party attached thereto are true,
complete, correct and up-to-date;    

 

  (iii) that the resolutions of the board of managers of such Loan Party, inter
alia, (a) approving the entering into, execution, delivery and performance of
the Loan Documents to which the applicable Loan Party is a party; (b) approving
the terms of and the transactions contemplated by, the Loan Documents to which
the applicable Loan Party is a party; (c) authorizing a specified person or
persons to execute and perform the Loan Documents to which the applicable Loan
Party is a party; attached thereto are true, complete, correct and up-to-date;

 

  (iv) that the resolutions of the partner of such Loan Party, inter alia,
(a) approving the entering into, execution, delivery and performance of the Loan
Documents to which the applicable Loan Party is a party; (b) approving the terms
of and the transactions contemplated by, the Loan Documents to which the
applicable Loan Party is a party; and (c) approving any distribution of
corporate assets in connection with the guarantees, the indemnities and security
granted by the applicable Loan Party under the Loan Documents to which the
applicable Loan Party is a party; attached thereto are true, complete, correct
and up-to-date;

 

29

--------------------------------------------------------------------------------

  (v) that the specimen signatures attached thereto are the specimen signature
of each director or other authorized signatory executing any Loan Document or
any other document delivered in connection herewith on behalf of the applicable
Loan Party;

 

  (vi) that there is no pending proceeding for the dissolution and/or
liquidation of such Loan Party;

 

  (vii) that the amounts to be borrowed, guaranteed or secured by such Loan
Party under the Loan Documents would not cause any borrowing, guarantee or
security or similar binding limit on it to be exceeded;

 

  (viii) that each copy document relating to such Loan Party as specified in
this Schedule 4.01 (d) is correct, complete and in full force and effect and has
not been amended or superseded;

 

  2. the following customary legal opinions, each addressed to the
Administrative Agent, Collateral Agent and Lenders in respect of the Loan
Documents:

 

  (i) a legal opinion of Python, as legal advisers to the Lenders as to Swiss
law, on legality, validity and enforceability of the Swiss law governed Loan
Documents;

 

  (ii) a legal opinion of CMS von Erlach Poncet Ltd., as legal advisers to the
Loan Parties as to Swiss law, on the existence of each Loan Party incorporated
in Switzerland and its capacity and due authorization to execute, enter into and
perform the Loan Documents to which it is a party;

 

30

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SCHEDULE 5.11

Post-Closing Deliverables1

 

Governing

Law of

Security

Documents

 

Security Document

  

Deadline

  

Grantors

France  

•       Pledge of the Cash Account in accordance with the provisions of Clause
3.3 of the Securities Account Pledge Agreement

  

•    15 Business Days following the Closing Date

   Claire’s Accessories UK Ltd. Gibraltar  

•       Satisfaction of the Gibraltar charges to be registered at Companies
House following the entry into Deed of Release

 

•       Registration of Debenture and mortgage of Shares

  

•    10 Business Days following the Closing Date

 

•    30 days following the Closing Date

   Claire’s Gibraltar Intermediate Holdings Limited Germany  

•       Pledge of Shares of Claire’s Germany GmbH (and related acknowledgment
thereof)

 

•       A Release Notice from HSBC Bank Plc to the Account Banks and Claire’s
confirming that the pledges under the German Law Account Pledge Agreement have
ceased to exist.

 

•       Three Notices of Pledge of accounts to the German Law Account Pledge
Agreement and respectively to HSBC Bank Plc, Deutsche Bank Privat-und
Geschäftskunden AG and Commerzbank AG

 

•       A Release Notice from HSBC Bank Plc to Toys “R” Us and Claire’s Germany
GmbH confirming that the Toys “R” Us Receivables (assigned under the German Law
Assignment Agreement to HSBC Bank Plc) have been reassigned to Claire’s Germany
GmbH.

 

•       A Notice of German Law Security Assignment Agreement to Toys “R” US GmbH

  

•    20 Business Days following the Closing Date

  

Claire’s Germany GmbH

 

Claire’s Holdings GmbH

 

 

1  Expressly subject to the Agreed Security Principles

 

31

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Governing

Law of

Security

Documents

 

Security Document

  

Deadline

  

Grantors

Cayman Islands  

•       One Director Resignation Letter

 

•       Annotated Register of Members of Claire’s Fashion Property Corp.
(“CFPC”)

 

•       Updated Register of Mortgages and Charges of CFPC

 

•       Registered Office Instruction Letter from CFPC

 

•       One Director Authorisation Letter

 

•       Written Resolutions deliverable under the Equitable Share Mortgage
signed by the second director

  

•    3 Business Days following the Closing Date

   Claire’s Fashion Property Corp. Switzerland  

•       Notification to the relevant banks under the Swiss Account Pledge
Agreements

 

•       Obtain Toys R Us consent pursuant to the Swiss Claire’s Switzerland
Receivables Assignment Agreement

 

•       Obtain originals of Swiss insurance policies

 

•       Obtain consent from the relevant insurances under the Swiss Receivables
Assignment Agreements

 

•       Execution of the Intangible Property Assignment Agreement

  

•    Notification: 5 Business Days following Closing Date; counter-signatures
from bank: 30 Business Days following Closing Date

 

•    Notification: on closing; counter-signatures from Toy R Us: 10 Business
Days following Closing Date

 

•    15 Business Days following Closing Date

 

•    30 Business Days following Closing Date

  

Claire’s Switzerland GmbH

 

Claire’s Holding GmbH

 

CSI Luxembourg S.à.r.l.

 

Claire’s Fashion Property Corp. (for the Intangible Property Assignment
Agreement)

    

•    5 days following the Closing Date

  

 

32

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Governing

Law of

Security

Documents

 

Security Document

  

Deadline

  

Grantors

England  

•       Reasonable endeavours to obtain acknowledgements to the bank account
notices served to the following banks Bank of Ireland, Natwest Bank, Royal Bank
of Scotland, Ulster Bank, ING Bank and HSBC Bank plc (in respect of the
non-Pooled Bank Accounts) pursuant to each of the English law Debenture and Bank
Account Charge

 

•       Notices of assignment of Insurance pursuant to English law Debenture

 

•       Reasonable endeavours to obtain acknowledgements in connection with the
assignment of Insurance pursuant to the English law Debenture

 

•       Securities Account Pledge Agreement (acte de nantissement de compte de
titres financiers) dated 13 December 2016 between Claire’s Accessories UK Ltd.,
HSBC Bank plc and Claire’s France with charge number 0311 5188 0003.

 

•       MR04

 

•       Debenture dated 20 September 2016 between Claire’s Accessories UK Ltd
and HSBC Bank Plc, registered on 23 September 2016 with charge number 0311 5188
0002.

 

•    MR04

  

•    20 Business Days following the Closing Date

 

•    5 Business Days following the Closing Date

 

•    20 Business Days following the delivery of the Notices mentioned in the
line above

 

•    To be filed on Closing Date

 

•    To be filed on the Closing Date

 

•    15 days following the Closing Date

 

•    Companies House 21 day deadline following the Closing Date

 

•    3 Business Days following the Closing Date

  

 

33

--------------------------------------------------------------------------------

Governing

Law of

Security

Documents

 

Security Document

  

Deadline

  

Grantors

 

•       Deliver share certificates and other documents of title or evidence of
ownership of all foreign subsidiaries of Claire’s Accessories UK Ltd to the
Collateral Agent

 

•       Debenture and bank account charge granted to be registered at Companies
House by filing MR01 forms

 

•       Notice of assignment in respect of the two Intra-Group Services
Agreements between CESL and Claire’s Stores Inc.

 

•       Obtain acknowledgements in connection with the assignment of the two
Intra-Group Services Agreements

 

•       Notice of assignment in respect of the Intra-Group Loan Agreement

 

•       Reasonable endeavours to obtain acknowledgements in connection with the
assignment of the Intra-Group Loan Agreement

 

•       Filing of new articles of association of Claire’s European Distribution
Limited and Claire’s European Services Limited with Companies House

  

•    5 Business Days following the Closing Date

 

•    5 Business Days following the Closing Date

 

•    20 Business Days following the Closing Date

 

•    15 days following date of each of the relevant shareholder resolutions

  

 

34

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Governing

Law of

Security

Documents

 

Security Document

  

Deadline

  

Grantors

Spain  

•       Security Agreement dated 14 October 2016 between Claire’s Accessories UK
Ltd, Claire’s Accessories Spain, S.L. and HSBC Bank Plc

 

•    Notices of release to be sent to the banks and Toys “R” Us

 

•       Amendment of Claire’s Accessories Spain, S.L.’s By-laws and registration
with the Commercial Registry

  

•    3 Business Days following the Closing Date

 

•    3 Business Days following the Closing Date

 

•    30 days following the Closing Date

   Claire’s Accessories Spain, S.L. Luxembourg  

•       Recording of pledge in shareholders’ register for share pledge of
Claire’s Holdings S.à r.l.

 

•       Recording of pledge in shareholders’ register for share pledge of
Claire’s Luxembourg S.à r.l.

 

•       Recording of pledge in shareholders’ register for share pledge of CSI
Luxembourg S.à r.l.

 

•       Claire’s Holdings S.à r.l. Accounts Pledge Agreement: Notification of
the accounts pledge to bank and delivery to pledgee of acknowledgment and waiver
letter executed by bank

 

•       Claire’s Luxembourg S.à r.l. Accounts Pledge Agreement: Notification of
the accounts pledge to bank and delivery to pledgee of acknowledgment and waiver
letter executed by bank

 

•       CSI Luxembourg S.à r.l. Accounts Pledge Agreement: Notification of the
accounts pledge to bank and delivery to pledgee of acknowledgment and waiver
letter executed by bank

  

•    5 Business Days following execution of share pledge agreement

 

•    Notification: 5 Business Days following execution of account pledge
agreement

 

•    Acknowledgment delivery: 20 Business Days following notification of the
bank

  

•    Claire’s (Gibraltar) Intermediate Holdings Limited and Claire’s Holdings
S.à r.l.

 

•    Claire’s Holdings S.à r.l. and Claire’s Luxembourg S.à r.l.

 

•    Claire’s Holding GmbH and CSI Luxembourg S.à r.l.

 

•    Claire’s Holdings S.à r.l.

 

•    Claire’s Luxembourg S.à r.l.

 

35

--------------------------------------------------------------------------------

Governing

Law of

Security

Documents

 

Security Document

  

Deadline

  

Grantors

       

•    CSI Luxembourg S.à r.l.

Applicable Law  

•       Pledge of the Claire’s Accessories UK Ltd and Claire’s European
Distribution Limited QEBs

 

•       Pledge of bank accounts listed on the Perfection Certificate but not
otherwise pledged pursuant to Security Documents on the Closing Date

  

•    10 Business Days following the Closing Date

 

•    10 Business Days following the Closing Date

  

•    Claire’s Fashion Property Corp.

 

•    Applicable Guarantors

 

36

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SCHEDULE 6.01

Indebtedness

Subsidiaries have bank credit facilities totaling $2.3 million. These credit
facilities have been arranged in accordance with customary lending practices in
their respective countries of operation. As of October 29, 2016, Subsidiaries
had a reduction of $1.8 million for outstanding bank guarantees, which reduces
the borrowing availability to $0.5 million as of that date.

 

37

--------------------------------------------------------------------------------

SCHEDULE 6.02(a)

Liens

None.

 

38

--------------------------------------------------------------------------------

SCHEDULE 6.04

Investments

Key money deposits in an amount of approximately $58.4 million repayable to
Claire’s France S.A.S. by landlords under leases with respect to the store
locations listed below:

 

Nice Cap 3000

     1,320,000.00   

Lyon / Ecully

     560,000.00   

Marseille / Vitrolles

     400,000.00   

Caen - CC Mondeville 2

     512,147.00   

Nancy

     618,000.00   

Clermont Ferrand

     455,000.00   

ST Etienne

     417,000.00   

Limoges

     597,000.00   

Créteil

     740,000.00   

Grenoble Gd Place N°2

     459,272.00   

Rosny 2

     470,000.00   

Paris / La Défense

     620,000.00   

Colmar

     348,560.64   

Tours - 6 Rue de Bordeaux

     482,658.00   

Mulhouse Illzach - CC Ile Napoléon

     435,337.00   

Lyon / St Priest

     430,000.00   

Clermont Ferrand / Aubierre

     484,736.00   

Nice Etoile

     360,000.00   

Paris / Parinor

     509,686.86   

CC Cergy Pontoise

     434,568.03   

Saint Quentin en Yvelines - CC Espace St Quentin

     434,987.00   

Villiers en Bière

     210,000.00   

Béziers

     250,000.00   

Paris Noisy le Grand

     435,066.72   

Marseille / St Ferréol

     750,000.00   

Toulon Grand Var

     427,875.00   

PERPIGNAN PORTE D’Espagne

     264,000.00   

Toulouse / Portet sur Garonne

     242,000.00   

SAINT NAZAIRE - TRIGNAC

     215,000.00   

DOUAI

     238,000.00   

NANTES BEAULIEU

     157,000.00   

MONTBELIARD

     220,000.00   

Bouliac / Pont d’Arcins

     174,439.00   

ST MALO LA MADELEINE

     205,000.00   

AGEN

     339,000.00   

Tours les Atlantes

     308,419.00   

 

39

--------------------------------------------------------------------------------

Avignon

     380,000.00   

Reims Vesle

     610,808.13   

Paris / Belle Epine

     430,000.00   

Beziers

     174,089.50   

TOULOUSE GRAMMONT

     184,000.00   

Le Paquebot St Nazaire

     248,207.68   

Perpignan le Canet

     229,411.00   

ST-ETIENNE - VILLARS

     240,000.00   

Vannes - 16 Rue du Mené

     224,713.00   

PARIS - LES ULLIS 2

     390,000.00   

Dunkerque

     235,320.00   

Mulhouse rue du sauvage

     587,797.36   

ANGOULEME

     200,000.00   

DUNKERQUE - GRANDE SYNTHES

     165,000.00   

TOULOUSE ST GEORGES

     210,000.00   

LE MANS CENTRE SUD

     159,000.00   

Troyes

     427,367.00   

Taverny

     266,502.00   

BOULOGNE SUR MER CC AUCHAN

     163,000.00   

Mâcon

     170,000.00   

DIJON - QUETIGNY

     130,000.00   

OLLIOULES

     283,000.00   

Roubaix Grande rue

     70,000.00   

TARBES

     30,000.00   

Tours / L’Heure Tranquille

     8,970.00   

LIEVIN

     79,000.00   

MONTCEAU LES MINES

     70,000.00   

Marseille / Grand Littoral

     100,000.00   

Lille / Euralille

     60,000.00   

VALENCIENNE

     90,000.00   

LONGWY - EXTENSION

     76,000.00   

Orleans Saran

     102,000.00   

ARCUEIL

     85,000.00   

BREST IROISE

     101,000.00   

Paris Montreuil Carrefour

     73,387.00   

Calais / Coquelles

     50,000.00   

Quimper

     184,290.00   

VILLEFRANCHE SUR SAONE

     197,000.00   

Nîmes / Casino

     57,092.00   

LA ROCHELLE - ANGOULINS

     283,000.00   

PARIS PONTAULT COMBAULT

     217,000.00   

Paris / Passage du Havre

     70,000.00   

Dijon Liberté

     363,771.00   

Toulouse Rue Alasace Lorraine

     379,900.00   

La Rochelle

     456,637.00   

 

40

--------------------------------------------------------------------------------

Bordeaux / Dijeaux

     390,000.00   

Rennes Estrée

     590,000.00   

Cannes Rue D’antibes

     144,000.00   

ARRAS

     30,000.00   

Cherbourg - CC Cotentin

     94,227.00   

Nantes - CC Basse Goulaine

     110,000.00   

Bordeaux St Médard

     135,652.00   

Angoulème

     131,096.00   

Hyères - CC Centr’Azur

     144,988.00   

ROANNE

     68,747.00   

Noyelles / Godault

     102,000.00   

Paris Carré Sénart

     160,000.00   

Toulouse FENOUILLET

     177,699.00   

OSNY

     149,000.00   

Auxerre

     84,156.00   

Dijon / Toison d’Or

     50,000.00   

CHARLEVILLE MEZIERES

     117,000.00   

Boulogne sur Mer

     60,396.00   

Louvroil / Maubeuge

     59,000.00   

ROCQUES SUR GARONNE

     135,000.00   

NANTES ST SEBASTIEN

     235,000.00   

Paris / Italie 2

     220,795.00   

LE MANS - JACOBINS

     145,000.00   

RONCQ

     138,000.00   

Villeneuve d’Ascq

     240,000.00   

Marseille - CC Avant Cap

     232,979.00   

AMIENS / DURY

     223,000.00   

POITIERS - Rue Des Grandes Ecoles

     299,000.00   

MULHOUSE WITTENHEIM

     188,000.00   

NICE TNL

     240,000.00   

VAL THOIRY

     178,000.00   

Saint Etienne

     210,000.00   

Avignon / Le Pontet

     439,421.00   

Paris / Forum des Halles

     558,000.00   

Vélizy 2

     900,000.00   

Toulouse St Rome 2

     260,043.84   

Orléans Place d’Arc

     347,471.16   

Angers St Aubin

     280,972.16   

Lyon Rue Victor Hugo

     581,415.36   

Leers CC Auchan

     151,753.43   

Montpellier Lattes

     262,697.92   

Nantes Paridis

     231,333.00   

Rouen / Tourville la Rivière

     195,253.76   

ST QUENTIN / FAYET

     118,000.00   

Flins carrefour

     81,234.90   

 

41

--------------------------------------------------------------------------------

Toulon Mayol

     164,889.60   

Brest Coat Ar Gueven

     104,045.20   

Montpellier

     309,984.00   

Toulouse / Blagnac

     227,899.52   

AVIGNON - MISTRAL 7

     220,000.00   

Strasbourg Illkirch

     259,465.44   

Nîmes / Coupole

     112,393.12   

Pau / Gal Leclerc

     78,195.60   

CHOLET

     170,000.00   

Montluçon

     121,972.50   

Saint Omer Longuenesses Auchan

     87,766.84   

BAGNOLET BEL EST

     300,000.00   

Marseille / Bourse

     195,684.00   

Chalons en Champagne

     167,073.90   

Le Havre Montivilliers

     117,544.00   

Argenteuil

     5,168.80   

Pau / Lescar

     57,125.28   

ST PAUL LES DAX

     38,000.00   

Valence Les Granges Auchan

     54,439.00   

LA VILLE DU BOIS

     35,000.00   

Tours La Riche

     57,167.28   

Amiens CC GC glisy

     65,470.08   

LENS 2

     65,000.00   

Rouen CC St Sever

     104,993.28   

NANCY HOUDEMONT

     80,000.00   

LORMONT - BORDEAUX

     72,000.00   

Perpignan Claira

     132,751.36   

MOULINS

     110,000.00   

Plaisir Auchan

     162,260.80   

Nantes CC Atlantis

     164,189.76   

AIX EN PROVENCE - GEANT CASINO

     7,000.00   

Metz Semecourt

     180,051.84   

BRIVE

     190,000.00   

SERRIS - VAL D’EUROPE

     220,000.00   

Niort

     219,323.39   

Bourg-en-Bresse

     230,496.00   

PERIGUEUX

     212,000.00   

THIONVILLE

     220,000.00   

Valence / Victor Hugo

     99,999.99   

Caen rue du Bras

     299,692.50   

MARTIGUES

     264,000.00   

Bordeaux / Lac (Résilié au profit de l’extension)

     304,043.84   

Metz / St Jacques

     313,853.60   

RENNES COLOMBIA

     320,000.00   

 

42

--------------------------------------------------------------------------------

TOULOUSE SAINT ORENS

     180,000.00   

Aix-en-Provence

     289,086.00   

Bordeaux / Mérignac

     325,331.84   

Strasbourg les Halles

     364,259.52   

Rouen Gros horloge

     362,064.08   

Bordeaux Sainte Catherine

     422,717.52   

Chartres

     414,740.03   

Amiens 3 Cailloux

     458,120.00   

Cannes

     462,680.85   

AUBAGNE

     460,000.00   

Strasbourg Vieux marché aux grains

     598,768.40   

Chalon sur Saon Carrefour

     140,000.00   

Paris Le Millenaire

     52,850.00   

Paris / St Michel

     1,078,229.00   

Paris / St Michel

     22,867.35   

Lyon Part Dieu n°2

     1,240,000.00   

Lyon Part Dieu n°2

     76,500.00   

Rouen / Barentin

     231,325.44   

Rouen / Barentin

     22,867.35   

Lille / rue d’Amiens

     277,000.00   

Lille / rue d’Amiens

     45,734.72   

Boulogne Billancourt

     668,000.00   

Boulogne Billancourt

     15,000.00   

Niort - CC Géant

     166,775.00   

Niort - CC Géant

     7,650.00   

Strasbourg / Hautepierre

     300,117.00   

Strasbourg / Hautepierre

     10,000.00   

Paris / Evry 2

     280,000.00   

Paris / Evry 2

     76,224.51   

REIMS CORMONTREUIL

     186,000.00   

REIMS CORMONTREUIL

     12,000.00   

Poitiers

     150,404.00   

Poitiers

     100,000.00   

ETREMBIERES

     211,000.00   

ETREMBIERES

     15,245.00   

LANESTER

     96,000.00   

LANESTER

     4,450.00   

CC Valence 2

     140,586.87   

CC Valence 2

     9,147.00   

Angers Espace Anjou

     239,924.00   

Angers Espace Anjou

     19,100.00   

Biarritz BAB 2

     279,091.90   

Besançon

     179,603.13   

Besançon

     22,867.35   

MARSEILLE - CC LA VALENTINE

     350,000.00   

 

43

--------------------------------------------------------------------------------

MARSEILLE - CC LA VALENTINE

     18,500.00   

BORDEAUX MERIADECK

     225,000.00   

BORDEAUX MERIADECK

     13,000.00   

Le HAVRE / Coty

     205,760.70   

Le HAVRE / Coty

     15,244.90   

BRETIGNY SUR ORGE

     207,000.00   

BRETIGNY SUR ORGE

     10,000.00   

Paris Rue de Rivoli Flagship

     2,800,000.00   

Frejus CC Geant

     150,000.00   

Albertville

     34,612.50   

Paris Claye Souilly Carrefour

     130,000.00   

Paris Claye Souilly Carrefour

     257,810.00   

Saint Brieuc

     320,000.00   

Moisselles

     75,000.00   

Rennes CC Saint Gregoire

     75,000.00   

Grenoble Grand rue

     150,000.00   

Aulnoy Les Valenciennes

     70,000.00   

Brest Le Phare de l’Europe

     137,800.00   

Lyon Rue de la République

     250,000.00   

Paris Général Leclerc

     548,000.00   

Tarbes

     75,000.00   

Sens Auchan

     6,500.00   

Lorient Rue Colonel Jean Muller

     120,000.00   

Bordeaux Begles

     320,000.00   

Laval La Mayenne

     125,000.00   

Epinay-Sur-Seine

     10,000.00   

Besancon Chateaufarine

     231,000.00   

Besancon Chateaufarine

     20,000.00   

Sete Avenue Gambetta

     130,000.00   

Narbonne rue du Pont des Marchands

     50,000.00   

Nice, Lingostiere

     290,500.00   

Strasbourg CORA Mundolsheim

     36,225.00   

Meaux

     15,000.00   

 

44

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SCHEDULE 6.07

Transactions with Affiliates

Reference is made to related party transaction disclosures in Claire’s Stores,
Inc.’s Form 10-Ks and Form 10-Qs filed with the U.S. Securities and Exchange
Commission.

 

45

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SCHEDULE 9.01

Notice Information

Administrative Agent:

Botticelli LLC

c/o Angelo, Gordon & Co., LP

245 Park Avenue, 26th Floor

New York, New York 10167

Attn: Gavin Baiera

Fax No. (212) 867-6395

Collateral Agent:

Cortland Capital Market Services LLC

225 W. Washington Street, 21st Floor

Chicago, IL 60606

Attention: Ryan Morick and Legal Department

Fax No.: (312) 562-5072

Borrowers:

Claire’s (Gibraltar) Holdings Limited

3 SW 129th Avenue

Suite 400

Pembroke Pines, FL 33027

Attention: Stephen Sernett, Director

Fax No.: (954) 433-3999

 

46

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Exhibit A

Exhibit A

[Form of]

Assignment and Acceptance Agreement

ASSIGNMENT AND ACCEPTANCE

This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each] Assignor identified in item 1 below ([the][each, an] “Assignor”) and
[the][each] Assignee identified in item 2 below ([the][each, an] “Assignee”).
[It is understood and agreed that the rights and obligations of [the
Assignors][the Assignees] hereunder are several and not joint.]1 Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by [the][each]
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below (including without limitation
any guarantees included in such facilities), and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of [the Assignor (in its capacity as a Lender)][the respective
Assignors (in their respective capacities as Lenders)] against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned by [the][any] Assignor
to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to
herein collectively as [the][an] “Assigned Interest”). Each such sale and
assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment and Acceptance, without representation or warranty
by [the][any] Assignor.

 

1.   Assignor[s]:  

 

     

 

  2.   Assignee[s]:  

 

     

 

    [Assignee is an [Affiliate][Approved Fund] of [identify Lender]   3.  
Borrowers:   Claire’s (Gibraltar) Intermediate Holdings Limited and Claire’s
Germany GmbH 4.   Administrative Agent:   Botticelli, L.L.C., as the
administrative agent under the Credit Agreement

 

 

1  Include bracketed language if there are either multiple Assignors or multiple
Assignees.

--------------------------------------------------------------------------------

5.   Credit Agreement:   That certain Credit Agreement, dated as of December
[    ], 2016 (as amended, restated, amended and restated, supplemented or
otherwise modified and in effect on the date hereof, the “Credit Agreement”),
among Claire’s (Gibraltar) Intermediate Holdings Limited and Claire’s Germany
GmbH, the Lenders party thereto from time to time, Botticelli, L.L.C., as
administrative agent and Cortland Capital Market Services LLC, as collateral
agent for the Lenders and the other parties party thereto. 6.  
Assigned Interest[s]:    

 

Assignor[s]2

   Assignee[s]3      Term Loans
Assigned      Aggregate Amount of
Commitment/Loans for
all Lenders4      Amount of
Commitment/Loans
Assigned8      Percentage
Assigned of
Commitment/
Loans5     CUSIP
Number            $                    $                           %            
$                    $                           %             $                
   $                           %   

 

[7.

 

Trade Date:

                      ]6

[Signature Page(s) Follow]

 

 

2  List each Assignor, as appropriate.

3  List each Assignee, as appropriate.

4  Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.

5  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

6  To be completed if the Assignor(s) and the Assignee(s) intend that the
minimum assignment amount is to be determined as of the Trade Date.

--------------------------------------------------------------------------------

Effective Date:              , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Acceptance are hereby agreed to:

 

ASSIGNOR[S] [NAME OF ASSIGNOR] By:  

 

Title:   [NAME OF ASSIGNOR] By:  

 

Title:   ASSIGNEE[S] [NAME OF ASSIGNEE] By:  

 

Title:   [NAME OF ASSIGNEE] By:  

 

Title:  

 

[Consented to and]7 Accepted: BOTTICELLI, L.L.C., as Administrative Agent By:  

 

Title:   [Consented to:]8 CLAIRE’S (GIBRALTAR) INTERMEDIATE HOLDINGS LIMITED By:
 

 

Title:  

 

 

7  To be added only if the consent of the Administrative Agent is required by
Section 9.04(b)(i)(B) of the Credit Agreement.

8  To be added only if the consent of Holdings is required by Section
9.04(b)(i)(A) of the Credit Agreement.

--------------------------------------------------------------------------------

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

Assignment and Acceptance

1. Representations and Warranties.

1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii)
[the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim, (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Acceptance and to
consummate the transactions contemplated hereby and (iv) it is not a Defaulting
Lender; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of the Borrowers, any of
their respective Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document, or (iv) the performance or observance by the
Borrowers, any of their respective Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

1.2. Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an assignee under Section 9.04 of the Credit
Agreement (subject to such consents, if any, as may be required thereunder),
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of [the][the
relevant] Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it is sophisticated with respect to decisions to acquire assets of the type
represented by the Assigned Interest and either it, or the Person exercising
discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the
Credit Agreement, and has received or has been accorded the opportunity to
receive copies of the most recent financial statements delivered pursuant to
Section 3.05 thereof, as applicable, and such other documents and information as
it deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance and to purchase [the][such] Assigned Interest,
and (vi) it has, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Assignment and Acceptance and to purchase [the][such] Assigned Interest; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, [the][any] Assignor or any other Lender, 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 the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date. Notwithstanding the foregoing, the Administrative Agent
shall make all payments of interest, fees or other amounts paid or payable in
kind from and after the Effective Date to [the][the relevant] Assignee.

3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the law of the State of New York.

--------------------------------------------------------------------------------

Exhibit B-1

Exhibit B-1

Form of Guarantee Agreement

 

- 1 -

--------------------------------------------------------------------------------

EXECUTION COPY

GUARANTEE

GUARANTEE, dated as of January 5, 2017 (this “Agreement”), among CLAIRE’S
(GIBRALTAR) INTERMEDIATE HOLDINGS LIMITED (“Holdings”) and CLAIRE’S GERMANY GMBH
(together with Holdings, each, a “Borrower” and collectively, the “Borrowers”),
each of the Subsidiaries listed on the signature pages hereto or that becomes a
party hereto pursuant to Section 4.12 of this Agreement (each a “Subsidiary
Guarantor” and, collectively, the “Subsidiary Guarantors”; the Subsidiary
Guarantors and each Borrower (in its capacity hereunder) are referred to
collectively as the “Guarantors”), BOTTICELLI LLC, as the administrative agent
for the Lenders (in such capacity, including any successor thereto, the
“Administrative Agent”), and CORTLAND CAPITAL MARKET SERVICES LLC, as collateral
agent for the Secured Parties (in such capacity, including any successor
thereto, the “Collateral Agent”).

PRELIMINARY STATEMENT

Reference is made to the Credit Agreement, dated as of the date hereof (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among the Borrowers, the lenders from time to
time party thereto (the “Lenders”), the Administrative Agent and the Collateral
Agent. Capitalized terms used but not defined in this Agreement shall have the
meanings given or ascribed to them in the Credit Agreement.

The Lenders have agreed to extend credit to the Borrowers pursuant to, and upon
the terms and conditions specified in, the Credit Agreement. Each Guarantor is
an Affiliate of the Borrowers, will derive substantial benefits from the
extension of credit to the Borrowers pursuant to the Credit Agreement and is
willing to execute and deliver this Agreement in order to induce the Lenders to
extend such credit. Accordingly, the parties hereto agree as follows:

ARTICLE I

GUARANTEE

SECTION 1.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with
the other Guarantors and severally, as a primary obligor and not merely as a
surety, the due and punctual payment and performance of the Obligations, whether
at the stated maturity, by acceleration or otherwise, of anyone other than such
Guarantor. Each Guarantor further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice to or further assent from it, and
that it will remain bound upon its guarantee notwithstanding any extension or
renewal of any Obligation. Each Guarantor waives diligence, presentment to,
protest, demand of payment from and protest to any Borrower or any other Loan
Party of any Obligation, and also waives notice of acceptance of its guarantee
and notice of protest for nonpayment.

SECTION 1.02. Guarantee of Payment. Each Guarantor further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and payable and
not of collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any security held for the payment
of the Obligations or to any balance of any deposit account or credit on the
books of the Collateral Agent or any other Secured Party in favor of any
Borrower or any other person (as defined in the Credit Agreement).

SECTION 1.03. Guarantor Intent. Subject to the limitations set forth in Sections
1.10 and 1.11, each Guarantor expressly confirms that it intends that this
guarantee shall extend from time to time to any (however fundamental) variation,
increase, extension or addition of or to any of the Loan

 

- 2 -

--------------------------------------------------------------------------------

Documents and/or any facility or amount made available under any of the Loan
Documents (including, without limitation, for the purposes of or in connection
with any acquisition of any nature, increasing working capital, enabling
investor distributions to be made, carrying out restructurings, refinancing
existing facilities, refinancing any other indebtedness, making facilities
available to additional borrowers, any other variation or extension of the
purposes for which any such facility or amount might be made available from time
to time and any fees, costs and/or expenses associated with any of the
foregoing). The foregoing notwithstanding, the Administrative Agent and the
Collateral Agent (directly or at the direction of any of Lenders or the Secured
Parties) may, in accordance with the ten Business Days’ term in Section 4.17,
request any of the Guarantors to ratify (either in a private or in a public
document before a notary) and carry out all necessary acts in order to confirm
any such extension from time to time to any (however fundamental) variation,
increase, extension or addition of or to any of the Loan Documents and/or any
facility or amount made available under any of the Loan Documents (including,
without limitation, for the purposes of or in connection with any acquisition of
any nature, increasing working capital, enabling investor distributions to be
made, carrying out restructurings, refinancing existing facilities, refinancing
any other indebtedness, making facilities available to additional borrowers, any
other variation or extension of the purposes for which any such facility or
amount might be made available from time to time and any fees, costs and/or
expenses associated with any of the foregoing).

SECTION 1.04. No Limitations, Etc.

(a) Except for the limitations set forth in Sections 1.10 and 1.11, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall be valid and enforceable and shall not be
discharged, terminated, reduced or impaired or otherwise affected by, whether or
not any Guarantor shall have had notice or knowledge of any of them, (i) the
failure of the Collateral Agent or any other Secured Party to assert any claim
or demand or to enforce any right or remedy under the provisions of any Loan
Document or otherwise, (ii) any rescission, waiver, amendment or modification
of, or any release from any of the terms or provisions of, any Loan Document or
any other agreement, including with respect to any other Guarantor under this
Agreement, (iii) the release of, or any impairment of or failure to perfect any
Lien on or security interest in, any security held by the Collateral Agent or
any other Secured Party for the Obligations or any of them, (iv) any default,
failure or delay, willful or otherwise, in the performance of the Obligations,
(v) the existence of any dispute between any Borrower and any Secured Party with
respect to the existence of any Event of Default or (vi) any other act or
omission that may or might in any manner or to any extent vary the risk of any
Guarantor or otherwise operate as a discharge of any Guarantor as a matter of
law or equity (other than the indefeasible payment in full in cash of all the
Obligations (other than those expressly stated to survive the Maturity Date)).
Each Guarantor expressly authorizes the Collateral Agent to take and hold
security for the payment and performance of the Obligations, to exchange, waive
or release any or all such security (with or without consideration), to enforce
or apply such security and direct the order and manner of any sale thereof in
its sole discretion or to release or substitute any one or more other guarantors
or obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.

(b) To the fullest extent permitted by applicable law, each Guarantor waives
(i) any defense based on or arising out of any defense of any Borrower or any
other Loan Party or the validity or unenforceability of the Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
any Borrower or any other Loan Party, other than the indefeasible payment in
full in cash of all the Obligations (other than those expressly stated to
survive the Maturity Date); (ii) any right to require any Secured Party, as a
condition of payment or performance by such Guarantor, to (A) proceed

 

- 3 -

--------------------------------------------------------------------------------

against any Borrower, any other guarantor (including any other Guarantor) of the
Obligations or any other person, (B) proceed against or exhaust any security
held from any Borrower, any such other guarantor (including any other Guarantor)
or any other person, (C) proceed against or have resort to any balance of any
deposit account or credit on the books of any Secured Party in favor of any
Borrower or any other person, or (D) pursue any other remedy in the power of any
Secured Party whatsoever; (iii) any defense based upon any applicable law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (iv) any defense
based upon any Secured Party’s errors or omissions in the administration of the
Obligations, except behavior which amounts to gross negligence, bad faith or
willful misconduct; (v) (A) any principles or provisions of applicable law,
which are or might be in conflict with the terms hereof and any legal or
equitable discharge of such Guarantor’s obligations hereunder, (B) the benefit
of any statute of limitations affecting such Guarantor’s liability hereunder or
the enforcement hereof, (C) any rights to set offs, recoupments and
counterclaims, and (D) promptness, diligence and any requirement that any
Secured Party protect, secure, perfect or insure any security interest or lien
or any property subject thereto; (vi) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance hereof, notices of default hereunder, or any agreement or
instrument related thereto, notices of any renewal, extension or modification of
the Obligations or any agreement related thereto, notices of any extension of
credit to any Borrower and notices of any of the matters referred to in this
Section 1.04 and any right to consent to any thereof; and (vii) any defenses or
benefits that may be derived from or afforded by law which limit the liability
of or exonerate guarantors or sureties, or which may conflict with the terms
hereof. Following the occurrence and during the continuance of an Event of
Default, the Collateral Agent and the other Secured Parties may, at their
election, foreclose on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such security in lieu
of foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any Borrower or any other Loan Party or exercise any other
right or remedy available to them against any Borrower or any other Loan Party,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations (other than those expressly
stated to survive the Maturity Date) have been fully and indefeasibly paid in
full in cash. To the fullest extent permitted by applicable law, each Guarantor
waives any defense arising out of any such election (other than the indefeasible
payment in full in cash of the Obligations (other than those expressly stated to
survive the Maturity Date)) even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against any Borrower or
any other Loan Party, as the case may be, or any security.

(c) Each Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than the indefeasible payment in full in cash of the Obligations
(other than those expressly stated to survive the Maturity Date). In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:

(i) the obligations of each Guarantor hereunder are independent of the
obligations of the Borrowers and the obligations of any other guarantor
(including any other Guarantor) in respect of the obligations of any Borrower,
and a separate action or actions may be brought and prosecuted against such
Guarantor whether or not any action is brought against any Borrower or any of
such other guarantors (including any other Guarantor) and whether or not any
Borrower is joined in any such action or actions;

(ii) payment by any Guarantor of a portion, but not all, of the Obligations
shall in no way limit, affect, modify, release, reduce or abridge any
Guarantor’s liability for any portion of the Obligations which has not been
paid;

 

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(iii) any Secured Party, in accordance with the Credit Agreement, upon such
terms as it deems appropriate, without notice or demand and without affecting
the validity or enforceability hereof or giving rise to any reduction,
limitation, impairment, discharge or termination of any Guarantor’s liability
hereunder, from time to time may (A) renew, extend, accelerate, increase the
rate of interest on, or otherwise change the time, place, manner or terms of
payment of the Obligations and (B) request and accept other guaranties of the
Obligations and take and hold security for the payment hereof or the
Obligations. The foregoing notwithstanding, the Administrative Agent and the
Collateral Agent (directly or at the direction of any of the Secured Parties)
may, in accordance with the ten Business Days’ term in Section 4.17, request any
of the Guarantors to ratify (either in a private or in a public document before
a notary) and carry out all necessary acts in order to reflect any such renewal,
extension, acceleration, increased rate of interest, or other change in the
time, place, manner or terms of payment of the Obligations; and

(iv) any Secured Party may exercise any other rights or remedies available to it
under the Loan Documents.

SECTION 1.05. Bankruptcy, etc.

(a) To the extent permitted under applicable law, the obligations of the
Guarantors hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any case, filing, petition, application,
plan of arrangement or proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of any Borrower or any other Guarantor, or the appointment of a receiver,
administrative receiver, interim receiver, receiver and manager, administrator,
judicial manager, trustee, custodian, sequestrator, conservator, controller or
any similar official or by any defense which any Borrower or any other Guarantor
may have by reason of the order, decree or decision of any court or
administrative body resulting from any such case, filing, petition, application,
plan of arrangement proceeding unless also stayed in connection with the
insolvency, bankruptcy or reorganization of such Guarantor.

(b) To the extent permitted under applicable law, each Guarantor acknowledges
and agrees that any interest on any portion of the Obligations which accrues
after the commencement of any voluntary or involuntary bankruptcy,
reorganization or insolvency case, filing, petition, application, plan of
arrangement or proceeding of or against any Borrower or any Guarantor (or, if
interest on any portion of the Obligations ceases to accrue by operation of law
by reason of the commencement of such case, filing, petition, application, plan
of arrangement or proceeding, such interest as would have accrued on such
portion of the Obligations if such case, filing, petition, application, plan of
arrangement or proceeding had not been commenced) shall be included in the
Obligations because it is the intention of the Guarantors and the Secured
Parties that the Obligations which are guaranteed by the Guarantors pursuant
hereto should be determined without regard to any rule of law or order which may
relieve any Borrower of any portion of such Obligations. The Guarantors will
permit any trustee in bankruptcy, receiver, administrative receiver, interim
receiver, receiver and manager, administrator, custodian, sequestrator,
conservator, controller, debtor in possession, assignee for the benefit of
creditors or similar person to pay the Administrative Agent, or allow the claim
of the Administrative Agent in respect of, any such interest accruing after the
date on which such case, filing, petition, application, plan of arrangement or
proceeding is commenced.

(c) If acceleration of the time for payment of any amount payable by any
Borrower under the Credit Agreement or by any Borrower or any Guarantor under
any other Loan Document is stayed upon the insolvency, bankruptcy or
reorganization of such Borrower or such Guarantor, all such amounts otherwise
subject to acceleration under the terms of the Credit Agreement or any other
Loan Document

 

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shall nonetheless be payable by each of the other Guarantors hereunder forthwith
on demand by the Administrative Agent unless also stayed in connection with the
insolvency, bankruptcy or reorganization of such Guarantor.

SECTION 1.06. Reinstatement. Each Guarantor agrees that its guarantee hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by the Collateral Agent or any other Secured Party upon
the insolvency, dissolution, liquidation, bankruptcy or reorganization of any
Borrower, any other Loan Party, the appointment of a receiver, administrative
receiver, interim receiver, receiver and manager, administrator, liquidator,
statutory manager, trustee, custodian, sequestrator, conservator or any similar
official or otherwise.

SECTION 1.07. Agreement To Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of any Borrower or any other Loan Party to pay any Obligation
when and as the same shall become due and payable, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Administrative
Agent or the Collateral Agent, as applicable, for distribution to the applicable
Secured Parties in cash the amount of such unpaid Obligation plus any accrued
and unpaid interest on such Obligation (including interest which, but for any
Borrower’s becoming the subject of a case, filing, petition, application, plan
of arrangement under any Debtor Relief Law, would have accrued on such
Obligations whether or not such claim is allowed against any Borrower for such
interest in the related case, filing, petition, application, plan of
arrangement). Upon payment by any Guarantor of any sums to the Administrative
Agent or the Collateral Agent, as applicable, as provided above, all rights of
such Guarantor against any Borrower or any other Guarantor arising as a result
thereof by way of right of subrogation, contribution, reimbursement, indemnity
or otherwise shall in all respects be subject to Article II.

SECTION 1.08. Information. Each Guarantor assumes all responsibility for being
and keeping itself informed of each Borrower’s and each other Loan Party’s
financial condition and assets and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that neither
the Collateral Agent nor any other Secured Party will have any duty to advise
such Guarantor of information known to it or any of them regarding such
circumstances or risks.

SECTION 1.09. Instrument for the Payment of Money. Each Guarantor hereby
acknowledges that the guarantee in this Article I constitutes an instrument for
the payment of money, and consents and agrees that any Lender, the
Administrative Agent or the Collateral Agent, at its sole option, in the event
of a dispute by such Guarantor in the payment of any moneys due hereunder, shall
have the right to bring a motion-action under New York CPLR Section 3213.

SECTION 1.10. General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate, limited partnership or limited
liability company law, or any applicable state, provincial, territorial, federal
or foreign bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of any Guarantor under
Section 1.01 would otherwise be held or determined to be void, voidable, invalid
or unenforceable, or subordinated to the claims of any other creditors, on
account of the amount of its liability under Section 1.01, then, notwithstanding
any other provision to the contrary, the amount of such liability shall, without
any further action by such Guarantor, any Loan Party or any other person, be
automatically limited and reduced to the highest amount (after giving effect to
the right of contribution established in Section 2.02) that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.

 

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SECTION 1.11. Limitation on Guarantee Obligations of Guarantors.

(a) Guarantors incorporated in England and Wales. This guarantee does not apply
to any liability of a Guarantor incorporated in England & Wales to the extent
that it would result in this guarantee constituting unlawful financial
assistance within the meaning of sections 677, 678 or 679 of the Companies Act
2006 or any equivalent provision of any applicable law.

(b) Guarantors incorporated in Luxembourg.

(i) Notwithstanding any provision to the contrary in this Agreement or any other
Loan Document, the aggregate amounts of the guarantee obligations under this
Agreement of any guarantor incorporated in Luxembourg (a “Luxembourg Guarantor”)
for the obligations of any other Loan Party which is not a direct or indirect
subsidiary of such Luxembourg Guarantor (the “Luxembourg Guarantee
Obligations”), shall be limited at any time, with no double counting, to an
aggregate amount not exceeding the greater of:

(A) (x) ninety percent (90%) of such Luxembourg Guarantor’s own funds (capitaux
propres) as referred to in article 34 of the Luxembourg act dated 19 December
2002 (the “2002 Law”) concerning the trade and companies register and the
accounting and annual accounts of undertakings, as amended (the “Own Funds”),
increased by (y) any amounts owed by such Luxembourg Guarantor to any affiliated
entity and that have not been financed (directly or indirectly) by the Credit
Agreement and (without double-counting) and any subordinated liabilities as
referred to in 2002 Law; each as reflected in the most recent available
financial statements of such Luxembourg Guarantor as on the date of this
Agreement; or

(B) (x) ninety percent (90%) of such Luxembourg Guarantor’s Own Funds increased
by (y) any amounts owed by such Luxembourg Guarantor to any affiliated entity
and that have not been financed (directly or indirectly) by the Credit Agreement
and (without double-counting) and any subordinated liabilities as referred to in
2002 Law; each as reflected in the most recent available financial statements of
such Luxembourg Guarantor as on the date of demand of payment of the guarantee
under this Agreement.

(ii) The limitation in clause (i) above shall not apply to the extent that the
obligations or liabilities assumed by such Luxembourg Guarantor under this
Agreement relate to any amounts borrowed or made available, in any form
whatsoever, under the Loan Documents to such Luxembourg Guarantor or any of its
(current or future) direct or indirect subsidiaries.

(iii) The Luxembourg Guarantee Obligations of a Luxembourg Guarantor will not
extend to include any obligations or liabilities if this would constitute a
breach of the financial assistance prohibitions contained in article 49-6 of the
Luxembourg Law dated August 10, 1915 on commercial companies, as amended.

(c) Guarantors incorporated in Gibraltar. This guarantee does not apply to any
liability of a Guarantor incorporated in Gibraltar to the extent that it would
result in this guarantee constituting unlawful financial assistance within the
meaning of section 100 of the Companies Act 2014 or any equivalent provision of
any applicable law.

 

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(d) Guarantors incorporated in Germany.

(i) The Secured Parties shall be entitled to enforce the Guarantee against each
Guarantor incorporated and existing under the laws of Germany as a company with
limited liability (Gesellschaft mit beschränkter Haftung) (each a “German
Guarantor”) without limitation in respect of:

(A) any and all amounts which are owed under the Obligations directly (i.e. as a
result of borrowing or other direct liability under the Loan Documents, thus
excluding any secondary liability under joint and several liability, guarantee
or indemnity) by the German Guarantor itself or by any of its direct or indirect
Subsidiaries; and

(B) any and all amounts which correspond to funds which have been borrowed under
any of the Loan Documents to the extent on-lent or otherwise passed on to, or
issued for the benefit of, the German Guarantor or any of its direct or indirect
Subsidiaries, or for the benefit of any of their creditors and in each case not
repaid and outstanding from time to time; and

(C) any and all amounts for which an enforcement is not limited by paragraphs
(ii) through (xi) below.

(ii) The Secured Parties shall not be entitled to enforce the Guarantee against
a German Guarantor, to the extent that:

(A) the enforcement of the Guarantee would result in a repayment of the
obligations of a Loan Party which is (i) a shareholder of the German Guarantor
or (ii) an affiliated company in which a shareholder of the German Guarantor
(other than the German Guarantor itself and any of its direct or indirect
Subsidiaries) directly or indirectly holds any shares, provided that such
enforcement would be regarded as a payment (Auszahlung) by the German Guarantor
to a shareholder of the German Guarantor within the meaning of section 30 of the
German Act on Companies with Limited Liability (GmbHG) (as amended from time to
time); and

(B) the German Guarantor as dependent (abhängig) and/or profit transferring
(gewinnabführend) company has not entered into a domination and/or profit and
loss transfer agreement (Beherrschungs- und/oder Gewinnabführungsvertrag) with
such shareholder or affiliate; and

(C) the enforcement of the Guarantee would (i) have the effect of reducing the
German Guarantor’s net assets (Reinvermögen) (hereinafter: “Net Assets”) to an
amount of less than its registered share capital or, if the Net Assets are
already an amount of less than its registered share capital, of causing such
amount to be further reduced and (ii) thereby affect the assets required for the
mandatory preservation of the German Guarantor’s registered share capital
according to section 30 of the German Act on Companies with Limited Liability
(GmbHG) (as amended from time to time), provided that the amount of the

 

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registered share capital to be taken into account shall be the amount registered
in the commercial register as at the date hereof (or if lower, such amount at
any date hereafter) and only to the extent that it is actually paid in, and any
increase of the registered share capital after the date of this Agreement shall
only be taken into account if such increase has been effected with the prior
written consent of the Secured Parties.

(iii) The Net Assets shall be calculated as an amount equal to the sum of the
book values of the German Guarantor’s assets (consisting of all assets which
correspond to the items set forth in section 266 sub-section (2) A, B and C of
the German Commercial Code (HGB)) less the aggregate amount of the German
Guarantor’s liabilities (consisting of all liabilities and liability reserves
which correspond to the items set forth in section 266 sub-section (3) B, C and
D of the German Commercial Code (HGB)), provided that:

(A) obligations under loans or other liabilities incurred by the German
Guarantor which (i) are subordinated within the meaning of section 39 paragraph
2 of the German Insolvency Code (Insolvenzordnung) or (ii) have been incurred in
violation of the provisions of the Loan Documents, shall (in each case) not be
taken into account as liabilities; and

(B) the book values shall be determined in accordance with the generally
accepted accounting principles applicable from time to time in Germany
(Grundsätze ordnungsgemäßer Buchfuhrüng) and be based on the same principles
which were applied by the German Guarantor in the preparation of its (at the
time in question) most recent annual commercial law balance sheet
(handelsbilanzielle Jahresbilanz).

(iv) If the Guarantee cannot be fully enforced against the German Guarantor due
to the limitations in Section 1.11, the German Guarantor shall, upon request of
the Collateral Agent, dispose or otherwise realise, to the extent legally
permitted and in order to enable the Secured Parties to enforce the Guarantee in
full or with less limitations, any and all of its assets which are not required
for the German Guarantor’s business (nicht betriebsnotwendig) and where the book
value (Buchwert) of such asset or assets shown in the most recent annual
commercial law balance sheet (handelsbilanzielle Jahresbilanz) is significantly
lower than the market value of the asset or assets, within a time period
reasonably required in order to dispose or otherwise realise any such asset or
assets.

(v) If the Guarantee cannot be fully enforced against the German Guarantor due
to the limitations in Section 1.11, the German Guarantor shall, to the extent
that the German Guarantor is legally permitted to do so and in order to enable
the Secured Parties to enforce the Guarantee in full or with less limitations,
take all measures (including, without limitation, setting-off claims or
dissolution of hidden reserves) requested by the Collateral Agent to increase
the amount of Net Assets.

(vi) Without prejudice to paragraph (vii) below, the enforcement of the
Guarantee shall only be limited pursuant to paragraph (ii) above if the German
Guarantor delivers to the Collateral Agent, without undue delay:

(A) but no later than within 20 Business Days after receipt of a request for
payment under the Guarantee by a Secured Party, a notice in writing specifying:

I. to what extent the Guarantee should not be enforced under paragraph
(ii) above; and

 

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II. the amounts which would, if the Guarantee were enforced, have the effect of
(x) reducing the German Guarantor’s Net Assets to an amount of less than its
registered share capital or, if the Net Assets are already an amount of less
than its registered share capital, of causing such amount to be further reduced
and (y) thereby affecting the assets required for the mandatory preservation of
the German Guarantor’s registered share capital in accordance with section 30 of
the German Act on Companies with Limited Liability (GmbHG) (as amended from time
to time),

and provides with such notice sufficient supporting evidence, including, without
limitation, an up-to-date pro forma balance sheet and a detailed calculation of
the Net Assets in accordance with paragraphs (ii) to (v) above (the “Management
Determination”);

(B) but not later than within 45 Business Days after receipt of a request for
payment under the Guarantee by a Secured Party, an up-to-date balance sheet
prepared by a firm of auditors of international standard and reputation which
shows the value of the German Guarantor’s Net Assets (hereinafter: “Balance
Sheet”). The Balance Sheet shall be prepared in accordance with the principles
set out in paragraph (iii) above and shall contain additional information (in
reasonable detail) relating to items to be adjusted pursuant to paragraph
(iii) above.

(vii) If a Secured Party has enforced the Guarantee without limitation because
the Management Determination and/or the Balance Sheet was not delivered or not
delivered within the applicable time, the relevant Secured Party shall, upon
written demand of the German Guarantor, repay to the German Guarantor any amount
which pursuant to the Management Determination and/or the Balance Sheet has been
enforced in excess, provided that (a) such Management Determination and/or the
Balance Sheet also confirms that, at such later point in time the application of
paragraph (ii) above would result in a limitation of the amount enforceable
under the Guarantee and (b) such Management Determination and/or Balance Sheet
is delivered not later than an additional 20 Business Days after it should have
been delivered. For the avoidance of doubt, a Secured Party is entitled, in any
event, to enforce the Guarantee without limitation to the extent enforcement is
not restricted based on the Management Determination and/or the Balance Sheet.

(viii) If a Secured Party disagrees with the Management Determination and/or the
Balance Sheet, it shall notify the relevant German Guarantor accordingly. The
Secured Party shall be entitled to enforce the Guarantee and to apply the
proceeds to settle its claims without limitation up to the amount which is
undisputed between it and the relevant German Guarantor. In relation to the
amount which is disputed by the relevant Secured Party, the Secured Party shall
be entitled to further pursue its claims under the Guarantee if and to the
extent that an up-to-date balance sheet prepared by a firm of auditors of
international standard and reputation opposing the Balance Sheet (hereinafter:
“Opposing Balance Sheet”) shows that the limitations under paragraph (ii) result
in a higher enforceable amount under the Guarantee. The Opposing Balance Sheet
shall be prepared in accordance with the principles set out in paragraph
(iii) above.

 

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(ix) In relation to any amounts exceeding the amount which according to the
Management Determination, the Balance Sheet and, as the case may be, the
Opposing Balance Sheet can be enforced in compliance with the limitations set
out in paragraph (ii) above for which the German Guarantors are liable under the
Guarantee, a Secured Party shall be entitled to further pursue its claims (if
any) after expiry of three (3) months from the date the Balance Sheet was
delivered to the Secured Party. However, the relevant German Guarantor is
entitled to prove that this amount is still necessary for maintaining its
registered share capital (calculated as of the date the demand under this
Guarantee was made (or if lower at any later date)).

(x) The limitations set out in paragraph (ii) above shall not apply:

(A) if and to the extent that, despite being in a position to take measures as
described in paragraphs (iv) and/or (v) and requested by a Secured Party or the
Collateral Agent, the German Guarantor delays or fails to take such measures; or

(B) if, at the time the Guarantee is enforced, the limitations set out in
paragraph (ii) above are no longer required in order to protect the managing
directors of the German Guarantor from incurring any personal liability exposure
due to an enforcement of the Guarantee with respect a breach of Section 30 of
the German Act on Companies with Limited Liability (GmbHG) (as amended from time
to time).

No reduction of the amount enforceable under the Guarantee shall prejudice the
right of a Secured Party to continue enforcing this Guarantee (subject always to
the operation of the limitations set out above at the time of such enforcement)
until there has been full and irrevocable satisfaction of all claims under the
Guarantee.

(e) Guarantors incorporated in France.

(i) Notwithstanding anything to the contrary in this Article I, the liability of
any French Guarantor in its capacity as a Guarantor is subject to the following
limitations:

 

  (A) the obligations and liabilities of any French Guarantor under the Loan
Documents and in particular under Article I of this Agreement shall not include
any obligation or liability which if incurred would constitute the provision of
unlawful financial assistance (assistance financière prohibée) within the
meaning of article L. 225-216 of the French Commercial Code (Code de commerce)
and/or would constitute a majority shareholding misuse or a misuse of corporate
assets within the meaning of articles L. 241-3, L. 242-6 or L. 244-1 of the
French Commercial Code (Code de commerce) or any other laws or regulations
having the same effect, as interpreted by French courts;

 

  (B) the obligations and the liabilities of any French Guarantor under Article
I of this Agreement for the obligations under the Loan

 

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  Documents of any other Obligor which is not a subsidiary of that French
Guarantor, shall be limited to an amount equal to the difference between:

 

  I. the aggregate of all amounts borrowed directly or indirectly under the
Agreement by such other Obligor as Borrower to the extent directly or indirectly
on-lent or otherwise provided by such Borrower to that French Guarantor and/or
its Subsidiaries under inter-company loan agreements or similar arrangements and
outstanding at the date a payment is to be made by that French Guarantor under
Clause 21.1 (Guarantee and indemnity) of this Agreement; and

 

  II. the aggregate of all the amounts already received by the Lender from the
French Guarantor pursuant to Clause 21.1 (Guarantee and indemnity);

 

  (C) the obligations and the liabilities of the French Guarantor under Article
I of this Agreement for the obligations under the Loan Documents of any
Guarantor which is its subsidiary shall not, in relation to amounts due by such
Guarantor as a borrower, be limited and shall therefore cover all amounts due by
such Guarantor as a borrower and shall cover, in relation to amounts due by such
Guarantor as a Guarantor, all amounts due by such Guarantor as a Guarantor
subject to the limitations set out in paragraphs (A) and (B) above as if the
same applied mutatis mutandis to such Guarantor.

 

  (D) For the avoidance of doubt, it is acknowledged that each French Guarantor
shall not be considered as “co-débiteur solidaire” as to their obligations
pursuant it the guarantees given in accordance with this Section 1.11(e).

(f) Guarantors incorporated in Spain. This guarantee does not apply to any
liability to the extent that it would result in this guarantee constituting
unlawful financial assistance within the meaning of Articles 143 and 150 of the
Spanish Royal Legislative Decree 1/2010, of 2 July, approving the consolidated
text of the companies law or any equivalent provision of any applicable law.

(g) Guarantors incorporated in Switzerland. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, if and to the extent
that (i) any Guarantor incorporated in Switzerland (a “Swiss Guarantor”) becomes
liable under this Agreement or any Loan Document, or any security granted by the
Swiss Guarantor under this Agreement or any Loan Document is enforced, for
obligations of such Swiss Guarantor’s Affiliates which are not direct or
indirect subsidiaries wholly owned by the Pledgor (the “Restricted Obligations”)
and (ii) discharging such liability, or using the proceeds of the enforcement of
such security toward satisfaction of the Restricted Obligations, would
constitute a repayment of capital (Einlagerückgewähr), a violation of the
legally protected reserves (gesetzlich geschütze Reserven) or the payment of a
(constructive) dividend (Gewinnausschüttung) by the Swiss Guarantor, or would
otherwise be restricted under Swiss law then applicable, then the aggregate
liability of the Swiss Guarantor for the Restricted Obligations shall be limited
to the amount of (unrestricted) equity of the Swiss Guarantor which is available
for distribution as dividends under the Swiss law (including retained earnings,
current net profits, and the reserves available for distribution) at the time
the payment of the Restricted Obligations is requested from the Swiss Guarantor
(the “Maximum Amount”), provided that such limitation shall not release the
Swiss Guarantor from its liability in excess of the Maximum Amount, but that it
shall merely postpone the performance date thereof until such time or times as
performance is again permitted.

 

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If any payment made in respect to Restricted Obligations under this Agreement or
any Loan Document is subject to the tax imposed pursuant the Swiss Federal Act
on Withholding Tax of 13 October 1965 (Bundesgesetz über die Verrechnungssteuer
vom 13 Oktober 1965) as amended from time to time (“Swiss Witholding Tax”), the
Swiss Guarantor shall:

(i) mitigate to the maximum extent possible any Swiss Withholding Tax to be
levied on any payment made in respect to Restricted Obligations under this
Agreement or any Loan Document (and cause its shareholder and other relevant
Affiliates to fully cooperate in any mitigating efforts) by discharging the
Swiss Withholding Tax liability through the notification procedure pursuant to
applicable law (including tax treaties); and/or, if the notification procedure
referred to in this paragraph (i). is not (fully) applicable,

(ii) deduct from the payment made in respect to Restricted Obligations the Swiss
Withholding Tax at the relevant then applicable rate and timely pay any such
deduction to the Swiss Federal Tax Administration; and

(iii) promptly notify the Collateral Agent that the notification and/or, as the
case may be, the deduction has (have) been made and paid to the Swiss Federal
Tax Administration and provide evidence thereof.

To the extent Swiss Withholding Tax is deducted from payment made in respect to
Restricted Obligations, the Swiss Guarantor shall use its commercially
reasonable efforts to ensure that any person which is, as a result of a
deduction of Swiss Withholding Tax, entitled to a full or partial refund of the
Swiss Withholding Tax, will, as soon as possible after the deduction of the
Swiss Withholding Tax, (i) request a refund of the Swiss Withholding Tax under
any applicable law (including double tax treaties) and (ii) promptly upon
receipt, pay to the Collateral Agent (or to any such other person as directed by
the Collateral Agent) any amount so refunded for application as a further
payment under this Agreement or any other relevant Loan Document.

If and to the extent requested by the Collateral Agent and if and to the extent
this is from time to time required under Swiss law rules (restricting profit
distributions), in order to allow the Collateral Agent and the Secured Parties
to obtain a maximum benefit under this Agreement or any other relevant Loan
Document, the Swiss Guarantor and any other relevant party to this Agreement
shall (and shall cause their shareholders and other relevant Affiliates to)
promptly implement all such measures and/or promptly procure the fulfilment of
all prerequisites allowing payment(s) made under this Agreement or any other
relevant Loan Document in respect to Restricted Obligations from time to time,
including the following:

(i) preparation of an up-to-date (interim) audited balance sheet of the Swiss
Guarantor;

(ii) to the extent possible and/or necessary, confirmation of the auditors of
the Swiss Guarantor that the relevant amount represents the maximum amount
available for distribution;

(iii) to the maximum extent permitted by Swiss law, conversion of restricted
reserves into profits, reserves and/or other equity account freely available for
the distribution as dividends;

(iv) to the maximum extent permitted by Swiss law, revaluation of hidden
reserves;

 

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(v) passing of a shareholder resolution approving the distribution; and

(vi) all such other measures necessary or useful to allow the Swiss Guarantor to
make the payments agreed hereunder with a minimum of limitations.

SECTION 1.12. Additional Jurisdictions. In the event that a Subsidiary is to
become a party to this Guarantee as required by Section 5.10 of the Credit
Agreement or otherwise and at such time such additional Guarantor is not
organized in one of the jurisdictions of a Guarantor that is or has already been
a signatory hereto, then the Guarantor Supplement to be executed and delivered
by such additional Guarantor shall include guarantee limitation provisions,
corporate benefit, tax and other provisions customary for such jurisdiction as
the Administrative Agent, the Collateral Agent and such additional Guarantor may
reasonably agree based on the advice of legal counsel (which may be legal
counsel for such Guarantor).

SECTION 1.13. Release. (a)On the Maturity Date, this Agreement and all
obligations (other than those expressly stated to survive the Maturity Date) of
the Administrative Agent, the Collateral Agent and each Guarantor hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party. At the request and sole expense of any Guarantor following any
such termination, the Administrative Agent and the Collateral Agent shall
execute and deliver to such Guarantor (or any of its agents, officers or
designees) such documents as such Guarantor (or any of its agents, officers or
designees) shall reasonably request to evidence such termination.

(b) At the request and sole expense of the Guarantors, a Guarantor shall be
released from its obligations hereunder if such Guarantor ceases to be a
Subsidiary as a result of a transaction permitted under the Credit Agreement in
accordance with Section 6.05 of the Credit Agreement; provided that, upon the
reasonable request of the Administrative Agent or the Collateral Agent, Holdings
shall have delivered to the Administrative Agent and the Collateral Agent a
certification by the Company stating that such transaction is in compliance with
the Credit Agreement and the other Loan Documents.

SECTION 1.14. Continuing Guarantee. The guarantee created under this Agreement
is a continuing guarantee and will extend to the ultimate balance of sums
payable by any Loan Party under the Loan Documents, regardless of any
intermediate payment or discharge in whole or in part.

SECTION 1.15. Additional Security. The guarantee created under this Agreement is
in addition to and is not in any way prejudiced by any other guarantee or
security now or subsequently held by any Secured Party.

ARTICLE III

NDEMNITY, SUBROGATION AND SUBORDINATION

SECTION 2.01. Indemnity and Subrogation.

(a) In addition to all such rights of indemnity and subrogation as the
Guarantors may have under applicable law (but subject to Section 2.03), each
Borrower agrees that (i) in the event a payment shall be made by any Guarantor
under this Agreement, such Borrower shall indemnify such Guarantor for the full
amount of such payment and such Guarantor shall be subrogated to the rights of
the person to whom such payment shall have been made to the extent of such
payment and (ii) in the event any assets of any Guarantor shall be sold pursuant
to this Agreement or any other Security Document to satisfy in whole or in part
a claim of any Secured Party, such Borrower shall indemnify such Guarantor in an
amount equal to the fair market value of the assets so sold.

 

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(b) If any amount shall be paid to any Guarantor on account of such subrogation
rights at any time when all of the Obligations (other than those expressly
stated to survive the Maturity Date) shall not have been paid in full, such
amount shall be held by such Guarantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Administrative Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required by applicable law), to be applied against
the Borrower Obligations, whether matured or unmatured, in the order set forth
in Section 7.02 of the Credit Agreement.

SECTION 2.02. Contribution and Subrogation.

(a) Each Guarantor (a “Contributing Guarantor”) agrees (subject to Section 2.03)
that, in the event a payment shall be made by any other Guarantor hereunder in
respect of any Obligation, or assets of any other Guarantor shall be sold
pursuant to any Security Document to satisfy any Obligation owed to any Secured
Party, and such other Guarantor (a “Claiming Guarantor”) shall not have been
fully indemnified by any Borrower as provided in Section 2.01, such Contributing
Guarantor shall indemnify such Claiming Guarantor in an amount equal to (i) the
amount of such payment or (ii) the fair market value of such assets, as the case
may be, in each case multiplied by a fraction of which the numerator shall be
the net worth of the Contributing Guarantor (as determined immediately prior to
such payment or sale) and the denominator shall be the aggregate net worth of
all the Guarantors (as determined immediately prior to such payment or sale).
Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant
to this Section 2.02 shall be subrogated to the rights of such Claiming
Guarantor under Section 2.01 to the extent of such payment.

(b) The obligations of the Guarantors under the Loan Documents, including their
liability for the Obligations and the enforceability of the security interests
granted thereby, are not contingent upon the validity, legality, enforceability,
collectability or sufficiency of any right of contribution or subrogation
arising under this Article II. To the fullest extent permitted under applicable
law, the invalidity, insufficiency, unenforceability or uncollectability of any
such right shall not in any respect diminish, affect or impair any such
obligation or any other claim, interest, right or remedy at any time held by any
Secured Party against any Guarantor or its property. The Secured Parties make no
representations or warranties in respect of any such right and shall, to the
fullest extent permitted under applicable law, have no duty to assure, protect,
enforce or ensure any such right or otherwise relating to any such right.

SECTION 2.03. Subordination.

(a) Notwithstanding any provision of this Agreement to the contrary, all rights
of the Guarantors under Sections 2.01 and 2.02 and all other rights of
indemnity, contribution or subrogation under applicable law or otherwise shall
be fully subordinated to the indefeasible payment in full in cash of the
Obligations (other than those expressly stated to survive the Maturity Date). No
failure on the part of any Borrower or any Guarantor to make the payments
required by Sections 2.01 and 2.02 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor with respect to its obligations hereunder, and each
Guarantor shall remain liable for the full amount of its obligations hereunder.

(b) Each Borrower and each other Guarantor hereby agree that all Indebtedness
and other monetary obligations owed to it by any Borrower or any Subsidiary
shall be fully subordinated to the indefeasible payment in full in cash of the
Obligations (other than those expressly stated to survive the Maturity Date).

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent, Collateral Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrowers thereunder, each Guarantor hereby
represents and warrants to the Administrative Agent, the Collateral Agent and
each Lender that the representations set forth in Article III of the Credit
Agreement are, with respect to such Guarantor, true and correct in all material
respects (without duplication of materiality qualifiers contained therein) on
and as of the date hereof, except to the extent such representations and
warranties expressly relate to an earlier date, in which case they shall be true
and correct in all material respects (without duplication of materiality
qualifiers contained therein) as of such earlier date. Each Guarantor hereby
acknowledges and confirms that as of the Closing Date, it has received and
reviewed the terms of the Credit Agreement.

ARTICLE IV

MISCELLANEOUS

SECTION 4.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement.

SECTION 4.02. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any Lender or on its behalf and notwithstanding that the
Administrative Agent, the Collateral Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended under the Credit Agreement, and shall continue in full force
and effect until the Maturity Date.

SECTION 4.03. Binding Effect; Several Agreement. This Agreement shall become
effective as to any Loan Party when a counterpart hereof executed on behalf of
such Loan Party shall have been delivered to the Administrative Agent and the
Collateral Agent and a counterpart hereof shall have been executed on behalf of
the Administrative Agent and the Collateral Agent, and thereafter shall be
binding upon such Loan Party, the Administrative Agent and the Collateral Agent
and their respective permitted successors, indorsees, transferees and assigns,
and shall inure to the benefit of such Loan Party, the Administrative Agent, the
Collateral Agent and the other Secured Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated or permitted by the Security Documents or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Loan Party and may be amended, modified, supplemented, waived or
released with respect to any Loan Party without the approval of any other Loan
Party and without affecting the obligations of any other Loan Party hereunder.

SECTION 4.04. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor, the Administrative Agent or the
Collateral Agent that are contained in this Agreement shall bind and inure to
the benefit of their respective successors and assigns.

 

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SECTION 4.05. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.

SECTION 4.06. Waivers; Amendment.

(a) No failure or delay by the Collateral Agent, the Administrative Agent or any
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver hereof or thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent, the Administrative Agent and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 4.06, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, the Collateral Agent or any Lender may have had notice or
knowledge of such Default at the time. No notice or demand on any Loan Party in
any case shall entitle any Loan Party to any other or further notice or demand
in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Administrative Agent, the Collateral Agent and the Loan Party or Loan
Parties with respect to which such waiver, amendment or modification is to
apply, subject to any consent required in accordance with Section 9.08 of the
Credit Agreement.

SECTION 4.07. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.07.

SECTION 4.08. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

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SECTION 4.09. Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 4.03.
Delivery of an executed signature page to this Agreement by facsimile or other
electronic transmission (including by .pdf, .tif or similar format) shall be as
effective as delivery of a manually signed counterpart of this Agreement.

SECTION 4.10. Headings. Article and Section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.

SECTION 4.11. Jurisdiction; Consent to Service of Process.

(a) Each party hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in the Borough of
Manhattan, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding shall be heard and determined in such New York State
or, to the extent permitted by law, in such federal court sitting in the Borough
of Manhattan, and any appellate court from any thereof. Each of the parties
hereto agrees that 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. Nothing in this Agreement or any other Loan
Document shall affect any right that the Collateral Agent, the Administrative
Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement, any other Loan Document or any Collateral against
any Guarantor or its properties in the courts of any jurisdiction.

(b) Each of the parties hereto hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or federal court sitting in the Borough of
Manhattan, and any appellate court from any thereof. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

(c) Each of the parties hereto hereby irrevocably designates, appoints and
empowers Corporation Service Company (whose current address is: 80 State Street,
Albany, New York 12207-2543, U.S.A.) (including any replacement agent as
provided below, the “Process Agent”), in the case of any suit, action or
proceeding brought in the United States of America as its designee, appointee
and agent to receive, accept and acknowledge for and on its behalf, and in
respect of its property, service of any and all legal process, summons, notices
and documents that may be served in any action or proceeding arising out of or
in connection with this Agreement or any other Loan Document. Such service may
be made by mailing (by registered or certified mail, postage prepaid) or
delivering a copy of such process to such person in care of the Process Agent at
the Process Agent’s above address, and each of the parties hereto hereby
irrevocably authorizes and directs the Process Agent to accept such service on
its behalf. Nothing in this Agreement will affect the right of the
Administrative Agent and the Collateral Agent to serve process in any other
manner permitted by law. Each of the parties hereto agrees that a failure by the
Process Agent for service of process to notify the relevant Guarantor of the
process will not invalidate the proceedings concerned.

 

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SECTION 4.12. Additional Subsidiaries. Each Subsidiary that is required to
become a party to this Agreement pursuant to Section 5.10 of the Credit
Agreement shall become a Guarantor, with the same force and effect as if
originally named as a Guarantor herein, for all purposes of this Guarantee, upon
execution and delivery by the Administrative Agent, the Collateral Agent and
such Subsidiary of a supplement in the form of Exhibit A hereto (the “Guarantor
Supplement”). The execution and delivery of any such instrument shall not
require the consent of any other Loan Party hereunder. The rights and
obligations of each Loan Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Loan Party as a party to this Agreement.

SECTION 4.13. Conflicts. In the event of any conflict between the provisions
contained herein and the provisions contained in the Credit Agreement, the
provisions contained in the Credit Agreement shall control.

SECTION 4.14. Set-Off. If an Event of Default shall have occurred and be
continuing, each Lender may, with the prior written consent of the Required
Lenders and the Administrative Agent (provided that no such consent shall be
required if an Event of Default shall have occurred and be continuing pursuant
to Section 7.01(h) or (i) of the Credit Agreement), at any time and from time to
time, except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Guarantor against any of and all the obligations of
such Guarantor then due and payable, now or hereafter existing under this
Agreement and the other Loan Documents held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
such other Loan Document. The applicable Lender shall endeavor to notify the
relevant Guarantor and the Administrative Agent of such setoff; provided that
the failure to provide such notice shall not affect the validity of such setoff
or application under this Section 4.15. The rights of each Lender under this
Section 4.14 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

SECTION 4.15. Expenses; Indemnification. Each Guarantor as principal obligor and
as a separate and independent obligation and liability from its obligations and
liabilities under Article I agrees to the expense reimbursement and
indemnification provisions of Section 9.05 of the Credit Agreement as if such
provisions were incorporated herein, mutatis mutandis.

SECTION 4.16. English Agreement. The parties hereto confirm that it is their
wish that this Agreement, as well as any other documents relating to this
Agreement, including notices, schedules and authorizations, have been and shall
be drawn up in the English language only, other than that established in
Section 4.17 in relation to the Spanish translation of the Agreement.

SECTION 4.17. Special Provisions on Spanish Enforcement Procedures.

(a) Notarisation and translation.

The Borrowers and the Guarantors undertake to notarise this Agreement (as well
as any amendment or supplemental agreement to it) in a Spanish public deed on
the date falling ten Business Days from the Administrative Agent’s request.

The Borrowers and the Guarantors undertake to provide a Spanish sworn
translation (at their cost) into Spanish this Agreement to the satisfaction of
the Administrative Agent within ten (1) Business Days from the Administrative
Agent’s request.

 

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(b) Accounts of the Administrative Agent and of the Lenders.

(i) For the purposes of enforcing the provisions of, or foreclosing under, this
Agreement pursuant to Spanish law (including, without limitation, the guarantee
provided by each Guarantor), the Administrative Agent, in its capacity as such
(and on behalf of the Lenders), shall open and maintain a special account in its
books on behalf of the Borrowers and/or the Guarantors, from which all interest,
fees, expenses, default interest, additional costs and any other amounts that
the Borrowers and/or the Guarantors owe to the Lenders under the Loan Documents
will be debited and into which all amounts received by or on account of the
Lenders from the Borrowers and/or the Guarantors under the Loan Documents will
be credited, so that the balance of the credit account represents the amount
owed from time to time by the Borrowers and/or the Guarantors to the Lenders
under the Loan Documents.

(ii) In addition to the accounting account referred to in paragraph (i) above,
each Lender shall open and maintain a special account in its records equivalent
to that referred to in paragraph (i) above, into which the interest, fees,
expenses, default interest, additional costs and any other amounts that the
Borrowers and/or the Guarantors owe to the Lender under the Loan Documents will
be debited and into which all amounts received by the Lender from the Borrowers
and/or the Guarantors under the Finance Documents shall be credited, so that the
sum of the balance of the credit account represents the amount owed from time to
time by the Borrowers and/or the Guarantors to the Lender under the Loan
Documents. In the event of assignment of the Loan or any Loan Document, the
assignor will totally or partially cancel the referenced accounts, with
corresponding accounts to be opened by the assignee.

(iii) In the event of any discrepancy between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent corresponding to such matters, the Administrative Agent’s accounts and
records will take precedence in the absence of manifest error.

(c) Determination of outstanding balance.

(i) If any Event of Default occurs and is continuing, the Administrative Agent
will settle the accounts referred to in Sections (a) and (b) above. For the
purposes of enforcement in judicial or extrajudicial proceedings, it is
expressly agreed that the balance of the accounts referred to in Sections (b)(i)
and (b)(ii) above resulting from the certification for that purpose issued by
the Administrative Agent will be deemed a liquid, due and payable amount
enforceable against the Borrowers and/or the Guarantors, provided that it is
evidenced in a notarial document that the settlement was made in the form agreed
by the parties in this agreement as duly formalized under an enforceable
instrument (título ejecutivo) and that the outstanding balance is equivalent to
that recording in the corresponding account of the Borrowers and/or Guarantors
opened in connection with the Credit Agreement.

(ii) The Administrative Agent shall give advance notice to the Parent of the
amount due as a result of the settlement.

(d) Enforcement.

(i) In the event that the Secured Parties decide to commence the ordinary
enforcement proceedings contemplated under articles 517 et seq. of the Spanish
Law 1/2000, of 7 January, on civil procedure, the Parties expressly agree for
the purposes of articles 571 et seq. of the Spanish Law 1/2000, of 7 January, on
civil procedure that the settlement to determine the enforceable due debt (deuda
ejecutivamente reclamable) will be carried out by the Administrative Agent.
Therefore, the following will be sufficient for the commencement of summary
proceedings:

 

  (A) an executory copy (copia autorizada de la escritura matriz con carácter
ejecutivo) of the notarial instrument notarizing this Agreement under a Spanish
public deed or public instrument (póliza mercantile);

 

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  (B) a certificate, issued by the Administrative Agent of the debt for which
the Borrowers and/or the Guarantors are liable, which shall include an extract
of the debit and credit entries and the entries corresponding to the application
of interest that determine the specific balance for which enforcement is
requested;

 

  (C) the document evidencing (documento fehaciente) that the settlement of the
debt has been carried out in the form agreed in this Agreement; and

 

  (D) a certified document evidencing the service of prior notice to the
Borrowers (on behalf of all Guarantors) of the amount due as a result of the
settlement.

(ii) All taxes, expenses and duties that accrue or incurred by reason of the
notarial instruments referred to in this Section 4.17 will be satisfied by the
Borrowers and the Guarantors.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

This document has been executed as a deed by Claire’s (Gibraltar) Intermediate
Holdings Limited and is delivered and takes effect on the date stated at the
beginning of it.

 

EXECUTED and DELIVERED as a DEED by CLAIRE’S (GIBRALTAR) INTERMEDIATE HOLDINGS
LIMITED acting by:                     )

  )     )     )    

 

  Name:  

 

 

Director

  in the presence of   Signature of witness   Name of witness   Address of
witness   Occupation of witness

 

[Signature Page to Guarantee Agreement]

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CLAIRE’S GERMANY GMBH By:  

 

Name:   Title:   CLAIRE’S HOLDINGS S.À R.L. By:  

 

Name:   Title:   CLAIRE’S HOLDINGS GMBH By:  

 

Name:   Title:   CLAIRE’S EUROPEAN SERVICES LIMITED By:  

 

Name:   Title:   CLAIRE’S EUROPEAN DISTRIBUTION LIMITED By:  

 

Name:   Title:   CLAIRE’S LUXEMBOURG S.A R.L. By:  

 

Name:   Title:   CLAIRE’S ACCESSORIES UK LTD. By:  

 

Name:   Title:  

 

[Signature Page to Guarantee Agreement]

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CLAIRE’S SWITZERLAND GMBH By:  

 

Name:   Title:   CLAIRE’S ACCESSORIES SPAIN, S.L. By:  

 

Name:   Title:   CLAIRE’S FRANCE S.A.S. By:  

 

Name:   Title:   CSI LUXEMBOURG S.A R.L. By:  

 

Name:   Title:   CLAIRE’S FASHION PROPERTY CORP. By:  

 

Name:   Title:  

 

[Signature Page to Guarantee Agreement]

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BOTTICELLI LLC,

as Administrative Agent

By:  

 

Name:   Title:  

CORTLAND CAPITAL MARKET SERVICES LLC,

as Administrative Agent

By:  

 

Name:   Title:  

 

[Signature Page to Guarantee Agreement]

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Exhibit A to

the Guarantee

SUPPLEMENT NO.     , dated as of [●], 20[●], to the Guarantee dated as of
January 5, 2017 (the “Guarantee”), among CLAIRE’S (GIBRALTAR) INTERMEDIATE
HOLDINGS LIMITED (“Holdings”) and CLAIRE’S GERMANY GMBH (together with Holdings,
each, a “Borrower” and collectively, the “Borrowers”), each of the Subsidiaries
listed on the signature pages thereto or that becomes a party thereto pursuant
to Section 4.12 thereof (each a “Subsidiary Guarantor” and, collectively, the
“Subsidiary Guarantors”; the Subsidiary Guarantors and each Borrower (in its
capacity as a Guarantor thereunder) are referred to collectively as the
“Guarantors”), BOTTICELLI LLC, as administrative agent for the Lenders (in such
capacity, including any successor thereto, the “Administrative Agent”), and
CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent for the Secured
Parties (in such capacity, including any successor thereto, the “Collateral
Agent”).

A. Reference is made to the Credit Agreement, dated as of January 5, 2017 (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among the Borrowers, the lenders from
time to time party thereto (the “Lenders”), the Administrative Agent and the
Collateral Agent.

B. Capitalized terms used herein (including in this preamble) and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement or the Guarantee, as applicable.

C. The Guarantors have entered into the Guarantee in order to induce the Lenders
to make the Loans. Section 4.12 of the Guarantee provides that additional
Subsidiaries shall become Guarantors under the Guarantee by execution and
delivery of an instrument in the form of this Supplement. The undersigned
Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance
with the requirements of the Credit Agreement and the Guarantee to become a
Guarantor under the Guarantee in order to induce the Lenders to make additional
Loans and as consideration for Loans previously made.

Accordingly, the Administrative Agent, the Collateral Agent and the New
Subsidiary agree as follows:

SECTION 1. In accordance with Section 4.12 of the Guarantee, the New Subsidiary
by its signature below becomes a Guarantor under the Guarantee with the same
force and effect as if originally named therein as a Guarantor and the New
Subsidiary hereby agrees to all the terms and provisions of the Guarantee
applicable to it as a Guarantor. Each reference to a “Subsidiary Guarantor” or
“Guarantor” in the Guarantee shall be deemed to include the New Subsidiary. The
Guarantee is hereby incorporated herein by reference.

SECTION 2. The New Subsidiary represents and warrants to the Administrative
Agent, the Collateral Agent and each Lender that the representations set forth
in Article III of the Credit Agreement are, with respect to the New Subsidiary,
true and correct in all material respects (without duplication of materiality
qualifiers contained therein) on and as of the date hereof, except to the extent
such representations and warranties expressly relate to an earlier date, in
which case they are true and correct in all material respects (without
duplication of materiality qualifiers contained therein) as of such earlier
date. The New Subsidiary hereby acknowledges and confirms that as of the date
hereof, it has received and reviewed the terms of the Credit Agreement.

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together

 

A-1

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shall constitute a single contract. This Supplement shall become effective when
the Administrative Agent and the Collateral Agent shall have received
counterparts of this Supplement, when taken together, bears the signatures of
the New Subsidiary, the Administrative Agent and the Collateral Agent. Delivery
of an executed signature page to this Supplement by facsimile or other
electronic transmission (including by .pdf, .tif or similar format) shall be as
effective as delivery of a manually signed counterpart of this Supplement.

SECTION 4. The New Subsidiary hereby represents and warrants that as of the date
hereof set forth under its signature hereto, is the true and correct legal name
of the New Subsidiary, its jurisdiction of formation and the location of its
chief executive office.

SECTION 5. Except as expressly supplemented hereby, the Guarantee shall remain
in full force and effect.

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 4.01 of the Guarantee.

SECTION 9. The New Subsidiary agrees to reimburse the Administrative Agent and
the Collateral Agent in accordance with Section 9.05(a) of the Credit Agreement.

[SECTION 10. Section 1.10 of the Guarantee is hereby supplemented and deemed to
include the following provisions applicable to Guarantors organized in [NAME OF
APPLICABLE JURISDICTION]:

[PLACEHOLDER FOR APPLICABLE LIMITATION LANGUAGE]]

 

A-2

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IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Guarantee as of the day and year first above
written.

 

[NAME OF NEW SUBSIDIARY] By  

 

Name:   Title:   Legal Name: Jurisdiction of Formation: Location of Chief
Executive Office: BOTTICELLI LLC,
as Administrative Agent By  

 

Name:   Title:   CORTLAND CAPITAL MARKET SERVICES LLC,
as Collateral Agent By  

 

Name:   Title:  

 

A-3

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Exhibit B-2

Exhibit B-2

Form of Security Agreement

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EXECUTION COPY

 

 

 

SECURITY AGREEMENT

dated as of

January 5, 2017

among

the Grantors from time to time party hereto,

and

CORTLAND CAPITAL MARKET SERVICES LLC, as Collateral Agent

 

 

 

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TABLE OF CONTENTS

 

         Page   ARTICLE I    DEFINITIONS   

SECTION 1.01

 

Credit Agreement

     1   

SECTION 1.02

 

Other Defined Terms

     1    ARTICLE II   

SECTION 2.01

 

Grantor Intent

     4    ARTICLE III    PLEDGE OF SECURITIES   

SECTION 3.01

 

Pledged Collateral

     4   

SECTION 3.02

 

Delivery of the Pledged Collateral

     5   

SECTION 3.03

 

Representations, Warranties and Covenants

     5   

SECTION 3.04

 

Certification of Limited Liability Company Interests and Limited Partnership
Interests

     7   

SECTION 3.05

 

Registration in Nominee Name; Denominations

     7   

SECTION 3.06

 

Voting Rights; Dividends and Interest, Etc.

     7    ARTICLE IV    SECURITY INTERESTS IN PERSONAL PROPERTY   

SECTION 4.01

 

Security Interest

     9   

SECTION 4.02

 

Representations and Warranties

     11   

SECTION 4.03

 

Covenants

     12    ARTICLE V    REMEDIES   

SECTION 5.01

 

Remedies upon Default

     13   

SECTION 5.02

 

Application of Proceeds

     14   

SECTION 5.03

 

Grant of License to Use Intellectual Property; Assignment of Licensed
Intellectual Property to Collateral Agent

     15    ARTICLE VI    MISCELLANEOUS   

SECTION 6.01

 

Notices

     15   

SECTION 6.02

 

Security Interest Absolute

     15   

 

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         Page  

SECTION 6.03

 

Survival of Agreement

     16   

SECTION 6.04

 

Binding Effect; Several Agreement

     16   

SECTION 6.05

 

Successors and Assigns

     16   

SECTION 6.06

 

Collateral Agent’s Fees and Expenses; Indemnification

     16   

SECTION 6.07

 

Collateral Agent Appointed Attorney-in-Fact

     16   

SECTION 6.08

 

Applicable Law

     17   

SECTION 6.09

 

Waivers; Amendment

     17   

SECTION 6.10

 

Waiver of Jury Trial

     18   

SECTION 6.11

 

Severability

     18   

SECTION 6.12

 

Counterparts

     18   

SECTION 6.13

 

Headings

     18   

SECTION 6.14

 

Jurisdiction; Consent to Service of Process

     18   

SECTION 6.15

 

Release

     19   

SECTION 6.16

 

Additional Grantors

     20   

SECTION 6.17

 

Conflicts

     20   

SECTION 6.18

 

Limitations

     20   

 

Schedules

 

Schedule I

 

Pledged Equity Interests

Schedule II

 

Pledged Debt Securities

Schedule III

 

Intellectual Property

Schedule IV

 

Commercial Tort Claims

Schedule V

 

Grantor Name; Jurisdiction

Exhibits

 

Exhibit A

 

Form of Supplement

Exhibit B

 

Form of Trademark Security Agreement

Exhibit C

 

Form of Patent Security Agreement

Exhibit D

 

Form of Copyright Security Agreement

 

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SECURITY AGREEMENT dated as of January 5, 2017 (this “Agreement”), among
CLAIRE’S (GIBRALTAR) INTERMEDIATE HOLDINGS LIMITED (“Holdings”) and CLAIRE’S
GERMANY GMBH (together with Holdings, each, a “Borrower” and collectively, the
“Borrowers”), each of the Subsidiaries listed on the signature pages hereto or
that becomes a party hereto pursuant to Section 6.16 of this Agreement (together
with the Borrowers (each in its capacity hereunder), each a “Grantor” and,
collectively, the “Grantors”) and CORTLAND CAPITAL MARKET SERVICES LLC, as
collateral agent (in such capacity, including any successor thereto, the
“Collateral Agent”) for the Secured Parties.

PRELIMINARY STATEMENT

Reference is made to the Credit Agreement, dated as of the date hereof (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among the Borrowers, the lenders from
time to time party thereto (the “Lenders”), Boticelli, L.L.C., as administrative
agent (the “Administrative Agent”) and a Lender, and the Collateral Agent.

The Lenders have agreed to extend credit to the Borrowers pursuant to, and upon
the terms and conditions specified in, the Credit Agreement. Each Grantor is an
affiliate of the Borrowers, will derive substantial benefits from the extension
of credit to the Borrowers pursuant to the Credit Agreement and is willing to
execute and deliver this Agreement in order to induce the Lenders to extend such
credit. Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01    Credit Agreement.

(a)    All capitalized terms defined in the New York UCC (as such term is
defined herein) and not defined in this Agreement have the meanings specified
therein (and if defined in more than one Article of the New York UCC, such terms
shall have the meaning specified in Article 8 or 9 of the New York UCC). All
other capitalized terms used in this Agreement and not otherwise defined herein
have the meanings set forth in the Credit Agreement. Unless otherwise noted in
this Agreement, all references to the Uniform Commercial Code shall mean the New
York UCC.

(b)    The rules of construction specified in Section 1.02 of the Credit
Agreement also apply to this Agreement.

SECTION 1.02    Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Accounts Receivable” shall mean all Accounts and all right, title and interest
in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.

“Additional Grantor” shall mean any Subsidiary that becomes a party to this
Agreement as an Additional Grantor after the Closing Date.

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“Administrative Agent” shall have the meaning assigned to such term in the
preliminary statement.

“Agreement” shall have the meaning assigned to such term in the preamble.

“Borrowers” shall have the meaning assigned to such term in the preamble.

“Collateral” shall mean the Personal Property Collateral and the Pledged
Collateral.

“Collateral Agent” shall have the meaning assigned to such term in the preamble.

“Copyright” shall mean all of the following now owned or hereafter acquired by
any Grantor: (a) all copyrights in any work, whether as author, assignee, or
transferee, and (b) all registrations and applications for registration of any
such copyright, including registrations, recordings, supplemental registrations
and pending applications for registration, including those copyright
registrations listed on Schedule III attached hereto.

“Copyright License” shall mean any written agreement, now or hereafter in
effect, granting any right to any third Person under any Copyright now or
hereafter owned by any Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any copyright now or
hereafter owned by any third Person, and all rights of such Grantor under any
such agreement.

“Copyright Security Agreement” shall mean an agreement substantially in the form
annexed hereto as Exhibit D.

“Credit Agreement” shall have the meaning assigned to such term in the
preliminary statement.

“Enforcement Event” shall mean any Event of Default has occurred and is
continuing.

“Excluded Collateral” shall mean any Collateral to the extent the granting or
pledge thereof would not be required pursuant to the Agreed Security.

“Federal Securities Laws” shall have the meaning assigned to such term in
Section 5.04.

“General Intangibles” shall mean (i) all “general intangibles” (as such term is
defined in the New York UCC), including “payment intangibles” (as such term is
defined in the New York UCC) and (ii) all rights and interests in partnerships,
limited partnerships, limited liability companies and other unincorporated
entities, indemnification claims, contract rights (including rights under
leases, whether entered into as lessor or lessee, Swap Agreements, Licenses and
other agreements), Intellectual Property, “software” (as such term is defined in
the New York UCC), goodwill, registrations, franchises, tax refund claims and
any guarantee, claim, security interest or other security held by or granted to
any Grantor to secure payment by an Account Debtor of any of the Accounts.

“Grantors” shall have the meaning assigned to such term in the preamble.

“Intellectual Property” shall mean all intellectual property of every kind and
nature now owned or hereafter acquired by any Grantor, including inventions,
designs, Patents, Copyrights, Trademarks, internet domain names, trade secrets,
confidential or proprietary technical and business information, know-how or
other data, software and databases.

 

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“Lenders” shall have the meaning assigned to such term in the preliminary
statement.

“License” shall mean any Patent License, Trademark License or Copyright License
to which any Grantor is a party, including those material inbound exclusive
licenses in third party owned Copyrights listed on Schedule III attached hereto.

“New York UCC” shall mean the Uniform Commercial Code as from time to time in
effect in the State of New York.

“Patent” shall mean all of the following now owned or hereafter acquired by any
Grantor: (a) all patents, and all applications for patents, including issued
patents and pending applications, including those patents and patent
applications listed on Schedule III attached hereto, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof.

“Patent License” shall mean any written agreement, now or hereafter in effect,
granting to any third Person any right to make, use or sell any invention
claimed in a Patent now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, or granting to any Grantor any right to
make, use or sell any invention claimed in a Patent now or hereafter owned by
any third Person, and all rights of any Grantor under any such agreement.

“Patent Security Agreement” shall mean an agreement substantially in the form
annexed hereto as Exhibit D.

“Personal Property Collateral” shall have the meaning assigned to such term in
Section 4.01.

“Pledged Collateral” shall have the meaning assigned to such term in
Section 3.01.

“Pledged Debt Securities” shall have the meaning assigned to such term in
Section 3.01.

“Pledged Equity Interests” shall have the meaning assigned to such term in
Section 3.01.

“Pledged Securities” shall mean any promissory notes, stock certificates or
other securities now or hereafter included in the Pledged Collateral, including
all certificates, instruments or other documents representing or evidencing any
Pledged Collateral.

“Registered Intellectual Property” shall mean Copyrights, Patents and Trademarks
issued by, registered with, renewed by or the subject of a pending application
before the United States Patent and Trademark Office, the United States
Copyright Office, the Office for Harmonization in the Internal Market (European
Community Trademarks), the World Intellectual Property Organization (Madrid
Protocol Trademarks) or the Swiss Federal Institute of Intellectual Property.

“Security Interest” shall have the meaning assigned to such term in
Section 4.01.

“Trademark License” shall mean any written agreement, now or hereafter in
effect, granting to any third Person any right to use any trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third Person, and all rights of any Grantor under any
such agreement.

“Trademark Security Agreement” shall mean an agreement substantially in the form
annexed hereto as Exhibit B.

 

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“Trademarks” shall mean all of the following now owned or hereafter acquired by
any Grantor: (a) trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, and other source or business identifiers, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, and all
extensions or renewals thereof, including those trademark applications and
registrations listed on Schedule III attached hereto, and (b) all goodwill
associated therewith or symbolized thereby.

ARTICLE II

SECTION 2.01    Grantor Intent. Subject to Section 6.15, each Grantor expressly
confirms that it intends that this Agreement shall extend from time to time to
any (however fundamental) variation, supplement, increase, extension or addition
of or to this Agreement and/or any amount secured by this Agreement.

ARTICLE III

PLEDGE OF SECURITIES

SECTION 3.01    Pledged Collateral. As security for the payment or performance,
as the case may be, in full of the Obligations, each Grantor hereby assigns and
pledges to the Collateral Agent, for the benefit of the Secured Parties, and
hereby grants to the Collateral Agent, for the benefit of the Secured Parties, a
Security Interest in, all of such Grantor’s right, title and interest in, to and
under:

(a)    all Equity Interests owned by such Grantor on the date hereof (including
all such Equity Interests listed on Schedule I attached hereto) and all other
Equity Interests obtained in the future by such Grantor and any certificates
representing all such Equity Interests (collectively referred to herein as the
“Pledged Equity Interests”); provided that the Pledged Equity Interests shall
not include any Equity Interests to the extent a pledge of such Equity Interests
would not comply with the Agreed Security Principles in the reasonable judgment
of the Collateral Agent;

(b)    (i) all debt securities and Indebtedness (including intercompany
Indebtedness) issued to or held by such Grantor on the date hereof including any
Indebtedness represented by an instrument or other transferable document listed
on Schedule II attached hereto, (ii) all other debt securities and Indebtedness
in the future issued to or held by such Grantor and (iii) the promissory notes
and any other instruments evidencing such debt securities or Indebtedness
(collectively referred to herein as the “Pledged Debt Securities”);

(c)    all payments of principal or interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of, in exchange for or upon the conversion of, and all other Proceeds
received in respect of, the securities referred to in clauses (a) and (b) above;

(d)    all rights and privileges of such Grantor with respect to the securities
and other property referred to in clauses (a), (b) and (c) above; and

(e)    all Proceeds of any of the foregoing (the items referred to in clauses
(a) through this clause (e) being collectively referred to as the “Pledged
Collateral”).

 

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SECTION 3.02    Delivery of the Pledged Collateral.

(a)    Each Grantor, in each case, subject to the Agreed Security Principles,
(i) has delivered (A) all certificates, if any, representing the Pledged Equity
Interests constituting securities issued to or held by such Grantor on the
Closing Date and (B) all instruments or other transferable documents, if any,
representing (x) any Indebtedness for borrowed money (other than intercompany
loans referred to in clause (y) below) and (y) any intercompany loans (other
than any short-term intercompany current liabilities incurred in the ordinary
course of business in connection with the cash management operations of Holdings
and the Subsidiaries), to the Collateral Agent, together with duly executed
undated blank membership interest, stock or note powers, as applicable, or other
equivalent instruments of transfer reasonably acceptable to the Collateral Agent
and (ii) with respect to (A) any certificates representing the Pledged Equity
Interests constituting securities issued to or held by such Grantor acquired
after the Closing Date and (B) any instruments or other transferable documents
representing (x) any Indebtedness for borrowed money (other than intercompany
loans referred to in clause (y) below) acquired after the Closing Date and
(y) any intercompany loans (other than any short-term intercompany current
liabilities incurred in the ordinary course of business in connection with the
cash management operations of Holdings and the Subsidiaries) owed to such
Grantor, agrees, within 30 days (as such date may be extended by the Collateral
Agent acting reasonably) of receipt thereof, to deliver or cause to be delivered
to the Collateral Agent any and all such certificates, instruments or other
transferable documents.

(b)    Each Grantor will cause (i) any Indebtedness for borrowed money (other
than intercompany loans referred to in clause (ii) below) having an aggregate
outstanding principal amount in excess of €5,000,000 owed to such Grantor by any
Person and (ii) any intercompany loans (other than any short-term intercompany
current liabilities incurred in the ordinary course of business in connection
with the cash management operations of Holdings and the Subsidiaries) owed to
such Grantor, in each case, to be evidenced by a duly executed promissory note
(or pursuant to a global note) that is pledged and delivered to the Collateral
Agent, for the benefit of the Secured Parties, pursuant to the terms hereof.

(c)    Upon delivery to the Collateral Agent, (i) any certificate, instrument or
document representing or evidencing Pledged Securities shall be accompanied by
undated membership interest, stock or note powers, as applicable, duly executed
in blank or other undated instruments of transfer reasonably satisfactory to the
Collateral Agent and duly executed in blank and by such other instruments and
documents as the Collateral Agent may reasonably request to perfect (including
to achieve priority) the Security Interest in such Pledged Securities under
applicable law and (ii) all other property comprising part of the Pledged
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Grantor and such other instruments or documents as
the Collateral Agent may reasonably request to perfect (including to achieve
priority) the Security Interest in such property under applicable law. If
reasonably requested by the Collateral Agent, each delivery of a certificate,
instrument or document representing or evidencing Pledged Securities shall be
accompanied by a schedule describing the securities, which schedule shall be
attached as a supplement to Schedule I or II, as applicable, and made a part
hereof; provided that failure to attach any such schedule hereto shall not
affect the validity of the pledge of such Pledged Securities. Each schedule so
delivered shall supplement any prior schedules so delivered. Without limiting
the foregoing, each Grantor hereby authorizes the Collateral Agent to supplement
this Agreement by supplementing Schedules I and II hereto to identify
specifically any Pledged Collateral of a Grantor; provided that failure to
attach any such schedule hereto shall not affect the validity of the security
interest in any such Pledged Collateral.

SECTION 3.03    Representations, Warranties and Covenants. The Grantors jointly
and severally represent, warrant and covenant to and with the Collateral Agent,
for the benefit of the Secured Parties, that:

(a)    as of the Closing Date, Schedules I and II correctly set forth, (i) in
the case of Equity Interests, the percentage of the issued and outstanding
shares of each class of the Equity Interests of the issuer thereof represented
by such Pledged Equity Interests and (ii) include all Equity Interests, debt
securities and promissory notes required to be pledged hereunder;

 

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(b)    the Pledged Equity Interests and Pledged Debt Securities issued by each
Grantor or any of its Subsidiaries have been duly authorized and validly issued
and, in the case of Pledged Equity Interests, are fully paid and non-assessable
(to the extent applicable);

(c)    as of the Closing Date, except for the security interests granted
hereunder, each Grantor (i) is the direct owner, beneficially and of record, of
the Pledged Securities indicated on Schedules I and II as owned by such Grantor
and (ii) holds the same free and clear of all Liens, other than Permitted Liens;

(d)    except for restrictions and limitations imposed by the Loan Documents or
securities laws generally, or except as otherwise permitted under the Credit
Agreement or any other Loan Document, the Pledged Collateral is and will
continue to be freely transferable and assignable, and none of the Pledged
Collateral is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any nature that might prohibit, impair, delay or otherwise adversely affect
the pledge of such Pledged Collateral hereunder, the sale or disposition thereof
pursuant hereto or the exercise by the Collateral Agent of rights and remedies
hereunder;

(e)    each Grantor (i) has good and valid rights in the Pledged Collateral with
respect to which it has purported to grant a Security Interest hereunder and the
power and authority to pledge the Pledged Collateral pledged by it hereunder in
the manner hereby done or contemplated;

(f)    no consent or approval of any Governmental Authority, any securities
exchange or any other Person was or is necessary to the validity of the pledge
effected hereby (except as may be required in connection with such disposition
of Pledged Securities by laws affecting the offering and sale of securities
generally and other than such as have been obtained and are in full force and
effect);

(g)    by virtue of the execution and delivery by each Grantor of this
Agreement, when any certificates, instruments or other transferable documents
representing Pledged Securities are delivered to the Collateral Agent in
accordance with this Agreement and, in the case of Pledged Securities not
represented by any certificate, instrument or other transferable document,
financing statements covering such Pledged Securities are filed in the
appropriate filing offices, the Collateral Agent will obtain a legal, valid and
perfected lien upon, and security interest in, such Pledged Securities, as
security for the payment and performance of the Obligations;

(h)    if any Pledged Equity Interests now or hereafter acquired by any Grantor
constitute uncertificated securities and are issued to such Grantor or its
nominee directly by the issuer thereof, such Grantor shall promptly notify the
Collateral Agent thereof, and at the Collateral Agent’s reasonable request,
pursuant to an agreement or acknowledgement of such issuer in form and substance
reasonably satisfactory to the Collateral Agent, either, at such Grantor’s
option, (i) cause the issuer to agree to comply with instructions from the
Collateral Agent as to such Pledged Equity Interests, without further consent of
any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become
the registered owner of such Pledged Equity Interests; and

 

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(i)    if any issuer of any of such Grantor’s Pledged Equity Interest is
organized under a jurisdiction outside of the United States and such issuer is a
Loan Party, such Grantor shall, subject to the Agreed Security Principles, take
such additional actions reasonably requested by the Collateral Agent, including,
without limitation, causing the issuer to register the pledge on its books and
records or making such filings or recordings, in each case as may be necessary
or advisable, under the laws of such issuer’s jurisdiction to ensure the
validity, perfection and priority of the security interest of the Collateral
Agent therein.

SECTION 3.04    Certification of Limited Liability Company Interests and Limited
Partnership Interests.

(a)    Each Grantor acknowledges and agrees that each interest in any United
States limited liability company or limited partnership which is a Subsidiary
and pledged hereunder and represented by a certificate (i) shall be a “security”
within the meaning of Article 8 of the New York UCC and shall be governed by
Article 8 of the Uniform Commercial Code of any applicable jurisdiction and
(ii) shall at all times hereafter be represented by a certificate that is
delivered to the Collateral Agent pursuant to the terms hereof.

(b)    Each Grantor further acknowledges and agrees that (i) each interest in
any United States limited liability company or limited partnership which is a
Subsidiary and pledged hereunder and not represented by a certificate shall not
be a “security” within the meaning of Article 8 of the New York UCC and shall
not be governed by Article 8 of the Uniform Commercial Code of any applicable
jurisdiction, and (ii) such Grantor shall at no time elect to treat any such
interest as a “security” within the meaning of Article 8 of the New York UCC or
issue any certificate representing such interest, unless such Grantor delivers
any such certificate to the Collateral Agent pursuant to the terms hereof.

SECTION 3.05    Registration in Nominee Name; Denominations. The Collateral
Agent, on behalf of the Secured Parties, shall hold the Pledged Securities in
the name of the applicable Grantor, endorsed or assigned in blank or in favor of
the Collateral Agent, but following the occurrence and during the continuance of
an Event of Default, shall have the right (in its sole and absolute discretion),
to hold the Pledged Securities in its own name as pledgee, or in the name of its
nominee (as pledgee or as sub-agent).    Following the occurrence and during the
continuance of an Event of Default, (i) each Grantor will promptly give to the
Collateral Agent copies of any material written notices or other material
written communications received by it with respect to Pledged Securities in its
capacity as the registered owner thereof and (ii) the Collateral Agent shall,
upon a reasonable request, have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.

SECTION 3.06    Voting Rights; Dividends and Interest, Etc.

(a)    Unless and until an Event of Default shall have occurred and be
continuing:

(i)    each Grantor shall be entitled to exercise any and all voting and/or
other consensual rights and powers inuring to an owner of Pledged Collateral or
any part thereof for any purpose consistent with the terms of this Agreement,
the Credit Agreement and the other Loan Documents; provided that, except as
permitted under the Credit Agreement, such rights and powers shall not be
exercised in any manner that could materially and adversely affect the rights
inuring to a holder of any Pledged Securities, the rights and remedies of the
Collateral Agent under this Agreement, the Credit Agreement or any other Loan
Documents.

 

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(ii)    the Collateral Agent shall execute and deliver to each Grantor, or cause
to be reasonably promptly executed and delivered to each Grantor, all such
proxies, powers of attorney and other instruments as such Grantor may reasonably
request for the purpose of enabling such Grantor to exercise the voting and/or
consensual rights and powers it is entitled to exercise pursuant to paragraph
(i) above.

(iii)    each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Collateral to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable laws; provided,
however, that any non-cash dividends, interest, principal or other distributions
that would constitute Pledged Collateral, whether resulting from a subdivision,
combination or reclassification of the outstanding Equity Interests of the
issuer of any Pledged Collateral or received in exchange for Pledged Collateral
or any part thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such issuer may
be a party or otherwise, shall be and become part of the Pledged Collateral,
and, if received by any Grantor, shall not be commingled by such Grantor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Collateral Agent for
the benefit of the Secured Parties, and, shall be forthwith delivered to the
Collateral Agent in the same form as so received (with any necessary endorsement
or instrument of assignment in accordance with Section 3.02(a); it being
understood that no Grantor shall be required to deliver possession of any
uncertificated Pledged Equity Interests to the Collateral Agent).

(b)    Upon the occurrence and during the continuance of an Event of Default,
all rights of any Grantor to dividends, interest, principal or other
distributions that such Grantor is authorized to receive pursuant to paragraph
(a)(iii) of this Section 3.06 shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to receive and retain such dividends, interest, principal or
other distributions. All dividends, interest, principal or other distributions
received by any Grantor contrary to the provisions of this Section 3.06 shall be
held in trust for the benefit of the Collateral Agent, shall be segregated from
other property or funds of such Grantor and shall be promptly delivered to the
Collateral Agent upon demand in the same form as so received (with any necessary
endorsement or instrument of assignment). Any and all money and other property
paid over to or received by the Collateral Agent pursuant to the provisions of
this paragraph (b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 5.02. After
all Events of Default have been cured or waived and the Borrowers have delivered
to the Administrative Agent a certificate to that effect, the Collateral Agent
shall, promptly after all such Events of Default have been cured or waived,
repay to each applicable Grantor (without interest) all dividends, interest,
principal or other distributions that such Grantor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and
that remain in such account.

(c)    Upon the occurrence and during the continuance of an Event of Default,
(i) all rights of any Grantor to exercise the voting and consensual rights and
powers it is entitled to exercise pursuant to paragraph (a)(i) of this
Section 3.06, and the obligations of the Collateral Agent under paragraph
(a)(ii) of this Section 3.06, shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to exercise such voting and consensual rights and powers;
provided that, unless otherwise directed by the Required Lenders, the Collateral
Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Grantors to exercise such
rights and (ii) each Grantor agrees to, upon the request of the Collateral
Agent, grant the Collateral Agent a proxy, and such other documents as may be
necessary to allow the Collateral Agent to exercise such voting and consensual
rights and powers.

 

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ARTICLE IV

SECURITY INTERESTS IN PERSONAL PROPERTY

SECTION 4.01    Security Interest.

(a)    As security for the payment or performance, as the case may be, in full
of the Obligations, each Grantor hereby pledges to the Collateral Agent, for the
benefit of the Secured Parties, and hereby grants to the Collateral Agent, for
the benefit of the Secured Parties, a security interest (the “Security
Interest”) in all right, title or interest in, or to, any and all of the
following assets and properties now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Personal Property
Collateral”):

(i)    all Accounts;

(ii)    all Chattel Paper;

(iii)    all money;

(iv)    all Commercial Tort Claims identified on Schedule IV attached hereto, as
such schedule may be updated from time to time;

(v)    all Documents;

(vi)    all Equipment and Fixtures;

(vii)    all General Intangibles;

(viii)    all Goods;

(ix)    all Instruments;

(x)    all Inventory;

(xi)    all Investment Property;

(xii)    all Letter-of-Credit Rights;

(xiii)    all books and records pertaining to the Personal Property Collateral;
and

(xiv)    all Proceeds and products of any and all of the foregoing, all
Supporting Obligations and all collateral security and guarantees given by any
Person with respect to any of the foregoing.

Notwithstanding anything herein to the contrary, in no event shall the
Collateral (whether the Personal Property Collateral or the Pledged Collateral)
include, and no Grantor shall be deemed to

 

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have assigned, pledged or granted a Security Interest in, any of such Grantor’s
right, title or interest in any Excluded Collateral; provided that Excluded
Collateral shall not include any Proceeds, substitutions or replacements of any
Excluded Collateral unless such Proceeds, substitutions or replacements would
constitute Excluded Collateral.

(b)    Each Grantor hereby irrevocably authorizes the Collateral Agent at any
time and from time to time to file in any relevant jurisdiction any initial
financing statements (it being understood and agreed that with respect to
fixtures, the Collateral Agent shall be authorized to file or record financing
statements only in the jurisdiction of organization of a Grantor, except in
connection with a Mortgage) with respect to the Personal Property Collateral or
any part thereof and amendments thereto that (i) indicate the Personal Property
Collateral as “all assets” of such Grantor, whether now owned or hereafter
acquired, or words of similar effect, and (ii) contain the information required
by Article 9 of the Uniform Commercial Code, or its equivalent, if applicable,
in each applicable jurisdiction, for the filing of any financing statement or
amendment, including (A) whether such Grantor is an organization, the type of
organization and any, if required in such jurisdiction, organizational
identification number issued to such Grantor and (B) in the case of a financing
statement filed as a fixture filing, a sufficient description of the real
property to which such Personal Property Collateral relates. Each Grantor agrees
to provide such information to the Collateral Agent promptly upon reasonable
request.

The Collateral Agent is further authorized to file with the United States Patent
and Trademark Office, the United States Copyright Office, the Office for
Harmonization in the Internal Market (European Community Trademarks), the World
Intellectual Property Organization (Madrid Protocol Trademarks) or the Swiss
Federal Institute of Intellectual Property (or, in each case, any successor
office) such documents as may be necessary or advisable for the purpose of
perfecting, confirming, continuing, enforcing or protecting the Security
Interest granted by each Grantor in any Registered Intellectual Property
included in the Personal Property Collateral and naming such Grantor or the
Grantors as debtors and the Collateral Agent as secured party.

(c)    The Security Interest is granted as security only and shall not subject
the Collateral Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Personal Property Collateral.

(d)    Notwithstanding anything herein to the contrary, (i) each Grantor shall
remain liable for all obligations under the Collateral and nothing contained
herein is intended or shall be a delegation of duties to the Collateral Agent or
any other Secured Party, (ii) each Grantor shall remain liable under each of the
agreements included in the Collateral, including, without limitation, any
agreements relating to Pledged Equity Interests constituting partnership
interests or limited liability company interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof and neither the Collateral Agent nor any
Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related thereto nor shall the Collateral Agent nor any Secured Party have any
obligation to make any inquiry as to the nature or sufficiency of any payment
received by it or have any obligation to take any action to collect or enforce
any rights under any agreement included in the Collateral, including, without
limitation, any agreements relating to Pledged Equity Interests constituting
partnership interests or limited liability company interests, and (iii) the
exercise by the Collateral Agent of any of its rights hereunder shall not
release any Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral.

 

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SECTION 4.02    Representations and Warranties. The Grantors jointly and
severally represent and warrant to the Collateral Agent and the Secured Parties
that:

(a)    Each Grantor has good and valid rights in the Personal Property
Collateral that is material to the conduct of its business with respect to which
it has purported to grant a Security Interest hereunder and has full power and
authority to grant to the Collateral Agent, for the benefit of the Secured
Parties, the Security Interest in such Personal Property Collateral pursuant
hereto and to execute, deliver and perform its obligations in accordance with
the terms of this Agreement, without the consent or approval of any other person
other than any consent or approval that has been obtained.

(b)    Schedule V correctly sets forth the exact legal name of each Grantor and
its jurisdiction of organization as of the Closing Date.

(c)    The Security Interest constitutes a legal, valid and enforceable security
interest in favor of the Collateral Agent for the benefit of the Secured Parties
in all Personal Property Collateral (with respect to Personal Property
Collateral consisting of Equity Interests of Non-U.S. Subsidiaries, to the
extent a security interest therein can be created under the New York UCC)
securing the payment and performance of the Obligations, subject to the effects
of bankruptcy, insolvency or similar laws affecting creditors’ rights generally
and general equitable principles. The Security Interest will constitute a valid
and perfected security interest in all Personal Property Collateral (to the
extent perfection may be obtained by the filings and other actions described in
clause (i), (ii) or (iii) below) in favor of the Collateral Agent for the
benefit of the Secured Parties, upon (i) with respect to Collateral in which a
security interest may be perfected by filing a financing statement in the United
States or any jurisdiction thereof pursuant to the Uniform Commercial Code in
the relevant jurisdiction, the filing in the applicable filing offices of
financing statements naming the applicable Grantor as “debtor” and the
Collateral Agent as “secured party” and describing the Collateral, (ii) with
respect to Instruments, Chattel Paper, Pledged Securities and negotiable
Documents in which a security interest may be perfected by possession by the
Collateral Agent, delivery to the Collateral Agent of all such Instruments,
Chattel Paper, Pledged Securities and negotiable Documents in each case,
accompanied by a stock power, note power or otherwise properly endorsed for
transfer in blank and (iii) with respect to Registered Intellectual Property,
the recording of a fully executed short-form agreement substantially in the form
of Exhibit B, C or D, as applicable, with the United States Patent and Trademark
Office, the Office for Harmonization in the Internal Market (European Community
Trademarks), the World Intellectual Property Organization (Madrid Protocol
Trademarks) or the Swiss Federal Institute of Intellectual Property (or, in each
case, any successor office), as applicable, within 90 days from the execution
date of such short-form agreement or in the United States Copyright Office, with
respect to U.S. registered Copyrights, within 30 days from the execution date of
such short-form agreement, as applicable. The Security Interest is and shall be
prior to any other Lien on any of the Personal Property Collateral, other than
Permitted Liens.

(d)    The Personal Property Collateral is owned by the Grantors free and clear
of any Lien, except for Permitted Liens. As of the date hereof, no Grantor has
filed or consented to the filing of any financing statement (or analogous
document under any other applicable laws covering any Collateral) or security
agreement naming a Grantor as debtor and describing all or any portion of the
Collateral that has not lapsed or been terminated except for financing
statements or security agreements naming the Collateral Agent, on behalf of the
Secured Parties, as the secured party, or otherwise permitted by the Credit
Agreement.

 

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SECTION 4.03    Covenants. Each Grantor hereby covenants and agrees with the
Collateral Agent that, from and after the date of this Agreement until the
Maturity Date:

(a)    Maintenance of Perfected Security Interest; Further Documentation.

(i)    Such Grantor shall maintain the Security Interest created by this
Agreement as a perfected Security Interest having at least the priority required
by the Credit Agreement and shall defend such Security Interest against the
claims and demands of all Persons whomsoever, in each case subject to Permitted
Liens.

(ii)    Subject to the Agreed Security Principles, such Grantor will furnish to
the Collateral Agent and the Lenders from time to time statements and schedules
further identifying and describing the assets and property of such Grantor and
such other reports in connection therewith as the Collateral Agent may
reasonably request.

(iii)    Each Grantor agrees that at any time and from time to time, at the
expense of such Grantor, it will execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements and other
documents), which may be required under any applicable law, or which, the
Collateral Agent may reasonably request, in order (i) to grant, preserve,
protect and perfect the validity and priority of the Security Interests created
or intended to be created hereby or (ii) to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral, including the filing of any financing or continuation statements
under the Uniform Commercial Code in effect in any jurisdiction with respect to
the Security Interests created hereby and all applicable documents required
under this Section 4.03(a)(iii), all at the expense of such Grantor.

(iv)    Notwithstanding anything in this Section 4.03 to the contrary, (i) with
respect to any assets acquired by such Grantor after the date hereof that are
required by the Credit Agreement to be subject to the Lien created hereby or
(ii) with respect to any Person that, subsequent to the date hereof, becomes a
Subsidiary that is required by the Credit Agreement to become a party hereto,
the relevant Grantor after the acquisition or creation thereof shall promptly
take all actions required by the Credit Agreement and this Section 4.03.

(b)    Damage or Destruction of Collateral. The Grantors agree promptly to
notify the Collateral Agent if any portion of the Collateral is damaged or
destroyed in any manner which could reasonably be expected to have a Material
Adverse Effect.

(c)    Notices. Each Grantor will advise the Collateral Agent promptly, in
reasonable detail, of any Lien of which it has knowledge (other than the
Security Interests created hereby or Liens permitted under the Credit Agreement)
on any of the Collateral which would reasonably be expected to result in a
Material Adverse Effect.

(d)    Changes in Locations, Name, Perfection Certificate updates etc. Each
Grantor agrees to furnish to the Collateral Agent the information set forth in
Section 5.10 of the Credit Agreement in accordance therewith.

(e)    Commercial Tort Claims. Each Grantor shall promptly notify the Collateral
Agent of any Commercial Tort Claims at any time held or acquired by such Grantor
and such Grantor shall promptly update Schedule IV attached hereto, thereby
granting to the Collateral Agent a security interest in such Commercial Tort
Claim(s). The requirement in the preceding sentence shall not apply to the
extent that the amount of such Commercial Tort Claim is not reasonably estimated
to exceed €5,000,000 held by each Grantor or to the extent such Grantor shall
have previously notified the Agent with respect to such Commercial Tort Claim.

 

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ARTICLE V

REMEDIES

SECTION 5.01    Remedies upon Default. Upon the occurrence and during the
continuance of an Enforcement Event, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Personal
Property Collateral consisting of Intellectual Property, on demand, to cause the
Security Interest to become an assignment, transfer and conveyance of any of or
all such Personal Property Collateral by the applicable Grantor to the
Collateral Agent, or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or nonexclusive basis, any such Personal
Property Collateral throughout the world on such terms and conditions and in
such manner as the Collateral Agent shall determine, and (b) with or without
legal process but with prior notice or demand for performance to the extent
required by applicable law, to take possession of the Personal Property
Collateral and to enter any premises where the Personal Property Collateral may
be located for the purpose of taking possession of or removing the Personal
Property Collateral and, generally, to exercise any and all rights afforded to a
secured party under the Uniform Commercial Code of each applicable jurisdiction
(including the New York UCC) or other applicable law. Without limiting the
generality of the foregoing, each Grantor agrees that the Collateral Agent shall
have the right, subject to the mandatory requirements of applicable law, to sell
or otherwise dispose of all or any part of the Collateral at a public or private
sale or at any broker’s board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem appropriate.
The Collateral Agent shall be authorized at any such sale of securities (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the Collateral Agent shall
have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Collateral so sold. Each such purchaser at any sale of Collateral
shall hold the property sold absolutely free from any claim or right on the part
of any Grantor, and each Grantor hereby waives (to the extent permitted by law)
all rights of redemption, stay and appraisal which such Grantor now has or may
at any time in the future have under any rule of law or statute now existing or
hereafter enacted.

The Collateral Agent shall give each applicable Grantor at least 10 days’ prior
written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent’s intention to make any sale of
Collateral in the United States. Such notice, in the case of a public sale,
shall state the time and place for such sale and, in the case of a sale at a
broker’s board or on a securities exchange, shall state the board or exchange at
which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice (if any) of such sale. At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such

 

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Collateral may be sold again upon like notice. At any public (or, to the extent
permitted by law, private) sale made pursuant to this Agreement, any Secured
Party may bid for or purchase, free (to the extent permitted by applicable law)
from any right of redemption, stay, valuation or appraisal on the part of any
Grantor (all said rights being also hereby waived and released to the extent
permitted by applicable law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to such Secured Party from any Grantor as a credit against the purchase
price, and such Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to any
Grantor therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Obligations paid in full. As an alternative to exercising
the power of sale herein conferred upon it, the Collateral Agent may proceed by
a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this
Section 5.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.

The Collateral Agent hereby authorizes each Grantor to collect such Grantor’s
accounts and the Collateral Agent may curtail or terminate said authority at any
time after the occurrence and during the continuance of an Event of Default upon
prior written notice to such Grantor. If required in writing by the Collateral
Agent at any time after the occurrence and during the continuance of an Event of
Default, any payments of accounts, when collected by any Grantor, shall be held
by such Grantor in trust for the Collateral Agent and the Secured Parties,
segregated from other funds of such Grantor until said authority is curtailed or
terminated by the Collateral Agent and such payments are turned over to the
Collateral Agent.

At any time after the occurrence and during the continuance of an Event of
Default, the Collateral Agent shall notify obligors on the accounts that the
accounts have been assigned to the Collateral Agent for the benefit of the
Secured Parties and that payments in respect thereof shall be made directly to
the Collateral Agent.

Neither the Collateral Agent nor any Secured Party shall have any obligation or
liability under any Account (or any agreement giving rise thereto) by reason of
or arising out of this Agreement or the receipt by the Collateral Agent or any
Secured Party of any payment relating thereto, nor shall the Collateral Agent or
any Secured Party be obligated in any manner to perform any of the obligations
of any Grantor under or pursuant to any account (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.

As among each Grantor, the Collateral Agent and the Secured Parties, each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Collateral, all in accordance with the terms and
conditions thereof.

SECTION 5.02    Application of Proceeds. The proceeds of any collection, sale,
foreclosure or other realization upon any Collateral, including any Collateral
consisting of cash, shall be applied by the Collateral Agent in accordance with
the terms of the Credit Agreement.

 

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SECTION 5.03    Grant of License to Use Intellectual Property; Assignment of
Licensed Intellectual Property to Collateral Agent.

(a)    For the purpose of enabling the Collateral Agent to exercise rights and
remedies under this Agreement, each Grantor hereby grants (but subject always to
the then existing license agreements or other rights of third parties, to the
extent such license agreements and other rights are Permitted Liens) to the
Collateral Agent an irrevocable (until this Agreement is terminated),
nonexclusive license (exercisable without payment of royalty or other
compensation to the Grantors), to use, license or sublicense any of the Personal
Property Collateral consisting of Patents, Trademarks and Copyrights and any
other Intellectual Property, in each case, now owned or hereafter acquired by
such Grantor, and wherever the same may be located, and including in such
license (but subject always to the then existing license agreements or other
rights of third parties, to the extent such license agreements and other rights
are Permitted Liens) access to all media in which any of the licensed items may
be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The Collateral Agent undertakes that the use of
such license by the Collateral Agent may be exercised, at the option of the
Collateral Agent, only upon the occurrence and during the continuation of an
Enforcement Event.

(b)    Upon the occurrence and during the continuance of an Event of Default,
each Grantor shall, at the request of the Collateral Agent, use commercially
reasonable efforts to obtain all requisite consents or approvals of each
licensor to Grantor under each Copyright License, Patent License or Trademark
License that shall require such consent to effect the assignment of all such
Grantor’s right, title and interest thereunder to the Collateral Agent, for the
ratable benefit of the Secured Parties, or its designee.

(c)    If (i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, is no longer continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment to the Collateral Agent of any rights, title and interest in and to
the Intellectual Property shall have been previously made, and (iv) the
Obligations shall not have become immediately due and payable, then, upon the
written request of any Grantor, the Collateral Agent shall promptly execute and
deliver to such Grantor such assignments as may be necessary to reassign to such
Grantor any such rights, title and interests as may have been made by the
Collateral Agent as aforesaid, subject to any disposition thereof that may have
been made by the Collateral Agent in accordance with this Article V; provided,
after giving effect to such reassignment, the Collateral Agent’s security
interest granted pursuant hereto, as well as all other rights and remedies of
the Collateral Agent granted hereunder, shall continue to be in full force and
effect. The rights, title and interests so reassigned shall be free and clear of
all Liens other than Permitted Liens (if any).

ARTICLE VI

MISCELLANEOUS

SECTION 6.01    Notices. All communications and notices hereunder shall (except
as otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement.

SECTION 6.02    Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor hereunder shall be
absolute and unconditional irrespective of (a) any lack of validity or
enforceability relating to or against any Grantor of the Credit Agreement, any
other Loan Document, any agreement with respect to any of the Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any change
in the time, manner or place of payment of, or in any

 

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other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to the foregoing, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement,
except that a Grantor may assert the defense of payment in full of the
Obligations (other than those expressly stated to survive the Maturity Date).

SECTION 6.03    Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any Lender or on its behalf and
notwithstanding that the Collateral Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended under the Credit Agreement, and shall continue in full force
and effect until the Maturity Date.

SECTION 6.04    Binding Effect; Several Agreement. This Agreement shall become
effective as to any Loan Party when a counterpart hereof executed on behalf of
such Loan Party shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Loan Party and the Collateral Agent
and their respective permitted successors, indorsees, transferees and assigns,
and shall inure to the benefit of such Loan Party, the Collateral Agent and the
other Secured Parties and their respective successors and assigns, except that
no Loan Party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly contemplated or
permitted by this Agreement or the Credit Agreement. This Agreement shall be
construed as a separate agreement with respect to each Loan Party and may be
amended, modified, supplemented, waived or released with respect to any Loan
Party without the approval of any other Loan Party and without affecting the
obligations of any other Loan Party hereunder.

SECTION 6.05    Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

SECTION 6.06    Collateral Agent’s Fees and Expenses; Indemnification.

(a)    The parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its reasonable and documented out-of-pocket expenses incurred
hereunder to the extent provided in Section 9.05 of the Credit Agreement.

(b)    The parties hereto agree that the Collateral Agent shall be entitled to
the benefits of, and the Grantors shall jointly and severally have the
indemnification obligations to the same extent as the Borrowers as described in
Section 9.05 of the Credit Agreement.

SECTION 6.07    Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby
appoints the Collateral Agent as the attorney-in-fact of such Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is

 

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irrevocable and coupled with an interest; provided that the Collateral Agent may
only take actions as attorney-in-fact after the occurrence and during the
continuance of any Event of Default. Without limiting the generality of the
foregoing, the Collateral Agent shall have the right upon the occurrence and
during the continuance of an Event of Default, with full power of substitution
either in the Collateral Agent’s name or in the name of such Grantor (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof, (b) to demand, collect, receive payment of, give receipt for
and give discharges and releases of all or any of the Collateral, (c) to sign
the name of any Grantor on any invoice or bill of lading relating to any of the
Collateral, (d) to send verifications of Accounts Receivable to any Account
Debtor, (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral, (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral,
(g) to notify, or to require any Grantor to notify, Account Debtors to make
payment directly to the Collateral Agent, and (h) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things necessary to carry
out the purposes of this Agreement in accordance with its terms, as fully and
completely as though the Collateral Agent were the absolute owner of the
Collateral for all purposes; provided, however, that nothing herein contained
shall be construed as requiring or obligating the Collateral Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent, or to present or file any claim or notice, or
to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby.
The Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence, willful misconduct or bad faith.

At its option, during the continuance of an Event of Default, the Collateral
Agent may discharge past due Taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and not expressly permitted pursuant to the Loan Documents, and may pay for the
maintenance and preservation of the Collateral to the extent any Grantor fails
to do so as required by the Credit Agreement or this Agreement, and each Grantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any
reasonable payment made or any reasonable expense incurred by the Collateral
Agent pursuant to the foregoing authorization; provided, however, that nothing
in this paragraph shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any Grantor
with respect to Taxes, assessments, charges, fees, Liens, security interests or
other encumbrances and maintenance as set forth herein or in the other Loan
Documents.

SECTION 6.08    Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.

SECTION 6.09    Waivers; Amendment.

(a)    No failure or delay by the Collateral Agent, the Administrative Agent or
any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver hereof or thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent, the Administrative Agent and the Lenders
hereunder and under the other Loan Documents are

 

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cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section 6.09, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, the
Collateral Agent or any Lender may have had notice or knowledge of such Default
at the time. No notice or demand on any Loan Party in any case shall entitle any
Loan Party to any other or further notice or demand in similar or other
circumstances.

(b)    Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Loan Party or Loan Parties with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.08 of the Credit Agreement.

SECTION 6.10    Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.

SECTION 6.11    Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 6.12    Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 6.04.
Delivery of an executed signature page to this Agreement by facsimile or other
electronic transmission (including by .pdf, .tif or similar format) shall be as
effective as delivery of a manually signed counterpart of this Agreement.

SECTION 6.13    Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 6.14    Jurisdiction; Consent to Service of Process.

(a)    Each Grantor hereby irrevocably and unconditionally submits, for itself
and its property, to the non-exclusive jurisdiction of any New York State court
or federal court of the United States

 

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of America, sitting in the Borough of Manhattan, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding shall be
heard and determined in such New York State or, to the extent permitted by law,
in such federal court sitting in the Borough of Manhattan, and any appellate
court from any thereof. Each Grantor agrees that 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.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Collateral Agent, the Administrative Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement, any other Loan
Document or any Collateral against any Grantor or its properties in the courts
of any jurisdiction.

(b)    Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or federal court sitting in the Borough of Manhattan, and any
appellate court from any thereof. Each Grantor hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(c)    Each Grantor hereby irrevocably designates, appoints and empowers
Corporation Service Company (whose current address is: 80 State Street, Albany,
New York 12207-2543, U.S.A.) (including any replacement agent as provided below,
the “Process Agent”), in the case of any suit, action or proceeding brought in
the United States of America as its designee, appointee and agent to receive,
accept and acknowledge for and on its behalf, and in respect of its property,
service of any and all legal process, summons, notices and documents that may be
served in any action or proceeding arising out of or in connection with this
Agreement or any other Loan Document. Such service may be made by mailing (by
registered or certified mail, postage prepaid) or delivering a copy of such
process to such Person in care of the Process Agent at the Process Agent’s above
address, and each of the parties hereto hereby irrevocably authorizes and
directs the Process Agent to accept such service on its behalf. Nothing in this
Agreement will affect the right of the Collateral Agent to serve process in any
other manner permitted by law. Each of the parties hereto agrees that a failure
by the Process Agent for service of process to notify the relevant Grantor of
the process will not invalidate the proceedings concerned.

SECTION 6.15    Release.

(a)    Upon the effectiveness of any release of Liens on the Collateral provided
for in Section 9.18 of the Credit Agreement, including upon the written consent
to the release of the security interest granted hereby in any Collateral
pursuant to Section 9.08 of the Credit Agreement, the security interest granted
hereby in such Collateral shall be automatically released. In addition, a
Grantor shall automatically be released from its obligations hereunder and the
Security Interests created hereunder in the Collateral of such Grantor shall be
automatically released as set forth in Section 9.18 of the Credit Agreement upon
the consummation of any transaction permitted by the Credit Agreement as a
result of which such Grantor ceases to be a Subsidiary or a Guarantor.

(b)    This Agreement, the Security Interest and all other security interests
granted hereby shall automatically terminate on the Maturity Date.

(c)    In connection with any release pursuant to paragraphs (a) or (b) above,
the Collateral Agent shall promptly, in accordance with Section 9.18 of the
Credit Agreement, execute and deliver to any Grantor, at such Grantor’s sole
expense, all documents that such Grantor shall reasonably request to evidence
such release. Any execution and delivery of documents pursuant to this
Section 6.15 shall be without recourse to or representation or warranty by the
Collateral Agent or any Secured Party.

 

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SECTION 6.16    Additional Grantors.

Pursuant and subject to Section 5.10 of the Credit Agreement, each Subsidiary
that was not in existence or not a Subsidiary on the Closing Date is required to
enter into this Agreement and each other applicable Security Document, as the
case may be, as a Grantor upon becoming such a Subsidiary. Upon execution and
delivery by the Collateral Agent and such Subsidiary of a supplement in the form
of Exhibit A hereto, such Subsidiary shall become a Grantor hereunder with the
same force and effect as if originally named as a Grantor herein. The execution
and delivery of any such instrument shall not require the consent of any other
Loan Party hereunder. The rights and obligations of each Loan Party hereunder
shall remain in full force and effect notwithstanding the addition of any new
Loan Party as a party to this Agreement.

SECTION 6.17    Conflicts. In the event of any conflict between the provisions
contained herein and the provisions contained in the Credit Agreement or in any
Security Document governed by the law of any jurisdiction other than the State
of New York, the provisions contained in the Credit Agreement or such Security
Document, as applicable, shall control.

SECTION 6.18    Limitations.

(a)    Grantors incorporated in Switzerland. The enforcement of the Collateral
granted hereunder by any Grantor incorporated in Switzerland shall be limited in
the same manner as the enforcement of the Guarantee by a Guarantor incorporated
in Switzerland as set out in Section 1.11(e) of the Guarantee Agreement.

(b)    Grantors incorporated in Germany. The enforcement of the Collateral
granted hereunder by any Grantor incorporated in the Federal Republic of Germany
shall be limited in the same manner as the enforcement of the Guarantee by a
Guarantor incorporated in the Federal Republic of Germany as set out in Section
1.11(d) of the Guarantee Agreement.

(c)    Grantors incorporated in France. The enforcement of the Collateral
granted hereunder by any Grantor incorporated in France shall be limited in the
same manner as the enforcement of the Guarantee by a Guarantor incorporated in
France as set out in Section 1.11(e) of the Guarantee Agreement.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

--------------------------------------------------------------------------------

This document has been executed as a deed by Claire’s (Gibraltar) Intermediate
Holdings Limited and is delivered and takes effect on the date stated at the
beginning of it.

 

EXECUTED and DELIVERED as a DEED by CLAIRE’S (GIBRALTAR) INTERMEDIATE HOLDINGS
LIMITED Acting by

  )     )     )    

 

  Name:  

 

 

Director

 

in the presence of

  Signature of witness   Name of witness   Address of witness   Occupation of
witness

 

[Signature Page to US Security Agreement]

--------------------------------------------------------------------------------

CLAIRE’S GERMANY GMBH By:  

 

Name:   Title:   CLAIRE’S HOLDINGS S.À R.L. By:  

 

Name:   Title:   CLAIRE’S HOLDING GMBH By:  

 

Name:   Title:   CLAIRE’S EUROPEAN SERVICES LIMITED By:  

 

Name:   Title:   CLAIRE’S EUROPEAN DISTRIBUTION LIMITED By:  

 

Name:   Title:   CLAIRE’S LUXEMBOURG S.A R.L. By:  

 

Name:   Title:   CLAIRE’S ACCESSORIES UK LTD. By:  

 

Name:   Title:  

 

[Signature Page to US Security Agreement]

--------------------------------------------------------------------------------

CLAIRE’S SWITZERLAND GMBH By:  

 

Name:   Title:   CLAIRE’S ACCESSORIES SPAIN, S.L. By:  

 

Name:   Title:   CLAIRE’S FRANCE S.A.S. By:  

 

Name:   Title:   CSI LUXEMBOURG S.A R.L. By:  

 

Name:   Title:   Executed as a deed: CLAIRE’S FASHION PROPERTY CORP. By:  

 

Name:   Title:  

 

[Signature Page to US Security Agreement]

--------------------------------------------------------------------------------

CORTLAND CAPITAL MARKET SERVICES LLC, as Collateral Agent By:  

 

Name:   Title:  

 

[Signature Page to US Security Agreement]

--------------------------------------------------------------------------------

Schedule I

Pledged Equity Interests

 

Issuer

   Pledgor / Owner      Certificate No.      No. Shares/Interest      Percent
Pledged              

--------------------------------------------------------------------------------

Schedule II

Pledged Debt Securities

--------------------------------------------------------------------------------

Schedule III

Intellectual Property

Trademarks

Patents

Copyrights

--------------------------------------------------------------------------------

Schedule IV

Commercial Tort Claims

--------------------------------------------------------------------------------

Schedule V

Grantor Name; Jurisdiction

 

Ref

   Legal Name      Type of
Entity      Registered
Organization
(Yes/No)      Organizational
Number      Federal
Taxpayer
Identification
Number      State
(if applicable)      Country  

1.

                    

--------------------------------------------------------------------------------

Exhibit A

to the U.S. Collateral Agreement

SUPPLEMENT NO.     , dated as of, 20[    ], to the U.S. Collateral Agreement,
dated as of January 5, 2017 (the “Collateral Agreement”), among CLAIRE’S
(GIBRALTAR) INTERMEDIATE HOLDINGS LIMITED (“Holdings”) and CLAIRE’S GERMANY GMBH
(together with Holdings, each, a “Borrower” and collectively, the “Borrowers”),
each of the Subsidiaries listed on the signature pages thereto or that becomes a
party thereto pursuant to Section 6.16 thereof (together with the Borrowers
(each in its capacity thereunder), each a “Grantor” and, collectively, the
“Grantors”) and CORLAND CAPITAL MARKET SERVICES LLC, as collateral agent (in
such capacity, including any successor thereto, the “Collateral Agent”) for the
Secured Parties.

A. Reference is made to the Credit Agreement, dated as of the date hereof (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among the Borrowers, the lenders from
time to time party thereto (the “Lenders”), Boticelli, L.L.C., as administrative
agent (the “Administrative Agent”) and Lender, and the Collateral Agent.

B. Capitalized terms used herein (including in this preamble) and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement or the Collateral Agreement referred to therein, as applicable.

C. The Grantors have entered into the Collateral Agreement in order to induce
the Lenders to make the Loans. Section 6.16 of the Collateral Agreement provides
that additional Subsidiaries shall become Grantors under the Collateral
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the “New Subsidiary”) is executing this
Supplement in accordance with the requirements of the Credit Agreement and the
Collateral Agreement to become a Grantor under the Collateral Agreement in order
to induce the Lenders to make additional Loans and as consideration for Loans
previously made.

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 6.16 of the Collateral Agreement, the New
Subsidiary by its signature below becomes a Grantor under the Collateral
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Subsidiary hereby (a) agrees to all the terms and provisions
of the Collateral Agreement applicable to it as a Grantor and (b) represents and
warrants that the representations and warranties made by it as a Grantor
thereunder (giving effect to any supplements to schedules thereto delivered in
connection herewith) are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Subsidiary, as security for the payment
and performance in full of the Obligations (as defined in the Collateral
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, a security interest in and
lien on all of the New Subsidiary’s right, title and interest in and to the
Collateral (as defined in the Collateral Agreement) of the New Subsidiary. Each
reference to a “Grantor” in the Collateral Agreement shall be deemed to include
the New Subsidiary. The Collateral Agreement is hereby incorporated herein by
reference.

SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent
for the benefit of the Secured Parties that this Supplement has been duly
authorized, executed and delivered by it

 

A-1

--------------------------------------------------------------------------------

and constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms, except to the extent that enforcement thereof may
be limited by any applicable bankruptcy, insolvency or similar laws now or
hereafter in effect affecting creditors’ rights generally and by general
principles of equity.

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received counterparts of this Supplement, which when taken together, bears
the signatures of the New Subsidiary and the Collateral Agent. Delivery of an
executed signature page to this Supplement by facsimile or other electronic
transmission (including by .pdf, .tif or similar format) shall be as effective
as delivery of a manually signed counterpart of this Supplement.

SECTION 4. The New Subsidiary hereby represents and warrants that attached to
this Agreement are duly completed schedules and, if applicable, short-form
agreements substantially in the form of Exhibits C, D or E to the Collateral
Agreement, as applicable, in each case, with respect to the New Subsidiary (the
“Supplemental Schedules”). The New Subsidiary represents and warrants that the
information contained on each of the Supplemental Schedules with respect to such
New Subsidiary and its properties and affairs is true and correct in all
material respects (except that any representation or warranty that is qualified
as to “materiality” or “Material Adverse Effect” shall be true in all respects)
as of the date hereof.

SECTION 5. Except as expressly supplemented hereby, the Collateral Agreement
shall remain in full force and effect.

SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK.

SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Collateral Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 6.01 of the Collateral Agreement.

SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent in
accordance with Section 6.06(a) of the Collateral Agreement.

 

A-2

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IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Collateral Agreement as of the day and year
first above written.

 

[NAME OF NEW SUBSIDIARY] By:  

 

Name:   Title:   Legal Name: Jurisdiction of Formation: Location of Chief
Executive office: CORTLAND CAPITAL MARKET SERVICES LLC, as Collateral Agent By:
 

 

Name:   Title:  

 

A-3

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Exhibit B to

the U.S. Collateral Agreement

[Form of]

TRADEMARK SECURITY AGREEMENT

THIS TRADEMARK SECURITY AGREEMENT, dated as of [            ], 20[    ] (this
“Agreement”), among [                    ], a [                    ] located at
[                    ], and [                    ], a [                    ]
located at [                    ] (each a “Grantor” and collectively the
“Grantors”), and CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent (in
such capacity, the “Collateral Agent”).

Reference is made to (a) the U.S. Collateral Agreement dated as of January 5,
2017 (as amended, supplemented or otherwise modified from time to time, the
“Collateral Agreement”), among the Grantors from time to time party thereto and
the Collateral Agent and (b) the Credit Agreement, dated as of January 5, 2017
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the Borrowers, the Lenders from time to
time party thereto, the Administrative Agent and the Collateral Agent.

The Lenders have agreed to extend credit to the Borrowers subject to the terms
and conditions set forth in the Credit Agreement. The obligations of the Lenders
to extend such credit are conditioned upon, among other things, the execution
and delivery of this Agreement. Each Grantor is an affiliate of the Company,
will derive substantial benefits from the extensions of credit to the Borrowers
pursuant to the Credit Agreement and is willing to execute and deliver the
Collateral Agreement and this Agreement in order to induce the Lenders to extend
such credit. Pursuant to the Collateral Agreement, the Grantor is required to
execute and deliver this Agreement. Accordingly, the parties hereto agree as
follows:

SECTION 1. Terms. Each capitalized term used but not defined in this Agreement
has the meaning given or ascribed to it in the Collateral Agreement. The rules
of construction specified in Section 1.01(b) of the Collateral Agreement also
apply to this Agreement.

SECTION 2. Grant of Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
pledges to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, a
security interest in all right, title or interest in or to any and all of the
following assets and properties now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Trademark Collateral”):

(a)    the United States Trademark applications and registrations of such
Grantor listed on Schedule I attached hereto (but excluding any Trademark
applications filed in the United States Patent and Trademark Office (or similar
governmental authority) on the basis of a Grantor’s “intent-to-use” such
Trademark prior to the filing with and acceptance by the United States Patent
and Trademark Office (or similar governmental authority) of a “Statement of
Use”, “Amendment to Allege Use” or similar filing with respect thereto, only to
the extent, if any, the grant of a security interest therein could impair the
validity or enforceability of such intent-to-use Trademark application (or any
Trademark registration therefrom) under applicable law);

(b)    all goodwill associated therewith or symbolized thereby; and

 

B-1

--------------------------------------------------------------------------------

(c)    all Proceeds and products of any and all of the foregoing, all Supporting
Obligations and all collateral security and guarantees given by any Person with
respect to any of the foregoing.

SECTION 3. Recordation. This Agreement has been executed and delivered by each
Grantor for the purpose of recording the grant of security interest herein with
the United States Patent and Trademark Office. Each Grantor authorizes and
requests that the Commissioner of Trademarks record this Agreement.

SECTION 4. Collateral Agreement. The security interests granted to the
Collateral Agent herein are granted in furtherance, and not in limitation of,
the security interests granted to the Collateral Agent pursuant to the
Collateral Agreement. Each Grantor hereby acknowledges and affirms that the
rights and remedies of the Collateral Agent with respect to the Trademark
Collateral are more fully set forth in the Collateral Agreement, the terms and
provisions of which are hereby incorporated herein by reference as if fully set
forth herein. In the event of any conflict between the terms of this Agreement
and the Collateral Agreement, the terms of the Collateral Agreement shall
govern, and for the avoidance of doubt, Trademark Collateral shall not include
any Excluded Collateral.

SECTION 5. Term. The term of this Agreement shall be co-terminus with the
Collateral Agreement as its term is set forth therein.

SECTION 6. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 6.04 of the
Collateral Agreement. Delivery of an executed signature page to this Agreement
by facsimile transmission or other electronic transmission (including by .pdf,
.tif or similar format) shall be as effective as delivery of a manually signed
counterpart of this Agreement.

SECTION 7. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.

[Remainder of this page intentionally left blank]

 

B-2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

[                                ], By:  

 

Name:   Title:  

 

B-3

--------------------------------------------------------------------------------

Acknowledged and Agreed by:

CORTLAND CAPITAL MARKET SERVICES LLC,

as Collateral Agent

By:  

 

Name:   Title:  

 

B-4

--------------------------------------------------------------------------------

SCHEDULE I TO

TRADEMARK SECURITY AGREEMENT

Trademark Registrations and Applications

 

B-5

--------------------------------------------------------------------------------

Exhibit C to

The U.S. Collateral Agreement

[Form of]

PATENT SECURITY AGREEMENT

THIS PATENT SECURITY AGREEMENT, dated as of [            ], 20[    ] (this
“Agreement”), among [                    ], a [                    ] located at
[                    ], and [                    ], a [                    ]
located at [                    ] (each a “Grantor” and collectively the
“Grantors”), and CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent (in
such capacity, the “Collateral Agent”).

Reference is made to (a) the U.S. Collateral Agreement dated as of January 5,
2017 (as amended, supplemented or otherwise modified from time to time, the
“Collateral Agreement”), among the Grantors from time to time party thereto and
the Collateral Agent and (b) the Credit Agreement, dated as of January 5, 2017
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the Borrowers, the Lenders from time to
time party thereto, the Administrative Agent and the Collateral Agent.

The Lenders have agreed to extend credit to the Borrowers subject to the terms
and conditions set forth in the Credit Agreement. The obligations of the Lenders
to extend such credit are conditioned upon, among other things, the execution
and delivery of this Agreement. Each Grantor is an affiliate of the Company,
will derive substantial benefits from the extensions of credit to the Borrowers
pursuant to the Credit Agreement and is willing to execute and deliver the
Collateral Agreement and this Agreement in order to induce the Lenders to extend
such credit. Pursuant to the Collateral Agreement, the Grantor is required to
execute and deliver this Agreement. Accordingly, the parties hereto agree as
follows:

SECTION 1. Terms. Each capitalized term used but not defined in this Agreement
has the meaning given or ascribed to it in the Collateral Agreement. The rules
of construction specified in Section 1.01(b) of the Collateral Agreement also
apply to this Agreement.

SECTION 2. Grant of Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
pledges to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, a
security interest in all right, title or interest in or to any and all of the
following assets and properties now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Patent Collateral”):

(a)    the United States Patents and Patent applications of such Grantor listed
on Schedule I attached hereto;

(b)    all Proceeds and products of any and all of the foregoing, all Supporting
Obligations and all collateral security and guarantees given by any Person with
respect to any of the foregoing.

SECTION 3. Recordation. This Agreement has been executed and delivered by each
Grantor for the purpose of recording the grant of security interest herein with
the United States Patent and Trademark Office. Each Grantor authorizes and
requests that the Commissioner of Patents record this Agreement.

 

C-1

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SECTION 4. Collateral Agreement. The security interests granted to the
Collateral Agent herein are granted in furtherance, and not in limitation of,
the security interests granted to the Collateral Agent pursuant to the
Collateral Agreement. Each Grantor hereby acknowledges and affirms that the
rights and remedies of the Collateral Agent with respect to the Patent
Collateral are more fully set forth in the Collateral Agreement, the terms and
provisions of which are hereby incorporated herein by reference as if fully set
forth herein. In the event of any conflict between the terms of this Agreement
and the Collateral Agreement, the terms of the Collateral Agreement shall
govern, and for the avoidance of doubt, Patent Collateral shall not include any
Excluded Collateral.

SECTION 5. Term. The term of this Agreement shall be co-terminus with the
Collateral Agreement as its term is set forth therein.

SECTION 6. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 6.04 of the
Collateral Agreement. Delivery of an executed signature page to this Agreement
by facsimile transmission or other electronic transmission (including by .pdf,
.tif or similar format) shall be as effective as delivery of a manually signed
counterpart of this Agreement.

SECTION 7. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.

[Remainder of this page intentionally left blank]

 

C-2

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

[                                ], By:  

 

Name:   Title:  

 

C-3

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Acknowledged and Agreed by:

CORTLAND CAPITAL MARKET SERVICES LLC,

as Collateral Agent

By:  

 

Name:   Title:  

 

C-4

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SCHEDULE I TO

PATENT SECURITY AGREEMENT

Patents and Patent Applications

 

Grantor

 

Title

 

Appl. No.

 

Patent No.

                                                                             

 

C-5

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Exhibit D to

the U.S. Collateral Agreement

[Form of]

COPYRIGHT SECURITY AGREEMENT

COPYRIGHT SECURITY AGREEMENT. dated as of [        ], 20[    ] (this
“Agreement”), among [                    ], a [                    ] located at
[                    ], and [                    ], a [                    ]
located at [                    ] (each a “Grantor” and collectively the
“Grantors”), and CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent (in
such capacity, the “Collateral Agent”).

Reference is made to (a) the U.S. Collateral Agreement dated as of January 5,
2017 (as amended, supplemented or otherwise modified from time to time, the
“Collateral Agreement”), among the Grantors from time to time party thereto and
the Collateral Agent and (b) the Credit Agreement, dated as of January 5, 2017
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the Borrowers, the Lenders from time to
time party thereto, the Administrative Agent and the Collateral Agent.

The Lenders have agreed to extend credit to the Borrowers subject to the terms
and conditions set forth in the Credit Agreement. The obligations of the Lenders
to extend such credit are conditioned upon, among other things, the execution
and delivery of this Agreement. Each Grantor is an affiliate of the Company,
will derive substantial benefits from the extensions of credit to the Borrowers
pursuant to the Credit Agreement and is willing to execute and deliver the
Collateral Agreement and this Agreement in order to induce the Lenders to extend
such credit. Pursuant to the Collateral Agreement, the Grantor is required to
execute and deliver this Agreement. Accordingly, the parties hereto agree as
follows:

SECTION 1. Terms. Each capitalized term used but not defined in this Agreement
has the meaning given or ascribed to it in the Collateral Agreement. The rules
of construction specified in Section 1.01(b) of the Collateral Agreement also
apply to this Agreement.

SECTION 2. Grant of Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
pledges to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, a
security interest in all right, title or interest in or to any and all of the
United States Copyright applications and registrations of such Grantor listed on
Schedule I attached hereto and all Proceeds and products of any and all of the
foregoing, all Supporting Obligations and all collateral security and guarantees
given by any Person with respect to any of the foregoing.

SECTION 3. Recordation. This Agreement has been executed and delivered by each
Grantor for the purpose of recording the grant of security interest herein with
the United States Copyright Office. Each Grantor authorizes and requests that
the Register of Copyrights record this Agreement.

SECTION 4. Collateral Agreement. The security interests granted to the
Collateral Agent herein are granted in furtherance, and not in limitation of,
the security interests granted to the Collateral Agent pursuant to the
Collateral Agreement. Each Grantor hereby acknowledges and affirms that the
rights and remedies of the Collateral Agent with respect to the Copyright
Collateral are more fully set forth in the Collateral Agreement, the terms and
provisions of which are hereby incorporated herein by reference as if fully set
forth herein. In the event of any conflict between the terms of this Agreement
and the Collateral Agreement, the terms of the Collateral Agreement shall
govern, and for the avoidance of doubt, Copyright Collateral shall not include
any Excluded Collateral.

 

D-1

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SECTION 5. Term. The term of this Agreement shall be co-terminus with the
Collateral Agreement as its term is set forth therein.

SECTION 6. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 6.04 of the
Collateral Agreement. Delivery of an executed signature page to this Agreement
by facsimile transmission or other electronic transmission (including by .pdf,
.tif or similar format) shall be as effective as delivery of a manually signed
counterpart of this Agreement.

SECTION 7. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.

[Remainder of this page intentionally left blank]

 

D-2

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

[                                ], By:  

 

Name:   Title:  

 

D-3

--------------------------------------------------------------------------------

Acknowledged and Agreed by:

CORTLAND CAPITAL MARKET SERVICES LLC,

as Collateral Agent

By:  

 

Name:   Title:  

 

D-4

--------------------------------------------------------------------------------

SCHEDULE I TO

COPYRIGHT SECURITY AGREEMENT

Copyrights

 

Title

   Owner      Registration No.                                                  
                             

 

D-5

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Exhibit C

Exhibit C

[Form of]

Note

 

$                New York, New York    December [●], 2016

FOR VALUE RECEIVED, CLAIRE’S (GIBRALTAR) INTERMEDIATE HOLDINGS LIMITED (“CGIH”
or “Holdings”) and CLAIRE’S GERMANY GMBH, as borrowers (together with Holdings,
each a “Borrower” and together, the “Borrowers”) hereby promise to pay to
[                    ] or its registered assigns (the “Lender”), in lawful money
of the United States of America in immediately available funds, on the Maturity
Date the principal sum of                      DOLLARS ($        ) or, if less,
the unpaid principal amount of all Term Loans made by the Lender pursuant to the
Credit Agreement (as defined below), payable at such times and in such amounts
as are specified in the Credit Agreement. Capitalized terms used herein but not
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.

The Borrowers also promise to pay interest on the unpaid principal amount of
each Term Loan made by the Lender from the date hereof until paid at the rates
and at the times provided in Section 2.13 of the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, dated as of
December [●], 2016 (as amended, restated, amended and restated, supplemented
and/or modified from time to time, the “Credit Agreement”), among inter alios
the Borrowers, the various lenders from time to time party thereto, and
Botticelli LLC, as administrative agent (in such capacity, the “Administrative
Agent”) and is entitled to the benefits thereof and of the other Loan Documents.
This Note is secured by the Security Documents and is entitled to the benefits
of the Guarantee Agreement. As provided in the Credit Agreement, this Note is
subject to voluntary prepayment and mandatory repayment prior to the Maturity
Date, in whole or in part.

In case an Event of Default shall occur and be continuing, the principal of and
accrued interest on this Note may be declared to be due and payable in the
manner and with the effect provided in the Credit Agreement.

The Borrowers hereby waive presentment, demand, protest or notice of any kind in
connection with this Note.

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THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.

 

BORROWERS: CLAIRE’S (GIBRALTAR) INTERMEDIATE HOLDINGS LIMITED By:  

 

Name:   Title:   CLAIRE’S GERMANY GMBH By:  

 

Name:   Title:  

 

[TERM NOTE]