exv4w1






Exhibit 4.1




EXECUTION VERSION




SENIOR SECURED SECOND LIEN NOTES INDENTURE




Dated as of March 4, 2011



Between



CLAIRE’S ESCROW CORPORATION



and



THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee and Collateral Agent



8.875% SENIOR NOTES DUE 2019






 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	 	 
	 
	 	 	 	 
	Section 1.01 Definitions
	 	 	1	 
	Section 1.02 Other Definitions
	 	 	45	 
	Section 1.03 Incorporation by Reference of Trust Indenture Act
	 	 	46	 
	Section 1.04 Rules of Construction
	 	 	46	 
	Section 1.05 Acts of Holders
	 	 	47	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	THE NOTES
	 	 	 	 
	 
	 	 	 	 
	Section 2.01 Form and Dating; Terms
	 	 	48	 
	Section 2.02 Execution and Authentication
	 	 	50	 
	Section 2.03 Registrar and Paying Agent
	 	 	50	 
	Section 2.04 Paying Agent to Hold Money in Trust
	 	 	51	 
	Section 2.05 Holder Lists
	 	 	51	 
	Section 2.06 Transfer and Exchange
	 	 	51	 
	Section 2.07 Replacement Notes
	 	 	65	 
	Section 2.08 Outstanding Notes
	 	 	65	 
	Section 2.09 Treasury Notes
	 	 	66	 
	Section 2.10 Temporary Notes
	 	 	66	 
	Section 2.11 Cancellation
	 	 	66	 
	Section 2.12 Defaulted Interest
	 	 	67	 
	Section 2.13 CUSIP/ISIN Numbers
	 	 	67	 
	Section 2.14 Calculation of Principal Amount of Securities
	 	 	67	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	REDEMPTION
	 	 	 	 
	 
	 	 	 	 
	Section 3.01 Notices to Trustee
	 	 	68	 
	Section 3.02 Selection of Notes to Be Redeemed
	 	 	68	 
	Section 3.03 Notice of Redemption
	 	 	68	 
	Section 3.04 Effect of Notice of Redemption
	 	 	69	 
	Section 3.05 Deposit of Redemption Price
	 	 	70	 
	Section 3.06 Notes Redeemed in Part
	 	 	70	 
	Section 3.07 Optional Redemption
	 	 	70	 
	Section 3.08 Mandatory Redemption
	 	 	71	 






i









 






	 	 	 	 	 
	 	 	Page	 
	Section 3.09 Offers to Repurchase by Application of Excess Proceeds
	 	 	71	 
	Section 3.10 Special Mandatory Redemption
	 	 	74	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	COVENANTS
	 	 	 	 
	 
	 	 	 	 
	Section 4.01 Payment of Notes
	 	 	74	 
	Section 4.02 Maintenance of Office or Agency
	 	 	74	 
	Section 4.03 Reports and Other Information
	 	 	75	 
	Section 4.04 Compliance Certificate
	 	 	77	 
	Section 4.05 Taxes
	 	 	77	 
	Section 4.06 Stay, Extension and Usury Laws
	 	 	80	 
	Section 4.07 Limitation on Restricted Payments
	 	 	80	 
	Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
	 	 	87	 
	Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock
	 	 	89	 
	Section 4.10 Asset Sales
	 	 	96	 
	Section 4.11 Transactions with Affiliates
	 	 	98	 
	Section 4.12 Liens
	 	 	101	 
	Section 4.13 Offer to Repurchase Upon Change of Control
	 	 	102	 
	Section 4.14 Future Guarantors
	 	 	104	 
	Section 4.15 Amendment of Security Documents
	 	 	105	 
	Section 4.16 After -  Acquired Property
	 	 	105	 
	Section 4.17 Company Existence
	 	 	106	 
	Section 4.18 Suspension of Covenants
	 	 	106	 
	Section 4.19 Activities Prior to the Assumption
	 	 	107	 
	Section 4.20 Escrow of Funds
	 	 	108	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	SUCCESSORS
	 	 	 	 
	 
	 	 	 	 
	Section 5.01 Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets
	 	 	108	 
	Section 5.02 Successor Corporation Substituted
	 	 	111	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	DEFAULTS AND REMEDIES
	 	 	 	 
	 
	 	 	 	 
	Section 6.01 Events of Default
	 	 	111	 
	Section 6.02 Acceleration
	 	 	113	 
	Section 6.03 Other Remedies
	 	 	114	 
	Section 6.04 Waiver of Past Defaults
	 	 	114	 
	Section 6.05 Control by Majority
	 	 	115	 






ii









 






	 	 	 	 	 
	 	 	Page	 
	Section 6.06 Limitation on Suits
	 	 	115	 
	Section 6.07 Rights of Holders of Notes to Receive Payment
	 	 	115	 
	Section 6.08 Collection Suit by Trustee
	 	 	115	 
	Section 6.09 Restoration of Rights and Remedies
	 	 	116	 
	Section 6.10 Rights and Remedies Cumulative
	 	 	116	 
	Section 6.11 Delay or Omission Not Waiver
	 	 	116	 
	Section 6.12 Trustee May File Proofs of Claim
	 	 	116	 
	Section 6.13 Priorities
	 	 	117	 
	Section 6.14 Undertaking for Costs
	 	 	117	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	TRUSTEE
	 	 	 	 
	 
	 	 	 	 
	Section 7.01 Duties of Trustee
	 	 	118	 
	Section 7.02 Rights of Trustee
	 	 	119	 
	Section 7.03 Individual Rights of Trustee
	 	 	120	 
	Section 7.04 Trustee’s and the Collateral Agent’s Disclaimer
	 	 	120	 
	Section 7.05 Notice of Defaults
	 	 	121	 
	Section 7.06 Reports by Trustee to Holders of the Notes
	 	 	121	 
	Section 7.07 Compensation and Indemnity
	 	 	121	 
	Section 7.08 Replacement of Trustee
	 	 	122	 
	Section 7.09 Successor Trustee by Merger, etc.
	 	 	123	 
	Section 7.10 Eligibility; Disqualification
	 	 	123	 
	Section 7.11 Preferential Collection of Claims Against Issuer
	 	 	123	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	 
	 	 	 	 
	LEGAL DEFEASANCE AND COVENANT DEFEASANCE
	 	 	 	 
	 
	 	 	 	 
	Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance
	 	 	124	 
	Section 8.02 Legal Defeasance and Discharge
	 	 	124	 
	Section 8.03 Covenant Defeasance
	 	 	124	 
	Section 8.04 Conditions to Legal or Covenant Defeasance
	 	 	125	 
	Section 8.05 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions
	 	 	127	 
	Section 8.06 Repayment to Issuer
	 	 	127	 
	Section 8.07 Reinstatement
	 	 	128	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	 
	 	 	 	 
	AMENDMENT, SUPPLEMENT AND WAIVER
	 	 	 	 
	 
	 	 	 	 
	Section 9.01 Without Consent of Holders of Notes
	 	 	128	 
	Section 9.02 With Consent of Holders of Notes
	 	 	129	 
	Section 9.03 Compliance with Trust Indenture Act
	 	 	131	 
	Section 9.04 Revocation and Effect of Consents
	 	 	131	 






iii









 






	 	 	 	 	 
	 	 	Page	 
	Section 9.05 Notation on or Exchange of Notes
	 	 	131	 
	Section 9.06 Trustee and Collateral Agent to Sign Amendments, Etc.
	 	 	132	 
	Section 9.07 Payment for Consent
	 	 	132	 
	Section 9.08 Additional Voting Terms; Calculation of Principal Amount
	 	 	132	 
	 
	 	 	 	 
	ARTICLE X
	 	 	 	 
	 
	 	 	 	 
	GUARANTEES
	 	 	 	 
	 
	 	 	 	 
	Section 10.01 Guarantee
	 	 	132	 
	Section 10.02 Limitation on Guarantor Liability
	 	 	134	 
	Section 10.03 Execution and Delivery
	 	 	134	 
	Section 10.04 Subrogation
	 	 	135	 
	Section 10.05 Benefits Acknowledged
	 	 	135	 
	Section 10.06 Release of Guarantees
	 	 	135	 
	 
	 	 	 	 
	ARTICLE XI
	 	 	 	 
	 
	COLLATERAL
	 	 	 	 
	 
	 	 	 	 
	Section 11.01 Security Documents
	 	 	136	 
	Section 11.02 Collateral Agent
	 	 	136	 
	Section 11.03 Authorization of Actions to Be Taken
	 	 	137	 
	Section 11.04 Release of Liens
	 	 	138	 
	Section 11.05 Filing, Recording and Opinions
	 	 	139	 
	Section 11.06 Powers Exercisable by Receiver or Trustee
	 	 	140	 
	Section 11.07 Release Upon Termination of the Issuer’s Obligations
	 	 	140	 
	Section 11.08 Designations
	 	 	140	 
	Section 11.09 Taking and Destruction
	 	 	141	 
	 
	 	 	 	 
	ARTICLE XII
	 	 	 	 
	 
	 	 	 	 
	SATISFACTION AND DISCHARGE
	 	 	 	 
	 
	 	 	 	 
	Section 12.01 Satisfaction and Discharge
	 	 	141	 
	Section 12.02 Application of Trust Money
	 	 	142	 
	 
	 	 	 	 
	ARTICLE XIII
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 13.01 Trust Indenture Act Controls
	 	 	142	 
	Section 13.02 Notices
	 	 	142	 
	Section 13.03 Electronic Instructions
	 	 	144	 
	Section 13.04 Communication by Holders of Notes with Other Holders of Notes
	 	 	144	 
	Section 13.05 Certificate and Opinion as to Conditions Precedent
	 	 	144	 
	Section 13.06 Statements Required in Certificate or Opinion
	 	 	144	 
	Section 13.07 Rules by Trustee and Agents
	 	 	145	 






iv









 






	 	 	 	 	 
	 	 	Page	 
	Section 13.08 No Personal Liability of Directors, Officers, Employees, Managers and Stockholders
	 	 	145	 
	Section 13.09 Governing Law
	 	 	145	 
	Section 13.10 Waiver of Jury Trial
	 	 	145	 
	Section 13.11 Force Majeure
	 	 	145	 
	Section 13.12 No Adverse Interpretation of Other Agreements
	 	 	146	 
	Section 13.13 Successors
	 	 	146	 
	Section 13.14 Severability
	 	 	146	 
	Section 13.15 Counterpart Originals
	 	 	146	 
	Section 13.16 Table of Contents, Headings, etc.
	 	 	146	 
	Section 13.17 Qualification of Indenture
	 	 	146	 
	Section 13.18 Currency of Account; Conversion of Currency; Foreign Exchange Restrictions
	 	 	146	 
	Section 13.19 Consent to Jurisdiction and Service
	 	 	148	 
	Section 13.20 Effectiveness of Provisions for the Company and the Guarantors
	 	 	148	 
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit A            Form of Note
	 	 	 	 
	Exhibit B            Form of Certificate of Transfer
	 	 	 	 
	Exhibit C            Form of Certificate of Exchange
	 	 	 	 
	Exhibit D            Form of Supplemental Indenture to be Delivered in Connection with the
Assumption
	 	 	 	 
	Exhibit E            Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors
	 	 	 	 
	Exhibit F            Form of Collateral Agreement to Be Delivered in Connection with the
Assumption
	 	 	 	 
	Exhibit G            Form of Second Lien Trademark Security Agreement to Be Delivered in
Connection with the Assumption
	 	 	 	 
	Exhibit H            Form of Intercreditor Agreement to Be Delivered in Connection with the
Assumption
	 	 	 	 







v











 





          INDENTURE, dated as of March 4, 2011, between Claire’s Escrow Corporation, a Delaware
corporation, and The Bank of New York Mellon Trust Company, N.A., a national banking association,
as Trustee (as defined below) and Collateral Agent (as defined below).




          Each party agrees as follows for the benefit of each other and for the equal and ratable
benefit of the Holders (as defined below) of the 8.875% Senior Secured Second Lien Notes due 2019
(the “Notes”).




ARTICLE I




DEFINITIONS AND INCORPORATION BY REFERENCE



     Section 1.01 Definitions.



          “144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing
the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and
registered in the name of, the Depositary or its nominee that will be issued in a denomination
equal to the outstanding principal amount of Notes sold in reliance on Rule 144A.




          “Acquired Indebtedness” means, with respect to any specified Person, (1) Indebtedness of any
other Person existing at the time such other Person is merged, consolidated or amalgamated with or
into or became a Restricted Subsidiary of such specified Person and (2) Indebtedness secured by a
Lien encumbering any asset acquired by such specified Person.




          “Acquisition” means the acquisition by Affiliates of the Sponsors of substantially all of the
outstanding shares of capital stock of the Issuer, pursuant to the Merger Agreement.




          “Acquisition Documents” means the Merger Agreement and any other document entered into in
connection therewith, in each case as amended, supplemented or modified from time to time prior to
the Issue Date or thereafter.




          “Additional Interest” means all additional interest then owing pursuant to the Registration
Rights Agreement.




          “Additional Notes” means additional Notes (other than Exchange Notes) issued from time to time
under this Indenture in accordance with Sections 2.01 and 4.09 hereof.




          “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For
purposes of this definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common






1









 







control with”), as used with respect to any
Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or otherwise.




          “Agent” means any Registrar or Paying Agent.




          “Applicable Currency Equivalent” means, with respect to any monetary amount in a currency
other than U.S. dollars, at any time for the determination thereof, the amount of U.S. dollars
obtained by converting such foreign currency involved in such computation into U.S. dollars, at the
spot rate for the purchase of U.S. dollars, with the applicable foreign currency as quoted by
Reuters at approximately 10:00 A.M. (New York City time) on the date that is two Business Days
prior to such determination.




          “Applicable Premium” means, on any applicable Redemption Date, the greater of:




          (1) 1.0% of the then outstanding principal amount of the Notes; and




          (2) the excess of:





          (a) the present value at such Redemption Date of (i) the redemption price of the Notes
at March 15, 2015 (such redemption price being set forth in the table in Section 3.07(a))
plus (ii) all required interest payments due on the Notes through March 15, 2015 (excluding
accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as
of such Redemption Date plus 50 basis points; over




          (b) the then outstanding principal amount of the Notes.



          “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial
interests in any Global Note, the rules and procedures of the Depositary that apply to such
transfer or exchange.




          “Asset Sale” means:




          (1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a
series of related transactions) of property or assets (including by way of a Sale/Leaseback
Transaction) outside the ordinary course of business of the Issuer or any Restricted Subsidiary of
the Issuer (each referred to in this definition as a “disposition”); or




          (2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and
shares issued to foreign nationals or other third parties to the extent required by applicable law)
of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary of the
Issuer) (whether in a single transaction or a series of related transactions);



2









 






in each case other than:





          (a) a disposition of Cash Equivalents or Investment Grade Securities or obsolete,
damaged or worn out property or equipment in the ordinary course of business;




          (b) the disposition of all or substantially all of the assets of the Issuer in a
manner permitted pursuant to the provisions described under Section 5.01 hereof or any
disposition that constitutes a Change of Control;




          (c) any Restricted Payment or Permitted Investment that is permitted to be made, and
is made, under Section 4.07 hereof;




          (d) any disposition of assets of the Issuer or any Restricted Subsidiary or issuance
or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity Interests
so disposed or issued have an aggregate Fair Market Value (as determined in good faith by
the Issuer) of less than $15 million;




          (e) any disposition of property or assets, or the issuance of securities, by a
Restricted Subsidiary of the Issuer to the Issuer or by the Issuer or a Restricted
Subsidiary of the Issuer to a Restricted Subsidiary of the Issuer;




          (f) any exchange of assets (including a combination of assets and Cash Equivalents)
for assets related to a Similar Business of comparable or greater market value or
usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as
determined in good faith by the Issuer;




          (g) foreclosure on assets of the Issuer or any of its Restricted Subsidiaries;




          (h) any sale of Equity Interests in, or Indebtedness or other securities of, an
Unrestricted Subsidiary;




          (i) the lease, assignment or sublease of any real or personal property in the ordinary
course of business;




          (j) any sale of inventory or other assets in the ordinary course of business;




          (k) any grant in the ordinary course of business of any license of patents,
trademarks, know-how or any other intellectual property;




          (l) in the ordinary course of business, any swap of assets, or lease, assignment or
sublease of any real or personal property, in exchange for services (including in
connection with any outsourcing arrangements) of comparable or greater value or usefulness
to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in
good faith by the Issuer;



3









 






          (m) a transfer of accounts receivable and related assets of the type specified in the
definition of “Receivables Financing” (or a fractional
undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables
Financing;




          (n) any financing transaction with respect to property built or acquired by the Issuer
or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction
or asset securitization permitted by this Indenture;




          (o) dispositions in connection with Permitted Liens;




          (p) any disposition of Capital Stock of a Restricted Subsidiary pursuant to an
agreement or other obligation with or to a Person (other than the Issuer or a Restricted
Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted
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; and




          (q) any surrender or waiver of contract rights or the settlement, release, recovery on
or surrender of contract, tort or other claims of any kind.



          “Assumption” means the assumption by the Company of all the obligations of the Issuer upon
consummation of the merger of the Issuer with and into the Company, with the Company as the
surviving entity.




          “Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief
of debtors.




          “Bank Indebtedness” means any and all amounts payable under or in respect of the Credit
Agreement and the other Credit Agreement Documents as amended, restated, supplemented, waived,
replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time
(including after termination of the Credit Agreement), including principal, premium (if any),
interest (including interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in
such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other
amounts payable thereunder or in respect thereof.




          “Board of Directors” means, as to any Person, the board of directors or managers, as
applicable, of such Person (or, if such Person is a partnership, the board of directors or other
governing body of the general partner of such Person) or any duly authorized committee thereof.




          “broker-dealer” means any broker or dealer registered under the Exchange Act.



4









 







          “Business Day” means a day other than a Saturday, Sunday or other day on which banking
institutions are authorized or required by law to close in New York City.




          “Capital Stock” means:




          (1) in the case of a corporation, corporate stock or shares;




          (2) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;




          (3) in the case of a partnership or limited liability company, partnership or membership
interests (whether general or limited); and




          (4) any other interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person.




          “Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the
amount of the liability in respect of a capital lease that would at such time be required to be
capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in
accordance with GAAP.




          “Capitalized Software Expenditures” shall mean, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted
Subsidiaries during such period in respect of purchased software or internally developed software
and software enhancements that, in conformity with GAAP, are or are required to be reflected as
capitalized costs on the consolidated balance sheet of such Person and such Restricted
Subsidiaries.




          “Cash Equivalents” means:




          (1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the
European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such
local currencies held by it from time to time in the ordinary course of business;




          (2) securities issued or directly and fully guaranteed or insured by the U.S. government or
any country that is a member of the European Union or any agency or instrumentality thereof in each
case maturing not more than two years from the date of acquisition;




          (3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one
year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not
exceeding one year and overnight bank deposits, in each case with any commercial bank having
capital and surplus in excess of $250.0 million



5









 






and whose long-term debt is rated “A” or the
equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally
recognized ratings agency);




          (4) repurchase obligations for underlying securities of the types described in clauses (2) and
(3) above entered into with any financial institution meeting the qualifications specified in
clause (3) above;




          (5) commercial paper issued by a corporation (other than an Affiliate of the Issuer) rated at
least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of
another internationally recognized ratings agency) and in each case maturing within one year after
the date of acquisition;




          (6) readily marketable direct obligations issued by any state of the United States of America
or any political subdivision thereof having one of the two highest rating categories obtainable
from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized
ratings agency) in each case with maturities not exceeding two years from the date of acquisition;




          (7) Indebtedness issued by Persons (other than the Sponsors or any of their Affiliates) with a
rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or reasonably equivalent ratings
of another internationally recognized ratings agency) in each case with maturities not exceeding
two years from the date of acquisition; and




          (8) investment funds investing at least 95% of their assets in securities of the types
described in clauses (1) through (7) above.




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




          (1) the sale, lease or transfer, in one or a series of related transactions, of all or
substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to a Person
other than any of the Permitted Holders; or




          (2) the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d)
of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or
group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any
successor provision), including any group acting for the purpose of acquiring, holding or disposing
of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of
the Permitted Holders, in a single transaction or in a related series of transactions, by way of
merger, consolidation, amalgamation or other business combination or purchase of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of
more than 50% of the total voting power of the Voting Stock of the Issuer. For purposes of
calculating the total voting power of the Voting Stock held by a group, the voting power
beneficially owned by a Permitted Holder shall be excluded to the extent such Permitted Holder
retains the sole economic rights with respect to the subject Voting Stock.



6









 







          The merger of the Issuer with and into the Company shall in no event constitute a Change of
Control.




          “Clearstream” means Clearstream Banking, Société Anonyme.




          “Code” means the Internal Revenue Code of 1986, as amended.




          “Collateral” means all property subject or purported to be subject, from time to time, to a
Lien under any Security Document.




          “Collateral Agent” means the Trustee in its capacity as “Collateral Agent” under the Indenture
and under the Security Documents and any successor thereto in such capacity.




          “Collateral Agreement” means the Collateral Agreement in substantially the form attached as
Exhibit F hereto, as the same may be amended, supplemented or otherwise modified from time to time.




          “Company” means Claire’s Stores, Inc., a Florida corporation (and not any of its
Subsidiaries), and its successors.




          “Consolidated Depreciation and Amortization Expense” means, with respect to any Person for any
period, the total amount of depreciation and amortization expense, including the amortization of
key money and other intangible assets, 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, of such Person and its Restricted
Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with
GAAP.




          “Consolidated Interest Expense” means, with respect to any Person for any period, the sum,
without duplication, of:




          (1) consolidated interest expense of such Person and its Restricted Subsidiaries for such
period, to the extent such expense was deducted in computing Consolidated Net Income (including
amortization of original issue discount, the interest component of Capitalized Lease Obligations,
and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding
Additional Interest in respect of the Notes and “additional interest” with respect to the Existing
Senior Subordinated Notes, amortization of deferred financing fees, debt issuance costs,
commissions, fees and expenses and expensing of any bridge, commitment or other financing fees);
plus




          (2) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued; plus




          (3) commissions, discounts, yield and other fees and charges Incurred in connection with any
Receivables Financing which are payable to Persons other than the Issuer and its Restricted
Subsidiaries; minus



7









 







          (4) interest income for such period.




          For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by the Issuer to be the rate of interest implicit
in such Capitalized Lease Obligation in accordance with GAAP.




          “Consolidated Leverage Ratio” means, as at any date of determination, the ratio of (1) the
Consolidated Total Indebtedness of the Issuer and its Restricted Subsidiaries as of the end of the
most recent fiscal quarter for which internal financial statements are available immediately
preceding the date on which such event for which such calculation is being made shall occur to (2)
the Issuer’s EBITDA for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such event for which
such calculation is being made shall occur, in each case with such pro forma adjustments to
Consolidated Total Indebtedness and EBITDA as are appropriate and consistent with the pro forma
adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.




          “Consolidated Net Income” means, with respect to any Person for any period, the aggregate of
the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated
basis; provided, however, that:




          (1) any net after-tax extraordinary, nonrecurring or unusual gains or losses (less all fees
and expenses relating thereto) or expenses or charges, any severance or relocation costs or
expenses, curtailments or modifications to pension and post-retirement employee benefit plans, any
expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of
fixed assets for alternate uses and fees, expenses or charges relating to new product lines, plant
shutdown costs, acquisition integration costs, expenses, excess pension charges, acquisition
integration charges, facilities opening costs and expenses or charges related to any issuance of
Equity Interests, any Investment, acquisition, disposition, recapitalization or issuance,
repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not
successful), and any fees, expenses, charges or change of control payments, including retention
payments, made under the Acquisition Documents or otherwise related to the Transactions, in each
case, shall be excluded;




          (2) 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 the Transactions or any
acquisition consummated after the Issue Date or the amortization or write-off of any amounts
thereof, net of taxes, shall be excluded;




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




          (4) any net after-tax income or loss from disposed, abandoned, transferred, closed or
discontinued operations or store closures and any net after-tax gain



8









 






or loss on disposal of
disposed, abandoned, transferred, closed or discontinued operations or store closures shall be
excluded;




          (5) any net after-tax gains or losses (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 Issuer) shall be
excluded;




          (6)(a) any net after-tax gains or losses (less all fees and expenses or charges relating
thereto) attributable to the early extinguishment of indebtedness, Hedging Obligations or other
derivative instruments and (b) any 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;




          (7) the equity interest in the Net Income for such period of any Person that is not a
Subsidiary of such Person, or is an Unrestricted Subsidiary, 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 Restricted Subsidiary thereof in respect of such period;




          (8) solely for the purpose of determining the amount available for Restricted Payments under
clause (A) of the definition of Cumulative Credit, the Net Income for such period of any Restricted
Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is
not at the date of determination permitted without any prior governmental approval (which has not
been obtained) or, directly or indirectly, by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable
to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the
payment of dividends or similar distributions have been legally waived; provided that the
Consolidated Net Income of such Person shall be increased by the amount of dividends or other
distributions or other payments actually paid in cash (or converted into cash) by any such
Restricted Subsidiary to such Person, to the extent not already included therein;




          (9) an amount equal to the amount of Tax Distributions actually made to any parent or equity
holder of such Person in respect of such period in accordance with Section 4.07(b)(xii) shall be
included as though such amounts had been paid as income taxes directly by such Person for such
period;




          (10) 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;




          (11) any non-cash expense realized or resulting from stock option plans, employee benefit
plans or post-employment benefit plans, or grants or sales of stock,



9









 







stock appreciation or similar
rights, stock options, restricted stock, preferred stock or other rights shall be excluded;




          (12) any (a) one-time non-cash compensation charges, (b) costs and expenses after the Issue
Date 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 the
Issue Date of officers, directors and employees, in each case of such Person or any of its
Restricted Subsidiaries, shall be excluded;




          (13) expenses associated with additional accruals and reserves that are established or
adjusted within 12 months after the Issue Date 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;




          (14) solely for purposes of calculating EBITDA, (a) the Net Income of any Person and its
Restricted Subsidiaries shall be calculated without deducting the income attributable to, or adding
the losses attributable to, the minority equity interests of third parties in any non-Wholly-owned
Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period
or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third
parties and (b) any ordinary course dividend, distribution or other payment paid in cash and
received from any Person in excess of amounts included in clause (7) above shall be included;




          (15) (a) the non-cash portion of “straight-line” rent expense shall be excluded and (b) the
cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such
rent expense shall be included, (c) the non-cash amortization of tenant allowances shall be
excluded and (d) cash received from landlords for tenant allowances and shall be included;




          (16) 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 Hedging Obligations for currency exchange risk, shall be excluded; and




          (17) solely for the purpose of determining the amount available for Restricted Payments under
clause (A) of the definition of Cumulative Credit, the difference, if positive, of the Consolidated
Taxes of the Issuer calculated in accordance with GAAP and the actual Consolidated Taxes paid in
cash by the Issuer during any Reference Period shall be included.




          Notwithstanding the foregoing, for the purpose of Section 4.07 hereof only, there shall be
excluded from Consolidated Net Income any dividends, repayments of loans or advances or other
transfers of assets from Unrestricted Subsidiaries of the Issuer or a Restricted Subsidiary of the
Issuer to the extent such dividends, repayments or



10









 






transfers increase the amount of Restricted
Payments permitted pursuant to clauses (D) and (E) of the definition of Cumulative Credit.




          “Consolidated Non-cash Charges” means, with respect to any Person for any period, the non-cash
expenses (other than Consolidated Depreciation and Amortization Expense) of such Person and its
Restricted Subsidiaries reducing
Consolidated Net Income of such Person for such period on a consolidated basis and otherwise
determined in accordance with GAAP; provided that if any such non-cash expenses represent an
accrual or reserve for potential cash items in any future period, the cash payment in respect
thereof in such future period shall be subtracted from EBITDA in such future period to the extent
paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash
item that was paid in a prior period.




          “Consolidated Taxes” means, with respect to any Person for any period, the provision for taxes
based on income, profits or capital, including, without limitation, state, franchise, property and
similar taxes, foreign withholding 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 and penalties related thereto and any Tax
Distributions taken into account in calculating Consolidated Net Income.




          “Consolidated Total Indebtedness” means, as at any date of determination, an amount equal to
(x) the sum of (1) the aggregate amount of all outstanding Indebtedness of the Issuer and its
Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money,
Obligations in respect of Capitalized Lease Obligations and debt obligations evidenced by
promissory notes and similar instruments (and excluding, for the avoidance of doubt, all
obligations relating to Receivables Facilities) and (2) the aggregate amount of all outstanding
Disqualified Stock of the Issuer and all Preferred Stock of its Restricted Subsidiaries on a
consolidated basis, with the amount of such Disqualified Stock and Preferred Stock equal to the
greater of their respective voluntary or involuntary liquidation preferences and maximum fixed
repurchase prices, in each case determined on a consolidated basis in accordance with GAAP, less
(y) the aggregate amount of unrestricted cash and Cash Equivalents included on the consolidated
balance sheet of the Issuer and any Restricted Subsidiaries as of such date; provided that
Indebtedness of the Issuer and its Restricted Subsidiaries under any revolving credit facility as
at any date of determination shall be determined using the Average Monthly Balance of such
Indebtedness for the most recently ended four fiscal quarters for which internal financial
statements are available as of such date of determination (the “Reference Period”). For purposes
of this definition, (a) the “maximum fixed repurchase price” of any Disqualified Stock or Preferred
Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms
of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were
purchased on any date on which Consolidated Total Indebtedness shall be required to be determined
pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value
of such Disqualified Stock or Preferred Stock, such fair market value shall be determined
reasonably and in good faith by the Issuer, (b) “Average Monthly Balance” means, with respect to
any Indebtedness incurred by the



11









 






Issuer or its Restricted Subsidiaries under a revolving credit
facility, the quotient of (x) the sum of each Individual Monthly Balance for each fiscal month
ended on or prior to such date of determination and included in the Reference Period divided by (y)
12, and (c) “Individual Monthly Balance” means, with respect to any Indebtedness incurred by the
Issuer or its Restricted Subsidiaries under a revolving credit facility during any fiscal month of
the Issuer, the quotient of (x) the sum of the aggregate outstanding principal
amount of all such Indebtedness at the end of each day of such fiscal month divided by (y) the
number of days in such fiscal month.




          “Contingent Obligations” means, with respect to any Person, any obligation of such Person
guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness
(“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly
or indirectly, including, without limitation, any obligation of such Person, whether or not
contingent:




          (1) to purchase any such primary obligation or any property constituting direct or indirect
security therefor;




          (2) to advance or supply funds (a) for the purchase or payment of any such primary obligation
or (b) to maintain working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor; or




          (3) to purchase property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to make payment of such
primary obligation against loss in respect thereof.




          “Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in
Section 13.02 hereof or such other address as to which the Trustee may give notice to the Holders
and the Issuer.




          “Credit Agreement” means (i) the credit agreement entered into in connection with, and on or
prior to, the consummation of the Acquisition, among the Issuer, the guarantors named therein, the
financial institutions named therein, and Credit Suisse, as Administrative Agent, as amended,
restated, supplemented, waived, replaced (whether or not upon termination, and whether with the
original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified
from time to time, including any agreement or indenture extending the maturity thereof,
refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such
agreement or agreements or indenture or indentures or any successor or replacement agreement or
agreements or indenture or indentures or increasing the amount loaned or issued thereunder or
altering the maturity thereof and (ii) whether or not the credit agreement referred to in clause
(i) remains outstanding, if designated by the Issuer to be included in the definition of “Credit
Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving
credit loans, term loans, receivables financing (including through the sale of receivables to
lenders or to special purpose entities formed to borrow from lenders against such receivables) or
letters of credit,



12









 






(B) debt securities, indentures or other forms of debt financing (including
convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C)
instruments or agreements evidencing any other Indebtedness, in each case, with the same or
different borrowers or issuers and, in each case, as amended, supplemented, modified, extended,
restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to
time; provided that for purposes of Section 4.09(b)(i) only,
the aggregate principal amount of Indebtedness Incurred under clause (i) and (ii) above (with
letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the
face amount thereof) at any one time outstanding shall not exceed the Initial Commitment Amount
plus an aggregate additional principal amount of secured Indebtedness that does not cause the
Secured Indebtedness Leverage Ratio of the Issuer to exceed 4.75 to 1.00, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom).




          “Credit Agreement Documents” means the collective reference to any Credit Agreement, any notes
issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto,
as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced
or otherwise modified, in whole or in part, from time to time.




          “Cumulative Credit” means the sum of (without duplication):





               (A) 50% of the Consolidated Net Income of the Issuer for the period (taken as one
accounting period, the “Reference Period”) from October 31, 2010 to the end of the Issuer’s
most recently ended fiscal quarter for which internal financial statements are available at
the time of such Restricted Payment (or, in the case such Consolidated Net Income for such
period is a deficit, minus 100% of such deficit), plus




               (B) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as
determined in good faith by the Issuer) of property other than cash, received by the Issuer
after the Issue Date (other than net proceeds to the extent such net proceeds have been
used to incur Indebtedness, Disqualified Stock, or Preferred Stock pursuant to clause
(xiii) of Section 4.09(b) hereof) from the issue or sale of Equity Interests of the Issuer
(excluding Refunding Capital Stock (as defined below), Designated Preferred Stock, Excluded
Contributions, and Disqualified Stock), including Equity Interests issued upon exercise of
warrants or options (other than an issuance or sale to a Restricted Subsidiary of the
Issuer), plus




               (C) 100% of the aggregate amount of contributions to the capital of the Issuer
received in cash and the Fair Market Value (as determined in good faith by the Issuer) of
property other than cash after the Issue Date (other than Excluded Contributions, Refunding
Capital Stock, Designated Preferred Stock, and Disqualified Stock and other than
contributions to the extent such contributions have been used to incur Indebtedness,
Disqualified Stock, or Preferred Stock pursuant to clause (xiii) of Section 4.09(b)
hereof), plus



13









 






               (D) 100% of the principal amount of any Indebtedness, or the liquidation preference or
maximum fixed repurchase price, as the case may be, of any Disqualified Stock of the Issuer
or any Restricted Subsidiary thereof issued after the Issue Date (other than Indebtedness
or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or
exchanged for Equity
Interests in the Issuer (other than Disqualified Stock) or any direct or indirect
parent of the Issuer (provided in the case of any parent, such Indebtedness or Disqualified
Stock is retired or extinguished), plus




               (E) 100% of the aggregate amount received by the Issuer or any Restricted Subsidiary
in cash and the Fair Market Value (as determined in good faith by the Issuer) of property
other than cash received by the Issuer or any Restricted Subsidiary from:




               (1) the sale or other disposition (other than to the Issuer or a Restricted
Subsidiary of the Issuer) of Restricted Investments made by the Issuer and its
Restricted Subsidiaries and from repurchases and redemptions of such Restricted
Investments from the Issuer and its Restricted Subsidiaries by any Person (other
than the Issuer or any of its Restricted Subsidiaries) and from repayments of loans
or advances, and releases of guarantees, which constituted Restricted Investments
(other than in each case to the extent that the Restricted Investment was made
pursuant to clause (vii) of Section 4.07(b) hereof),




               (2) the sale (other than to the Issuer or a Restricted Subsidiary of the
Issuer) of the Capital Stock of an Unrestricted Subsidiary, or




               (3) a distribution or dividend from an Unrestricted Subsidiary, plus




               (F) in the event any Unrestricted Subsidiary of the Issuer has been redesignated as a
Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or
transfers or conveys its assets to, or is liquidated into, the Issuer or a Restricted
Subsidiary, the Fair Market Value (as determined in good faith by the Issuer) of the
Investment of the Issuer in such Unrestricted Subsidiary at the time of such redesignation,
combination or transfer (or of the assets transferred or conveyed, as applicable) (other
than in each case to the extent that the designation of such Subsidiary as an Unrestricted
Subsidiary was made pursuant to clause (vii) of Section 4.07(b) hereof to the extent such
Investment constituted a Permitted Investment).



          “Custodian” means the Trustee, as custodian with respect to the Notes, each in global form, or
any successor entity.




          “Default” means any event which is, or after notice or passage of time or both would be, an
Event of Default.



14









 







          “Definitive Note” means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.06(c) hereof, substantially in the form of Exhibit A hereto
except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of
Exchanges of Interests in the Global Note” attached thereto.




          “Depositary” means, with respect to the Notes issuable or issued in whole or in part in global
form, any Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and
any and all successors thereto appointed as Depositary hereunder and having become such pursuant to
the applicable provision of this Indenture.




          “Designated Non-cash Consideration” means the Fair Market Value (as determined in good faith
by the Issuer) of non-cash consideration received by the Issuer or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash
Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, less
the amount of Cash Equivalents received in connection with a subsequent sale of such Designated
Non-cash Consideration.




          “Designated Preferred Stock” means Preferred Stock of the Issuer or any direct or indirect
parent of the Issuer (other than Disqualified Stock), that is issued for cash (other than to the
Issuer or any of its Subsidiaries or an employee stock ownership plan or trust established by the
Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to
an Officer’s Certificate, on the issuance date thereof.




          “Destruction” means any damage to, loss or destruction of all or any portion of the
Collateral.




          “Discharge of Senior Lender Claims” means, except to the extent otherwise provided in the
Intercreditor Agreement, payment in full in cash (except for contingent indemnities and cost and
reimbursement obligations to the extent no claim has been made) of:




          (a) all Obligations in respect of all outstanding First-Priority Lien Obligations and, with
respect to letters of credit or letter of credit guaranties outstanding thereunder, delivery of
cash collateral or backstop letters of credit in respect thereof in compliance with the Credit
Agreement, in each case after or concurrently with the termination of all commitments to extend
credit thereunder and




          (b) any other First-Priority Lien Obligations that are due and payable or otherwise accrued
and owing at or prior to the time such principal and interest are paid; provided that the Discharge
of Senior Lender Claims shall not be deemed to have occurred if such payments are made with the
proceeds of other First-Priority Lien Obligations that constitute an exchange or replacement for or
a refinancing of such Obligations or First-Priority Lien Obligations. In the event the
First-Priority Lien Obligations are modified and the Obligations are paid over time or otherwise
modified pursuant to Section 1129 of the Bankruptcy Code, the First-Priority Lien Obligations



15









 






shall
be deemed to be discharged when the final payment is made, in cash, in respect of such indebtedness
and any obligations pursuant to such new indebtedness shall have been satisfied.




          “Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
 convertible or for which it is redeemable or exchangeable), or upon the happening of any
event:




          (1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than as a result of a change of control or asset sale),




          (2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or




          (3) is redeemable at the option of the holder thereof, in whole or in part (other than solely
as a result of a change of control or asset sale),




in each case prior to 91 days after the earlier of the maturity date of the Notes or the date the
Notes are no longer outstanding; provided, however, that only the portion of Capital Stock which so
matures or is mandatorily redeemable, is so convertible or exchangeable or is 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 Capital Stock is issued to any employee or to any plan for the
benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Stock solely because it may be required to be
repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations or as
a result of such employee’s termination, death or disability; provided, further, that any class of
Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations
thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be
Disqualified Stock.




          “Domestic Subsidiary” means a Restricted Subsidiary that is not a Foreign Subsidiary.




          “EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such
Person for such period plus, without duplication, to the extent the same was deducted in
calculating Consolidated Net Income:




          (1) Consolidated Taxes; plus




          (2) Fixed Charges; plus




          (3) Consolidated Depreciation and Amortization Expense; plus




          (4) Consolidated Non-cash Charges; plus



16









 







          (5) the amount of any restructuring charges or reserves in such period; plus




          (6) the amount of management, monitoring, consulting, transaction and advisory fees and
related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses)
during such period to the extent otherwise permitted under Section 4.11 hereof; plus




          (7) 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 or any stock subscription or
shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds
contributed to the capital of the Issuer or a Guarantor or net cash proceeds of an issuance of
Equity Interests of the Issuer (other than Disqualified Stock) solely to the extent that such net
cash proceeds are excluded from the calculation of the Cumulative Credit; plus




          (8) any pre-opening or opening costs and expenses in connection with new store openings; plus




          (9) to the extent covered by insurance and actually reimbursed, or, so long as such Person has
made a determination that there exists reasonable evidence that such amount will in fact be
reimbursed by the insurer and only to the extent that such amount is (a) not denied by the
applicable carrier in writing within 180 days and (b) in fact reimbursed within 365 days of the
date of such evidence (with a deduction for any amount so added back to the extent not so
reimbursed within 365 days), expenses with respect to liability or casualty events or business
interruption shall be excluded; provided that any proceeds of such reimbursement when received
shall be excluded from the calculation of EBITDA to the extent the expense reimbursed was
previously excluded pursuant to this clause (9);




less, without duplication,




          (10) non-cash items increasing Consolidated Net Income for such period (excluding the
recognition of deferred revenue or any items which represent the reversal of any accrual of, or
cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items
for which cash was received in a prior period).




          “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).




          “Equity Offering” means any public or private sale after the Issue Date of common stock or
Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as applicable (other
than Disqualified Stock), other than: (1) public offerings with respect to the Issuer’s or such
direct or indirect parent’s common stock registered on Form S-8; and (2) any such public or private
sale that constitutes an Excluded Contribution.



17









 







          “Escrow Account” means a segregated account, under the sole control of the Trustee, that
includes only cash and Cash Equivalents, the proceeds thereof and interest earned thereon, free
from all Liens other than the Lien in favor of the Trustee for the benefit of the Holders of the
Notes.




          “Escrow Agreement” means the Escrow Agreement between and among the Issuer, the Company and
The Bank of New York Mellon Trust Company, N.A., as Escrow Agent (the “Escrow Agent”), Financial
Institution (the “Financial Institution”)
 and Trustee, dated as of March 4, 2011, as such agreement may be amended, modified or
supplemented from time to time.




          “Escrow Conditions” means (x) the Satisfaction of the Secured Debt Condition and (y) no
Default or Event of Default (including with respect to Restricted Subsidiaries) has occurred and is
continuing (or would have occurred had the Company or any of the Guarantors been subject to all the
provisions of this Indenture as of the date such Escrow Conditions are tested) under this
Indenture.




          “Escrow Release Date” means the date, on or prior to March 31, 2011, that the Escrow
Conditions are fulfilled and the Escrow Agent receives the Disbursement Request described in
Section 4(a) of the Escrow Agreement and the Escrow Agent releases the Escrowed Property (as
defined in the Escrow Agreement), including investment earnings, to the Issuer and the Company as
set forth in such Disbursement Request.




          “Escrowed Property” means the cash and Cash Equivalents, the proceeds thereof and interest
earned thereon in the Escrow Account.




          “Euroclear” means Euroclear S.A./N.V., as operator of the Euroclear System.




          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.




          “Exchange Notes” means the Notes issued in the Exchange Offer pursuant to Section 2.06(f)
hereof.




          “Exchange Offer” has the meaning set forth in the Registration Rights Agreement.




          “Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights
Agreement.




          “Excluded Contributions” means the Cash Equivalents or other assets (valued at their Fair
Market Value as determined in good faith by senior management or the Board of Directors of the
Issuer) received by the Issuer after the Issue Date from: (1) contributions to its common equity
capital, and (2) the sale (other than to a Subsidiary of the Issuer or to any Subsidiary management
equity plan or stock option plan or any other management or employee benefit plan or agreement) of
Capital Stock (other than



18









 






Disqualified Stock and Designated Preferred Stock) of the Issuer, in each
case designated as Excluded Contributions pursuant to an Officer’s Certificate executed by an
Officer of the Issuer on or promptly after the date such capital contributions are made or the date
such Capital Stock is sold, as the case may be.




          “Existing Notes” means the Existing Senior Notes and the Existing Senior Subordinated Notes.




          “Existing Senior Notes” means the 9.25% Senior Notes due 2015 of the Issuer and the 9.625%/
10.375% Senior Toggle Notes due 2015 of the Issuer.




          “Existing Senior Subordinated Notes” means the 10.50% Senior Subordinated Notes due 2017 of
the Issuer.




          “Fair Market Value” means, with respect to any asset or property, the price which could be
negotiated in an arm’s-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.




          “First Lien Agent” has the meaning given to such term in the Intercreditor Agreement.




          “First Priority After-Acquired Property” means any property (other than the initial
Collateral) of the Issuer or any Guarantor that secures any Secured Bank Indebtedness.




          “First-Priority Lien Obligations” means (1) all Secured Bank Indebtedness, (2) all other
Obligations (not constituting Indebtedness) of the Issuer and its Restricted Subsidiaries under the
agreements governing Secured Bank Indebtedness and (3) all other Obligations of the Issuer or any
of its Restricted Subsidiaries in respect of Hedging Obligations or Obligations in respect of cash
management services in each case owing to a Person that is a holder of Indebtedness described in
clause (1) or Obligations described in clause (2) or an Affiliate of such holder at the time of
entry into such Hedging Obligations or Obligations in respect of cash management services.




          “Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of
EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the
event that the Issuer or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems
any Indebtedness (other than in the case of revolving credit borrowings or revolving advances under
any Qualified Receivables Financing, in which case interest expense shall be computed based upon
the average daily balance of such Indebtedness during the applicable period) or issues, repurchases
or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for
which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment,
repurchase or



19









 






redemption of Indebtedness, or such issuance, repurchase or redemption of
Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the
applicable four-quarter period.




          For purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in
accordance with GAAP), in each case with respect to an operating unit of a business, during the
four-quarter reference period or subsequent to
such reference period and on or prior to or simultaneously with the Calculation Date shall be
calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions,
mergers, amalgamations, consolidations and discontinued operations (and the change of any
associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on
the first day of the four-quarter reference period. If since the beginning of such period any
Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or
any Restricted Subsidiary since the beginning of such period shall have made any Investment,
acquisition, disposition, merger, consolidation, amalgamation or discontinued operation, in each
case with respect to an operating unit of a business, that would have required adjustment pursuant
to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma
effect thereto for such period as if such Investment, acquisition, disposition, discontinued
operation, merger, amalgamation or consolidation had occurred at the beginning of the applicable
four-quarter period.




          For purposes of this definition, whenever pro forma effect is to be given to any event, the
pro forma calculations shall be made in good faith by a responsible financial or accounting officer
of the Issuer. Any such pro forma calculation may include adjustments appropriate, in the
reasonable good faith determination of the Issuer as set forth in an Officer’s Certificate, to
reflect (1) operating expense reductions and other operating improvements or synergies reasonably
expected to result from the applicable event including, to the extent applicable, from the
Transactions, and (2) all adjustments of the nature used in connection with the calculation of
“Adjusted EBITDA” as set forth in footnote 2 to the “Summary Historical Consolidated Financial
Information” under “Summary” in the Offering Circular to the extent such adjustments, without
duplication, continue to be applicable to such four-quarter period.




          If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the
interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date
had been the applicable rate for the entire period (taking into account any Hedging Obligations
applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12
months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of
making the computation referred to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average daily balance of
such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be
determined at an interest rate based upon a factor of a prime or similar



20









 






rate, a eurocurrency
interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually
chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.




          For purposes of this definition, any amount in a currency other than U.S. dollars will be
converted to U.S. 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.




          “Fixed Charges” means, with respect to any Person for any period, the sum, without
duplication, of (1) Consolidated Interest Expense of such Person for such period and (2) all cash
dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or
Disqualified Stock of such Person and its Restricted Subsidiaries.




          “Foreign Subsidiary” means a Subsidiary not organized or existing under the laws of the United
States of America or any state thereof or the District of Columbia and any direct or indirect
subsidiary of such Subsidiary.




          “GAAP” means generally accepted accounting principles in the United States set forth in the
opinions and pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect on the Issue Date. For the
purposes of this Indenture, the term “consolidated” with respect to any Person shall mean such
Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted
Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as
an Investment.




          “Global Note Legend” means the legend set forth in Section 2.06(g)(ii) hereof, which is
required to be placed on all Global Notes issued under this Indenture.




          “Global Notes” means, individually and collectively, the Restricted Global Notes and the
Unrestricted Global Notes, substantially in the form of Exhibit A hereto.




          “Government Securities” means securities that are:





     (1) direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged; or




     (2) obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of
America,



21









 





          which, in either case, are not callable or redeemable at the option of the issuers thereof,
and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act), as custodian with respect to any such Government Securities or a specific payment
of principal of or interest on any such Government Securities held by such custodian for the
account of the holder of such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the holder of such
depository receipt from any
 amount received by the custodian in respect of the Government Securities or the specific
payment of principal of or interest on the Government Securities evidenced by such depository
receipt.




          “guarantee” means a guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in any manner (including,
without limitation, letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness or other obligations.




          “Guarantee” means any guarantee of the obligations of the Issuer under this Indenture and the
Notes by any Person in accordance with the provisions herein.




          “Guarantor” means any Person that Incurs a Guarantee; provided that upon the release or
discharge of such Person from its Guarantee in accordance with this Indenture such Person ceases to
be a Guarantor.




          “Hedging Obligations” means, with respect to any Person, the obligations of such Person under:




          (1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest
rate or commodity cap agreements and currency exchange, interest rate or commodity collar
agreements; and




          (2) other agreements or arrangements designed to protect such Person against fluctuations in
currency exchange, interest rates or commodity prices.




          “Holder” means the Person in whose name a Note is registered on the Registrar’s books.




          “Incur” means issue, assume, guarantee, incur or otherwise become liable for; provided,
however, that any Indebtedness or Capital Stock of a Person existing at the time such person
becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise)
shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.




          “Indebtedness” means, with respect to any Person:




          (1) the principal and premium (if any) of any indebtedness of such Person, whether or not
contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar
instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement
agreements in respect thereof), (c)



22









 






representing the deferred and unpaid purchase price of any
property (except any such balance that (i) constitutes a trade payable or similar obligation to a
trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until
such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and
(iii) liabilities accrued in the ordinary course of business), which purchase price is due more
than six months after the date of placing the property in service or taking delivery and title
thereto, (d) in respect of Capitalized Lease Obligations, or (e)
representing any Hedging Obligations, if and to the extent that any of the foregoing
indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on
a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;




          (2) to the extent not otherwise included, any obligation of such Person to be liable for, or
to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another
Person (other than by endorsement of negotiable instruments for collection in the ordinary course
of business); and




          (3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on
any asset owned by such Person (whether or not such Indebtedness is assumed by such Person);
provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market
Value (as determined in good faith by the Issuer) of such asset at such date of determination, and
(b) the amount of such Indebtedness of such other Person;




provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include
(1) Contingent Obligations incurred in the ordinary course of business and not in respect of
borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a
portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of
the respective seller; (4) Obligations under or in respect of Qualified Receivables Financing or
(5) obligations under the Acquisition Documents.




          Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include,
and shall be calculated without giving effect to, the effects of Statement of Financial Accounting
Standards No. 133 and related interpretations to the extent such effects would otherwise increase
or decrease an amount of Indebtedness for any purpose under this Indenture as a result of
accounting for any embedded derivatives created by the terms of such Indebtedness; and any such
amounts that would have constituted Indebtedness under this Indenture but for the application of
this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.




          “Indenture” means this Indenture, as amended or supplemented from time to time.




          “Independent Financial Advisor” means an accounting, appraisal or investment banking firm or
consultant, in each case of nationally recognized standing, that is, in the good faith
determination of the Issuer, qualified to perform the task for which it has been engaged.




23









 








          “Indirect Participant” means a Person who holds a beneficial interest in a Global Note through
a Participant.




          “Initial Commitment Amount” means the sum of (i) the aggregate principal amount of term loans
outstanding under the Credit Agreement as of May 29, 2007, (ii) the aggregate principal amount of
the revolving credit facility (whether drawn, in whole or in part, or undrawn) under the Credit
Agreement as of May 29, 2007, and (iii)
the aggregate principal amount of delayed draw term loans or incremental term loan or
revolving credit facilities contemplated by the Credit Agreement (as in effect on the Issue Date)
up to a maximum of $250 million pursuant to this clause (iii) minus (iv) the outstanding principal
amount of the Notes (or any exchange Notes) or any Refinancing Indebtedness Incurred in respect of
the Notes (or any exchange Notes), but in no event more than $450 million.




          “Initial Notes” means the Notes issued on the Issue Date and any Notes issued in replacement
thereof, but not including any Exchange Notes issued in exchange therefore.




          “Initial Purchasers” means Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC,
Goldman, Sachs & Co. and Morgan Joseph TriArtisan LLC.




          “Interest Payment Date” means March 15 and September 15 of each year to Stated Maturity.




          “Intercreditor Agreement” means the Intercreditor Agreement in substantially the form attached
as Exhibit H hereto, as the same may be amended, supplemented or otherwise modified from time to
time.




          “Interest Payment Date” means March 15 and September 15 of each year to Stated Maturity.




          “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.




          “Investment Grade Securities” means:




          (1) securities issued or directly and fully guaranteed or insured by the U.S. government or
any agency or instrumentality thereof (other than Cash Equivalents);




          (2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s or
BBB- (or equivalent) by S&P, or an equivalent rating by any other Rating Agency, but excluding any
debt securities or loans or advances between and among the Issuer and its Subsidiaries;




          (3) investments in any fund that invests exclusively in investments of the type described in
clauses (1) and (2) above which fund may also hold immaterial amounts of cash pending investment
and/or distribution; and



24









 







          (4) corresponding instruments in countries other than the United States customarily utilized
for high quality investments and in each case with maturities not exceeding two years from the date
of acquisition.




          “Investments” means, with respect to any Person, all investments by such Person in other
Persons (including Affiliates) in the form of loans (including guarantees),
advances or capital contributions (excluding accounts receivable, trade credit and advances to
customers and commission, travel and similar advances to officers, employees and consultants made
in the ordinary course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities issued by any other Person and investments that
are required by GAAP to be classified on the balance sheet of the Issuer in the same manner as the
other investments included in this definition to the extent such transactions involve the transfer
of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section
4.07 hereof:




          (1) “Investments” shall include the portion (proportionate to the Issuer’s equity interest in
such Subsidiary) of the Fair Market Value (as determined in good faith by the Issuer) of the net
assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Issuer shall be deemed to continue to have a permanent “Investment” in an
Unrestricted Subsidiary equal to an amount (if positive) equal to:





          (a) the Issuer’s “Investment” in such Subsidiary at the time of such redesignation,
less




          (b) the portion (proportionate to the Issuer’s Equity Interest in such Subsidiary) of
the Fair Market Value (as determined in good faith by the Issuer) of the net assets of such
Subsidiary at the time of such redesignation; and



          (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair
Market Value (as determined in good faith by the Issuer) at the time of such transfer, in each case
as determined in good faith by the Board of Directors of the Issuer.




          “Issue Date” means the date on which the Notes are originally issued.




          “Issuer” means Claire’s Escrow Corporation, a Delaware corporation (and not any of its
Subsidiaries), and its successors.




          “Issuer Order” means a written request or order signed on behalf of the Issuer by an Officer
of the Issuer, who must be the principal executive officer, the principal financial officer, the
treasurer or the principal accounting officer of the Issuer, and delivered to the Trustee.





25











 





          “Letter of Transmittal” means the letter of transmittal to be prepared by the Issuer and
sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.



          “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest
or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event
shall an operating lease be deemed to constitute a Lien.



          “Management Group” means the group consisting of the directors, executive officers and other
management personnel of the Issuer or any direct or indirect parent of the Issuer, as the case may
be, on the Issue Date together with (1) any new directors whose election by such boards of
directors or whose nomination for election by the shareholders of the Issuer or any direct or
indirect parent of the Issuer, as applicable, was approved by a vote of a majority of the directors
of the Issuer or any direct or indirect parent of the Issuer, as applicable, then still in office
who were either directors on the Issue Date or whose election or nomination was previously so
approved and (2) executive officers and other management personnel of the Issuer or any direct or
indirect parent of the Issuer, as applicable, hired at a time when the directors on the Issue Date
together with the directors so approved constituted a majority of the directors of the Issuer or
any direct or indirect parent of the Issuer, as applicable.



          “Merger Agreement” means the Agreement and Plan of Merger, dated as of March 20, 2007, among
Claire’s Stores, Inc., Bauble Holdings Corp. and Bauble Acquisition Sub, Inc., as amended,
supplemented or modified from time to time prior to the Issue Date or thereafter.



          “Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business
thereof.



          “Net Income” means, 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.



          “Net Insurance Proceeds” means the insurance proceeds (excluding liability insurance proceeds
payable to the Trustee for any loss, liability or expense incurred by it and excluding the proceeds
of business interruption insurance) or condemnation awards actually received by the Issuer or any
Restricted Subsidiary as a result of the Destruction or Taking of all or any portion of the
Collateral, net of:



          (1) reasonable out-of-pocket expenses and fees relating to such Taking or Destruction
(including, without limitation, expenses of attorneys and insurance adjusters); and



26









 





          (2) repayment of Indebtedness that is secured by the property or assets that are the subject
of such Taking or Destruction; provided that, in the case of any Destruction or Taking involving
Collateral, the Lien securing such Indebtedness constitutes a Lien permitted by this Indenture to
be senior to the Notes Liens.



          “Net Proceeds” means the aggregate cash proceeds received by the Issuer or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash
received in respect of or upon the sale or other disposition of any Designated Non-cash
Consideration received in any Asset Sale and any cash payments received by way of deferred payment
of principal pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding the assumption by the acquiring person of Indebtedness relating to the
disposed assets or other consideration received in any other non-cash form), net of the direct
costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash
Consideration (including, without limitation, legal, accounting and investment banking fees, and
brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements related thereto), amounts required to be applied to the
repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant
to Section 4.10(b) hereof) to be paid as a result of such transaction, and any deduction of
appropriate amounts to be provided by the Issuer as a reserve in accordance with GAAP against any
liabilities associated with the asset disposed of in such transaction and retained by the Issuer
after such sale or other disposition thereof, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.



          “Non-U.S. Person” means a Person who is not a U.S. Person.



          “Notes” has the meaning assigned to such term in the recitals hereto.



          “Notes Liens” means the Liens securing the Notes Obligations.



          “Notes Obligations” means any Obligations in respect of the Notes, this Indenture or the
Security Documents, including, for the avoidance of doubt, obligations in respect of Exchange Notes
and Guarantees thereof.



          “Obligations” means any principal, interest, penalties, fees, expenses, indemnifications,
reimbursements (including, without limitation, reimbursement obligations with respect to letters of
credit and bankers’ acceptances), damages and other liabilities payable under the documentation
governing any Indebtedness; provided that Obligations with respect to the Notes shall not include
fees or indemnifications in favor of the Trustee and other third parties other than the Holders of
the Notes.



          “Offering Circular” means the confidential Offering Circular, dated February 17, 2011,
relating to the sale of the Initial Notes.



27









 





          “Officer” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer,
President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or
the Secretary of the Issuer.



          “Officer’s Certificate” means a certificate signed on behalf of the Issuer by an Officer of
the Issuer that meets the requirements set forth in this Indenture.



          “Opinion of Counsel” means a written opinion, acceptable to the Trustee and the Collateral
Agent, from legal counsel who may be an employee of or counsel to the Issuer.



          “Other Second-Lien Obligation” means other Indebtedness of the Issuer and its Restricted
Subsidiaries that is equally and ratably secured with the Notes and is designated by the Issuer as
an Other Second-Lien Obligation.



          “Pari Passu Indebtedness” means:



          (1) with respect to the Issuer, the Notes and any Indebtedness which ranks pari passu in right
of payment to the Notes; and



          (2) with respect to any Guarantor, its Guarantee and any Indebtedness which ranks pari passu
in right of payment to such Guarantor’s Guarantee.



          “Participant” means, with respect to the Depositary a Person who has an account with the
Depositary (and, with respect to DTC, shall include Euroclear and Clearstream).



          “Permitted Amount” means (a) an aggregate additional principal amount that does not cause the
Secured Indebtedness Leverage Ratio of the Issuer to exceed 5.0 to 1.00, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), or (b) an aggregate
principal amount, which when aggregated with the principal amount of all other Indebtedness
(including Capitalized Lease Obligations), together with any refinancings or replacements thereof,
then outstanding and Incurred under this clause (b), does not exceed the greater of $75 million and
2.25% of Total Assets at the time of Incurrence.



          “Permitted Holders” means, at any time, each of (i) the Sponsors and (ii) the Management
Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of
Control in respect of which a Change of Control Offer is made in accordance with the requirements
of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted
Holder.



          “Permitted Investments” means:



          (1) any Investment in the Issuer or any Restricted Subsidiary;



          (2) any Investment in Cash Equivalents or Investment Grade Securities;



28









 





          (3) any Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person if as
a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Issuer, or (b)
such Person, in one transaction or a series of related transactions, is merged, consolidated or
amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Issuer or a Restricted Subsidiary of the Issuer;



          (4) any Investment in securities or other assets not constituting Cash Equivalents and
received in connection with an Asset Sale made pursuant to Section 4.10 hereof or any other
disposition of assets not constituting an Asset Sale;



          (5) any Investment existing on, or made pursuant to binding commitments existing on, the Issue
Date or an Investment consisting of any extension, modification or renewal of any Investment
existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as
required by the terms of such Investment as in existence on the Issuer Date or (y) as otherwise
permitted under this Indenture;



          (6) advances to employees, taken together with all other advances made pursuant to this clause
(6), not to exceed the greater of (x) $5 million and (y) 0.25% of Total Assets at any one time
outstanding;



          (7) any Investment acquired by the Issuer or any of its Restricted Subsidiaries (a) in
exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted
Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other Investment or accounts receivable, or (b) as a result
of a foreclosure by the Issuer or any of its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured Investment in default;



          (8) Hedging Obligations permitted under Section 4.09(b)(x) hereof;



          (9) any Investment by the Issuer or any of its Restricted Subsidiaries in a Similar Business
having an aggregate Fair Market Value (as determined in good faith by the Issuer), taken together
with all other Investments made pursuant to this clause (9) that are at that time outstanding, not
to exceed the greater of (x) $50 million and (y) 1.5% of Total Assets at the time of such
Investment (with the Fair Market Value of each Investment being measured at the time made and
without giving effect to subsequent changes in value); provided, however, that if any Investment
pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary of the Issuer
at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the
Issuer after such date, such Investment shall thereafter be deemed to have been made pursuant to
clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such
Person continues to be a Restricted Subsidiary;



          (10) additional Investments by the Issuer or any of its Restricted Subsidiaries having an
aggregate Fair Market Value (as determined in good faith by the



29









 




Issuer), taken together with all other Investments made pursuant to this clause (10) that are
at that time outstanding, not to exceed the greater of (x) $100 million and (y) 3.0% of Total
Assets at the time of such Investment (with the Fair Market Value of each Investment being measured
at the time made and without giving effect to subsequent changes in value); provided, however, that
if any Investment pursuant to this clause (10) is made in any Person that is not a Restricted
Subsidiary of the Issuer at the date of the making of such Investment and such Person becomes a
Restricted Subsidiary of the Issuer after such date, such Investment shall thereafter be deemed to
have been made pursuant to clause (1) above and shall cease to have been made pursuant to this
clause (10) for so long as such Person continues to be a Restricted Subsidiary;




          (11) loans and advances to officers, directors or employees for business-related travel
expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course
of business or consistent with past practice or to fund such person’s purchase of Equity Interests
of the Issuer or any direct or indirect parent of the Issuer;



          (12) Investments the payment for which consists of Equity Interests of the Issuer (other than
Disqualified Stock) or any direct or indirect parent of the Issuer, as applicable; provided,
however, that such Equity Interests will not increase the amount available for Restricted Payments
under clause (C) of the definition of Cumulative Credit;



          (13) any transaction to the extent it constitutes an Investment that is permitted by and made
in accordance with Section 4.11(b) hereof (except transactions described in clauses (ii), (vi),
(vii) and (xi)(b) thereof);



          (14) Investments consisting of the licensing or contribution of intellectual property pursuant
to joint marketing arrangements with other Persons;



          (15) guarantees issued in accordance with Section 4.09 and Section 4.14;



          (16) Investments consisting of or to finance purchases and acquisitions of inventory,
supplies, materials, services or equipment or purchases of contract rights or licenses or leases of
intellectual property;



          (17) any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary
in any other Person in connection with a Qualified Receivables Financing, including Investments of
funds held in accounts permitted or required by the arrangements governing such Qualified
Receivables Financing or any related Indebtedness;



          (18) additional Investments in joint ventures not to exceed at any one time in the aggregate
outstanding under this clause (18), the greater of (x) $65 million and (y) 2.0% of Total Assets;
provided, however, that if any Investment pursuant to this clause (18) is made in any Person that
is not a Restricted Subsidiary of the Issuer at the date of the making of such Investment and such
Person becomes a Restricted Subsidiary



30









 




of the Issuer after such date, such Investment shall
thereafter be deemed to have been
made pursuant to clause (1) above and shall cease to have been made pursuant to this clause
(18) for so long as such Person continues to be a Restricted Subsidiary; and




          (19) Investments of a Restricted Subsidiary of the Issuer acquired after the Issue Date or of
an entity merged into, amalgamated with, or consolidated with the Issuer or a Restricted Subsidiary
of the Issuer in a transaction that is not prohibited by Section 5.01 after the Issue Date to the
extent that such Investments were not made in contemplation of such acquisition, merger,
amalgamation or consolidation and were in existence on the date of such acquisition, merger,
amalgamation or consolidation.



          “Permitted Liens” means, with respect to any Person:



          (1) pledges or deposits by such Person under workmen’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Indebtedness) or leases to which such Person is a party,
or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S.
government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in each case Incurred in
the ordinary course of business;



          (2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case
for sums not yet due or being contested in good faith by appropriate proceedings or other Liens
arising out of judgments or awards against such Person with respect to which such Person shall then
be proceeding with an appeal or other proceedings for review;



          (3) Liens for taxes, assessments or other governmental charges not yet due or payable or
subject to penalties for nonpayment or which are being contested in good faith by appropriate
proceedings;



          (4) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to
other regulatory requirements or letters of credit issued pursuant to the request of and for the
account of such Person in the ordinary course of its business;



          (5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the use of real properties or Liens
incidental to the conduct of the business of such Person or to the ownership of its properties
which were not Incurred in connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially impair their use in the
operation of the business of such Person;



          (6) (A) Liens on assets of a Restricted Subsidiary that is not a Guarantor securing
Indebtedness of such Restricted Subsidiary permitted to be Incurred



31









 




pursuant to Section 4.09
hereof, (B) Liens securing Indebtedness permitted to be incurred under the Credit Agreement,
including any letter of credit facility relating thereto, that
was permitted to be incurred pursuant to clause (i) of Section 4.09(b) hereof, (C) Liens
securing obligations in respect of any Indebtedness permitted to be incurred pursuant to clauses
(xii) and (xxii) of Section 4.09(b) hereof, provided that, with respect to Liens securing
obligations permitted under this clause (C), at the time of incurrence and after giving pro forma
effect thereto, the Secured Indebtedness Leverage Ratio of the Issuer would not exceed 4.75 to
1.00, and (D) Liens securing Indebtedness permitted to be Incurred pursuant to clause (iv) of
Section 4.09(b), provided that such Liens do not extend to any property or assets that are not
being purchased, leased, constructed or improved with the proceeds of such Indebtedness being
Incurred pursuant to clause (iv);




          (7) Liens existing on the Issue Date;



          (8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a
Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or
in contemplation of, such other Person becoming such a Subsidiary; provided, further, however, that
such Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary of
the Issuer;



          (9) Liens on assets or property at the time the Issuer or a Restricted Subsidiary of the
Issuer acquired the assets or property, including any acquisition by means of a merger,
amalgamation or consolidation with or into the Issuer or any Restricted Subsidiary of the Issuer;
provided, however, that such Liens are not created or Incurred in connection with, or in
contemplation of, such acquisition; provided, further, however, that the Liens may not extend to
any other property owned by the Issuer or any Restricted Subsidiary of the Issuer;



          (10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the
Issuer or another Restricted Subsidiary of the Issuer permitted to be Incurred in accordance with
Section 4.09;



          (11) Liens securing Hedging Obligations not incurred in violation of this Indenture; provided
that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the
property securing such Indebtedness;



          (12) Liens on specific items of inventory or other goods and proceeds of any Person securing
such Person’s obligations in respect of bankers’ acceptances issued or created for the account of
such Person to facilitate the purchase, shipment or storage of such inventory or other goods;



          (13) leases and subleases of real property which do not materially interfere with the ordinary
conduct of the business of the Issuer or any of its Restricted Subsidiaries;



32









 





          (14) Liens arising from Uniform Commercial Code financing statement filings regarding
operating leases entered into by the Issuer and its Restricted Subsidiaries in the ordinary course
of business;



          (15) Liens in favor of the Issuer or any Guarantor;



          (16) Liens on accounts receivable and related assets of the type specified in the definition
of “Receivables Financing” Incurred in connection with a Qualified Receivables Financing;



          (17) deposits made in the ordinary course of business to secure liability to insurance
carriers;



          (18) Liens on the Equity Interests of Unrestricted Subsidiaries;



          (19) grants of software and other technology licenses in the ordinary course of business;



          (20) Liens to secure any refinancing, refunding, extension, renewal or replacement (or
successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part,
of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9),
(10), (11), (15) and (27); provided, however, that (x) such new Lien shall be limited to all or
part of the same property that secured the original Lien (plus improvements on such property), and
(y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than
the sum of (A) the outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clauses (6), (7), (8), (9), (10), (11), (15) and (27) at the time the
original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any
fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal
or replacement; provided further, however, that in the case of any Liens to secure any refinancing,
refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (6)(B)
above, the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension
or renewal shall be deemed secured by a Lien under clause (6)(B) above and not this clause (20) for
purposes of determining the principal amount of Indebtedness outstanding under clause (6)(B) above;



          (21) Liens on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary
course of business to the Issuer’s or such Restricted Subsidiary’s client at which such equipment
is located;



          (22) judgment and attachment Liens not giving rise to an Event of Default and notices of lis
pendens and associated rights related to litigation being contested in good faith by appropriate
proceedings and for which adequate reserves have been made;



          (23) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of business;



33









 





          (24) Liens incurred to secure cash management services in the ordinary course of business;



          (25) other Liens securing obligations incurred in the ordinary course of business which
obligations do not exceed $30 million at any one time outstanding;



          (26) Liens arising by virtue of any statutory or common law provisions relating to banker’s
liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds
maintained with a depository or financial institution; and



          (27) Liens securing the Notes, any Exchange Notes and the related Guarantees.



          “Person” means any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.



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



          “Private Placement Legend” means the legend set forth in Section 2.06(g)(i) hereof to be
placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions
of this Indenture.



          “QIB” means a “qualified institutional buyer” as defined in Rule 144A.



          “Qualified Receivables Financing” means any Receivables Financing of a Receivables Subsidiary
that meets the following conditions:



          (1) the Board of Directors of the Issuer shall have determined in good faith that such
Qualified Receivables Financing (including financing terms, covenants, termination events and other
provisions) is in the aggregate economically fair and reasonable to the Issuer and the Receivables
Subsidiary;



          (2) all sales of accounts receivable and related assets to the Receivables Subsidiary are made
at Fair Market Value (as determined in good faith by the Issuer); and



          (3) the financing terms, covenants, termination events and other provisions thereof shall be
market terms (as determined in good faith by the Issuer) and may include Standard Securitization
Undertakings.



          The grant of a security interest in any accounts receivable of the Issuer or any of its
Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Bank Indebtedness shall not
be deemed a Qualified Receivables Financing.



34









 





          “Rating Agency” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the
Notes for reasons outside of the Issuer’s control, a “nationally recognized statistical rating
organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the
Issuer or any direct or indirect parent of the Issuer as a replacement agency for Moody’s or S&P,
as the case may be.



          “Receivables Fees” means distributions or payments made directly or by means of discounts with
respect to any participation interests issued or sold in connection with, and all other fees paid
to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.



          “Receivables Financing” means any transaction or series of transactions that may be entered
into by the Issuer or any of its Subsidiaries pursuant to which the Issuer or any of its
Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of
a transfer by the Issuer or any of its Subsidiaries); and (b) any other Person (in the case of a
transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable
(whether now existing or arising in the future) of the Issuer or any of its Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of such accounts
receivable, proceeds of such accounts receivable and other assets which are customarily transferred
or in respect of which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable and any Hedging Obligations entered into
by the Issuer or any such Subsidiary in connection with such accounts receivable.



          “Receivables Repurchase Obligation” means any obligation of a seller of receivables in a
Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a
representation, warranty or covenant or otherwise, including as a result of a receivable or portion
thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a
result of any action taken by, any failure to take action by or any other event relating to the
seller.



          “Receivables Subsidiary” means a Wholly-owned Restricted Subsidiary of the Issuer (or another
Person formed for the purposes of engaging in Qualified Receivables Financing with the Issuer in
which the Issuer or any Subsidiary of the Issuer makes an Investment and to which the Issuer or any
Subsidiary of the Issuer transfers accounts receivable and related assets) which engages in no
activities other than in connection with the financing of accounts receivable of the Issuer and its
Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other
assets relating thereto, and any business or activities incidental or related to such business, and
which is designated by the Board of Directors of the Issuer (as provided below) as a Receivables
Subsidiary and:




          (a) no portion of the Indebtedness or any other obligations (contingent or otherwise)
of which (i) is guaranteed by the Issuer or any other Subsidiary of the Issuer (excluding
guarantees of obligations (other than the principal of and interest on, Indebtedness)
pursuant to Standard Securitization



35









 






Undertakings), (ii) is recourse to or obligates the
Issuer or any other Subsidiary of the Issuer in any way other than pursuant to Standard
Securitization Undertakings, or (iii) subjects any property or asset of the Issuer or any
other Subsidiary of the Issuer, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard Securitization Undertakings;




          (b) with which neither the Issuer nor any other Subsidiary of the Issuer has any
material contract, agreement, arrangement or understanding other than on terms which the
Issuer reasonably believes to be no less favorable to the Issuer or such Subsidiary than
those that might be obtained at the time from Persons that are not Affiliates of the
Issuer; and




          (c) to which neither the Issuer nor any other Subsidiary of the Issuer has any
obligation to maintain or preserve such entity’s financial condition or cause such entity
to achieve certain levels of operating results.



          Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee
by filing with the Trustee a certified copy of the resolution of the Board of Directors of the
Issuer giving effect to such designation and an Officer’s Certificate certifying that such
designation complied with the foregoing conditions.



          “Record Date” for the interest payable on any applicable Interest Payment Date means the March
1 and September 1 (whether or not a Business Day) immediately preceding such Interest Payment Date.



          “Registration Rights Agreement” means the Registration Rights Agreement with respect to the
Notes dated as of the Issue Date, among the Issuer, the Company, the Guarantors and Credit Suisse
Securities (USA) LLC, J.P. Morgan Securities LLC, Goldman, Sachs & Co. and Morgan Joseph TriArtisan
LLC, as representatives of the Initial Purchasers, as such agreement may be amended, modified or
supplemented from time to time and, with respect to any Additional Notes, one or more registration
rights agreements between the Issuer and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights given by the Issuer to the
purchasers of Additional Notes to register such Additional Notes under the Securities Act.



          “Regulation S” means Regulation S promulgated under the Securities Act.



          “Regulation S Global Note” means a Regulation S Temporary Global Note or Regulation S
Permanent Global Note, as applicable.



          “Regulation S Permanent Global Note” means a permanent Global Note in the form of Exhibit A
bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of
and registered in the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note of the applicable series
upon expiration of the Restricted Period.



36









 





          “Regulation S Temporary Global Note” means a temporary Global Note in the form of Exhibit A
bearing the Global Note Legend, the Private Placement Legend and the Regulation S Temporary Global
Note Legend and deposited with or on behalf of and registered in the name of the Depositary or its
nominee, issued in a denomination equal to the outstanding principal amount of the Notes of the
applicable series initially sold in reliance on Rule 903.



          “Regulation S Temporary Global Note Legend” means the legend set forth in Section 2.06(g)(iii)
hereof.



          “Representative” means the trustee, agent or representative (if any) for an issue of
Indebtedness; provided that if, and for so long as, such Indebtedness lacks such a Representative,
then the Representative for such Indebtedness shall at all times constitute the holder or holders
of a majority in outstanding principal amount of obligations under such Indebtedness.



          “Responsible Officer” means, when used with respect to the Trustee or the Collateral Agent,
any officer within the corporate trust department of the Trustee or the Collateral Agent, including
any vice president, assistant vice president, assistant secretary, assistant treasurer, trust
officer or any other officer of the Trustee or the Collateral Agent who customarily performs
functions similar to those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge
of and familiarity with the particular subject and who shall have direct responsibility for the
administration of this Indenture.



          “Restricted Definitive Note” means a Definitive Note bearing, or that is required to bear, the
Private Placement Legend.



          “Restricted Global Note” means a Global Note bearing, or that is required to bear, the Private
Placement Legend.



          “Restricted Cash” means cash and Cash Equivalents held by Restricted Subsidiaries that is
contractually restricted from being distributed to the Issuer, except for such restrictions that
are contained in agreements governing Indebtedness permitted under this Indenture and that is
secured by such cash or Cash Equivalents.



          “Restricted Investment” means an Investment other than a Permitted Investment.



          “Restricted Period” means the 40-day distribution compliance period as defined in Regulation
S.



          “Restricted Subsidiary” means, with respect to any Person, any Subsidiary of such Person other
than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this Indenture, all
references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Issuer.



37









 





          “Rule 144” means Rule 144 promulgated under the Securities Act.



          “Rule 144A” means Rule 144A promulgated under the Securities Act.



          “Rule 903” means Rule 903 promulgated under the Securities Act.



          “Rule 904” means Rule 904 promulgated under the Securities Act.



          “S&P” means Standard & Poor’s Ratings Group or any successor to the rating agency business
thereof.



          “Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter
acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a Restricted Subsidiary
transfers such property to a Person and the Issuer or such Restricted Subsidiary leases it from
such Person, other than leases between the Issuer and a Restricted Subsidiary of the Issuer or
between Restricted Subsidiaries of the Issuer.



          “Satisfaction of Secured Debt Condition” means the delivery to the Trustee of an Officer’s
Certificate stating that under the terms of the Company’s Credit Agreement, based on the Company’s
available financial statements for its fiscal year ended January 29, 2011, upon the application of
the net proceeds of the note offering as described under “Use of Proceeds” in the Offering Circular
or otherwise, the Company may effect the Assumption and the Guarantors may provide the Guarantees
as contemplated by “Guarantees” in the Offering Circular and the Company and the Guarantors may
grant a Lien on the Collateral to secure the Notes and the Guarantees as contemplated by “Security”
in the Offering Circular.



          “SEC” means the Securities and Exchange Commission.



          “Second-Priority Obligations” means the Obligations with respect to the Notes and any
Obligations in respect of Other Second-Lien Obligations.



          “Secured Bank Indebtedness” means any Bank Indebtedness that is secured by a Permitted Lien
incurred or deemed incurred pursuant to clause 6(B) of the definition of “Permitted Liens.”



          “Secured Indebtedness” means any Indebtedness secured by a Lien.



          “Secured Indebtedness Leverage Ratio” means, with respect to any Person, at any date the ratio
of (i) Secured Indebtedness of such Person and its Restricted Subsidiaries as of such date of
calculation (determined on a consolidated basis in accordance with GAAP) less the amount of cash
and cash Equivalents in excess of any Restricted Cash that would be stated on the balance sheet of
such Person and its Restricted Subsidiaries and held by such Person and its Restricted Subsidiaries
as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters
for which internal financial statements are available immediately preceding such date on which such
additional Indebtedness is Incurred. In the event that the Issuer or any of its



38









 




Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness subsequent to the commencement
of the period for which the Secured Indebtedness Leverage Ratio is being calculated but prior to
the event for which the calculation of the Secured Indebtedness Leverage Ratio is made (the
“Secured Leverage Calculation Date”), then the Secured Indebtedness Leverage Ratio shall be
calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of
Indebtedness as if the same had occurred at the beginning of the applicable four-quarter period;
provided that the Issuer may elect pursuant to an Officer’s Certificate delivered to the Trustee to
treat all or any portion of the commitment under any Indebtedness as being Incurred at such time,
in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed,
for purposes of this calculation, to be an Incurrence at such subsequent time.




          For purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, amalgamations, consolidations (including the Transactions) and discontinued
operations (as determined in accordance with GAAP), in each case with respect to an operating unit
of a business, during the four-quarter reference period or subsequent to such reference period and
on or prior to or simultaneously with the Secured Leverage Calculation Date (each, for purposes of
this calculation, a pro forma event) shall be calculated on a pro forma basis assuming that all
such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations (including the
Transactions) and discontinued operations (and the change of any associated Indebtedness and the
change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference
period. If since the beginning of such period any Person that subsequently became a Restricted
Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning
of such period shall have made any Investment, acquisition, disposition, merger, consolidation,
amalgamation or discontinued operation, in each case with respect to an operating unit of a
business, that would have required adjustment pursuant to this definition, then the Secured
Indebtedness Leverage Ratio shall be calculated giving pro forma effect thereto for such period as
if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation or
consolidation had occurred at the beginning of the applicable four-quarter period.



          For purposes of this definition, whenever pro forma effect is to be given to any pro forma
event, the pro forma calculations shall be made in good faith by a responsible financial or
accounting officer of the Issuer. Any such pro forma calculation may include adjustments
appropriate, in the reasonable good faith determination of the Issuer as set forth in an Officer’s
Certificate, to reflect (1) operating expense reductions and other operating improvements or
synergies reasonably expected to result from the applicable event (including, to the extent
applicable, from the Transactions) and (2) all adjustments of the nature used in connection with
the calculation of “Adjusted EBITDA” as set forth in footnote 2 to the “Summary Historical
Consolidated Financial Information” under “Summary” in the Offering Circular to the extent such
adjustments, without duplication, continue to be applicable to such four-quarter period.



39









 





          For purposes of this definition, any amount in a currency than U.S. dollars will be converted
to U.S. 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.



          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the SEC promulgated thereunder.



          “Security Documents” means the security agreements, pledge agreements, collateral assignments
and related agreements (including the Collateral Agreement and the Trademark Security Agreement),
as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced
or otherwise modified from time to time, creating the security interest in the Collateral as
contemplated by the Indenture.



          “Shelf Registration Statement” means the Shelf Registration Statement as defined in the
Registration Rights Agreement.



          “Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant
Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the
SEC (or any successor provision).



          “Similar Business” means a business, the majority of whose revenues are derived from the
activities of the Issuer and its Subsidiaries as of the Issue Date or any business or activity that
is reasonably similar or complementary thereto or a reasonable extension, development or expansion
thereof or ancillary thereto.



          “Special Redemption Price” means 100% of the issue price of the Notes, plus accrued and unpaid
interest, from, and including, the Issue Date to, but excluding, the Special Redemption Date,
notwithstanding any noncompliance by the Issuer with the requirements of the second sentence of
Section 3.10.



          “Sponsors” means (i) one or more funds controlled by Apollo Management, L.P., any of their
respective Affiliates and other affiliated co-investment partnerships (collectively, the “Apollo
Sponsors”) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, or any successor provision) with any Apollo Sponsors;
provided that any Apollo Sponsor (x) owns a majority of the voting power and (y) controls a
majority of the Board of Directors of the Issuer.



          “Standard Securitization Undertakings” means representations, warranties, covenants,
indemnities and guarantees of performance entered into by the Issuer or any Subsidiary of the
Issuer which the Issuer has determined in good faith to be customary in a Receivables Financing
including, without limitation, those relating to the servicing of the assets of a Receivables
Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a
Standard Securitization Undertaking.



40









 





          “Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the final payment of principal of such security is due and payable,
including pursuant to any mandatory redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has occurred).



          “Subordinated Indebtedness” means (a) with respect to the Issuer, any Indebtedness of the
Issuer which is by its terms subordinated in right of payment to the
Notes, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by
its terms subordinated in right of payment to its Guarantee.



          “Subsidiary” means, with respect to any Person, (1) any corporation, association or other
business entity (other than a partnership, joint venture or limited liability company) of which
more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or trustees thereof
is at the time of determination owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership,
joint venture or limited liability company of which (x) more than 50% of the capital accounts,
distribution rights, total equity and voting interests or general and limited partnership
interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of that Person or a combination thereof, whether in the form of
membership, general, special or limited partnership interests or otherwise, and (y) such Person or
any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.



          “Synthetic Lease Obligations” means obligations of a Loan Party, as defined in the Credit
Agreement, as lessee/borrower under any transaction which is classified as an operating lease under
GAAP but as a financing for tax purposes either currently or when such leases were originally
written.



          “Taking” means any taking of all or any portion of the Collateral by condemnation or other
eminent domain proceedings, pursuant to any law, general or special, or by reason of the temporary
requisition of the use or occupancy of all or any portion of the Collateral by any governmental
authority, civil or military, or any sale pursuant to the exercise by any such governmental
authority of any right which it may then have to purchase or designate a purchaser or to order a
sale of all or any portion of the Collateral.



          “Tax Distributions” means any distributions described in clause (xii) of Section 4.07(b).



          “Total Assets” means the total consolidated assets of the Issuer and its Restricted
Subsidiaries, as shown on the most recent balance sheet of the Issuer, without giving effect to any
amortization of the amount of intangible assets since the Issue Date.



41









 





          “Trademark Security Agreement” means the Second Lien Trademark Security Agreement in
substantially the form attached as Exhibit G hereto, as the same may be amended, supplemented or
otherwise modified from time to time.



          “Transactions” has the meaning set forth under “Summary — Acquisition of the Company by
Apollo Management VI, L.P.” in the Offering Circular.



          “Treasury Rate” means, as of the applicable Redemption Date, the yield to maturity as of such
Redemption 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 business days
prior to such Redemption 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 such Redemption Date
to June 1, 2011; provided, however, that if the period from such Redemption Date to June 1, 2011 is
less than one year, the weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year will be used.



          “Trust Indenture Act” means the Trust Indenture Act of 1939, (15 U.S.C. §§ 77aaa-777bbbb) as
in effect on the date hereof.



          “Trustee” means The Bank of New York Mellon Trust Company, N.A., as trustee, until a successor
replaces it in accordance with the applicable provisions of this Indenture and thereafter means the
successor serving hereunder.



          “Unapplied Proceeds” means net cash proceeds received by the Issuer and its Restricted
Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of
the Issuer or any direct or indirect parent entity of the Issuer (which proceeds are contributed to
the Issuer or its Restricted Subsidiary) or cash contributed to the capital of the Issuer (in each
case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions
received from, the Issuer or any of its Subsidiaries) as determined in accordance with clauses (B)
and (C) of the definition of Cumulative Credit to the extent such net cash proceeds or cash have
not been applied pursuant to such clauses to make Restricted Payments or to make other Investments,
payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other
than Permitted Investments specified in clauses (1) and (3) of the definition thereof).



          “Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to
time.



          “Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not
required to bear the Private Placement Legend.



          “Unrestricted Global Note” means a permanent Global Note, substantially in the form of Exhibit
A that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the
Global Note” attached thereto, and that is



42









 




deposited with or on behalf of and registered in the
name of the Depositary, representing Notes that do not bear the Private Placement Legend.




          “Unrestricted Subsidiary” means:



          (1) any Subsidiary of the Issuer that at the time of determination shall be designated an
Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and



          (2) any Subsidiary of an Unrestricted Subsidiary.



          The Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly
formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any
property of, the Issuer or any other Subsidiary of the Issuer that is not a Subsidiary of the
Subsidiary to be so designated; provided, however, that the Subsidiary to be so designated and its
Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness
pursuant to which the lender has recourse to any of the assets of the Issuer or any of its
Restricted Subsidiaries; provided, further, however, that either:




          (a) the Subsidiary to be so designated has total consolidated assets of $1,000 or
less; or




          (b) if such Subsidiary has consolidated assets greater than $1,000, then such
designation would be permitted under the covenant described under Section 4.07.



          The Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however, that immediately after giving effect to such designation:



          (x) (1) the Issuer could Incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) or
(2) the Fixed Charge Coverage Ratio for the Issuer and its Restricted Subsidiaries would be equal
to or greater than such ratio for the Issuer and its Restricted Subsidiaries immediately prior to
such designation, in each case on a pro forma basis taking into account such designation, and



          (y) no Event of Default shall have occurred and be continuing.



          Any such designation by Issuer shall be evidenced to the Trustee and the Collateral Agent by
promptly filing with the Trustee and the Collateral Agent a copy of the resolution of the Board of
Directors or any committee thereof of the Issuer giving effect to such designation and an Officer’s
Certificate certifying that such designation complied with the foregoing provisions.



          “U.S. Dollar Equivalent” means, with respect to any monetary amount in a currency other than
U.S. dollars, at any time for the determination thereof, the amount of U.S. dollars obtained by
converting such foreign currency involved in such



43









 




computation into U.S. dollars at the spot rate
for the purchase of U.S. dollars with the applicable foreign currency as quoted by Reuters at
approximately 10:00 A.M. (New York City time) on such date of determination (or if no such quote is
available on such date, on the immediately preceding Business Day for which such a quote is
available).




          “U.S. Government Obligations” means securities that are:



          (1) direct obligations of the United States of America for the timely payment of which its
full faith and credit is pledged, or



          (2) obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of America,



          which, in each case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific
payment of principal of or interest on any such U.S. Government Obligations held by such custodian
for the account of the holder of such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S. Government Obligations
evidenced by such depository receipt.



          “U.S. Person” means a U.S. person as defined in Rule 902(k) under the Securities Act.



          “Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at
the time entitled to vote in the election of the Board of Directors of such Person.



          “Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified
Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing; (1)
the sum of the products of the number of years from the date of determination to the date of each
successive scheduled principal payment of such Indebtedness or redemption or similar payment with
respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by
(2) the sum of all such payments.



          “Wholly-owned Restricted Subsidiary” is any Wholly-owned Subsidiary that is a Restricted
Subsidiary.



          “Wholly-owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the
outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying
shares or shares required to be held by Foreign



44









 




Subsidiaries) shall at the time be owned by such
Person or by one or more Wholly-owned Subsidiaries of such Person.




     Section 1.02 Other Definitions.



	 	 	 	 	 
	Term	 	Defined in Section	 
	“Additional Amounts”
	 	 	4.05	 
	“Affiliate Transaction”
	 	 	4.11	 
	“Asset Sale Offer”
	 	 	4.10	 
	“Authentication Order”
	 	 	2.02	 
	“Base Currency”
	 	 	13.18	 
	“Change of Control Offer”
	 	 	4.13	 
	“Change of Control Payment”
	 	 	4.13	 
	“Change of Control Payment Date”
	 	 	4.13	 
	“Covenant Defeasance”
	 	 	8.03	 
	“Covenant Suspension Event”
	 	 	4.18	 
	“DTC”
	 	 	2.03	 
	“Escrow Period”
	 	 	4.19	 
	“Event of Default”
	 	 	6.01	 
	“Excess Proceeds”
	 	 	4.10	 
	“Foreign Payor”
	 	 	4.05	 
	“Judgment Currency”
	 	 	13.18	 
	“Legal Defeasance”
	 	 	8.02	 
	“Note Register”
	 	 	2.03	 
	“Offer Amount”
	 	 	3.09	 
	“Offer Period”
	 	 	3.09	 
	“Paying Agent”
	 	 	2.03	 
	“Purchase Date”
	 	 	3.09	 
	“Redemption Date”
	 	 	3.07	 
	“Refinancing Indebtedness”
	 	 	4.09	 
	“Refunding Capital Stock”
	 	 	4.07	 
	“Registrar”
	 	 	2.03	 
	“Relevant Taxing Jurisdiction”
	 	 	4.05	 
	“Restricted Payments”
	 	 	4.07	 
	“Retired Capital Stock”
	 	 	4.07	 
	“Reversion Date”
	 	 	4.18	 
	“Second Commitment”
	 	 	4.10	 
	“Special Redemption”
	 	 	3.10	 
	“Special Redemption Date”
	 	 	3.10	 
	“Successor Guarantor”
	 	 	5.01	 
	“Suspended Covenants”
	 	 	4.18	 
	“Taxes”
	 	 	4.05	 






45









 






     Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a
provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part
of this Indenture.



          The following Trust Indenture Act terms used in this Indenture have the following meanings:



          “indenture securities” means the Notes and the Guarantees;



          “indenture security Holder” means a Holder of a Note;



          “indenture to be qualified” means this Indenture;



          “indenture trustee” or “institutional trustee” means the Trustee; and



          “obligor” on the Notes and the Guarantees means the Issuer and the Guarantors, respectively,
and any successor obligor upon the Notes and the Guarantees, respectively.



          All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by
Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture
Act have the meanings so assigned to them.



     Section 1.04 Rules of Construction. Unless the context otherwise requires:



          (a) a term has the meaning assigned to it;



          (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;



          (c) “or” is not exclusive;



          (d) “including” means including without limitation;



          (e) words in the singular include the plural, and in the plural include the singular;



          (f) “will” shall be interpreted to express a command;



          (g) provisions apply to successive events and transactions;



          (h) references to sections of, or rules under, the Securities Act shall be deemed to include
substitute, replacement or successor sections or rules adopted by the SEC from time to time;



          (i) unless the context otherwise requires, any reference to an “Article,” “Section” or
“clause” refers to an Article, Section or clause, as the case may be, of this Indenture;



46









 





          (j) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to
this Indenture as a whole and not any particular Article, Section, clause or other subdivision; and



          (k) all references to any interest or other amount payable on or with respect to the Notes
shall be deemed to include any Additional Interest payable pursuant to the Registration Rights
Agreement.



     Section 1.05 Acts of Holders.



          (a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing. Except as
herein otherwise expressly provided, such action shall become effective when such instrument
or instruments or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any
such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this
Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if made
in the manner provided in this Section 1.05.



          (b) The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by the certificate of any notary public
or other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by or on behalf of any legal entity other than an individual, such certificate or affidavit
shall also constitute proof of the authority of the Person executing the same. The fact and date
of the execution of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner that the Trustee deems sufficient.



          (c) The ownership of Notes shall be proved by the Note Register.



          (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by
the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note
issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.



          (e) The Issuer may, in the circumstances permitted by the Trust Indenture Act, set a record
date for purposes of determining the identity of Holders entitled to give any request, demand,
authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to
any action by vote or consent authorized or permitted to be given or taken by Holders.



47









 





          (f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard
to any particular Note may do so with regard to all or any part of the principal amount of such
Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount. Any notice given or action taken by a
Holder or its agents with regard to different parts of such principal amount pursuant to this
paragraph shall have the same effect as if given or taken by separate Holders of each such
different part.



          (g) Without limiting the generality of the foregoing, a Holder, including DTC, may make, give
or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in this Indenture to be made, given or
taken by Holders, and DTC may provide its proxy to the beneficial owners of interests in any such
Global Note through such depositary’s standing instructions and customary practices.



          (h) The Issuer may fix a record date for the purpose of determining the Persons who are
beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such
depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request,
demand, authorization, direction, notice, consent, waiver or other action provided in this
Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on
such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled
to make, give or take such request, demand, authorization, direction, notice, consent, waiver or
other action, whether or not such Holders remain Holders after such record date. No such request,
demand, authorization, direction, notice, consent, waiver or other action shall be valid or
effective if made, given or taken more than 90 days after such record date.



ARTICLE II




THE NOTES



     Section 2.01 Form and Dating; Terms.



          (a) General. The Notes and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations, legends or
endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of
its authentication. The Notes shall be in minimum denominations of $2,000 and integral multiples
of $1,000 in excess thereof.



          (b) Global Notes. Notes issued in global form shall be substantially in the form of
Exhibit A hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of
Interests in the Global Note” attached thereto). Notes issued in definitive form shall be
substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and
without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global
Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of
Exchanges of Interests in the Global Note”



48









 




attached thereto and each shall provide that it shall
represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that
the aggregate principal amount of outstanding Notes represented thereby may from time to time be
reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement of a
Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with Section 2.06 hereof.




          (c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S shall
be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited
on behalf of the purchasers of the Notes represented thereby with the Custodian and registered in
the name of the Depositary or the nominee of the Depositary for the accounts of designated agents
holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the
Trustee as hereinafter
provided. The Restricted Period shall be terminated upon the receipt by the Trustee of an
Officer’s Certificate from the Issuer.



          Following the termination of the Restricted Period, beneficial interests in each Regulation S
Temporary Global Note shall be exchanged for beneficial interests in a Regulation S Permanent
Global Note of the same series pursuant to the Applicable Procedures. Simultaneously with the
authentication of the corresponding Regulation S Permanent Global Note, the Trustee shall cancel
the corresponding Regulation S Temporary Global Note. The aggregate principal amount of a
Regulation S Temporary Global Note and a Regulation S Permanent Global Note may from time to time
be increased or decreased by adjustments made on the records of the Trustee and the Depositary or
its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.



          (d) Terms. The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is unlimited.



          The terms and provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and the Issuer, the Guarantors and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be controlling.



          The Notes shall be subject to repurchase by the Issuer pursuant to an Asset Sale Offer as
provided in Section 4.10 hereof or a Change of Control Offer as provided in Section 4.13 hereof.
The Notes shall not be redeemable, other than as provided in Article III hereof.



          Additional Notes ranking pari passu with the Initial Notes may be created and issued from time
to time by the Issuer without notice to or consent of the Holders and shall be consolidated with
and form a single class with the Initial Notes and shall have the same terms as to status,
redemption or otherwise as the Initial Notes; provided that the



49









 




Issuer’s ability to issue Additional Notes shall be subject to the Issuer’s compliance with Section 4.09 hereof. Any
Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.




     Section 2.02 Execution and Authentication. At least one Officer of the Issuer shall execute the Notes
on behalf of the Issuer by manual or facsimile signature.



          If an Officer of the Issuer whose signature is on a Note no longer holds that office at the
time the Trustee authenticates the Note, the Note shall nevertheless be valid.



          A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose until authenticated substantially in the form of Exhibit A by the manual or facsimile
signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly
authenticated and delivered under this Indenture.



          On the Issue Date, the Trustee shall, upon receipt of an Issuer Order (an “Authentication
Order”), authenticate and deliver the Initial Notes. In addition, at any time, from time to time,
the Trustee shall upon an Authentication Order authenticate and deliver any Additional Notes or
Exchange Notes for an aggregate principal amount specified in such Authentication Order for such
Additional Notes or Exchange Notes issued or increased hereunder.



          The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by such agent.
An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of
the Issuer.


Section 2.03 Registrar and Paying Agent. The Issuer shall maintain (i) an office or agency where Notes
may be presented for registration of transfer or for exchange (“Registrar”) and (ii) an office or
agency in the Borough of Manhattan, the City of New York, the State of New York where Notes may be
presented for payment (“Paying Agent”). The Registrar shall keep a register of the Notes (“Note
Register”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars
and one or more additional paying agents. The term “Registrar” includes any co-registrar, and the
term “Paying Agent” includes any additional paying agents. The Issuer initially appoints the
Trustee as Paying Agent. The Issuer may change any Paying Agent or Registrar without prior notice
to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall, to the extent that it is capable, act as such. The
Issuer or any of its domestic Subsidiaries may act as Paying Agent or Registrar.




          The Issuer initially appoints The Depository Trust Company (“DTC”) to act as Depositary with
respect to the Global Notes representing the Notes.




50











 





          The Issuer initially appoints the Trustee to act as the Registrar for the Notes.




     Section 2.04 Paying Agent to Hold Money in Trust. The Issuer shall require each Paying Agent other than
the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if
any, or Cash Interest on the Notes, and will notify the Trustee of any default by the Issuer in
making any such payment. While any such default continues, the Trustee may require a Paying Agent
to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if
other than the Issuer or a Subsidiary) shall have no further liability for the money. If the
Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund
for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the
Notes.



     Section 2.05 Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of all Holders and shall otherwise
comply with Trust Indenture Act Section 312(a). If the Trustee is not the Registrar, the Issuer
shall furnish to the Trustee at least five Business Days before each Interest Payment Date and at
such other times as the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of Notes and the
Issuer shall otherwise comply with Trust Indenture Act Section 312(a).



     Section 2.06 Transfer and Exchange.



          (a) Transfer and Exchange of Global Notes. Except as otherwise set forth in this
Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee
of the Depositary or to a successor thereto or a nominee of such successor thereto. A beneficial
interest in a Global Note may not be exchanged for a Definitive Note of the same series unless (A)
the Depositary (x) notifies the Issuer that it is unwilling or unable to continue as Depositary for
such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act, and,
in either case, a successor Depositary is not appointed by the Issuer within 120 days or (B) there
shall have occurred and be continuing a Default with respect to the Notes. Upon the occurrence of
any of the preceding events in (A) above, Definitive Notes delivered in exchange for any Global
Note of the same series or beneficial interests therein will be registered in the names, and issued
in any approved denominations, requested by or on behalf of the Depositary (in accordance with its
customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for,
or in lieu of, a Global Note of the same series or any portion thereof, pursuant to this Section
2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall
be, a Global Note, except for Definitive Notes issued subsequent to any of the preceding events in
(A) or (B) above and pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for
another






51









 







Note other than as provided in this Section 2.06(a); provided, however, that beneficial
interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or
(f) hereof.




          (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer
and exchange of beneficial interests in the Global Notes shall be effected through the Depositary
in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial
interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Transfers of beneficial
interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii)
below, as applicable, as well as one or more of the other following subparagraphs, as applicable:





          (i) Transfer of Beneficial Interests in the Same Global Note. Beneficial
interests in any Restricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Restricted Global Note in
accordance with the transfer restrictions set forth in the Private Placement Legend;
provided that, prior to the expiration of the Restricted Period, transfers of beneficial
interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for
the account or benefit of a U.S. Person other than pursuant to Rule 144A. Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note. No written
orders or instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.06(b)(i).




          (ii) All Other Transfers and Exchanges of Beneficial Interests in Global
Notes. In connection with all transfers and exchanges of beneficial interests that are
not subject to Section 2.06(b)(i) hereof, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or (B) (1) a written
order from a Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to cause to be issued a Definitive
Note of the same series in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be registered to
effect the transfer or exchange referred to in (1) above; provided that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial interests in a
Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period and
(B) the receipt by the Registrar of any certificates required pursuant to Rule 903. Upon
consummation of an Exchange Offer by the Issuer in accordance with Section 2.06(f) hereof,
the



52









 






requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.




          (iii) Transfer of Beneficial Interests to Another Restricted Global Note. A
beneficial interest in any Restricted Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another Restricted Global Note if
the transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar
receives the following:




               (A) if the transferee will take delivery in the form of a beneficial interest in a
144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; or




               (B) if the transferee will take delivery in the form of a beneficial interest in a
Regulation S Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof.




          (iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for
Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer
complies with the requirements of Section 2.06(b)(ii) hereof and:




               (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Issuer;




               (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




               (C) such transfer is effected by a broker-dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or



53









 






               (D) the Registrar receives the following:




               (1) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a beneficial interest in an
Unrestricted Global Note of the same series, a certificate from such Holder
substantially in the form of Exhibit C hereto, including the certifications in item
(1)(a) thereof; or




               (2) if the holder of such beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note of the
same series, a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain compliance with the
Securities Act.



          If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an
Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.




          Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to
Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.




          (c) Transfer or Exchange of Beneficial Interests for Definitive Notes.





          (i) Beneficial Interests in Restricted Global Notes to Restricted Definitive
Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a Restricted
Definitive Note, then, upon the occurrence of any of the events in subsection (A) of
Section 2.06(a) hereof and receipt by the Registrar of the following documentation:




               (A) if the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note, a certificate from such
holder substantially in the form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;



54









 






               (B) if such beneficial interest is being transferred to a QIB in accordance with Rule
144A, a certificate substantially in the form of Exhibit B hereto, including the
certifications in item (1) thereof;




               (C) if such beneficial interest is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially
in the form of Exhibit B hereto, including the certifications in item (2) thereof;




               (D) if such beneficial interest is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with Rule 144, a certificate
substantially in the form of Exhibit B hereto, including the certifications in item (3)(a)
thereof;




               (E) if such beneficial interest is being transferred to the Issuer or any of its
Restricted Subsidiaries, a certificate substantially in the form of Exhibit B hereto,
including the certifications in item (3)(b) thereof; or




               (F) if such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate substantially in the form of
Exhibit B hereto, including the certifications in item (3)(c) thereof,




the Trustee shall cause the aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and
the Trustee shall authenticate and mail to the Person designated in the instructions a
Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)
shall be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or Indirect Participant. The
Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein.




     (ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive
Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial interest
in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or
transferred to a Person who takes delivery thereof in the form of a Definitive Note prior
to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any
certificates required pursuant to Rule 903(b)(3)(ii)(B) of the Securities Act, except in
the case of a transfer pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 903 or Rule 904.



55









 






          (iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive
Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only upon the occurrence of any of the events in subsection (A) of Section 2.06(a)
hereof and if:




               (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Issuer;




               (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




               (C) such transfer is effected by a broker-dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or




               (D) the Registrar receives the following:




               (1) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for an Unrestricted Definitive Note,
a certificate from such holder substantially in the form of Exhibit C hereto,
including the certifications in item (1)(b) thereof; or




               (2) if the holder of such beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate from such
holder substantially in the form of Exhibit B hereto, including the certifications
in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain compliance with the
Securities Act.




          (iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive
Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes
to exchange such beneficial interest for a Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Definitive Note, then,
upon the occurrence of any



56









 







of the events in subsection (A) of Section 2.06(a) hereof and
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate
and mail to the Person designated in the instructions a Definitive Note in the applicable
principal amount. Any Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from or through the Depositary and the
Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the
Private Placement Legend.



          (d) Transfer and Exchange of Definitive Notes for Beneficial Interests.





          (i) Restricted Definitive Notes to Beneficial Interests in Restricted Global
Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note
for a beneficial interest in a Restricted Global Note or to transfer such Restricted
Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest
in a Restricted Global Note, then, upon receipt by the Registrar of the following
documentation:




               (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note
for a beneficial interest in a Restricted Global Note, a certificate from such Holder
substantially in the form of Exhibit C hereto, including the certifications in item (2)(b)
thereof;




               (B) if such Restricted Definitive Note is being transferred to a QIB in accordance
with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the
certifications in item (1) thereof;




               (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially
in the form of Exhibit B hereto, including the certifications in item (2) thereof;




               (D) if such Restricted Definitive Note is being transferred pursuant to an exemption
from the registration requirements of the Securities Act in accordance with Rule 144, a
certificate substantially in the form of Exhibit B hereto, including the certifications in
item (3)(a) thereof;




               (E) if such Restricted Definitive Note is being transferred to the Issuer or any of
its Restricted Subsidiaries, a certificate substantially in the form of Exhibit B hereto,
including the certifications in item (3)(b) thereof; or



57









 






               (F) if such Restricted Definitive Note is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate substantially in the form of
Exhibit B hereto, including the certifications in item (3)(c) thereof,


the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the
aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global
Note, in the case of clause (B) above, the applicable 144A Global Note, and in the case of clause
(C) above, the applicable Regulation S Global Note.





          (ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of a Restricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive
Note to a Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:




               (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;




               (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




               (C) such transfer is effected by a broker-dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or




               (D) the Registrar receives the following:




               (1) if the Holder of such Definitive Notes proposes to exchange such Notes for
a beneficial interest in the Unrestricted Global Note, a certificate from such
Holder substantially in the form of Exhibit C hereto, including the certifications
in item (1)(c) thereof; or




               (2) if the Holder of such Definitive Notes proposes to transfer such Notes to
a Person who shall take delivery thereof in the form of a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder substantially in the
form of Exhibit B hereto, including the certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or



58









 






transfer is in compliance
with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.



          Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii),
the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.





          (iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to
be increased the aggregate principal amount of one of the Unrestricted Global Notes.



          If any such exchange or transfer from a Definitive Note to a beneficial interest is effected
pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note
has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so
transferred.




          (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a
Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section
2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or surrender to the
Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized
in writing. In addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following provisions of this
Section 2.06(e):





          (i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name of Persons who
take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives
the following:




               (A) if the transfer will be made pursuant to a QIB in accordance with Rule 144A, then
the transferor must deliver a certificate substantially in the form of Exhibit B hereto,
including the certifications in item (1) thereof;




               (B) if the transfer will be made pursuant to Rule 903 or Rule 904 then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the certifications in
item (2) thereof; or



59









 






               (C) if the transfer will be made pursuant to any other exemption from the registration
requirements of the Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications required by item (3) thereof, if
applicable.




          (ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted
Definitive Note or transferred to a Person or Persons who take delivery thereof in the form
of an Unrestricted Definitive Note if:




               (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;




               (B) any such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




               (C) any such transfer is effected by a broker-dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or




               (D) the Registrar receives the following:




               (1) if the Holder of such Restricted Definitive Notes proposes to exchange
such Notes for an Unrestricted Definitive Note, a certificate from such Holder
substantially in the form of Exhibit C hereto, including the certifications in item
(1)(d) thereof; or




               (2) if the Holder of such Restricted Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such Holder substantially in the
form of Exhibit B hereto, including the certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an
Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.




          (iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note.



60









 






Upon receipt of a request to register such a transfer, the Registrar shall register
the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.




     (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Issuer shall issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee shall authenticate (i) one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes of the same series tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they are
not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Issuer, and accepted for exchange in the Exchange Offer and (ii)
Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes of the same series tendered for acceptance by Persons that certify in
the applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they are not
participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined
in Rule 144) of the Issuer, and accepted for exchange in the Exchange Offer. Concurrently with the
issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly, and the Issuer shall execute and the Trustee
shall authenticate and mail to the Persons designated by the Holders of Definitive Notes so
accepted Unrestricted Definitive Notes in the applicable principal amount. Any Notes that remain
outstanding after the consummation of the Exchange Offer, and Exchange Notes issued in connection
with the Exchange Offer, shall be treated as a single class of securities under this Indenture.




     (g) Legends. The following legends shall appear on the face of all Global Notes and
Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable
provisions of this Indenture:




          (i) Private Placement Legend.




               (A) Except as permitted by subparagraph (B) below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form:




“THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS
NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.



61









 






THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES,
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”




          (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant
to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of
this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.




     (ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form (with appropriate changes in the last sentence if DTC is
not the Depositary):




“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS
NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II)
THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF



62









 






SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK)
(“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”




          (iii) Regulation S Temporary Global Note Legend. The Regulation S Temporary
Global Note shall bear a legend in substantially the following form:




“THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT of 1933 (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE TRANSFERRED
IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM
IN REGULATION S UNDER THE SECURITIES ACT.”



          (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial
interests in a particular Global Note have been exchanged for Definitive Notes or a particular
Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global
Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11
hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial
interest in another Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note, such other Global
Note shall be increased accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such increase.






63









 








          (i) General Provisions Relating to Transfers and Exchanges.





          (i) To permit registrations of transfers and exchanges, the Issuer shall execute and
the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an
Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.




          (ii) No service charge shall be made to a holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but
the Issuer may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07,
2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).




          (iii) Neither the Registrar nor the Issuer shall be required to register the transfer
of or exchange any Note selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.




          (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or
exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of transfer or
exchange.




          (v) The Issuer shall not be required (A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of business 15 days before the
day of any selection of Notes for redemption under Section 3.02 hereof and ending at the
close of business on the day of selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part or (C) to register the transfer of or to exchange a Note
between a Record Date with respect to such Note and the next succeeding Interest Payment
Date with respect to such Note.




          (vi) Prior to due presentment for the registration of a transfer of any Note, the
Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving payment of
principal of (and premium, if any) and interest on such Notes and for all other purposes,
and none of the Trustee, any Agent or the Issuer shall be affected by notice to the
contrary.




          (vii) Upon surrender for registration of transfer of any Note at the office or agency
of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the
Trustee shall authenticate and mail, in the name of the designated transferee or
transferees, one or more replacement Notes of any authorized denomination or denominations
of a like aggregate principal amount.



64









 






          (viii) At the option of the Holder, Notes may be exchanged for other Notes of any
authorized denomination or denominations of a like aggregate principal amount upon
surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes
or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the
Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes
which the Holder making the exchange is entitled to in accordance with the provisions of
Section 2.02 hereof.




          (ix) All certifications, certificates and Opinions of Counsel required to be submitted
to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.




          (x) The Trustee shall have no obligation or duty to monitor, determine or inquire as
to compliance with any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Note (including any
transfers between or among Depositary participants or beneficial owners of interests in any
registered Global Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.




          (xi) Neither the Trustee nor any Agent shall have any responsibility for any actions
taken or not taken by the Depositary.



     Section 2.07 Replacement Notes. If any mutilated Note is surrendered to the Trustee, the Registrar or
the Issuer and the Trustee receives evidence to its satisfaction of the ownership and destruction,
loss or theft of any Note, the Issuer shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met.
If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any
Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced.
The Issuer and the Trustee may charge the Holder for their expenses in replacing a Note.



          Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all
of the benefits of this Indenture equally and proportionately with all other Notes duly issued
hereunder.




     Section 2.08 Outstanding Notes. The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for cancellation, those
reductions in the interest in a Global Note effected by the Trustee in accordance with the
provisions hereof and those described in this Section 2.08 as not outstanding. Except as set forth
in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer, a Guarantor or
an Affiliate of the Issuer or a Guarantor holds the Note.



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          If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser
(as defined in Section 8-303 of the Uniform Commercial Code).




          If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to
be outstanding and interest on it ceases to accrue.




          If the Paying Agent (other than the Issuer, a Guarantor or an Affiliate of the Issuer or a
Guarantor) holds, on a Redemption Date or maturity date, money sufficient to pay Notes (or portions
thereof) payable on that date, then on and after that date such Notes (or portions thereof) shall
be deemed to be no longer outstanding and shall cease to accrue interest.




     Section 2.09 Treasury Notes. In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, a Guarantor or
by any Affiliate of the Issuer or a Guarantor shall be considered as though not outstanding, except
that for the purposes of determining whether the Trustee or the Collateral Agent shall be protected
in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee or the Collateral Agent knows are so owned shall be so disregarded. Notes so owned which
have been pledged in good faith shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee or the Collateral Agent the pledgee’s right to deliver any such
direction, waiver or consent with respect to the Notes and that the pledgee is not the Issuer, a
Guarantor or any obligor upon the Notes or any Affiliate of the Issuer, a Guarantor or of such
other obligor.



     Section 2.10 Temporary Notes. Until certificates representing Notes are ready for delivery, the Issuer
may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have
variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.



          Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to
all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this
Indenture.




     Section 2.11 Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee,
the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all cancelled Notes



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shall be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.




     Section 2.12 Defaulted Interest. If the Issuer defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the
defaulted interest, in each case at the rate provided in the Notes and in Section 4.01 hereof. The
Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record
date. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed
to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall
deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such defaulted interest as provided in this Section
2.12. The Issuer shall fix or cause to be fixed any such special record date and payment date;
provided that no such special record date shall be less than 10 days prior to the related payment
date for such defaulted interest. The Issuer shall promptly notify the Trustee of any such special
record date. At least 15 days before any such special record date, the Issuer (or, upon the
written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail
or cause to be mailed, first-class postage prepaid, to each Holder, with a copy to the Trustee, a
notice at his or her address as it appears in the Note Register that states the special record
date, the related payment date and the amount of such interest to be paid.



          Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note
delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of
any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Note.




     Section 2.13 CUSIP/ISIN Numbers. The Issuer in issuing the Notes may use CUSIP and ISIN numbers (in
each case, if then generally in use) and, if so, the Trustee shall use CUSIP and ISIN numbers in
notices of redemption as a convenience to Holders; provided, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Issuer will as promptly as practicable notify the
Trustee in writing of any change in the CUSIP and ISIN numbers.



     Section 2.14 Calculation of Principal Amount of Securities. The aggregate principal amount of the
Notes, at any date of determination, shall be the principal amount of the Notes at such date of
determination. With respect to any matter requiring consent, waiver, approval or other action of
the Holders of a specified percentage of the principal amount of all the Notes, such percentage
shall be calculated, on the relevant date of determination, by dividing (a) the principal amount,
as of such date of determination, of Notes, the Holders of which have so consented by (b) the
aggregate principal amount, as of such date of determination, of the Notes then outstanding, in
each case, as determined



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in accordance with the preceding sentence, Section 2.08 and Section 2.09 of this Indenture. Any
such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to
the Trustee pursuant to an Officer’s Certificate.




ARTICLE III




REDEMPTION



     Section 3.01 Notices to Trustee. If the Issuer elects to redeem the Notes pursuant to Section 3.07
hereof, it shall furnish to the Trustee, at least 15 days (unless a shorter period is agreed upon
by the Trustee) before notice of redemption is required to be mailed or caused to be mailed to
Holders pursuant to Section 3.03 hereof but not more than 60 days before a Redemption Date, an
Officer’s Certificate of the Issuer setting forth (i) the paragraph or subparagraph of such Note
and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the Redemption
Date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price.



     Section 3.02 Selection of Notes to Be Redeemed. If less than all of the Notes are to be redeemed at any
time, the Trustee shall select the Notes to be redeemed (a) if the Notes are listed on any national
securities exchange, in compliance with the requirements of the principal national securities
exchange on which the Notes are listed or (b) on a pro rata basis or by lot, or by such other
method in accordance with the procedures of DTC the Trustee shall deem fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed shall be selected,
unless otherwise provided herein, not less than 30 nor more than 60 days prior to the Redemption
Date by the Trustee from the outstanding Notes not previously called for redemption.



          The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption
and, in the case of any Notes selected for partial redemption, the principal amount thereof to be
redeemed. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of
$1,000 in excess thereof; no Notes of less than $2,000 can be redeemed in part. Except as provided
in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.




     Section 3.03 Notice of Redemption. Subject to Section 3.09 hereof, the Issuer shall mail or cause to be
mailed by first-class mail notices of redemption at least 30 days but not more than 60 days before
the Redemption Date to each Holder of Notes to be redeemed at such Holder’s registered address or
otherwise in accordance with Applicable Procedures.



          The notice shall identify the Notes to be redeemed and shall state:




          (a) the Redemption Date;




          (b) the redemption price;






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          (c) if any Note is to be redeemed in part only, the portion of the principal amount of that
Note that is to be redeemed and that, after the Redemption Date upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion of the original Note representing
the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the
Notes upon cancellation of the original Note;




          (d) the name and address of the Paying Agent;




          (e) that Notes called for redemption must be surrendered to the Paying Agent to collect the
redemption price;




          (f) that, unless the Issuer defaults in making such redemption payment, interest on Notes
called for redemption ceases to accrue on and after the Redemption Date;




          (g) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed;




          (h) the CUSIP and ISIN number, if any, printed on the Notes being redeemed and that no
representation is made as to the correctness or accuracy of any such CUSIP and ISIN number that is
listed in such notice or printed on the Notes; and




          (i) if in connection with a redemption pursuant to Section 3.07(c) hereof, any condition to
such redemption.




          At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name
and at its expense; provided that the Issuer shall have delivered to the Trustee, at least 15 days
(unless a shorter period is agreed upon by the Trustee) before notice of redemption is required to
be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter period
shall be agreed to by the Trustee), an Officer’s Certificate of the Issuer requesting that the
Trustee give such notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.




     Section 3.04 Effect of Notice of Redemption. Subject to Section 3.07(c) hereof, once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become
irrevocably due and payable on the Redemption Date at the redemption price. The notice, if mailed
in a manner herein provided, shall be conclusively presumed to have been given, whether or not the
Holder receives such notice. In any case, failure to give such notice by mail or any defect in the
notice to the Holder of any Note designated for redemption in whole or in part shall not affect the
validity of the proceedings for the redemption of any other Note. Subject to Section 3.05 hereof,
on and after the Redemption Date, interest ceases to accrue on Notes or portions of Notes called
for redemption.



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     Section 3.05 Deposit of Redemption Price.



          (a) Prior to 11:00 a.m. (New York City time) on the Redemption Date, the Issuer shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption price of, and
accrued and unpaid interest and Additional Interest, if any, to the Redemption Date on, all Notes
to be redeemed. The Trustee or the Paying Agent shall promptly return to the Issuer any money
deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to
pay the redemption price of, and accrued and unpaid interest and Additional Interest, if any, to
the Redemption Date on, all Notes to be redeemed.




          (b) If the Issuer complies with the provisions of the preceding paragraph (a), on and after
the Redemption Date, interest shall cease to accrue on the Notes or the portions of Notes called
for redemption. If a Note is redeemed on or after a Record Date but on or prior to the related
Interest Payment Date, then any accrued and unpaid interest to the Redemption Date shall be paid to
the Person in whose name such Note was registered at the close of business on such Record Date. If
any Note called for redemption shall not be so paid upon surrender for redemption because of the
failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the Redemption Date until such principal is paid, and to the extent lawful on any
interest and Additional Interest, if any, accrued to the Redemption Date not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.




     Section 3.06 Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Issuer
shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new
Note equal in principal amount to the unredeemed portion of the Note surrendered representing the
same indebtedness to the extent not redeemed; provided that each new Note will be in a principal
amount of $2,000 or an integral multiple of $1,000 in excess thereof.



     Section 3.07 Optional Redemption.



          (a) On or after March 15, 2015, the Issuer may redeem the Notes at its option, in whole at any
time or in part from time to time, at the following redemption prices (expressed as a percentage of
principal amount), plus accrued and unpaid interest and Additional Interest, if any, to the date of
redemption (the “Redemption Date”) (subject to the right of Holders of record on the Record Date to
receive interest due on the Interest Payment Date), if redeemed during the 12-month period
commencing on March 15 of the years set forth below:




	 	 	 	 	 
	Period	 	Redemption Price	 
	2015
	 	 	104.438	%
	2016
	 	 	102.219	%
	2017 and thereafter
	 	 	100.000	%






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          (b) After the Assumption and prior to March 15, 2015, the Issuer may redeem the Notes at its
option, in whole at any time or in part from time to time, at a redemption price equal to 100% of
the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and
unpaid interest and Additional Interest, if any, to, the Redemption Date (subject to the right of
Holders of record on the Record Date to receive interest due on the Interest Payment Date).




          (c) At any time and from time to time after the Assumption and on or prior to March 15, 2014,
the Issuer may redeem in the aggregate up to 35% of the original aggregate principal amount of the
Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash
proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent
of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the
common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified
Stock) of the Issuer from it, at a redemption price (expressed as a percentage of principal amount
thereof) of 108.875%, plus accrued and unpaid interest and Additional Interest, if any, to the
Redemption Date (subject to the right of Holders of record on the Record Date to receive interest
due on the Interest Payment Date); provided, however, that at least 65% of the original aggregate
principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes)
must remain outstanding after each such redemption; provided, further, that such redemption shall
occur within 90 days after the date on which any such Equity Offering is consummated.




               Notice of any redemption upon any Equity Offering may be given prior to the completion
thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or
more conditions precedent, including, but not limited to, completion of the related Equity
Offering.



     Section 3.08 Mandatory Redemption. Except as set forth in Section 3.10 herein, the Issuer shall not be
required to make any mandatory redemption or sinking fund payments with respect to the Notes.



     Section 3.09 Offers to Repurchase by Application of Excess Proceeds.



          (a) In the event that, pursuant to Section 4.10 hereof, the Issuer shall be required to
commence an Asset Sale Offer, it shall follow the procedures specified below.




          (b) The Asset Sale Offer shall remain open for a period of twenty Business Days following its
commencement and no longer, except to the extent that a longer period is required by applicable law
(the “Offer Period”). No later than five Business Days after the termination of the Offer Period
(the “Purchase Date”), the Issuer shall apply all Excess Proceeds (the “Offer Amount”) to the
purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata basis, if applicable),
or, if less than the Offer Amount has been tendered, all Notes and Pari Passu Indebtedness tendered
in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same
manner as interest payments are made.






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          (c) If the Purchase Date is on or after a Record Date and on or before the related Interest
Payment Date, any accrued and unpaid interest, up to but excluding the Purchase Date, shall be paid
to the Person in whose name a Note is registered at the close of business on such Record Date, and
no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.




          (d) Upon the commencement of an Asset Sale Offer, the Issuer shall send, by first-class mail,
postage prepaid, at least 30 but not more than 60 days before the Purchase Date, a notice to each
of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale
Offer shall be made to all Holders and holders of Pari Passu Indebtedness. The notice, which shall
govern the terms of the Asset Sale Offer, shall state:





          (i) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section
4.10 hereof and the length of time the Asset Sale Offer shall remain open;




          (ii) the Offer Amount, the purchase price and the Purchase Date;




          (iii) that any Note not tendered or accepted for payment shall continue to accrue
interest;




          (iv) that, unless the Issuer defaults in making such payment, any Note accepted for
payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase
Date;




          (v) that any Holder electing to have less than all of the aggregate principal amount
of its Notes purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in
denominations of $2,000 or whole multiples of $1,000 in excess thereof;




          (vi) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer
shall be required to surrender the Note, with the form entitled “Option of Holder to Elect
Purchase” attached to the Note completed, or transfer by book-entry transfer, to the
Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address
specified in the notice at least two Business Days before the Purchase Date;




          (vii) that Holders shall be entitled to withdraw their election if the Issuer, the
Depositary or the Paying Agent, as the case may be, receives, not later than the expiration
of the Offer Period, a facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note purchased;



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          (viii) that, if the aggregate principal amount of Notes and Pari Passu Indebtedness
surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall select the
Notes and the Company or its applicable agent shall select such Pari Passu Indebtedness to
be purchased on a pro rata basis based on the accreted value or principal amount of the
Notes or such Pari Passu Indebtedness tendered or by lot, or by such other method in
accordance with the procedures of DTC (with such adjustments as may be deemed appropriate
by the Trustee so that only Notes in denominations of $2,000 or whole multiples of $1,000
in excess thereof are purchased); and




          (ix) that Holders whose Notes were purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer) representing the same indebtedness to the extent not
repurchased.



          (e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for
payment, on a pro rata or other basis as described in clause (d)(viii) of this Section 3.09, the
Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if
less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be
delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating
the aggregate principal amount of Notes or portions thereof so tendered.




          (f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or
deliver to each tendering Holder an amount equal to the purchase price of the Notes properly
tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly
issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and
mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder in a
principal amount equal to any unpurchased portion of the Note surrendered representing the same
indebtedness to the extent not repurchased. Any Note not so accepted shall be promptly mailed or
delivered by the Issuer to the Holder thereof. The Issuer shall publicly announce the results of
the Asset Sale Offer on or as soon as practicable after the Purchase Date.




          (g) Prior to 11:00 a.m. (New York City time) on the purchase date, the Issuer shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the purchase price of and accrued
and unpaid interest on all Notes to be purchased on that purchase date. The Trustee or the Paying
Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent
by the Issuer in excess of the amounts necessary to pay the purchase price of, and accrued and
unpaid interest on, all Notes to be redeemed.




          Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase
pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01
through 3.06 hereof, and references therein to “redeem,” “redemption” and similar words shall be
deemed to refer to “purchase,” “repurchase” and similar words, as applicable.




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     Section 3.10 Special Mandatory Redemption. If the Escrow Conditions shall not have been fulfilled, or
the Escrow Agent shall not have received the Disbursement Request described in Section 4(a) of the
Escrow Agreement on or before March 31, 2011, the Escrow Agent, pursuant to the Escrow Agreement,
shall, without the requirement of notice to or action by the Issuer, the Trustee or any other
Person, notify the Trustee in writing that all of the Notes shall be subject to a special mandatory
redemption (the “Special Redemption”) in accordance with this Section 3.10 on the second Business
Day after delivery of such notice but in any event on or prior to April 4, 2011 (the “Special
Redemption Date”). In the case of a Special Redemption, the Issuer shall, not later than 11:00
A.M. New York City time (or such other time of day acceptable to the Trustee which will permit it
to give the notice referred to in the second paragraph of Section 3.03) at least two Business Days
prior to the Special Redemption Date, deliver an Officers’ Certificate to the Trustee setting forth
(i) that a Special Redemption will occur, (ii) the Special Redemption Date, (iii) the Special
Redemption Price and (iv) the other information specified in Section 3.03. The Trustee shall
deliver to each Holder a written notice (specifying the information set forth in such Officers’
Certificate) of the Special Redemption at least two Business Days prior to the Special Redemption
Date. On the Special Redemption Date, the Issuer shall instruct the Escrow Agent to release cash
to the Paying Agent for the purposes of the Special Redemption. On the Special Redemption Date,
the Notes shall be redeemed pursuant to the redemption procedures of this Article III, in whole but
not in part, at a redemption price equal to the Special Redemption Price.



ARTICLE IV




COVENANTS



     Section 4.01 Payment of Notes. The Issuer shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if
other than the Issuer, a Guarantor or an Affiliate of the Issuer or a Guarantor, holds as of 11:00
a.m. New York City time, on the due date money deposited by the Issuer in immediately available
funds and designated for and sufficient to pay all principal, premium, if any, and interest then
due.



          The Issuer shall pay all Additional Interest, if any, in the same manner on the dates and in
the amounts set forth in the Registration Rights Agreement.




          The Issuer shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.




     Section 4.02 Maintenance of Office or Agency. The Issuer shall maintain the offices or agencies (which
may be an office of the Trustee or an affiliate of the Trustee,



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Registrar or co-registrar) required under Section 2.03 where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice
to the Trustee of the location, and any change in the location, of such office or agency. If at
any time the Issuer shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.




          The Issuer may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided that no such designation or rescission shall in any manner
relieve the Issuer of its obligation to maintain such offices or agencies as required by Section
2.03 for such purposes. The Issuer shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other office or agency.




          The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or
agency of the Issuer in accordance with Section 2.03 hereof.




     Section 4.03 Reports and Other Information.



          (a) After the Assumption, notwithstanding that the Issuer may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and
quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and
regulations promulgated by the SEC, after the consummation of the Exchange Offer, the Issuer shall
file with the SEC (and provide the Trustee and Holders with copies thereof, without cost to each
Holder, within 15 days after the Issuer files such reports with the SEC),





          (1) within the time period specified in the SEC’s rules and regulations for
non-accelerated filers, annual reports on Form 10-K (or any successor or comparable form)
containing the information required to be contained therein (or required in such successor
or comparable form),




          (2) within the time period specified in the SEC’s rules and regulations for
non-accelerated filers, reports on Form 10-Q (or any successor or comparable form)
containing the information required to be contained therein (or required in such successor
or comparable form),




          (3) promptly from time to time after the occurrence of an event required to be therein
reported (and in any event within the time period specified in the SEC’s rules and
regulations), such other reports on Form 8-K (or any successor or comparable form), and




75












 






               (4) any other information, documents and other reports which the Issuer would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;


provided, however, that the Issuer shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event the Issuer shall make available such information to
prospective purchasers of Notes, in addition to providing such information to the Trustee and the Holders, in each case within 15 days after the time the Issuer would be required to file such information
with the SEC, if it were subject to Sections 13 or 15(d) of the Exchange Act. Delivery of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein, including compliance with any of the covenants hereunder (as to which the
Trustee and the Collateral Agent are entitled to rely exclusively on Officer’s Certificates). The availability of the foregoing materials on the SEC’s Electronic Data Gathering and Retrieval service or
on the Issuer’s website shall be deemed to satisfy the Issuer’s delivery obligation.




          (b) In the event that:





          (i) the rules and regulations of the SEC permit the Issuer and any direct or indirect parent of the Issuer to report at such parent entity’s level on a consolidated basis
and such parent entity is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the capital stock of the Issuer, or




          (ii) any direct or indirect parent of the Issuer is or becomes a Guarantor of the Notes,


consolidating reporting at the parent entity’s level in a manner consistent with that described in this Section 4.03 for the Issuer shall satisfy this Section 4.03, and the Issuer shall satisfy its
obligations under this Section 4.03 with respect to financial information relating to the Issuer by furnishing financial information relating to such direct or indirect parent; provided that such
financial information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent and any
of its Subsidiaries other than the Issuer and its Subsidiaries, on the one hand, and the information relating to the Issuer, the Guarantors and the other Subsidiaries of the Issuer on a standalone
basis, on the other hand.




          (c) The Issuer will make the reports and other information required by this Section 4.03 available to prospective investors upon request. In addition, the Issuer shall, for so long as any
Notes are outstanding during any period when the Issuer is not subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to
Rule 12g3-2(b) of the Exchange Act, furnish to Holders and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.





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          (d) Notwithstanding the foregoing, the Issuer will be deemed to have furnished such reports referred to above to the Trustee and the Holders if
the Issuer has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available.




     Section 4.04 Compliance Certificate.



          (a) The Issuer shall deliver to the Trustee and the Collateral Agent, within 120 days after
the end of each fiscal year ending after the Issue Date, a certificate from the principal executive
officer, principal financial officer or principal accounting officer stating that a review of the
activities of the Issuer and its Restricted Subsidiaries during the preceding fiscal year has been
made under the supervision of the signing Officer with a view to determining whether the Issuer and
its Restricted Subsidiaries have kept, observed, performed and fulfilled their obligations under
this Indenture, and further stating, as to such Officer signing such certificate, that to the best
of his or her knowledge the Issuer and its Restricted Subsidiaries have kept, observed, performed
and fulfilled each and every condition and covenant contained in this Indenture and are not in
default in the performance or observance of any of the terms, provisions, covenants and conditions
of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he
or she may have knowledge and what action the Issuer is taking or proposes to take with respect
thereto).




          (b) When any Default has occurred and is continuing under this Indenture, or if the Trustee,
the Collateral Agent or the holder of any other evidence of Indebtedness of the Issuer or any
Subsidiary gives any notice or takes any other action with respect to a claimed Default, the Issuer
shall promptly (which shall be no more than 30 days after becoming aware of such Default) deliver
to the Trustee and the Collateral Agent by registered or certified mail or by facsimile
transmission an Officer’s Certificate specifying such event and what action the Issuer proposes to
take with respect thereto.




     Section 4.05 Taxes.



          (a) The Issuer shall pay, and shall cause each of its Restricted Subsidiaries to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except such as are contested
in good faith and by appropriate negotiations or proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the Notes.




          (b) All payments that any Guarantor that is not organized or existing under the laws of the
United States, any state thereof, the District of Columbia, or any territory thereof (each a
“Foreign Payor”) makes under or with respect to the Notes or any Guarantee, will be made free and
clear of, and without withholding or deduction for or on account of, any present or future tax,
duty, levy, impost, assessment or other governmental charges (including penalties, interest and
other similar liabilities related thereto) of whatever nature (collectively, “Taxes”) imposed or
levied by or on behalf of any jurisdiction in which any Foreign Payor is incorporated, organized or
otherwise resident for tax purposes or from or through which any of the foregoing makes any



77









 






payment
on the Notes or by any taxing authority therein or political subdivision thereof (each, as
applicable, a “Relevant Taxing Jurisdiction”), unless the applicable Foreign Payor is required to
withhold or deduct Taxes by law or by the interpretation or administration of law. If a Foreign
Payor is required to withhold or deduct any amount for, or on account of, Taxes of a Relevant
Taxing Jurisdiction from any payment made under or with respect to the Notes or any Guarantee, such
Foreign Payor will pay such additional amounts (“Additional Amounts”) as may be necessary to ensure
that the net amount received by each Holder of the Notes after such withholding or deduction will
be not less than the amount such Holder would have received if such Taxes had not been required to
be withheld or deducted.




          (c) Notwithstanding the foregoing, no Foreign Payor will be required to pay Additional Amounts
to a Holder of Notes in respect of or on account of:





          (i) any Taxes that are imposed or levied by a Relevant Taxing Jurisdiction by reason
of such Holder’s present or former connection with such Relevant Taxing Jurisdiction,
including such Holder being or having been a citizen, national, or resident, being or
having been engaged in a trade or business, being, or having been, physically present in or
having or having had a permanent establishment in a Relevant Taxing Jurisdiction (but not
including, in each case, any connection arising from the mere receipt or holding of Notes
or the receipt of payments thereunder or under a Guarantee or the exercise or enforcement
of rights under any Notes or the Indenture or a Guarantee);




          (ii) any Taxes that are imposed or levied by reason of the failure of such Holder,
following the written request of any Foreign Payor (as the case may be) addressed to such
Holder (and made at a time that would enable such Holder acting reasonably to comply with
that request) made in accordance with the notice procedures set forth in the Indenture, to
comply with any certification, identification, information or other reporting requirements,
whether required by statute, treaty, regulation or administrative practice of a Relevant
Taxing Jurisdiction, as a precondition to exemption from, or reduction in the rate of
withholding or deduction of, Taxes imposed by the Relevant Taxing Jurisdiction (including a
certification that such Holder is not resident in the Relevant Taxing Jurisdiction);




          (iii) any estate, inheritance, gift, sales, transfer, personal property or similar
Taxes;




          (iv) any Tax that is payable otherwise than by withholding or deduction from payments
made under or with respect to the Notes;




          (v) any Tax that is imposed or levied by reason of the presentation (where
presentation is required in order to receive payment) of the Notes for payment on a date
more than 30 days after the date on which such payment became due and payable or the date
on which payment thereof is duly provided for, whichever is later, except to the extent
that the beneficial owner or



78









 






holder thereof would have been entitled to Additional Amounts
had the Notes been presented for payment on any date during such 30 day period;




          (vi) any Tax except to the extent it exceeds any Tax that would have been required to
be withheld from payments to the Holder if such payments were made by the Issuer; or




          (vii) any combination of items (i) through (vi) above.



          (d) Additional Amounts will not be paid with respect to the Notes to a Holder who is a
fiduciary, a partnership, a limited liability company or other than the sole beneficial owner of
the payment under or with respect to the Notes, to the extent that payment would be required by the
laws of a Relevant Taxing Jurisdiction to be included in the income, for tax purposes, of a
beneficiary or settlor with respect to the fiduciary, a member of that partnership, an interest
holder in that limited liability company or a beneficial owner who would not have been entitled to
the Additional Amounts had it been the Holder of the Notes.




          (e) The relevant Foreign Payor shall (i) make such withholding or deduction as is required by
applicable law and (ii) remit the full amount withheld or deducted to the relevant taxing authority
in accordance with applicable law.




          At least 30 calendar days prior to each date on which any payment under or with respect to the
Notes is due and payable, if the relevant Foreign Payor will be obligated to pay Additional Amounts
with respect to such payment (unless such obligation to pay Additional Amounts arises after the
30th day prior to the date on which payment under or with respect to the Notes is due and payable,
in which case it will be promptly thereafter), the relevant Foreign Payor will deliver to the
Trustee an Officer’s Certificate of such Foreign Payor stating that such Additional Amounts will be
payable and the amounts so payable and will set forth such other information necessary to enable
the Trustee to pay such Additional Amounts to the applicable Holders on the payment date.




          The relevant Foreign Payor shall promptly publish a notice in accordance with the notice
provisions set forth in this Indenture stating that such Additional Amounts will be payable and
describing the obligation to pay such amounts.




          (f) Upon written request, the relevant Foreign Payor shall furnish to the Trustee or to a
Holder of the Notes copies of tax receipts evidencing the payment of any Taxes by such Foreign
Payor in such form as provided in the normal course by the taxing authority imposing such Taxes and
as is reasonably available to such Foreign Payor. If, notwithstanding the efforts of such Foreign
Payor to obtain such receipts, the same are not obtainable, such Foreign Payor shall provide the
Trustee or the applicable Holder with other evidence reasonably satisfactory to the Trustee or such
Holder.




          (g) The Issuer and any Guarantor, as the case may be, will pay any present or future stamp,
issue, registration, court, documentation, excise or property taxes




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or other similar taxes, charges and duties, including interest and penalties with respect thereto, imposed by or in any Relevant
Taxing Jurisdiction in respect of the execution, issue, enforcement or delivery of the Notes or any
other document or instrument referred to thereunder (other than on or in connection with a transfer
of the Notes other than the initial resale by the Initial Purchasers).




          (h) Whenever this Indenture or the Notes refers to, in any context, the payment of principal,
premium, if any, interest or any other amount payable under or with respect to any Note or with
respect to any Guarantee, such reference includes the payment of Additional Amounts, if applicable.




     Section 4.06 Stay, Extension and Usury Laws. The Issuer and each of the Guarantors
covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants
or the performance of this Indenture; and the Issuer and each of the Guarantors (to the extent that
they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and
covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee and the Collateral Agent, but shall suffer and permit the
execution of every such power as though no such law has been enacted.



     Section 4.07 Limitation on Restricted Payments.



          (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly:





          (i) declare or pay any dividend or make any distribution on account of the Issuer’s or
any of its Restricted Subsidiaries’ Equity Interests, including any payment made in
connection with any merger, amalgamation or consolidation involving the Issuer, other than:




               (A) dividends or distributions by the Issuer payable solely in Equity Interests (other
than Disqualified Stock) of the Issuer; or




               (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of
any dividend or distribution payable on or in respect of any class or series of securities
issued by a Restricted Subsidiary other than a Wholly-owned Restricted Subsidiary, the
Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or
distribution in accordance with its Equity Interests in such class or series of securities;




          (ii) purchase or otherwise acquire or retire for value any Equity Interests of the
Issuer or any direct or indirect parent of the Issuer;




          (iii) make any principal payment on, or redeem, repurchase, defease or otherwise
acquire or retire for value, in each case prior to any



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scheduled repayment or scheduled
maturity, any Subordinated Indebtedness of the Issuer or any of its Restricted
Subsidiaries, other than the payment, redemption, repurchase, defeasance, acquisition or
retirement of:




               (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of the date of
such payment, redemption, repurchase, defeasance, acquisition or retirement; and




               (B) Indebtedness permitted under clauses (vii) and (ix) of Section 4.09(b) hereof; or




          (iv) make any Restricted Investment




(all such payments and other actions set forth in clauses (i) through (iv) of this Section
4.07(a) being collectively referred to as “Restricted Payments”), unless, at the time of
such Restricted Payment:




          (1) no Default shall have occurred and be continuing or would occur as a consequence
thereof;




          (2) immediately after giving effect to such transaction on a pro forma basis, the
Issuer could Incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof;




          (3) immediately after giving effect to such transaction on a pro forma basis, the
Issuer’s Consolidated Leverage Ratio would be less than 6.0 to 1.0; and




          (4) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Issuer and its Restricted Subsidiaries after the Issue Date
(including Restricted Payments permitted by clauses (i), (iv) (only to the extent of
one-half of the amounts paid pursuant to such clause), (vi) and (viii) of Section 4.07(b)
hereof, but excluding all other Restricted Payments permitted by Section 4.07(b) hereof),
is less than the amount equal to the Cumulative Credit.



          (b) Section 4.07(a) hereof will not prohibit:





          (i) the payment of any dividend or distribution within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have complied with
the provisions of this Indenture;




          (ii) (A) the redemption, repurchase, retirement or other acquisition of any Equity
Interests (“Retired Capital Stock”) or Subordinated Indebtedness of the Issuer, any direct
or indirect parent of the Issuer or any Guarantor in exchange for, or out of the proceeds
of, the substantially concurrent sale of, Equity Interests of the Issuer or any direct or
indirect parent of the Issuer



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or contributions to the equity capital of the Issuer (other
than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer )
(collectively, including any such contributions, “Refunding Capital Stock”) (B) the
declaration and payment of dividends on the Retired Capital Stock out of the proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Issuer) of Refunding
Capital Stock, and (C) if immediately prior to the retirement of the Retired Capital Stock,
the declaration and payment of dividends thereon was permitted under clause (vi) of this
Section 4.07(b) and not made pursuant to clause (ii)(B) of this paragraph, the declaration
and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock
the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any
Equity Interests of any direct or indirect parent of the Issuer) in an aggregate amount per
year no greater than the aggregate amount of dividends per annum that were declarable and
payable on such Retired Capital Stock immediately prior to such retirement;




          (iii) the redemption, repurchase, defeasance, or other acquisition or retirement of
Subordinated Indebtedness of the Issuer or any Guarantor made by exchange for, or out of
the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or a
Guarantor which is Incurred in accordance with Section 4.09 hereof so long as:




               (A) the principal amount (or accreted value, if applicable) of such new Indebtedness
does not exceed the principal amount (or accreted value, if applicable) plus any accrued
and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired for value (plus the amount of any premium required to be paid under the
terms of the instrument governing the Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and
expenses incurred in connection therewith);




               (B) such Indebtedness is subordinated to the Notes or the related Guarantee, as the
case may be, at least to the same extent as such Subordinated Indebtedness so purchased,
exchanged, redeemed, repurchased, acquired or retired for value;




               (C) such Indebtedness has a final scheduled maturity date equal to or later than the
earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired and (y) 91 days following the maturity date of
the Notes; and




               (D) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred
which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity
of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and
(y) the Weighted Average Life to Maturity that would result if all payments of principal on
the Subordinated Indebtedness being redeemed, repurchased, acquired or retired that



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were
due on or after the date that is one year following the last maturity date of any Notes
then outstanding were instead due on such date one year following the last date of maturity
of the Notes;




          (iv) the repurchase, retirement or other acquisition (or dividends to any direct or
indirect parent of the Issuer to finance any such repurchase, retirement or other
acquisition) for value of Equity Interests of the Issuer or any direct or indirect parent
of the Issuer held by any future, present or former employee, director or consultant of the
Issuer or any direct or indirect parent of the Issuer or any Subsidiary of the Issuer
pursuant to any management equity plan or stock option plan or any other management or
employee benefit plan or other agreement or arrangement; provided, however, that the
aggregate Restricted Payments made under this clause (iv) do not exceed $30 million plus an
additional $30 million in any calendar year (with unused amounts in any calendar year being
permitted to be carried over to succeeding calendar years); provided, further, however,
that such amount in any calendar year may be increased by an amount not to exceed:




               (A) the cash proceeds received by the Issuer or any of its Restricted Subsidiaries
from the sale of Equity Interests (other than Disqualified Stock) of the Issuer or any
direct or indirect parent of the Issuer (to the extent contributed to the Issuer) to
members of management, directors or consultants of the Issuer and its Restricted
Subsidiaries or any direct or indirect parent of the Issuer that occurs after the Issue
Date (provided that the amount of such cash proceeds utilized for any such repurchase,
retirement, other acquisition or dividend will not increase the amount available for
Restricted Payments under clause (iii) of Section 4.07(a) hereof; plus




               (B) the cash proceeds of key man life insurance policies received by the Issuer or any
direct or indirect parent of the Issuer (to the extent contributed to the Issuer) or the
Issuer’s Restricted Subsidiaries after the Issue Date; plus




               (C) the amount of any cash bonuses otherwise payable to members of management,
directors or consultants of the Issuer and its Restricted Subsidiaries or any direct or
indirect parent of the Issuer in connection with the Transactions that are foregone in
return for the receipt of Equity Interests;




provided that the Issuer may elect to apply all or any portion of the aggregate increase
contemplated by clauses (A), (B) and (C) of this Section 4.07(b)(iv) in any calendar year;
and provided, further, that cancellation of Indebtedness owing to the Issuer or any
Restricted Subsidiary from members of management of the Issuer, any of its Restricted
Subsidiaries or its direct or indirect parents in connection with a repurchase of Equity
Interests of the Issuer or any of its direct or indirect parents will not be deemed to
constitute a Restricted Payment for purposes of this Section 4.07 or any other provision of
this Indenture;



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          (v) the declaration and payment of dividends or distributions to holders of any class
or series of Disqualified Stock of the Issuer or any of its Restricted Subsidiaries issued
or incurred in accordance with Section 4.09 hereof;




          (vi) (A) the declaration and payment of dividends or distributions to holders of any
class or series of Designated Preferred Stock (other than Disqualified Stock) issued after
the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant
to this clause (A) does not exceed the net cash proceeds actually received by the Issuer
from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued
after the Issue Date;




               (B) a Restricted Payment to any direct or indirect parent of the Issuer, the proceeds
of which will be used to fund the payment of dividends to Holders of any class or series of
Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent
of the Issuer issued after the Issue Date; provided that the aggregate amount of dividends
declared and paid pursuant to this clause (B) does not exceed the net cash proceeds
actually received by the Issuer from any such sale of Designated Preferred Stock (other
than Disqualified Stock) issued after the Issue Date; or




               (C) the declaration and payment of dividends on Refunding Capital Stock that is
Preferred Stock in excess of the dividends declarable and payable thereon pursuant to
clause (ii) of this Section 4.07(b);


provided, however, in the case of each of (A), (B) and (C) of this clause (vi), that for the most
recently ended four full fiscal quarters for which internal financial statements are available
immediately preceding the date of issuance of such Designated Preferred Stock after giving effect
to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Issuer
would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;





          (vii) so long as immediately after giving effect to such transaction on a pro forma
basis, the Issuer’s Consolidated Leverage Ratio would be less than 6.0 to 1.0, Investments
in Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good
faith by the Issuer), taken together with all other Investments made pursuant to this
clause (vii) that are at that time outstanding, not to exceed the greater of $35 million
and 1.0% of Total Assets at the time of such Investment (with the Fair Market Value of each
Investment being measured at the time made and without giving effect to subsequent changes
in value);




          (viii) the payment of dividends on the Issuer’s common stock (or a Restricted Payment
to any direct or indirect parent of the Issuer to fund the payment by such direct or
indirect parent of the Issuer of dividends on such entity’s common stock) of up to 6.0% per
annum of the net proceeds received by



84









 






the Issuer from any public offering of common stock
of the Issuer or any direct or indirect parent of the Issuer;




          (ix) Restricted Payments that are made with Excluded Contributions;




          (x) other Restricted Payments in an aggregate amount not to exceed the greater of $50
million and 1.5% of Total Assets at the time made;




          (xi) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or
Indebtedness owed to the Issuer or a Restricted Subsidiary of the Issuer by, Unrestricted
Subsidiaries;




          (xii) the payment of dividends or other distributions to any direct or indirect parent
of the Issuer in amounts required for such parent to pay foreign, federal, state or local
income taxes (as the case may be) imposed directly on such parent to the extent such income
taxes are attributable to the income of the Issuer and its Restricted Subsidiaries
(including, without limitation, by virtue of such parent being the common parent of a
consolidated or combined tax group of which the Issuer and/or its Restricted Subsidiaries
are members);




          (xiii) the payment of dividends, other distributions or other amounts or the making of
loans or advances or any other Restricted Payment, if applicable:




               (A) in amounts required for any direct or indirect parent of the Issuer, if
applicable, to pay fees and expenses (including franchise or similar taxes) required to
maintain its corporate existence, customary salary, bonus and other benefits payable to,
and indemnities provided on behalf of, officers and employees of any direct or indirect
parent of the Issuer, if applicable, and general corporate operating and overhead expenses
of any direct or indirect parent of the Issuer, if applicable, in each case to the extent
such fees and expenses are attributable to the ownership or operation of the Issuer, if
applicable, and its Subsidiaries;




               (B) in amounts required for any direct or indirect parent of the Issuer, if
applicable, to pay interest and/or principal on Indebtedness the proceeds of which have
been contributed to the Issuer or any of its Restricted Subsidiaries and that has been
guaranteed by, or is otherwise considered Indebtedness of, the Issuer Incurred in
accordance with Section 4.09 hereof; and




               (C) in amounts required for any direct or indirect parent of the Issuer to pay fees
and expenses, other than to Affiliates of the Issuer, related to any unsuccessful equity or
debt offering of such parent;




          (xiv) any Restricted Payment used to fund the Transactions and the payment of fees and
expenses incurred in connection with the Transactions or



85









 






owed by the Issuer or any direct
or indirect parent of the Issuer or Restricted Subsidiaries of the Issuer to Affiliates, in
each case to the extent permitted under Section 4.11 hereof;




          (xv) repurchases of Equity Interests deemed to occur upon exercise of stock options or
warrants if such Equity Interests represent a portion of the exercise price of such options
or warrants;




          (xvi) purchases of receivables pursuant to a Receivables Repurchase Obligation in
connection with a Qualified Receivables Financing and the payment or distribution of
Receivables Fees;




          (xvii) payments of cash, or dividends, distributions, advances or other Restricted
Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of
the issuance of fractional shares upon the exercise of options or warrants or upon the
conversion or exchange of Capital Stock of any such Person;




          (xviii) the repurchase, redemption or other acquisition or retirement for value of any
Subordinated Indebtedness pursuant to the provisions similar to those described under
Sections 4.10 and 4.13 hereof; provided that all Notes tendered by Holders in connection
with a Change of Control or Asset Sale Offer, as applicable, have been repurchased,
redeemed or acquired for value;




          (xix) any payments made, including any such payments made to any direct or indirect
parent of the Issuer to enable it to make payments, in connection with the consummation of
the Transactions or as contemplated by the Acquisition Documents, whether payable on the
Issue Date or thereafter (other than payments to any Permitted Holder or any Affiliate
thereof which are not permitted by Section 4.11 hereof);




          (xx) payments or distributions to dissenting stockholders pursuant to applicable law,
pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all
or substantially all of the assets of the Issuer and its Restricted Subsidiaries, taken as
a whole, that complies with Section 5.01; provided that as a result of such consolidation,
amalgamation, merger or transfer of assets, the Issuer shall have made a Change of Control
Offer (if required by this Indenture) and that all Notes tendered by Holders in connection
with such Change of Control Offer have been repurchased, redeemed or acquired for value;
and




          (xxi) the merger of the Issuer with or into the Company and the Assumption upon the
satisfaction of the Escrow Conditions;


provided, however, that at the time of, and after giving effect to, any Restricted Payment
permitted under clauses (x) and (xi) of this Section 4.07(b), no Default shall have occurred and be
continuing or would occur as a consequence thereof.




86









 








          (c) As of the Issue Date, all of the Issuer’s Subsidiaries will be Restricted Subsidiaries.
The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except
pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted
Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its
Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be
deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the
definition of “Investments.” Such designation will only be permitted if a Restricted Payment in
such amount would be permitted at such time and if such Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.




     Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.



          (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:





          (i) (A) pay dividends or make any other distributions to the Issuer or any of its
Restricted Subsidiaries (1) on its Capital Stock; or (2) with respect to any other interest
or participation in, or measured by, its profits; or (B) pay any Indebtedness owed to the
Issuer or any of its Restricted Subsidiaries;




          (ii) make loans or advances to the Issuer or any of its Restricted Subsidiaries; or




          (iii) sell, lease or transfer any of its properties or assets to the Issuer or any of
its Restricted Subsidiaries.



          (b) Section 4.08(a) hereof shall not apply to encumbrances or restrictions existing under or
by reason of:





          (i) contractual encumbrances or restrictions in effect on the Issue Date, including
pursuant to the Credit Agreement and the other Credit Agreement Documents;




          (ii) (A) this Indenture and the Notes (and any Exchange Notes and guarantees thereof),
the Intercreditor Agreement and the Security Documents (B) the Existing Notes (and
guarantees thereof) and (C) the indentures governing the Existing Notes;




          (iii) applicable law or any applicable rule, regulation or order;




          (iv) any agreement or other instrument of a Person acquired by the Issuer or any
Restricted Subsidiary which was in existence at the time of such acquisition (but not
created in contemplation thereof or to provide all or any portion of the funds or credit
support utilized to consummate such acquisition),



87









 






which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than the Person
and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so
acquired;




          (v) contracts or agreements for the sale of assets, including any restriction with
respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the
sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;




          (vi) Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.09
and 4.12 hereof that limit the right of the debtor to dispose of the assets securing such
Indebtedness;




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




          (viii) customary provisions in joint venture agreements, similar agreements relating
solely to such joint venture and other similar agreements entered into in the ordinary
course of business;




          (ix) purchase money obligations for property acquired and Capitalized Lease
Obligations in the ordinary course of business;




          (x) customary provisions contained in leases, licenses and other similar agreements,
entered into in the ordinary course of business;




          (xi) any encumbrance or restriction of a Receivables Subsidiary effected in connection
with a Qualified Receivables Financing; provided, however, that such restrictions apply
only to such Receivables Subsidiary;




          (xii) other Indebtedness, Disqualified Stock or Preferred Stock of (a) any Restricted
Subsidiary of the Issuer that is a Guarantor or a Foreign Subsidiary or (b) any Restricted
Subsidiary that is not a Guarantor or a Foreign Subsidiary so long as such encumbrances and
restrictions contained in any agreement or instrument will not materially affect the
Issuer’s ability to make anticipated principal or interest payments on the Notes (as
determined in good faith by the Issuer), in the case of each of clauses (a) and (b) to the
extent that such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be
Incurred subsequent to the Issue Date under Section 4.09 hereof;




          (xiii) any Restricted Investment not prohibited by Section 4.07 and any Permitted
Investment; or




          (xiv) any encumbrances or restrictions of the type referred to in Section 4.08(a)
hereof imposed by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (i) through (xiii) of this Section 4.08(b); provided
that such amendments, modifications, restatements,



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renewals, increases, supplements,refundings, replacements or refinancings are, in the good faith judgment of the Issuer, no
more restrictive with respect to 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.




          For purposes of determining compliance with this covenant, (1) the priority of any
Preferred Stock in receiving dividends or liquidating distributions prior to dividends or
liquidating distributions being paid on common stock shall not be deemed a restriction on
the ability to make distributions on Capital Stock and (2) the subordination of loans or
advances made to the Issuer or a Restricted Subsidiary of the Issuer to other Indebtedness
Incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction
on the ability to make loans or advances.



     Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock.




          (a) (i) the Issuer will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue
any shares of Disqualified Stock; and




          (ii) the Issuer will not permit any of its Restricted Subsidiaries (other than a
Guarantor) to issue any shares of Preferred Stock;




provided, however, that the Issuer and any Guarantor may Incur Indebtedness (including
Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary
of the Issuer that is not a Guarantor may Incur Indebtedness (including Acquired
Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in
each case if the Fixed Charge Coverage Ratio of the Issuer for the most recently ended four
full fiscal quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is Incurred or such Disqualified
Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a
pro forma basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock
had been issued, as the case may be, and the application of proceeds therefrom had occurred
at the beginning of such four-quarter period.



          (b) The provisions of Section 4.09(a) hereof shall not apply to:





          (i) the Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under
the Credit Agreement and the issuance and creation of letters of credit and bankers’
acceptances thereunder;



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          (ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by
the Notes (not including any Additional Notes) and the Guarantees (including Exchange Notes
and related guarantees thereof);




          (iii) Indebtedness of the Issuer or any of its Restricted Subsidiaries existing on the
Issue Date, including the Existing Notes and related guarantees (other than Indebtedness
described in clauses (i) and (ii) of this Section 4.09(b));




          (iv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or
any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its
Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the
Issuer to finance (whether prior to or within 270 days after) the purchase, lease,
construction or improvement of property (real or personal) or equipment (whether through
the direct purchase of assets or the Capital Stock of any Person owning such assets), and
any refinancings or replacements thereof, in an aggregate principal amount, which when
aggregated with the principal amount of all other Indebtedness (including Capitalized Lease
Obligations), together with any refinancings ore replacements thereof, then outstanding and
Incurred under this clause (iv), does not exceed the Permitted Amount at the time of
Incurrence (it being understood that any Indebtedness Incurred under this clause (iv) shall
cease to be deemed Incurred or outstanding for purposes of this clause (iv) but shall be
deemed Incurred for purposes of the first paragraph of this covenant from and after the
first date on which the Issuer, or the Restricted Subsidiary, as the case may be, could
have Incurred such Indebtedness under the first paragraph of this covenant without reliance
upon this clause (iv));




          (v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries
constituting reimbursement obligations with respect to letters of credit and bank
guarantees issued in the ordinary course of business, including without limitation letters
of credit in respect of workers’ compensation claims, health, disability or other benefits
to employees or former employees or their families or property, casualty or liability
insurance or self-insurance, and letters of credit in connection with the maintenance of,
or pursuant to the requirements of, environmental or other permits or licenses from
governmental authorities, or other Indebtedness with respect to reimbursement type
obligations regarding workers’ compensation claims;




          (vi) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary
providing for indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred in connection with the Transactions or any other acquisition or disposition
of any business, assets or a Subsidiary of the Issuer in accordance with the terms of this
Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such business, assets or Subsidiary for the purpose of financing such
acquisition;



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          (vii) Indebtedness of the Issuer to a Restricted Subsidiary; provided that any such
Indebtedness owed to a Restricted Subsidiary that is not a Guarantor is subordinated in
right of payment to the obligations of the Issuer under the Notes; provided, further, that
any subsequent issuance or transfer of any Capital Stock or any other event which results
in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted
Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be
deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause
(vii);




          (viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or
another Restricted Subsidiary; provided that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except
to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an
issuance of shares of Preferred Stock not permitted by this clause (viii);




          (ix) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted
Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted
Subsidiary that is not a Guarantor, such Indebtedness is subordinated in right of payment
to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or
transfer of any Capital Stock or any other event which results in any Restricted Subsidiary
holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent
transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or
any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each
case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);




          (x) Hedging Obligations that are not incurred for speculative purposes and are either
(1) for the purpose of fixing or hedging interest rate risk with respect to any
Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for
the purpose of fixing or hedging currency exchange rate risk with respect to any currency
exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to
any commodity purchases or sales;




          (xi) obligations (including reimbursement obligations with respect to letters of
credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and
completion guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary
course of business or consistent with past practice or industry practice;




          (xii) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary of
the Issuer and Preferred Stock of any Restricted Subsidiary of the Issuer not otherwise
permitted hereunder in an aggregate principal amount or liquidation preference, which when
aggregated with the



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principal amount or liquidation preference of all other Indebtedness,
Disqualified Stock and Preferred Stock then outstanding and Incurred under this clause
(xii), does not exceed the greater of $100 million and 3.0% of Total Assets at the time of
Incurrence (it being understood that any Indebtedness Incurred under this clause (xii)
shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but
shall be deemed Incurred for purposes of the first paragraph of this covenant from and
after the first date on which the Issuer, or the Restricted Subsidiary, as the case may be,
could have Incurred such Indebtedness under the first paragraph of this covenant without
reliance upon this clause (xii));




          (xiii) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary
of the Issuer and Preferred Stock of any Restricted Subsidiary of the Issuer not otherwise
permitted hereunder in an aggregate principal amount or liquidation preference not greater
than 200.0% of the Unapplied Proceeds;




          (xiv) any guarantee by the Issuer or any Restricted Subsidiary of the Issuer of
Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so
long as the Incurrence of such Indebtedness Incurred by the Issuer or such Restricted
Subsidiary is permitted under the terms of this Indenture; provided that (i) if such
Indebtedness is by its express terms subordinated in right of payment to the Notes or the
Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such
Guarantor with respect to such Indebtedness shall be subordinated in right of payment to
such Guarantor’s Guarantee with respect to the Notes substantially to the same extent as
such Indebtedness is subordinated to the Notes or the Guarantee of such Restricted
Subsidiary, as applicable and (ii) if such guarantee is of Indebtedness of the Issuer, such
guarantee is Incurred in accordance with Section 4.14 hereof solely to the extent Section
4.14 is applicable;




          (xv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of
Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the
Issuer which serves to refund, refinance or defease any Indebtedness Incurred or
Disqualified Stock or Preferred Stock issued as permitted under Section 4.09(a) and clauses
(ii), (iii), (xiii), (xv), (xvi) and (xx) of this Section 4.09(b) or any Indebtedness,
Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness,
Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified
Stock or Preferred Stock Incurred to pay premiums (including tender premiums), defeasance
costs and fees in connection therewith (subject to the following proviso, “Refinancing
Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing
Indebtedness:




               (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness
is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life
to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded,
refinanced or defeased and



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(y) the Weighted Average Life to Maturity that would result if
all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being
refunded or refinanced that were due on or after the date that is one year following the
last maturity date of any Notes then outstanding were instead due on such date one year
following the last date of maturity of the Notes;




               (B) has a Stated Maturity which is not earlier than the earlier of (x) the Stated
Maturity of the Indebtedness being refunded or refinanced and (y) 91 days following the
maturity date of the Notes;




               (C) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to
the Notes or the Guarantee of such Restricted Subsidiary, as applicable, such Refinancing
Indebtedness is junior to the Notes or the Guarantee of such Restricted Subsidiary, as
applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is
Disqualified Stock or Preferred Stock; and




               (D) shall not include (x) Indebtedness of a Restricted Subsidiary of the Issuer that
is not a Guarantor that refinances Indebtedness of the Issuer or a Guarantor, or (y)
Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an
Unrestricted Subsidiary,




provided, further, that subclauses (A) and (B) of this clause (xv) will not apply to any
refunding or refinancing of any Secured Indebtedness.




          (xvi) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or any of
its Restricted Subsidiaries incurred to finance an acquisition or (y) Persons that are
acquired by the Issuer or any of its Restricted Subsidiaries or merged, consolidated or
amalgamated with or into the Issuer or any of its Restricted Subsidiaries in accordance
with the terms of this Indenture; provided that after giving effect to such acquisition or
merger, consolidation or amalgamation, either:




               (A) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness
under Section 4.09(a) hereof; or




               (B) the Fixed Charge Coverage Ratio of the Issuer would be equal to or greater than
immediately prior to such acquisition or merger, consolidation or amalgamation;




          (xvii) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables
Financing that is not recourse to the Issuer or any Restricted Subsidiary other than a
Receivables Subsidiary (except for Standard Securitization Undertakings);




          (xviii) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against



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insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five
Business Days of its Incurrence;




          (xix) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of
credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not
in excess of the stated amount of such letter of credit;




          (xx) Indebtedness of Foreign Subsidiaries; provided, however, that the aggregate
principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the
principal amount of all other Indebtedness then outstanding and Incurred pursuant to this
clause (xx), does not exceed the greater of $50 million and 1.5% of Total Assets at any one
time outstanding (it being understood that any Indebtedness incurred pursuant to this
clause (xx) shall cease to be deemed incurred or outstanding for purposes of this clause
(xx) but shall be deemed incurred for the purposes of the first paragraph of this covenant
from and after the first date on which such Foreign Subsidiary could have incurred such
Indebtedness under the first paragraph of this covenant without reliance upon this clause
(xx));




          (xxi) Indebtedness of the Issuer or any Restricted Subsidiary consisting of the
financing of insurance premiums;




          (xxii) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a
Restricted Subsidiary of the Issuer incurred to finance or assumed in connection with an
acquisition, and any refinancing or replacement thereof, in a principal amount not to
exceed the greater of (A) $75 million and (B) 2.25% of Total Assets in the aggregate at any
one time outstanding together with all other Indebtedness, Disqualified Stock and/or
Preferred Stock issued under this clause (xxii) (it being understood that any Indebtedness,
Disqualified Stock or Preferred Stock incurred pursuant to this clause (xxii) shall cease
to be deemed incurred or outstanding for purposes of this clause (xxii) but shall be deemed
incurred for the purposes of Section 4.09(a) hereof from and after the first date on which
such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or
Preferred Stock under the first paragraph of this covenant without reliance on this clause
(xxii));




          (xxiii) Indebtedness consisting of Indebtedness issued by the Issuer or a Restricted
Subsidiary of the Issuer to current or former officers, directors and employees thereof or
any direct or indirect parent thereof, their respective estates, spouses or former spouses,
in each case to finance the purchase or redemption of Equity Interests of the Issuer or any
of its direct or indirect parent companies to the extent described in clause (iv) of
Section 4.07(b) hereof; and




          (xxiv) Indebtedness incurred on behalf of, or representing Guarantees of Indebtedness
of, joint ventures of the Issuer or any Restricted



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Subsidiary not in excess, at any one time outstanding, of the greater of (x) $25 million and (y) 1.0% of Total Assets.



          (c) For purposes of determining compliance with this Section 4.09:





          (i) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock
(or any portion thereof) meets the criteria of more than one of the categories of permitted
Indebtedness described in clauses (i) through (xxiv) of Section 4.09(b) hereof or is
entitled to be Incurred pursuant to Section 4.09(a) hereof, the Issuer shall, in its 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 4.09; and




          (ii) at the time of incurrence, the Issuer will be entitled to divide and classify an
item of Indebtedness in more than one of the types of Indebtedness described in Sections
4.09(a) and 4.09(b) hereof without giving pro forma effect to the Indebtedness Incurred
pursuant to Section 4.09(b) hereof when calculating the amount of Indebtedness that may be
Incurred pursuant to Section 4.09(a) hereof.



          Accrual of interest, the accretion of accreted value, the payment of interest or dividends in
the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable,
accretion of original issue discount, the accretion of liquidation preference and increases in the
amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of
currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred
Stock for purposes of this Section 4.09. Guarantees of, or obligations in respect of letters of
credit relating to, Indebtedness which is otherwise included in the determination of a particular
amount of Indebtedness shall not be included in the determination of such amount of Indebtedness;
provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit,
as the case may be, was in compliance with this Section 4.09.




          For purposes of determining compliance with any U.S. dollar-denominated restriction on the
Incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated
in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on
the date such Indebtedness was incurred, in the case of term debt, or first committed or first
Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt;
provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated
restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been
exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced.




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          Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that
the Issuer and its Restricted Subsidiaries may Incur pursuant to this covenant shall not be deemed
to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in
the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance
other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced,
shall be calculated based on the currency exchange rate applicable to the currencies in which such
respective Indebtedness is denominated that is in effect on the date of such refinancing.




          Notwithstanding any other provision of this Section 4.09, the Issuer may provide a Guarantee
of any Indebtedness of the Company and its Subsidiaries in connection with the merger of the Issuer
with and into the Company and the Assumption upon the satisfaction of the Escrow Conditions.




     Section 4.10 Asset Sales.



          (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, cause or
make an Asset Sale, unless (i) the Issuer or any of its Restricted Subsidiaries, as the case may
be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value
(as determined in good faith by the Issuer) of the assets sold or otherwise disposed of, and (ii)
at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as
the case may be, is in the form of Cash Equivalents; provided that the amount of:





               (A) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most
recent balance sheet or in the notes thereto) of the Issuer or any Restricted Subsidiary of
the Issuer (other than liabilities that are by their terms subordinated to the Notes or any
Guarantee) that are assumed by the transferee of any such assets;




               (B) any notes or other obligations or other securities or assets received by the
Issuer or such Restricted Subsidiary of the Issuer from such transferee that are converted
by the Issuer or such Restricted Subsidiary of the Issuer into cash within 180 days of the
receipt thereof (to the extent of the cash received); and




               (C) any Designated Non-cash Consideration received by the Issuer or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value (as
determined in good faith by the Issuer), taken together with all other Designated Non-cash
Consideration received pursuant to this clause (c) that is at that time outstanding, not to
exceed the greater of 3.0% of Total Assets and $100 million at the time of the receipt of
such Designated Non-cash Consideration (with the Fair Market Value of each item of
Designated Non-cash Consideration being measured at the time received and without giving
effect to subsequent changes in value)


shall be deemed to be Cash Equivalents for the purposes of this provision.




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          (b) Within 15 months after the Issuer’s or any Restricted Subsidiary of the Issuer’s receipt
of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary of the Issuer may
apply the Net Proceeds from such Asset Sale, at its option:





          (i) to repay (a) Indebtedness constituting Bank Indebtedness and other Pari Passu
Indebtedness that is secured by a Lien permitted under this Indenture (and, if the
Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto), (b) Indebtedness of a Restricted Subsidiary that is not a Guarantor,
(c) Obligations under the Notes or (d) other Pari Passu Indebtedness (provided that if the
Issuer or any Guarantor shall so reduce Obligations under unsecured Pari Passu
Indebtedness, the Issuer will equally and ratably reduce Obligations under the Notes as
provided under Section 3.07 hereof, through open-market purchases (provided that such
purchases are at or above 100% of the principal amount thereof) or by making an offer (in
accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to
purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest and additional interest, if any, the pro rata principal amount of
Notes), in each case other than Indebtedness owed to the Issuer or an Affiliate of the
Issuer; or




          (ii) to make an Investment in any one or more businesses (provided that if such
Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition
results in such Person becoming a Restricted Subsidiary of the Issuer), assets, or property
or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that
replace the properties and assets that are the subject of such Asset Sale.



          In the case of clause (ii) of this Section 4.10(b), a binding commitment shall be treated as a
permitted application of the Net Proceeds from the date of such commitment; provided that in the
event such binding commitment is later canceled or terminated for any reason before such Net
Proceeds are so applied, the Issuer or such Restricted Subsidiary enters into another binding
commitment (a “Second Commitment”) within nine months of such cancellation or termination of the
prior binding commitment; provided, further that the Issuer or such Restricted Subsidiary may only
enter into a Second Commitment under the foregoing provision one time with respect to each Asset
Sale.




          (c) Pending the final application of any such Net Proceeds, the Issuer or such Restricted
Subsidiary of the Issuer may temporarily reduce Indebtedness under a revolving credit facility, if
any, or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture. Any Net
Proceeds from any Asset Sale that are not applied as provided and within the time period set forth
in this Section 4.10(b) (it being understood that any portion of such Net Proceeds used to make an
offer to purchase Notes, as described in clause (i) of this Section 4.10(b), shall be deemed to
have been invested whether or not such offer is accepted) will be deemed to constitute “Excess
Proceeds.” When the aggregate amount of Excess Proceeds exceeds $20 million, the Issuer shall make
an offer to all Holders of Notes (and, at the option of the Issuer, to






97









 







holders of any Pari Passu Indebtedness) (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes (and such
Pari Passu Indebtedness), that is at least $2,000 and an integral multiple of $1,000 that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof (or, in the event such Pari Passu Indebtedness was issued with significant
original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and
additional interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if
any, as may be provided for by the terms of such Pari Passu Indebtedness), to the date fixed for
the closing of such offer, in accordance with the procedures set forth in Section 3.09 hereof. The
Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten (10) Business
Days after the date that Excess Proceeds exceeds $20 million by mailing the notice required
pursuant to the terms this Indenture, with a copy to the Trustee and the Collateral Agent. To the
extent that the aggregate amount of Notes (and such Pari Passu Indebtedness) tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess
Proceeds for any purpose that is not prohibited by this Indenture. If the aggregate principal
amount of Notes (and such Pari Passu Indebtedness) surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased in the manner
described in Section 4.10(e) hereof. Upon completion of any such Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.




          (d) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations to the extent such laws or regulations are applicable in
connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that
the provisions of any securities laws or regulations conflict with the provisions of this
Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations described in this Indenture by virtue thereof.




          (e) If more Notes (and such Pari Passu Indebtedness) are tendered pursuant to an Asset Sale
Offer than the Issuer is required to purchase, selection of such Notes for purchase will be made by
the Trustee on a pro rata basis or by lot, or by such other method in accordance with the
procedures of DTC; provided that no Notes of $2,000 or less shall be purchased in part. Selection
of such Pari Passu Indebtedness will be made pursuant to the terms of such Pari Passu Indebtedness.




     Section 4.11 Transactions with Affiliates.



          (a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into or make or amend
any transaction or series of transactions, contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an
“Affiliate Transaction”) involving aggregate consideration in excess of $10 million, unless:





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          (i) such Affiliate Transaction is on terms that are not materially less favorable to
the Issuer or the relevant Restricted Subsidiary than those that could have been obtained
in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated
Person; and




          (ii) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $25 million, the Issuer
delivers to the Trustee and the Collateral Agent a resolution adopted in good faith by the
majority of the Board of Directors of the Issuer, approving such Affiliate Transaction and
set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies
with clause (i) of this Section 4.11(a).



          (b) Section 4.11(a) will not apply to the following:





          (i) transactions between or among the Issuer and/or any of its Restricted Subsidiaries
and any merger, consolidation or amalgamation of the Issuer and any direct parent of the
Issuer; provided that such parent shall have no material liabilities and no material assets
other than cash, Cash Equivalents and the Capital Stock of the Issuer and such merger,
consolidation or amalgamation is otherwise in compliance with the terms of this Indenture
and effected for a bona fide business purpose;




          (ii) Restricted Payments permitted by Section 4.07 hereof and Permitted Investments;




          (iii) (x) the entering into of any agreement (and any amendment or modification of any
such agreement) to pay, and the payment of, management, consulting, monitoring and advisory
fees to the Sponsors in an aggregate amount in any fiscal year not to exceed the greater of
(A) $6 million and (B) 2.0% of EBITDA of the Issuer and its Restricted Subsidiaries for the
immediately preceding fiscal year, plus out-of-pocket expense reimbursement; provided,
however, that any payment not made in any fiscal year may be carried forward and paid in
any succeeding fiscal year and (y) the payment of the present value of all amounts payable
pursuant to any agreement described in clause (x) of this paragraph in connection with the
termination of such agreement;




          (iv) the payment of reasonable and customary fees and reimbursement of expenses paid
to, and indemnity provided on behalf of, officers, directors, employees or consultants of
the Issuer or any Restricted Subsidiary or any direct or indirect parent of the Issuer;




          (v) payments by the Issuer or any of its Restricted Subsidiaries to the Sponsors made
for any financial advisory, financing, underwriting or placement services or in respect of
other investment banking activities, including, without limitation, in connection with
acquisitions or divestitures, which payments are (x) made pursuant to the agreements with
the Sponsors disclosed in



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the Offering Circular or (y) approved by a majority of the Board of Directors of the Issuer in good faith;




          (vi) transactions in which the Issuer or any of its Restricted Subsidiaries, as the
case may be, delivers to the Trustee and the Collateral Agent a letter from an Independent
Financial Advisor stating that such transaction is fair to the Issuer or such Restricted
Subsidiary from a financial point of view or meets the requirements of Section 4.11(a)
hereof;




          (vii) payments or loans (or cancellation of loans) to officers, directors, employees
or consultants which are approved by a majority of the Board of Directors of the Issuer in
good faith;




          (viii) any agreement as in effect as of the Issue Date or any amendment thereto (so
long as any such agreement together with all amendments thereto, taken as a whole, is not
more disadvantageous to the Holders of the Notes in any material respect than the original
agreement as in effect on the Issue Date) or any transaction contemplated thereby as
determined in good faith by the Issuer;




          (ix) the existence of, or the performance by the Issuer or any of its Restricted
Subsidiaries of its obligations under the terms of, Acquisition Documents, any stockholders
agreement (including any registration rights agreement or purchase agreement related
thereto) to which it is a party as of the Issue Date, and any transaction, agreement or
arrangement described in the Offering Circular and, in each case, any amendment thereto or
similar transactions, agreements or arrangements which it may enter into thereafter;
provided, however, that the existence of, or the performance by the Issuer or any of its
Restricted Subsidiaries of its obligations under, any future amendment to any such existing
transaction, agreement or arrangement or under any similar transaction, agreement or
arrangement entered into after the Issue Date shall only be permitted by this clause (ix)
to the extent that the terms of any such existing transaction, agreement or arrangement
together with all amendments thereto, taken as a whole, or new transaction, agreement or
arrangement are not otherwise more disadvantageous to the Holders of the Notes in any
material respect than the original transaction, agreement or arrangement as in effect on
the Issue Date;




          (x) the execution of the Transactions and the payment of all fees and expenses related
to the Transactions, including fees to the Sponsors, which are disclosed in the Offering
Circular or contemplated by the Acquisition Documents;




          (xi) (a) transactions with customers, clients, suppliers or purchasers or sellers of
goods or services, or transactions otherwise relating to the purchase or sale of goods or
services, in each case in the ordinary course of business and otherwise in compliance with
the terms of this Indenture, which are fair to the Issuer and its Restricted Subsidiaries
in the reasonable determination of the Board of Directors or the senior management of the
Issuer, or are on terms at



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least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (b) transactions with joint ventures or
Unrestricted Subsidiaries entered into in the ordinary course of business;




          (xii) any transaction effected as part of a Qualified Receivables Financing;




          (xiii) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer
to any Person;




          (xiv) the issuances of securities or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements, stock
option and stock ownership plans or similar employee benefit plans approved by the Board of
Directors of the Issuer or any direct or indirect parent of the Issuer or of a Restricted
Subsidiary of the Issuer, as appropriate, in good faith;




          (xv) the entering into of any tax sharing agreement or arrangement;




          (xvi) any contribution to the capital of the Issuer;




          (xvii) transactions permitted by, and complying with, Section 5.01 hereof;




          (xviii) transactions between the Issuer or any of its Restricted Subsidiaries and any
Person, a director of which is also a director of the Issuer or any direct or indirect
parent of the Issuer; provided, however, that such director abstains from voting as a
director of the Issuer or such direct or indirect parent, as the case may be, on any matter
involving such other Person;




          (xix) pledges of Equity Interests of Unrestricted Subsidiaries;




          (xx) any employment agreements entered into by the Issuer or any of its Restricted
Subsidiaries in the ordinary course of business;




          (xxi) transactions undertaken in good faith (as certified by a responsible financial
or accounting officer of the Issuer in an Officer’s Certificate) for the purpose of
improving the consolidated tax efficiency of the Issuer and its Subsidiaries and not for
the purpose of circumventing any covenant in this Indenture; and




          (xxii) the guarantee of Indebtedness of the Company and its Subsidiaries by the
Issuer, the merger of the Issuer with and into the Company and the Assumption upon the
satisfaction of the Escrow Conditions.



     Section 4.12 Liens. The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur or suffer to exist any Lien



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(other than a Permitted Lien) on any asset or property of the Issuer or such Restricted Subsidiary securing
Indebtedness. The expansion of Liens by virtue of accrual of interest, the accretion of accreted
value, the payment of interests or dividends in the form of additional Indebtedness, amortization
of original issue discount and increases in the amount of Indebtedness outstanding solely as a
result of fluctuations in the exchange rate of currency will not be deemed to an incurrence of
Liens the purpose of this Section 4.12.




     Section 4.13 Offer to Repurchase Upon Change of Control. (a) If a Change of Control
occurs, unless the Issuer has previously or concurrently mailed a redemption notice with respect to
all the outstanding Notes as described under Section 3.07 hereof, the Issuer shall make an offer to
purchase all of the Notes (the “Change of Control Offer”) at a price in cash (the “Change of
Control Payment”) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Additional Interest, if any, to the date of repurchase, subject to the right of
Holders of the Notes of record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date. Within 30 days following any Change of Control, except to the extent that
the Issuer has exercised its right to redeem the Notes by delivery of a notice of redemption as
described under Section 3.03 hereof, the Issuer shall send notice of such Change of Control Offer
by first-class mail to each Holder of Notes to the address of such Holder appearing in the Note
Register or otherwise in accordance with Applicable Procedures, with a copy to the Trustee, with
the following information:



          (1) that a Change of Control has occurred and that such Holder has the right to require the
Issuer to repurchase such Holder’s Notes at a repurchase price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest and Additional Interest, if
any, to the date of repurchase (subject to the right of the Holders of record on a Record Date to
receive interest on the relevant Interest Payment Date);




          (2) the circumstances and relevant facts and financial information regarding such Change of
Control;




          (3) the repurchase date, which will be no earlier than 30 days nor later than 60 days from the
date such notice is mailed (the “Change of Control Payment Date”);




          (4) that any Note not properly tendered will remain outstanding and continue to accrue
interest;




          (5) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the
Change of Control Payment Date;




          (6) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer
will be required to surrender such Notes, with the form entitled “Option of Holder to Elect
Purchase” on the reverse of such Notes completed, to the





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paying agent specified in the notice at the address specified in the notice prior to the close of business on the Change of Control Payment
Date;




          (7) that Holders will be entitled to withdraw their tendered Notes and their election to
require the Issuer to purchase such Notes, provided that the paying agent receives, not later than
the close of business on the Change of Control Payment Date, a telegram, facsimile transmission or
letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered
for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election
to have such Notes purchased;




          (8) that if the Holder elects to have less than all of such Holder’s Notes repurchased, the
Holder will receive new Notes and such new Notes will be equal in principal amount to the
unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal
to $2,000 or an integral multiple of $1,000 in excess of $2,000;




          (9) if such notice is mailed prior to the occurrence of a Change of Control, that the Change
of Control Offer is conditional on the occurrence of such Change of Control, and that a definitive
agreement is in place for the Change of Control at the time of making of the Change of Control
Offer;




          (10) the other instructions, as determined by the Issuer, consistent with this Section 4.13,
that a Holder must follow in order to have its Notes repurchased; and




          (11) the CUSIP and ISIN number, if any, printed on the Notes that may be repurchased and that
no representation is made as to the correctness or the accuracy of any such CUSIP or ISIN number
that is listed on such notice or printed on the Notes.




          The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been
given, whether or not the Holder receives such notice. If (a) the notice is mailed in a manner
herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice
but it is defective, such Holder’s failure to receive such notice or such defect shall not affect
the validity of the proceedings for the purchase of the Notes as to all other Holders that properly
received such notice without defect. The Issuer shall comply, to the extent applicable, with the
requirements of Rule 14(e) under the Exchange Act and any other securities laws and regulations in
connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the provisions of this Section
4.13, the Issuer shall comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.13 by virtue thereof.




          In the event that at the time of such Change of Control the terms of any Bank Indebtedness
restrict or prohibit the repurchase of Notes pursuant to this Section 4.13, then prior to the
mailing of the notice to Holders provided for in this Section 4.13 but in any event within 30 days
following any Change of Control, the Issuer shall:





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          (i) repay in full all Bank Indebtedness or, if doing so will allow the purchase of
Notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each
lender who has accepted such offer; or




          (ii) obtain the requisite consent under the agreements governing the Bank Indebtedness
to permit the repurchase of the Notes as provided for in this Section 4.13.



          (b) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law:





          (i) accept for payment all Notes issued by it or portions thereof properly tendered
pursuant to the Change of Control Offer;




          (ii) deposit with the Paying Agent an amount equal to the aggregate Change of Control
Payment in respect of all Notes or portions thereof so tendered; and




          (iii) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so
accepted together with an Officer’s Certificate to the Trustee stating that such Notes or
portions thereof have been tendered to and purchased by the Issuer.



          (c) The Issuer shall not be required to make a Change of Control Offer following a Change of
Control if a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in this Section 4.13 applicable to a Change
of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer. Notes repurchased by the Issuer pursuant to a Change of
Control Offer will have the status of Notes issued but not outstanding or will be retired and
canceled at the option of the Issuer. Notes purchased by a third party will have the status of
Notes issued and outstanding. Notwithstanding anything to the contrary herein, a Change of Control
Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control,
if a definitive agreement is in place for the Change of Control at the time of making of the Change
of Control Offer.




          (d) Other than as specifically provided in this Section 4.13, any purchase pursuant to this
Section 4.13 shall be made pursuant to the provisions of Sections 3.05 and 3.06 hereof, and
references therein to “redeem,” “redemption” and similar words shall be deemed to refer to
“purchase,” “repurchase” and similar words, as applicable.




     Section 4.14 Future Guarantors. After the Assumption, the Issuer shall cause each
Wholly-owned Restricted Subsidiary that is a Domestic Subsidiary (unless such Subsidiary is a
Receivables Subsidiary or a Domestic Subsidiary that is wholly-owned by one or more Foreign
Subsidiaries and created to enhance the tax efficiency of the Issuer and its Subsidiaries) that
guarantees any Indebtedness of the Issuer under the Credit



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Agreement to execute and deliver to the
Trustee and the Collateral Agent a supplemental indenture, the form of which is attached as Exhibit
E hereto, pursuant to which such Subsidiary will guarantee payment of the Notes and become a
Guarantor under Article X hereof. Each Guarantee will be limited to an amount not to exceed the
maximum amount that can be guaranteed by that Subsidiary without rendering the Guarantee, as it
relates to such Subsidiary, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally. Each Guarantor
shall also become a party to the Security Documents and execute and file all documents and
instruments necessary to grant to the Collateral Agent a perfected security interest in the
Collateral of such Wholly-owned Restricted Subsidiary.




          Concurrently with the execution and delivery of such supplemental indenture, the Issuer shall
deliver to the Trustee an Opinion of Counsel and an Officer’s Certificate to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and
that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and other similar laws relating to creditors’ rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, the Guarantee of such Subsidiary is
a legal, valid and binding obligation of such Subsidiary, enforceable against such Subsidiary in
accordance with its terms and to such other matters as the Trustee may reasonably request.




     Section 4.15 Amendment of Security Documents.The Issuer shall not amend, modify or
supplement, or permit or consent to any amendment, modification or supplement of, the Security
Documents in any way that would be adverse to the Holders in any material respect, except as
contemplated by the Intercreditor Agreement or as permitted under Article IX hereof.



     Section 4.16 After-Acquired Property.From and after the Assumption, upon the creation of
any Lien in favor of First-Priority Obligations by the Issuer or any Guarantor in respect of any
First-Priority After-Acquired Property, the Issuer or such Guarantor shall execute and deliver such
mortgages, deeds of trust, security instruments, financing statements and certificates and opinions
of counsel as shall be necessary to vest in the Trustee a perfected security interest, subject only
to Permitted Liens, in such First-Priority After-Acquired Property and to have such First-Priority
After-Acquired Property (but subject to certain limitations as described in the Security Documents,
if applicable) added to the Collateral, and thereupon all provisions of this Indenture relating to
the Collateral shall be deemed to relate to such First-Priority After-Acquired Property to the same
extent and with the same force and effect; provided, however, that if granting such second-priority
security interest in such First-Priority After-Acquired Property requires the consent of a third
party, the Issuer shall use commercially reasonable efforts to obtain such consent with respect to
the second-priority interest for the benefit of the Trustee on behalf of the Holders; provided,
further, however, that if such third party does not consent to the granting of such second-priority
security interest after the use of such commercially reasonable efforts, the Issuer or such
Guarantor, as the case may be, will not be required to provide such security interest.



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     Section 4.17 Company Existence. Subject to Article V hereof, the Issuer shall do or cause
to be done all things necessary to preserve and keep in full force and effect (i) its company
existence, and the corporate, partnership or other existence of each of its Restricted
Subsidiaries, in accordance with the respective organizational documents (as the same may be
amended from time to time) of the Issuer or any such Restricted Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Issuer and its Restricted Subsidiaries;
provided that the Issuer shall not be required to preserve any such right, license or franchise, or
the corporate, partnership or other existence of any of its Restricted Subsidiaries, if the Issuer
in good faith shall determine that the preservation thereof is no longer desirable in the conduct
of the business of the Issuer and its Restricted Subsidiaries, taken as a whole.



     Section 4.18 Suspension of Covenants.



          (a) If, on any date following the Assumption, (i) the Notes have Investment Grade Ratings from
both Rating Agencies, and (ii) no Default has occurred and is continuing under this Indenture and
the Issuer has delivered to the Trustee an Officer’s Certificate stating the same then, beginning
on that day and continuing at all times thereafter regardless of any subsequent changes in the
rating of the Notes, Sections 4.07, 4.08, 4.09, 4.10, 4.11 and 4.14 hereof and clause (iv) of
Section 5.01(a) hereof shall not be applicable to the Notes.




          (b) In addition, during any period of time after the Assumption that (i) the Notes of a series
have Investment Grade Ratings from both Rating Agencies and (ii) no Default has occurred and is
continuing under this Indenture (the occurrence of the events described in the foregoing clauses
(i) and (ii) being collectively referred to as a “Covenant Suspension Event”), the Issuer and its
Restricted Subsidiaries will not be subject to Section 4.13 herein (the “Suspended Covenant”). In
the event that the Issuer and its Restricted Subsidiaries are not subject to the Suspended Covenant
under this Indenture for any period of time as a result of the foregoing, and on any subsequent
date (the “Reversion Date”) one or both of the Rating Agencies (x) withdraw their Investment Grade
Rating or downgrade the rating assigned to such series of Notes below an Investment Grade Rating
and/or (y) the Issuer or any of its Affiliates enters into an agreement to effect a transaction
that would result in a Change of Control and one or more of the Rating Agencies indicate that if
consummated, such transaction (alone or together with any related recapitalization or refinancing
transactions) would cause such Rating Agency to withdraw its Investment Grade Rating or downgrade
the ratings assigned to such series of Notes below an Investment Grade Rating, then the Issuer and
its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenant under this
Indenture with respect to future events, including, without limitation, a proposed transaction
described in clause (y) of this paragraph.




          (c) On each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred
Stock issued, during the Suspension Period will be classified as having been Incurred or issued
pursuant to Section 4.09(a) or Section 4.09(b) (to the extent such Indebtedness or Disqualified
Stock or Preferred Stock would be permitted to be Incurred or issued thereunder as of the Reversion
Date and after giving effect to Indebtedness





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Incurred or issued prior to the Suspension Period and
outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or
Preferred Stock would not be so permitted to be Incurred or issued pursuant to Section 4.09(a) or
Section 4.09(b), such Indebtedness or Disqualified Stock or Preferred Stock will be deemed to have
been outstanding on the Issue Date, so that it is classified as permitted under Section
4.09(b)(iii). Calculations made after the Reversion Date of the amount available to be made as
Restricted Payments under Section 4.07 will be made as though the covenant described under Section
4.07 had been in effect since the Issue Date and throughout the Suspension Period. Accordingly,
Restricted Payments made during the Suspension Period will reduce the amount available to be made
as Restricted Payments under Section 4.07(a). As described above, however, no Default or Event of
Default will be deemed to have occurred on the Reversion Date as a result of any actions taken by
the Issuer or the Restricted Subsidiaries during the Suspension Period. On and after each
Reversion Date, the Issuer and its Subsidiaries will be permitted to consummate the transactions
contemplated by any contract entered into during the Suspension Period so long as such contract and
such consummation would have been permitted during such Suspension Period.




          (d) For purposes of Section 4.08 hereof, on the Reversion Date, any contractual encumbrances
or restrictions of the type specified in clauses (a), (b) or (c) of Section 4.08 hereof entered
into during the Suspension Period will be deemed to have been in effect on the Issue Date, so that
they are permitted under Section 4.08(b)(i).




          (e) For purposes of Section 4.10 hereof, on the Reversion Date, the unutilized Excess Proceeds
will be reset to zero.




          (f) For purposes of Section 4.11 hereof, any contract, agreement, loan, advance or guaranty
with, or for the benefit of, any Affiliate of the Issuer entered into during the Suspension Period
will be deemed to have been in effect as of the Issue Date for purposes of Section 4.11(b)(viii).




          (g) During a Suspension Period, the Issuer may not designate any of its Subsidiaries as
Unrestricted Subsidiaries.




     Section 4.19 Activities Prior to the Assumption.



          (a) Prior to the Assumption, the Issuer’s primary activities will be restricted to issuing the
Notes, issuing capital stock to, and receiving capital contributions from, the Company, performing
its obligations in respect of the Notes under this Indenture and the Escrow Agreement, consummating
the Assumption and redeeming the Notes in the Special Mandatory Redemption, if applicable, and
conducting such other activities as are necessary or appropriate to carry out the activities
described above. In connection with its merger with and into the Company, the Issuer may guarantee
certain Indebtedness of the Company. Prior to the Assumption, the Issuer will not own, hold or
otherwise have any interest in any assets other than the Escrowed Property.





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          (b) Any activity engaged in or transaction or agreement entered into by the Company or any of
its Restricted Subsidiaries or Guarantors during the period from and including the Issue Date and
ending on the Escrow Release Date (the “Escrow Period”) which would have been subject to the
covenants of Article IV herein shall be deemed to have occurred on the Issue Date as if all such
covenants had been applicable to the Company and the Restricted Subsidiaries or Guarantors since
the Issue Date and throughout the Escrow Period and shall be classified as having been made or
incurred or entered into pursuant to any relevant provision of such covenants; provided that the
calculations made under this Indenture shall be made as if the covenants had been in effect since
the Issue Date and throughout the Escrow Period.




     Section 4.20 Escrow of Funds.



          (a) On the Issue Date, the Issuer, the Company, the Trustee, the Financial Institution and the
Escrow Agent shall enter into the Escrow Agreement and in connection therewith the Company will
deposit the Account Property (as defined in the Escrow Agreement) into the Escrow Account, which
will include an amount sufficient to yield the aggregate Special Redemption Price on the Special
Redemption Date for the Notes. The Issuer will grant the Trustee, for the benefit of the Holders,
a first priority security interest in the Escrow Account and all deposits therein to secure the
Obligations under the Notes pending disbursement as described below.




          (b) The Issuer and the Company agree that (i) the terms of the Escrow Agreement shall
exclusively control the conditions under which and procedures pursuant to which Account Property
(as defined in the Escrow Agreement) can be released and (ii) neither the Issuer nor the Company
will attempt to have Escrowed Funds released from escrow except in accordance with the Escrow
Agreement.




          (c) The Trustee agrees with the Issuer that the Trustee will not deliver any entitlement
orders or instructions under the Escrow Agreement unless and until an Event of Default has occurred
and in no event shall the Trustee be required to give any instruction under the Escrow Agreement
unless it is directed by Holders of a majority of the aggregate principal amount of the Notes then
outstanding.




ARTICLE V




SUCCESSORS



     Section 5.01 Merger, Amalgamation, Consolidation or Sale of All or Substantially All
Assets.



          (a) The Issuer shall not, directly or indirectly, consolidate, amalgamate or merge with or
into or wind up or convert into (whether or not the Issuer is the surviving Person), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions, to any Person unless:




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          (i) the Issuer is the surviving person or the Person formed by or surviving any such
consolidation, amalgamation, merger, winding up or conversion (if other than the Issuer) or
to which such sale, assignment, transfer, lease, conveyance or other disposition will have
been made is a corporation, partnership or limited liability company organized or existing
under the laws of the United States, any state thereof, the District of Columbia, or any
territory thereof (the Issuer or such Person, as the case may be, being herein called the
“Successor Issuer”); provided that in the case where the surviving Person is not a
corporation, a co-obligor of the Notes is a corporation;




          (ii) the Successor Issuer (if other than the Issuer) expressly assumes all the
obligations of the Issuer under this Indenture and the Notes pursuant to supplemental
indentures or other documents or instruments in form reasonably satisfactory to the Trustee
and the Collateral Agent;




          (iii) immediately after giving effect to such transaction (and treating any
Indebtedness which becomes an obligation of the Successor Issuer or any of its Restricted
Subsidiaries as a result of such transaction as having been Incurred by the Successor
Issuer or such Restricted Subsidiary at the time of such transaction) no Default shall have
occurred and be continuing;




          (iv) immediately after giving pro forma effect to such transaction, as if such
transaction had occurred at the beginning of the applicable four-quarter period (and
treating any Indebtedness which becomes an obligation of the Successor Issuer or any of its
Restricted Subsidiaries as a result of such transaction as having been Incurred by the
Successor Issuer or such Restricted Subsidiary at the time of such transaction), either




               (A) the Successor Issuer would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to Section 4.09(a) hereof; or




               (B) the Fixed Charge Coverage Ratio for the Successor Issuer and its Restricted
Subsidiaries would be equal or greater than such ratio for the Issuer and its Restricted
Subsidiaries immediately prior to such transaction;




          (v) if the Issuer is not the Successor Issuer, each Guarantor, unless it is the other
party to the transactions described above, shall have by supplemental indenture confirmed
that its Guarantee shall apply to such Person’s obligations under this Indenture and the
Notes; and




          (vi) the Issuer shall have delivered to the Trustee and the Collateral Agent an
Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, amalgamation or transfer and such supplemental indentures, if any, and in the case
of the merger of the Issuer with and into the Company, the Assumption, comply with this
Indenture.



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          (b) The Successor Issuer (if other than the Issuer) will succeed to, and be substituted for,
the Issuer under this Indenture and the Notes and in such event the Issuer will automatically be
released and discharged from its obligations under this Indenture and the Notes. Notwithstanding
clauses (iii) and (iv) of Section 5.01(a) hereof, (A) any Restricted Subsidiary may merge,
consolidate or amalgamate with or transfer all or part of its properties and assets to the Issuer
or to another Restricted Subsidiary, and (B) the Issuer may merge, consolidate or amalgamate with
an Affiliate incorporated solely for the purpose of reincorporating the Issuer in another state of
the United States, the District of Columbia or any territory of the United States or may convert
into a limited liability company, so long as the amount of Indebtedness of the Issuer and its
Restricted Subsidiaries is not increased thereby. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among the Issuer and its
Restricted Subsidiaries. Notwithstanding the foregoing, clauses (iii) and (iv) of Section 5.01(a)
hereof shall not apply to the merger of the Issuer with and into the Company upon satisfaction of
the Escrow Conditions.



          (c) Subject to Section 10.06 hereof, no Guarantor shall, and the Issuer shall not permit any
Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not the
Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose
of all or substantially all of its properties or assets, in one or more related transactions, to
any Person (other than any such sale, assignment, transfer, lease conveyance or disposition in
connection with the Transactions) unless:




               (i) Either (A) such Guarantor is the surviving Person or the Person formed by or
surviving any such consolidation, amalgamation or merger (if other than such Guarantor) or
to which such sale, assignment, transfer, lease, conveyance or other disposition will have
been made is a corporation, partnership or limited liability company organized or existing
under the laws of the United States, any state thereof, the District of Columbia, or any
territory thereof (such Guarantor or such Person, as the case may be, being herein called
the “Successor Guarantor”) and the Successor Guarantor (if other than such Guarantor)
expressly assumes all the obligations of such Guarantor under this Indenture, such
Guarantor’s Guarantees pursuant to a supplemental indenture or other documents or
instruments in form reasonably satisfactory to the Trustee, or (B) such sale or disposition
or consolidation, amalgamation or merger is not in violation of Section 4.10 hereof; and




               (ii) the Successor Guarantor (if other than such Guarantor), shall have delivered or
caused to be delivered to the Trustee and the Collateral Agent an Officer’s Certificate and
an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or
transfer and such supplemental indenture, if any, is authorized and permitted by this
Indenture.



          (d) The Successor Guarantor (if other than such Guarantor) will succeed to, and be substituted
for, such Guarantor under this Indenture and such Guarantor’s Guarantees, and such Guarantor will
automatically be released and discharged from its obligations under this Indenture and such
Guarantor’s Guarantee.



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Notwithstanding the foregoing, (i) a Guarantor may merge, amalgamate or
consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Guarantor
in another state of the United States, the District of Columbia or any territory of the United
States so long as the amount of Indebtedness of such Guarantor is not increased thereby and (ii) a
Guarantor may merge, amalgamate or consolidate with another Guarantor or the Issuer.




          (e) Notwithstanding anything in this Section 5.01 to the contrary, any Guarantor may
consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or assets (collectively,
a “Transfer”) to (x) the Issuer or any Guarantor or (y) any Restricted Subsidiary of the Issuer
that is not a Guarantor; provided that at the time of each such Transfer pursuant to clause (y) the
aggregate amount of all such Transfers pursuant to this clause (y) since the Issue Date shall not
exceed 5.0% of the consolidated assets of the Issuer and the Guarantors as shown on the most recent
available balance sheet of the Issuer and its Restricted Subsidiaries after giving effect to each
such Transfer and including all such Transfers occurring from and after the Issue Date (excluding
Transfers in connection with the Transactions and Transfers pursuant to clause (x) of this
paragraph).




     Section 5.02 Successor Corporation Substituted. Upon any consolidation or merger, or any
sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Issuer or a Guarantor in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Issuer or such Guarantor, as
applicable, is merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this
Indenture referring to the Issuer or such Guarantor, as applicable, shall refer instead to the
successor corporation and not to the Issuer or such Guarantor, as applicable), and may exercise
every right and power of the Issuer or such Guarantor, as applicable, under this Indenture with the
same effect as if such successor Person had been named as the Issuer or a Guarantor, as applicable,
herein; provided that the predecessor Issuer shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale, assignment, transfer,
conveyance or other disposition of all of the Issuer’s assets that meets the requirements of
Section 5.01 hereof.



ARTICLE VI




DEFAULTS AND REMEDIES



     Section 6.01 Events of Default.



          (a) An “Event of Default” wherever used herein, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any





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judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):





          (i) a default in any payment of interest (including any Additional Interest) on any
Note when due, continued for 30 days;




          (ii) a default in the payment of principal or premium, if any, of any Note when due at
its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration
or otherwise;




          (iii) the failure by the Issuer or any Restricted Subsidiary for 60 days after receipt
of written notice given by the Trustee or the Holders of not less than 30% in principal
amount of the Notes to comply with any of its obligations, covenants or agreements (other
than a default referred to in clauses (i) and (ii) above) contained in this Indenture or
the Notes;




          (iv) the failure by the Issuer or any Significant Subsidiary to pay any Indebtedness
(other than Indebtedness owing to the Issuer or a Restricted Subsidiary) within any
applicable grace period after final maturity or the acceleration of any such Indebtedness
by the holders thereof because of a default, in each case, if the total amount of such
Indebtedness unpaid or accelerated exceeds $25 million or its foreign currency equivalent
(the “cross-acceleration provision”);




          (v) the failure by the Issuer or any Significant Subsidiary to pay final judgments
aggregating in excess of $25 million or its foreign currency equivalent (net of any amounts
which are covered by enforceable insurance policies issued by solvent carriers), which
judgments are not discharged, waived or stayed for a period of 60 days (the “judgment
default provision”);




          (vi) any Guarantee of a Significant Subsidiary with respect to the Notes ceases to be
in full force and effect (except as contemplated by the terms thereof) or any Guarantor
that qualifies as a Significant Subsidiary denies or disaffirms its obligations under this
Indenture or any Guarantee with respect to the Notes and such Default continues for 10
days;




          (vii) the Issuer or any of its Restricted Subsidiaries that is a Significant
Subsidiary (or any group of Restricted Subsidiaries that, taken together, would constitute
a Significant Subsidiary), pursuant to or within the meaning of any Bankruptcy Law: (i)
commences proceedings to be adjudicated bankrupt or insolvent; (ii) consents to the
institution of bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under applicable Bankruptcy
Law; (iii) consents to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of it or for all or substantially all of its
property; (iv) makes a general assignment for the benefit of its creditors; or (v)
generally is not paying its debts as they become due;



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          (viii) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (i) is for relief against the Issuer or any of its Restricted
Subsidiaries that is a Significant Subsidiary (or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary), in a proceeding in which
the Issuer or any such Restricted Subsidiaries, that is a Significant Subsidiary (or any
group of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary), is to be adjudicated bankrupt or insolvent; (ii) appoints a receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or any
of its Restricted Subsidiaries that is a Significant Subsidiary (or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary), or for all
or substantially all of the property of the Issuer or any of its Restricted Subsidiaries
that is a Significant Subsidiary (or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary); or (iii) orders the liquidation of
the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary (or any
group of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary); and the order or decree remains unstayed and in effect for 60 consecutive
days;




          (ix) unless all the Collateral has been released from the Liens in accordance with the
provisions of the Security Documents, the Issuer shall assert or any Guarantor shall
assert, in any pleading in a court of competent jurisdiction, that any such security
interest is invalid or unenforceable and, in the case of any such Person that is a
Subsidiary of the Issuer, the Issuer fails to cause such Subsidiary to rescind such
assertions within 30 days after the Issuer has actual knowledge of such assertions; or




          (x) the failure of any Issuer or any Guarantor to comply for 60 days with notice with
its other agreements contained in the Security Documents, except for a failure that would
not be material to the whole of the Notes and without materially affecting the value of the
Collateral taken as a whole.



     Section 6.02 Acceleration. If any Event of Default (other than an Event of Default
specified in clause (vii) or (viii) of Section 6.01 hereof) occurs and is continuing under this
Indenture, the Trustee or the Holders of at least 30% in principal amount of the then total
outstanding Notes may declare the principal, premium, if any, interest and any other monetary
obligations on all the then outstanding Notes to be due and payable; provided, however, that so
long as any Bank Indebtedness remains outstanding, no such acceleration shall be effective until
the earlier of (i) five Business Days after the giving of written notice to the Issuer and the
Representative under the Credit Agreement and (ii) the day on which any Bank Indebtedness is
accelerated. Upon the effectiveness of such declaration, such principal and interest shall be due
and payable immediately. The Trustee shall have no obligation to accelerate the Notes if in the
best judgment of the Trustee acceleration is not in the best interests of the Holders of the Notes.



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          Notwithstanding the foregoing, in the case of an Event of Default arising under clause (vii)
or (viii) of Section 6.01 hereof, all outstanding Notes shall be due and payable immediately
without further action or notice.




          The Holders of a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may on behalf of all of the Holders of all of the Notes rescind any
acceleration with respect to the Notes and its consequences if such rescission would not conflict
with any judgment or decree of a court of competent jurisdiction and if all existing Events of
Default (except nonpayment of principal, interest or premium that has become due solely because of
the acceleration) have been cured or waived.




          In the event of any Event of Default specified in clause (iv) of Section 6.01 hereof, such
Event of Default and all consequences thereof (excluding any resulting payment default, other than
as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically
and without any action by the Trustee or the Holders, if within 20 days after such Event of Default
arose the Issuer delivers an Officer’s Certificate to the Trustee stating that:




          (1) the Indebtedness or guarantee that is the basis for such Event of Default has been
discharged; or




          (2) Holders thereof have rescinded or waived the acceleration, notice or action (as the case
may be) giving rise to such Event of Default; or




          (3) the default that is the basis for such Event of Default has been cured.




     Section 6.03 Other Remedies. If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if any, and interest
on the Notes or to enforce the performance of any provision of the Notes or this Indenture.



          The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note
in exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.




     Section 6.04 Waiver of Past Defaults. Subject to Section 6.02 hereof, Holders of not less
than a majority in aggregate principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its
consequences hereunder (except a continuing Default in the payment of the principal of, premium, if
any, or interest on, any Note held by a non-consenting Holder) (including in connection with an
Asset Sale Offer or a Change of Control Offer). Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising



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therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.




     Section 6.05 Control by Majority. Holders of a majority in principal amount of the then
total outstanding Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The
Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or
that would involve the Trustee in personal liability. Prior to taking any action under this
Indenture, the Trustee will be entitled to indemnification satisfactory to it in its sole
discretion against any losses or expenses caused by taking or not taking such action.



     Section 6.06 Limitation on Suits. Subject to Section 6.07 hereof, no Holder of a Note may
pursue any remedy with respect to this Indenture or the Notes unless:




          (i) such Holder has previously given the Trustee notice that an Event of Default is
continuing;




          (ii) Holders of at least 30% in principal amount of the total outstanding Notes have
requested the Trustee to pursue the remedy;




          (iii) Holders of the Notes have offered the Trustee security or indemnity satisfactory
to the Trustee against any loss, liability or expense;




          (iv) the Trustee has not complied with such request within 60 days after the receipt
thereof and the offer of security or indemnity; and




          (v) Holders of a majority in principal amount of the total outstanding Notes have not
given the Trustee a direction inconsistent with such request within such 60 day period.



          A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a
Note or to obtain a preference or priority over another Holder of a Note.




     Section 6.07 Rights of Holders of Notes to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive payment of principal of,
premium, if any, and interest on the Note, on or after the respective due dates expressed in the
Note (including in connection with an Asset Sale Offer or a Change of Control Offer), or to bring
suit for the enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.



     Section 6.08 Collection Suit by Trustee. If an Event of Default specified in Section
6.01(i) or (ii) hereof occurs and is continuing, the Trustee is authorized to recover judgment in
its own name and as trustee of an express trust against the Issuer for the



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whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.




     Section 6.09 Restoration of Rights and Remedies. If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any determination in such proceedings,
the Issuer, the Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding has been instituted.



     Section 6.10 Rights and Remedies Cumulative. Except as otherwise provided with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 hereof, no
right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment
of any other appropriate right or remedy.



     Section 6.11 Delay or Omission Not Waiver. No delay or omission of the Trustee or of any
Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.



     Section 6.12 Trustee May File Proofs of Claim. The Trustee is authorized to file such
proofs of claim and other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel), the Collateral Agent and the Holders of the
Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the
Notes including the Guarantors), its creditors or its property and shall be entitled and empowered
to participate as a member in any official committee of creditors appointed in such matter and to
collect, receive and distribute any money or other property payable or deliverable on any such
claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts



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due the Trustee under Section 7.07 and the Collateral Agent under
Section 11.02 hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee and the Collateral Agent, their respective agents and
counsel, and any other amounts due the Trustee and the Collateral Agent under Section 7.07 and
Section 11.02 hereof out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the Holders may be entitled
to receive in such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.




     Section 6.13 Priorities. If the Trustee, the Collateral Agent or any Agent collects any
money pursuant to this Article VI or Article XI, as applicable, or if proceeds are received by the
Collateral Agent in connection with the foreclosure, collection or other enforcement of Liens
granted to the Collateral Agent in the Security Documents, in any such case, it shall pay out the
money in the following order:




          (i) to the Trustee, the Collateral Agent, such Agent, their agents and attorneys for
amounts due under Section 7.07 and Section 11.02(e) hereof, including payment of all
compensation, expenses and liabilities incurred, and all advances made, by the Trustee, the
Collateral Agent or such Agent and the costs and expenses of collection;




          (ii) to Holders of Notes for amounts due and unpaid on the Notes for principal,
premium, if any, and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal, premium, if any, and
interest, respectively; and




          (iii) to the Issuer or to such party as a court of competent jurisdiction shall
direct, including a Guarantor, if applicable.



          The Trustee may fix a record date and payment date for any payment to Holders of Notes
pursuant to this Section 6.13.




     Section 6.14 Undertaking for Costs. In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party litigant. This
Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.



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ARTICLE VII




TRUSTEE



     Section 7.01 Duties of Trustee.



          (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.




          (b) Except during the continuance of an Event of Default:





          (i) the duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and




          (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the accuracy of the
mathematical calculations or other facts stated therein).



          (c) The Trustee may not be relieved from liabilities for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:





          (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;




          (ii) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer of the Trustee, unless it is proved in a court of competent
jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and




          (iii) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.02,
6.04 or 6.05 hereof.



          (d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.





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          (e) Neither the Trustee nor the Collateral Agent shall be under any obligation to exercise any
of its rights or powers under this Indenture at the request or direction of any of the Holders of
the Notes unless the Holders have offered indemnity or security against any loss, liability or
expense acceptable to the Trustee and the Collateral Agent.




          (f) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.




     Section 7.02 Rights of Trustee.



          (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Issuer and its Restricted Subsidiaries, personally or by agent or attorney at the
sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation.




          (b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate
of the Issuer or an Opinion of Counsel or both. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of
Counsel. The Trustee may consult with counsel of its selection and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.




          (c) The Trustee may act through its attorneys and agents and shall not be responsible for the
misconduct or negligence of any agent or attorney appointed with due care.




          (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
that it believes to be authorized or within the rights or powers conferred upon it by this
Indenture.




          (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer.




          (f) None of the provisions of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or indemnity satisfactory to it against such
risk or liability is not assured to it.





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          (g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Notes and this Indenture.




          (h) In no event shall the Trustee or the Collateral Agent be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever (including, but not
limited to, loss of profit) irrespective of whether the Trustee or the Collateral Agent has been
advised of the likelihood of such loss or damage and regardless of the form of action.




          (i) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.




          (j) In the event the Issuer is required to pay Additional Interest, the Issuer will provide
written notice to the Trustee of the Issuer’s obligation to pay Additional Interest no later than
15 days prior to the next Interest Payment Date, which notice shall set forth the amount of the
Additional Interest to be paid by the Issuer. The Trustee shall not at any time be under any duty
or responsibility to any Holders to determine whether the Additional Interest is payable and the
amount thereof.




          (k) Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by
an Issuer Order and any resolution of the Board of Directors may be sufficiently evidenced by a
resolution adopted by the majority of the Board of Directors of the Issuer.




          (l) The Trustee may request that the Issuer deliver a certificate setting forth the names of
individuals and/or titles of officers authorized at such time to take specified actions pursuant to
this Indenture.




     Section 7.03 Individual Rights of Trustee. The Trustee in its individual or any other
capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any
Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the
event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same
with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.



     Section 7.04 Trustee’s and the Collateral Agent’s Disclaimer. Neither the Trustee nor the
Collateral agent shall be responsible for and neither makes any representation as to the validity
or adequacy of this Indenture or the Notes, neither shall be accountable for the Issuer’s use of
the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under
any provision of this Indenture, neither shall be responsible for the use or application of any
money received by any Paying



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Agent other than the Trustee, and neither shall be responsible for any
statement or recital herein or any statement in the Notes or any other document in connection with
the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.




     Section 7.05 Notice of Defaults. If a Default occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default within 90 days
after it occurs. Except in the case of a Default relating to the payment of principal, premium, if
any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing
Default if and so long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes. The Trustee shall not be
deemed to know of any Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is such a Default is received by the Trustee in
accordance with Section 13.02 hereof at the Corporate Trust Office of the Trustee and such notice
references the Notes and this Indenture.



     Section 7.06 Reports by Trustee to Holders of the Notes. Within 60 days after each June
15, beginning with the June 15 following the date of this Indenture, and for so long as Notes
remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of
such reporting date that complies with Trust Indenture Act Section 313(a) (but if no event
described in Trust Indenture Act Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply with Trust Indenture
Act Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by Trust
Indenture Act Section 313(c).



          A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to
the Issuer and filed with the SEC and each stock exchange on which the Notes are listed in
accordance with Trust Indenture Act Section 313(d). The Issuer shall promptly notify the Trustee
when the Notes are listed on any stock exchange.




     Section 7.07 Compensation and Indemnity. The Issuer shall pay to the Trustee from time to
time such compensation for its acceptance of this Indenture and services hereunder as the parties
shall agree in writing from time to time. The Trustee’s compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and expenses incurred or made by
it in addition to the compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.



          The Issuer and the Guarantors, jointly and severally, shall indemnify the Trustee and its
officers, directors, employees, agents and any predecessor trustee and its officers, directors,
employees and agents for, and hold the Trustee harmless against, any and all loss, damage, claims,
liability or expense (including attorneys’ fees and expenses) incurred by it in connection with the
acceptance or administration of this trust and the performance of its duties hereunder (including
the costs and expenses of enforcing this Indenture against the Issuer or any of the Guarantors
(including this Section 7.07) or





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defending itself against any claim whether asserted by any Holder,
the Issuer or any Guarantor, or liability in connective with the acceptance, exercise or
performance of any of its powers or duties hereunder). The Trustee shall notify the Issuer
promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the
Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the
claim and the Trustee may have separate counsel and the Issuer shall pay the fees and expenses of
such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad
faith.




          The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal of the Trustee.




          To secure the payment obligations of the Issuer and the Guarantors in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or collected by the
Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien
shall survive the satisfaction and discharge of this Indenture.




          When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.01(vi) or (vii) hereof occurs, the expenses and the compensation for the services
(including the fees and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.




          The Trustee shall comply with the provisions of Trust Indenture Act Section 313(b)(2) to the
extent applicable.




     Section 7.08 Replacement of Trustee. A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the successor Trustee’s
acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at
any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders
of a majority in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:



          (a) the Trustee fails to comply with Section 7.10 hereof or Section 310 of the Trust Indenture
Act;




          (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Law;




          (c) a custodian or public officer takes charge of the Trustee or its property; or




          (d) the Trustee becomes incapable of acting.




          If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Issuer shall promptly appoint a successor Trustee. Within one






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year after the successor
Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes
may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.




          If a successor Trustee does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at
least 10% in principal amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.




          If the Trustee, after written request by any Holder who has been a Holder for at least six
months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.




          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee; provided that all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.




     Section 7.09 Successor Trustee by Merger, etc. If the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the successor Trustee.



     Section 7.10 Eligibility; Disqualification. There shall at all times be a Trustee
hereunder that is a corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise corporate trustee
power, that is subject to supervision or examination by federal or state authorities and that has,
together with its parent, a combined capital and surplus of at least $50,000,000 as set forth in
its most recent published annual report of condition.



          This Indenture shall always have a Trustee who satisfies the requirements of Trust Indenture
Act Sections 310(a)(1), (2) and (5). The Trustee is subject to Trust Indenture Act Section 310(b).



     Section 7.11 Preferential Collection of Claims Against Issuer. The Trustee is subject to
Trust Indenture Act Section 311(a), excluding any creditor relationship listed in Trust Indenture
Act Section 311(b). A Trustee who has resigned or been removed shall be subject to Trust Indenture
Act Section 311(a) to the extent indicated therein.





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ARTICLE VIII




LEGAL DEFEASANCE AND COVENANT DEFEASANCE



     Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. The Issuer may, at its option
and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes
upon compliance with the conditions set forth below in this Article VIII.



     Section 8.02 Legal Defeasance and Discharge. Upon the Issuer’s exercise under Section 8.01 hereof of
the option applicable to this Section 8.02, the Issuer and the Guarantors shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged
from their obligations with respect to all outstanding Notes and Guarantees and with respect to the
Security Documents on the date the conditions set forth below are satisfied (“Legal Defeasance”).
For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of
this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations
under such Notes, this Indenture, and the Security Documents, including that of the Guarantors (and
the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging the same) except for the following provisions which shall survive until otherwise
terminated or discharged hereunder:




     (A) the rights of Holders of Notes to receive payments in respect of the
principal of, premium, if any, and interest on the Notes when such payments are due
solely out of the trust created pursuant to this Indenture referred to in Section
8.04 hereof;




     (B) the Issuer’s obligations with respect to Notes concerning the issuance of
temporary Notes, the registration of the transfer or exchange of Notes, the
replacement of mutilated, destroyed, lost or stolen Notes and the maintenance of an
office or agency for payment and money for security payments held in trust;




     (C) the rights, powers, trusts, duties and immunities of the Trustee and the
Collateral Agent, and the Issuer’s obligations in connection therewith; and




     (D) this Section 8.02.


Subject to compliance with this Article VIII, the Issuer may exercise its option under this Section
8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.




     Section 8.03 Covenant Defeasance. Upon the Issuer’s exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuer and the Guarantors



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shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from their obligations under the
covenants contained in Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.17
hereof and clauses (iv) and (v) of Section 5.01(a) hereof with respect to the outstanding Notes,
each Guarantor shall be released from its obligations under its Guarantee and the Issuer and each
Guarantor shall be released from all obligations with respect to the Security Documents, all on and
after the date the conditions set forth in Section 8.04 hereof are satisfied (“Covenant
Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed “outstanding” for all other
purposes hereunder (it being understood that such Notes shall not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as
specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(a)(iii) (solely with respect to the covenants that are released upon a
Covenant Defeasance), 6.01(a)(iv), 6.01(a)(v), 6.01(a)(vi), 6.01(a)(vii) (solely with respect to
Significant Subsidiaries), 6.01(a)(viii) (solely with respect to Significant Subsidiaries),
6.01(a)(ix) and 6.01(a)(x) hereof shall not constitute Events of Default.




     Section 8.04 Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the
application of either Section 8.02 or 8.03 hereof to the outstanding Notes:



          In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:





     (1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders of the Notes, cash in U.S. dollars, U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal of, premium, if
any, and interest due on the Notes on the Stated Maturity or on the Redemption Date, as the
case may be, of such principal, premium, if any, or interest on such Notes and the Issuer
must specify whether such Notes are being defeased to maturity or to a particular
Redemption Date.



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     (2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an
Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to
customary assumptions and exclusions,




          (A) the Issuer has received from, or there has been published by, the United
States Internal Revenue Service a ruling, or




          (B) since the issuance of the Notes, there has been a change in the
applicable U.S. federal income tax law,




in either case to the effect that, and based thereon such Opinion of Counsel shall confirm
that, subject to customary assumptions and exclusions, the Holders of the Notes will not
recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a
result of such Legal Defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;




     (3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee
an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to
customary assumptions and exclusions, the Holders of the Notes will not recognize income,
gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance
and will be subject to such tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;




     (4) no Default (other than that resulting from borrowing funds to be applied to make
such deposit and any similar and simultaneous deposit relating to other Indebtedness and,
in each case, the granting of Liens in connection therewith) shall have occurred and be
continuing on the date of such deposit;




     (5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under the Credit Agreement Documents, the
Intercreditor Agreement, the Security Documents, the Existing Notes, the indentures
governing the Existing Notes or any other material agreement or instrument (other than this
Indenture) to which, the Issuer or any Guarantor is a party or by which the Issuer or any
Guarantor is bound (other than that resulting from any borrowing of funds to be applied to
make the deposit required to effect such Legal Defeasance or Covenant Defeasance and any
similar and simultaneous deposit relating to other Indebtedness, and the granting of Liens
in connection therewith);




     (6) the Issuer shall have delivered to the Trustee and the Collateral Agent an Opinion
of Counsel to the effect that, as of the date of such opinion and subject to customary
assumptions and exclusions following the deposit, the trust funds will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization, or similar laws
affecting creditors’ rights generally (including



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Section 547 of Title 11 of the United States Code) under any applicable U.S. Federal
or state law, and that the Trustee has a perfected security interest in such trust funds
for the ratable benefit of the Holders;




     (7) the Issuer shall have delivered to the Trustee and the Collateral Agent an
Officer’s Certificate stating that the deposit was not made by the Issuer with the intent
of defeating, hindering, delaying or defrauding any creditors of the Issuer or any
Guarantor or others; and




     (8) the Issuer shall have delivered to the Trustee and the Collateral Agent an
Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to
customary assumptions and exclusions) each stating that all conditions precedent provided
for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be,
have been complied with.



     Section 8.05 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous
Provisions. Subject to Section 8.06 hereof, all money and Government Securities (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Issuer or a Guarantor acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect of principal,
premium and interest, but such money need not be segregated from other funds except to the extent
required by law.



          The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the cash or Government Securities deposited pursuant to Section 8.04 hereof or
the principal and interest received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the outstanding Notes.




          Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or
pay to the Issuer from time to time upon the request of the Issuer any money or Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in
excess of the amount thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.




     Section 8.06 Repayment to Issuer. Subject to any applicable abandoned property law, any money deposited
with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the
principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due and payable shall be paid to the
Issuer on its request or (if then



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held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall
thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof,
shall thereupon cease.




     Section 8.07 Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars
or Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by
reason of any order or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Issuer’s obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or
8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Issuer makes
any payment of principal of, premium, if any, or interest on any Note following the reinstatement
of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.



ARTICLE IX



AMENDMENT, SUPPLEMENT AND WAIVER



     Section 9.01 Without Consent of Holders of Notes. Notwithstanding Section 9.02 hereof, the Issuer, the
Guarantors, the Trustee, and the Collateral Agent may amend or supplement this Indenture and any
Guarantee or the Notes without the Consent of any Holder or any Security Document and the Issuer
may direct the Trustee and the Collateral Agent to, and the Trustee and the Collateral Agent shall,
enter into an amendment to the Intercreditor Agreement:




          (1) to cure any ambiguity, omission, mistake, defect or inconsistency,




          (2) to provide for the Assumption,




          (3) to provide for the assumption by a Successor Issuer of the obligations of
the Issuer under this Indenture and the Notes,




          (4) to provide for the assumption by a Successor Guarantor of the obligations
of a Guarantor under this Indenture and its Guarantee,




          (5) to provide for uncertificated Notes in addition to or in place of
certificated Notes (provided that the uncertificated Notes are issued in registered
form for purposes of Section 163(f) of the Code, or in a manner such that the
uncertificated Notes are described in Section 163(f)(2)(B) of the Code),



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          (6) to add a Guarantee with respect to the Notes,




          (7) to evidence and provide for the acceptance of appointment by a successor
trustee,




          (8) to add additional assets as Collateral, to release Collateral from the
Lien pursuant to this Indenture, the Security Documents and the Intercreditor
Agreement when permitted or required by this Indenture, the Security Documents or
the Intercreditor Agreement, to modify the Security Documents and/or the
Intercreditor Agreement to secure additional extensions of credit and add
additional secured creditors holding Other Second-Lien Obligations so long as such
Other Second-Lien Obligations are not prohibited by the provisions of this
Indenture,




          (9) to add to the covenants of the Issuer for the benefit of the Holders or to
surrender any right or power conferred upon the Issuer,




          (10) to make any change that does not adversely affect the rights of any
Holder,




          (11) to conform the text of this Indenture, the Guarantees, the Notes, the
Intercreditor Agreement or any Security Document to any provision of the
“Description of Notes” section of the Offering Circular to the extent that such
provision under the Offering Circular’s heading, “Description of Notes” was
intended to be a verbatim recitation of a provision of this Indenture, the
Guarantees, the Notes, the Intercreditor Agreement, or any Security Document,




          (12) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the Trust Indenture Act to effect any
provision of this Indenture, or




          (13) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in this Indenture as of the date hereof.



     Section 9.02 With Consent of Holders of Notes. Except as provided below in this Section 9.02, the
Issuer, the Guarantors, the Trustee, and the Collateral Agent may amend or supplement this
Indenture, the Notes, the Guarantees, the Security Documents and the Intercreditor Agreement with
the consent of the Holders of at least a majority in principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded) or compliance



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with any provision of this Indenture, the Guarantees, the Notes, the Security Documents or the
Intercreditor Agreement may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class
(including consents obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes).




          Upon the request of the Issuer accompanied by a resolution of its Board of Directors
authorizing the execution of any such amendment or amended or supplemental indenture, and upon the
filing with the Trustee and the Collateral Agent of evidence satisfactory to the Trustee and the
Collateral Agent of the consent of the Holders of Notes as aforesaid, and upon receipt by the
Trustee and the Collateral Agent of the documents described in Section 7.02 hereof, the Trustee and
the Collateral Agent shall join with the Issuer in the execution of such amendment or amended or
supplemental indenture unless such amendment or amended or supplemental indenture directly affects
the Trustee’s or the Collateral Agent’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee or the Collateral Agent may in its discretion, but shall not
be obligated to, enter into such amendment or amended or supplemental indenture.




          It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to
approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such
consent approves the substance thereof.




          After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer
shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Issuer to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such amended or supplemental
indenture or waiver.




          Without the consent of each affected Holder of Notes, an amendment or waiver under this
Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):




          (1) reduce the amount of the Notes whose Holders must consent to an amendment,




          (2) reduce the rate of or extend the time for payment of interest on the Notes,




          (3) reduce the principal of or change the Stated Maturity of the Notes,




          (4) reduce the premium payable upon the redemption of the Notes or change the time at which
the Notes may be redeemed as described under Section 3.07 herein,




          (5) make the Notes payable in money other than that stated in the Notes,







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          (6) expressly subordinate the Notes or the Guarantees to any other Indebtedness of the Issuer
or the Guarantor,




          (7) impair the right of any holder to receive payment of principal of, premium, if any, and
interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder’s Notes,




          (8) make any change in the amendment provisions which require each Holder’s consent or in the
waiver provisions,




          (9) modify any Guarantee in any manner adverse to the Holders, or




          (10) make any change in the provisions in the Intercreditor Agreement or this Indenture
dealing with the application of gross proceeds of Collateral that would adversely affect the
holders of the Notes.




     Section 9.03 Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or
the Notes shall be set forth in an amended or supplemental indenture that complies in all material
respects with the Trust Indenture Act as then in effect.



     Section 9.04 Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note
and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any
such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in accordance with its
terms and thereafter binds every Holder.



          The Issuer may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record
date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at
such record date (or their duly designated proxies), and only such Persons, shall be entitled to
consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether
or not such Persons continue to be Holders after such record date. No such consent shall be valid
or effective for more than 120 days after such record date unless the consent of the requisite
number of Holders has been obtained.




     Section 9.05 Notation on or Exchange of Notes. The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for
all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate
new Notes that reflect the amendment, supplement or waiver.



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          Failure to make the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.




     Section 9.06 Trustee and Collateral Agent to Sign Amendments, Etc. The Trustee and the Collateral Agent
shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the
amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of
the Trustee and the Collateral Agent. The Issuer may not sign an amendment, supplement or waiver
until the Board of Directors of the Issuer approves it. In executing any amendment, supplement or
waiver, the Trustee and the Collateral Agent shall be entitled to receive, upon request, and
(subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the
documents required by Section 13.05 hereof, an Officer’s Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is authorized or permitted by
this Indenture and that such amendment, supplement or waiver is the legal, valid and binding
obligation of the Issuer and any Guarantors party thereto, enforceable against them in accordance
with its terms, subject to customary exceptions, and complies with the provisions hereof (including
Section 9.03).



     Section 9.07 Payment for Consent. Neither the Issuer, the Issuer nor any Affiliate of the Issuer shall,
directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee
or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture or the Notes unless such consideration is offered to all
Holders and is paid to all Holders that so consent, waive or agree to amend in the time frame set
forth in solicitation documents relating to such consent, waiver or agreement.



     Section 9.08 Additional Voting Terms; Calculation of Principal Amount. Except as provided in the
proviso to the first sentence of Section 9.02, all Notes issued under this Indenture shall vote and
consent together on all matters (as to which any of such Notes may vote) as one class and no Notes
will have the right to vote or consent as a separate series on any matter. Determinations as to
whether Holders of the requisite aggregate principal amount of Notes have concurred in any
direction, waiver or consent shall be made in accordance with this Article IX and Section 2.14.



ARTICLE X



GUARANTEES



     Section 10.01 Guarantee. Subject to this Article X, each of the Guarantors hereby, jointly and severally
irrevocably and unconditionally guarantees on a senior basis to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and the Collateral Agent and their respective
successors and assigns, irrespective of the validity and enforceability of this Indenture, the
Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of,
premium, if any, or interest or Additional Interest on the Notes, expenses, indemnification or
otherwise shall be promptly paid in full when due, whether at Stated Maturity, by acceleration,
redemption



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or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Issuer to the Holders, the Trustee or the Collateral Agent
hereunder or thereunder shall be promptly paid in full or performed, all in accordance with the
terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by
acceleration, redemption or otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment
and not a guarantee of collection.




          The Guarantors hereby agree that their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with
respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any
action to enforce the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest,
notice and all demands whatsoever and covenants that this Guarantee shall not be discharged except
by complete performance of the obligations contained in the Notes and this Indenture.




          Each Guarantor also agrees to pay any and all costs and expenses (including reasonable
attorneys’ fees and expenses) incurred by the Trustee, the Collateral Agent or any Holder in
enforcing any rights under this Section 10.01.




          If any Holder, the Trustee or the Collateral Agent is required by any court or otherwise to
return to the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar
official acting in relation to either the Issuer or the Guarantors, any amount paid either to the
Trustee, the Collateral Agent or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.




          Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to
the Holders in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on
the one hand, and the Holders, the Trustee and the Collateral Agent on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI hereof
for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event
of any declaration of acceleration of such obligations as provided in Article VI hereof, such
obligations (whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right does not impair
the rights of the Holders under the Guarantees.







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          Each Guarantee shall remain in full force and effect and continue to be effective should any
petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer
become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest
extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee on the Notes or Guarantees,
whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment
or performance had not been made. In the event that any payment or any part thereof, is rescinded,
reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be
reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or
returned.




          In case any provision of any Guarantee shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.




          Each payment to be made by a Guarantor in respect of its Guarantee shall be made without
set-off, counterclaim, reduction or diminution of any kind or nature.




     Section 10.02 Limitation on Guarantor Liability. Each Guarantor, and by its acceptance of Notes, each
Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any Guarantee. To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each
Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are relevant under
such laws and after giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article X, result in the obligations of such Guarantor under its Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each Guarantor
that makes a payment under its Guarantee shall be entitled upon payment in full of all guaranteed
obligations under this Indenture to a contribution from each other Guarantor in an amount equal to
such other Guarantor’s pro rata portion of such payment based on the respective net assets of all
the Guarantors at the time of such payment determined in accordance with GAAP.



     Section 10.03 Execution and Delivery. To evidence its Guarantee set forth in Section 10.01 hereof, each
Guarantor hereby agrees that this Indenture or a supplemental indenture in the form attached as
Exhibit D or Exhibit E hereto shall be executed on behalf of such Guarantor by its President, one
of its Vice Presidents or one of its Assistant Vice Presidents.



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          Each Guarantor hereby agrees that its Guarantee set forth in Section 10.01 hereof shall remain
in full force and effect notwithstanding the absence of the endorsement of any notation of such
Guarantee on the Notes.




          If an Officer whose signature is on this Indenture no longer holds that office at the time the
Trustee authenticates the Note, the Guarantee shall be valid nevertheless.




          Upon the Assumption, the Guarantees set forth in this Indenture shall be deemed duly
delivered, without any further action by any Person, on behalf of the Guarantors. Following the
Escrow Release Date, the delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of
the Guarantors.




          If required by Section 4.14 hereof, the Issuer shall cause any newly created or acquired
Restricted Subsidiary to comply with the provisions of Section 4.14 hereof and this Article X, to
the extent applicable.




     Section 10.04 Subrogation. Each Guarantor shall be subrogated to all rights of Holders of Notes against
the Issuer in respect of any amounts paid by any Guarantor pursuant to the provisions of Section
10.01 hereof; provided that if an Event of Default has occurred and is continuing, no Guarantor
shall be entitled to enforce or receive any payments arising out of, or based upon, such right of
subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes
shall have been paid in full.



     Section 10.05 Benefits Acknowledged. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture and that the
guarantee and waivers made by it pursuant to its Guarantee are knowingly made in contemplation of
such benefits.



     Section 10.06
Release of Guarantees. A Guarantee of a Guarantor will be automatically released
upon:



          (a) the sale, disposition, exchange or other transfer (including through merger,
consolidation, amalgamation or otherwise) of the Capital Stock (including any sale, disposition or
other transfer following which the applicable Guarantor is no longer a Restricted Subsidiary) of
the applicable Guarantor if such sale, disposition, exchange or other transfer is made in a manner
not in violation of this Indenture;




          (b) the Issuer designating such Guarantor to be an Unrestricted Subsidiary in accordance with
Section 4.07 and the definition of “Unrestricted Subsidiary”;




          (c) the release or discharge of the guarantee by such Restricted Subsidiary of the Credit
Agreement or the guarantee of any other Indebtedness which resulted in the obligation to guarantee
the Notes;







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          (d) the Issuer’s exercise of its legal defeasance option or covenant defeasance option as
described under Article VIII or if the Issuer’s obligations under the this Indenture are discharged
in accordance with the terms of this Indenture; or




          (e) the applicable Guarantor ceasing to be a Subsidiary as a result of any foreclosure of any
pledge or security interest securing First-Priority Lien Obligations or other exercise of remedies
in respect thereof.




ARTICLE XI

COLLATERAL



     Section 11.01 Security Documents. Prior to the Escrow Release Date, the Notes shall be secured as
provided in the Escrow Agreement. From and after the Escrow Release Date, the payment of the
principal of and interest and premium, if any, on the Notes when due, whether on an interest
payment date, at maturity, by acceleration, repurchase, redemption or otherwise and whether by the
Issuer pursuant to the Notes or by any Guarantor pursuant to its Guarantees, the payment of all
other Obligations and the performance of all other obligations of the Issuer and the Guarantors
under this Indenture, the Notes, the Guarantees and the Security Documents shall be secured as
provided in Security Documents and will be secured by Security Documents hereafter delivered as
required or permitted by this Indenture. The Issuer shall, and shall cause each Restricted
Subsidiary to, and each Restricted Subsidiary shall, execute any and all further documents,
financing statements, agreements and instruments and take all such further actions (including the
filing and recording of UCC financing statements and continuation statements and amendments to UCC
financing statements that may be necessary to continue the effectiveness of such UCC financing
statements) that may be required by the Security Documents to maintain (at the sole cost and
expense of the Issuer and its Restricted Subsidiaries) the security interest created by the
Security Documents in the Collateral (other than with respect to any Collateral the security
interest in which is not required to be perfected under the Security Documents) as a perfected
second priority security interest subject only to Permitted Liens.



     Section 11.02 Collateral Agent.



          (a) The Collateral Agent is authorized and empowered to appoint one or more co-Collateral
Agents as it deems necessary or appropriate.




          (b) Neither the Trustee nor the Collateral Agent nor any of their respective officers,
directors, employees, attorneys or agents shall be responsible or liable for the existence,
genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness
or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or
protection of any Lien, or for any defect or deficiency as to any such matters, or for any failure
to demand, collect, foreclose or realize upon or otherwise enforce any of the Notes Liens or
Security Documents or any delay in doing so.







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          (c) Subject to the Security Documents and the Intercreditor Agreement, the Collateral Agent
shall be subject to such directions as may be given it by the Trustee from time to time (as
required or permitted by this Indenture). Subject to the Security Documents and the Intercreditor
Agreement, except as directed by the Trustee as required or permitted by this Indenture and any
other representatives, the Collateral Agent will not be obligated:





          (i) to act upon directions purported to be delivered to it by any other Person;




          (ii) to foreclose upon or otherwise enforce any Lien; or




          (iii) to take any other action whatsoever with regard to any or all of the Notes
Liens, Security Documents or Collateral.



          (d) The Collateral Agent shall be accountable only for amounts that it actually receives as a
result of the enforcement of the Notes Liens or Security Documents.




          (e) In acting as Collateral Agent or co-Collateral Agent, the Collateral Agent and each
co-Collateral Agent may conclusively rely upon and enforce each and all of the rights, powers,
immunities, indemnities and benefits of the Trustee under Article VII hereof, including the
compensation and indemnification provisions set forth in Section 7.07 (with the references to the
Trustee therein being deemed to refer to the Collateral Agent or co-Collateral Agent).




          (f) If the Issuer (i) Incurs First-Priority Lien Obligations at any time when no intercreditor
agreement is in effect or at any time when Indebtedness constituting First-Priority Lien
Obligations entitled to the benefit of an existing intercreditor agreement is concurrently retired,
and (ii) delivers to the Collateral Agent an Officer’s Certificate so stating and requesting the
Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the
form of the Intercreditor Agreement attached as Exhibit H hereto) accompanied by an Opinion of
Counsel pursuant to Sections 13.04 and 13.05 hereof in favor of a designated agent or
representative for the holders of the First-Priority Lien Obligations so Incurred, the Trustee and
the Collateral Agent shall (and each is hereby authorized and directed to) enter into such
Intercreditor Agreement, bind the Holders on the terms set forth therein and perform and observe
their respective obligations thereunder.




     Section 11.03 Authorization of Actions to Be Taken.



          (a) Each Holder of Notes, by its acceptance thereof, consents and agrees to the terms of each
Security Document and the Intercreditor Agreement, as originally in effect and as amended,
supplemented or replaced from time to time in accordance with its terms or the terms of this
Indenture, authorizes and directs the Trustee and the Collateral Agent to enter into the Security
Documents to which it is a party, authorizes and empowers the Trustee to direct the Collateral
Agent to enter into,






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and the Collateral Agent to execute and deliver, the Intercreditor Agreement, and authorizes
and empowers the Trustee and the Collateral Agent to bind the Holders of Notes and other holders of
Obligations as set forth in the Security Documents to which it is a party and the Intercreditor
Agreement and to perform its obligations and exercise its rights and powers thereunder.




          (b) The Collateral Agent and the Trustee are authorized and empowered to receive for the
benefit of the Holders of Notes any funds collected or distributed under the Security Documents to
which the Collateral Agent or Trustee is a party and to make further distributions of such funds to
the Holders of Notes according to the provisions of this Indenture.




          (c) Subject to the provisions of the Intercreditor Agreement, the Trustee may, in its sole
discretion and without the consent of the Holders, direct, on behalf of the Holders, the Collateral
Agent to take all actions it deems necessary or appropriate in order to:





          (i) foreclose upon or otherwise enforce any or all of the Notes Liens;




          (ii) enforce any of the terms of the Security Documents to which the Collateral Agent
or Trustee is a party; or




          (iii) collect and receive payment of any and all Obligations.



          Subject to the Intercreditor Agreement, the Trustee is authorized and empowered to institute
and maintain, or direct the Collateral Agent to institute and maintain, such suits and proceedings
as it may deem expedient to protect or enforce the Notes Liens or the Security Documents to which
the Collateral Agent or Trustee is a party or to prevent any impairment of Collateral by any acts
that may be unlawful or in violation of the Security Documents to which the Collateral Agent or
Trustee is a party or this Indenture, and such suits and proceedings as the Trustee or the
Collateral Agent may deem expedient to preserve or protect its interests and the interests of the
Holders of Notes in the Collateral, including power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other governmental enactment,
rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of Holders, the Trustee or the Collateral Agent.




     Section 11.04 Release of Liens.



          (a) Subject to subsection (b) of this Section 11.04, Collateral may be released from the Lien
and security interest created by the Security Documents at any time or from time to time in
accordance with the provisions of the Security Documents, the Intercreditor Agreement or as
provided hereby. Upon the request of the Issuer






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pursuant to an Officer’s Certificate and Opinion of Counsel certifying that all conditions
precedent hereunder have been met, the Issuer and the Guarantors shall be entitled to the release
of assets included in the Collateral from the Liens securing the Notes, and the Collateral Agent
and the Trustee (if the Trustee is not then the Collateral Agent) shall release the same from such
Liens at the Issuer’s sole cost and expense, under any one or more of the following circumstances:





          (i) to enable the Issuer or any Guarantor to consummate the disposition of such
property or assets to the extent not prohibited under Section 4.10;




          (ii) in the case of a Guarantor that is released from its Guarantee with respect to
the Notes, the release of the property and assets of such Guarantor; or




          (iii) with the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including Additional Notes, if any) voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or purchase of,
the Notes).



          Upon the receipt of an Officer’s Certificate and an Opinion of Counsel from the Issuer, as
described above, and any necessary or proper instruments of termination, satisfaction or release
prepared by the Issuer, the Collateral Agent shall execute, deliver or acknowledge such instruments
or releases to evidence the release of any Collateral permitted to be released pursuant to this
Indenture or the Security Documents or the Intercreditor Agreement.




          (b) Except as otherwise provided in the Intercreditor Agreement, no Collateral may be released
from the Lien and security interest created by the Security Documents unless (i) written notice of
such release has been delivered to the Collateral Agent and the Trustee not less than five days
prior to the date of such release and (ii) the Officer’s Certificate required by this Section 11.04
has been delivered to the Collateral Agent and the Trustee not less than two Business Days prior to
the date of such release.




     Section 11.05 Filing, Recording and Opinions.



          (a) The Issuer will comply with the provisions of Trust Indenture Act Sections 314(b) and
314(d), in each case following qualification of this Indenture pursuant to the Trust Indenture Act
and except to the extent not required as set forth in any SEC regulation or interpretation
(including any no-action letter issued by the Staff of the SEC, whether issued to the Issuer or any
other Person). Following such qualification, to the extent the Issuer is required to furnish to
the Trustee an Opinion of Counsel pursuant to Trust Indenture Act Section 314(b)(2), the Issuer
will furnish such opinion not more than 60 but not less than 30 days prior to each April 30.







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          Any release of Collateral permitted by Section 11.04 hereof will be deemed not to impair the
Liens under this Indenture and the Security Documents in contravention thereof and any person that
is required to deliver an Officer’s Certificate or Opinion of Counsel pursuant to Section 314(d) of
the Trust Indenture Act, shall be entitled to conclusively rely upon the foregoing as a basis for
delivery of such certificate or opinion. The Trustee may, to the extent permitted by Sections 7.01
and 7.02 hereof, accept as conclusive evidence of compliance with the foregoing provisions the
appropriate statements contained in such documents and Opinion of Counsel.




          (b) If any Collateral is released in accordance with this Indenture or any Security Document
and if the Issuer has delivered the certificates and documents required by the Security Documents
and Section 11.04, the Trustee will determine whether it has received all documentation required by
Trust Indenture Act Section 314(d) in connection with such release and, based on such determination
and the Opinion of Counsel delivered pursuant to Section 11.04, will, upon request, deliver a
certificate to the Collateral Agent setting forth such determination.




     Section 11.06 Powers Exercisable by Receiver or Trustee. In case the Collateral shall be in the
possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article XI
upon the Issuer or a Guarantor with respect to the release, sale or other disposition of such
property may be exercised by such receiver or trustee, and an instrument signed by such receiver or
trustee shall be deemed the equivalent of any similar instrument of the Issuer or a Guarantor or of
any officer or officers thereof required by the provisions of this Article XI; and if the Trustee
shall be in the possession of the Collateral under any provision of this Indenture, then such
powers may be exercised by the Trustee.



     Section 11.07 Release Upon Termination of the Issuer’s Obligations. In the event (i) that the Issuer
delivers to the Trustee, in form and substance acceptable to it, an Officer’s Certificate and
Opinion of Counsel certifying that all the obligations under this Indenture, the Notes and the
Security Documents (other than contingent or unliquidated obligations or liabilities not then due)
have been satisfied and discharged by the payment in full of the Issuer’s obligations under the
Notes, this Indenture and the Security Documents, and all such obligations have been so satisfied,
or (ii) a discharge of this Indenture under Article XII or Legal Defeasance or Covenant Defeasance
of this Indenture occurs under Article VIII, the Trustee shall deliver to the Issuer and the
Collateral Agent a notice stating that the Trustee, on behalf of the Holders, disclaims and gives
up any and all rights it has in or to the Collateral, and any rights it has under the Security
Documents, and upon receipt by the Collateral Agent of such notice, the Collateral Agent shall be
deemed not to hold a Lien in the Collateral on behalf of the Trustee and shall, at the expense of
the Issuer, do or cause to be done all acts reasonably necessary to release such Lien as soon as is
reasonably practicable.



     Section 11.08 Designations. Except as provided in the next sentence, for purposes of the provisions
hereof and the Intercreditor Agreement requiring the Issuer to designate Indebtedness for the
purposes of the terms “First-Priority Lien Obligations” and “Other Second-Lien Obligations,” or any
other such designations hereunder or under



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the Intercreditor Agreement, any such designation shall be sufficient if the relevant designation
provides in writing that such First-Priority Lien Obligations or Other Second-Lien Obligations are
permitted under this Indenture and is signed on behalf of the Issuer by an Officer and delivered to
the Trustee and the Collateral Agent. For all purposes hereof and the Intercreditor Agreement, the
Issuer hereby designates the Obligations pursuant to the Credit Agreement as in effect on the Issue
Date as First-Priority Lien Obligations.




     Section 11.09 Taking and Destruction. Subject to the Intercreditor Agreement, upon any Taking or
Destruction of any Collateral, all Net Insurance Proceeds received by the Issuer or a Restricted
Subsidiary shall be deemed Net Proceeds and shall be applied in accordance with Section 4.10.



ARTICLE XII



SATISFACTION AND DISCHARGE



     Section 12.01 Satisfaction and Discharge. This Indenture shall be discharged and shall cease to be of
further effect (except as to surviving rights of registration or transfer or exchange of Notes as
expressly provided for in this Indenture) as to all Notes, when either:




     (1) all Notes heretofore authenticated and delivered, except lost, stolen or destroyed
Notes which have been replaced or paid and Notes for whose payment money has heretofore
been deposited in trust, have been delivered to the Trustee for cancellation; or




     (2) (A) all Notes not heretofore delivered to the Trustee for cancellation have become
due and payable by reason of the making of a notice of redemption or otherwise, will become
due and payable within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Issuer, and the Issuer or any Guarantor has
irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust
solely for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S.
dollar-denominated Government Securities, or a combination thereof, in such amounts as will
be sufficient without consideration of any reinvestment of interest to pay and discharge
the entire indebtedness on the Notes not heretofore delivered to the Trustee for
cancellation for principal, premium, if any, and accrued interest to the date of maturity
or redemption;




     (B) the Issuer and the Guarantors have paid or caused to be paid all sums payable by
it under this Indenture; and



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     (C) the Issuer has delivered irrevocable instructions to the Trustee to apply the
deposited money toward the payment of the Notes at maturity or the Redemption Date, as the
case may be.



          In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel to the
Trustee and the Collateral Agent stating that all conditions precedent to satisfaction and
discharge have been satisfied.



Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been
deposited with the Trustee pursuant to subclause (A) of clause (2) of this Section 12.01, the
provisions of Sections 7.07, 8.06, 11.02 and Section 12.02 hereof shall survive.




     Section 12.02 Application of Trust Money. Subject to the provisions of Section 8.06 hereof, all money
deposited with the Trustee pursuant to Section 12.01 hereof shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and
interest for whose payment such money has been deposited with the Trustee; but such money need not
be segregated from other funds except to the extent required by law.



          If the Trustee or Paying Agent is unable to apply any Government Securities in accordance with
Section 12.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting such application,
the Issuer’s and any Guarantor’s obligations under this Indenture and the Notes shall be revived
and reinstated as though no deposit had occurred pursuant to Section 12.01 hereof; provided that if
the Issuer has made any payment of principal of, premium, if any, or interest on any Notes because
of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the
Holders of such Notes to receive such payment from the money or Government Securities held by the
Trustee or Paying Agent.




ARTICLE XIII



MISCELLANEOUS



     Section 13.01 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by Trust Indenture Act Section 318(c), the imposed duties shall
control.



     Section 13.02 Notices. Any notice or communication by the Issuer, any Guarantor or the Trustee to the
others is duly given if in writing and delivered in person or mailed by first-class mail
(registered or certified, return receipt requested), fax or overnight air courier guaranteeing next
day delivery, to the others’ address:



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If to the Issuer or any Guarantor:



Claire’s Escrow Corporation

c/o Claire’s Stores, Inc.

2400 West Central Road

Hoffman Estates, IL 60192

Fax No.: (847) 765-6747

Attention: Chief Financial Officer



If to the Trustee:



The Bank of New York Mellon Trust Company, N.A.

10161 Centurion Parkway

Jacksonville, FL 32256

Fax No.: (904) 645-1921

Attn: Corporate Trust Administration



If to the Collateral Agent:



The Bank of New York Mellon Trust Company, N.A.

10161 Centurion Parkway

Jacksonville, FL 32256

Fax No.: (904) 645-1921

Attn: Corporate Trust Administration




          The Issuer, any Guarantor, the Trustee or the Collateral Agent, by notice to the others, may
designate additional or different addresses for subsequent notices or communications.




          All notices and communications (other than those sent to Holders) shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five calendar days after being
deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt acknowledged,
if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery; provided that any notice or communication delivered to the
Trustee or the Collateral Agent shall be deemed effective upon actual receipt thereof.




          Any notice or communication to a Holder shall be mailed by first-class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the Note Register kept by the Registrar. Any notice or communication shall
also be so mailed to any Person described in Trust Indenture Act Section 313(c), to the extent
required by the Trust Indenture Act. Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.







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          If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.




          If the Issuer mails a notice or communication to Holders, it shall mail a copy to the Trustee,
the Collateral Agent and each Agent at the same time.




     Section 13.03 Electronic Instructions. The Trustee and the Collateral Agent agree to accept and act upon
notice, instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile
transmission or other similar unsecured electronic methods. If a party elects to give the Trustee
or the Collateral Agent e-mail or facsimile instructions (or instructions by a similar electronic
method) and the Trustee or the Collateral Agent, as applicable, in its discretion elects to act
upon such instructions, the Trustee’s or the Collateral Agent’s understanding of such instructions
shall be deemed controlling. Neither the Trustee nor the Collateral Agent shall be liable for any
losses, costs or expenses arising directly or indirectly from the Trustee’s or the Collateral
Agent’s reliance upon or compliance with such instructions notwithstanding whether such
instructions conflict with or are inconsistent with a subsequent written instruction. The party
providing electronic instructions agrees to assume all risks arising out of the use of such
electronic methods to submit instructions and directions to the Trustee or the Collateral Agent,
including without limitation the risk of the Trustee or the Collateral Agent acting on unauthorized
instructions, and the risk of interception and misuse by third parties.



     Section 13.04 Communication by Holders of Notes with Other Holders of Notes. Holders may communicate
pursuant to Trust Indenture Act Section 312(b) with other Holders with respect to their rights
under this Indenture or the Notes. The Issuer, the Trustee, the Collateral Agent, the Registrar
and anyone else shall have the protection of Trust Indenture Act Section 312(c).



     Section 13.05 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the
Issuer or any of the Guarantors to the Trustee to take any action under this Indenture, the Issuer
or such Guarantor, as the case may be, shall furnish to the Trustee:



          (a) An Officer’s Certificate of the Issuer in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 13.06 hereof) stating that, in
the opinion of the signers, all conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and




          (b) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which
shall include the statements set forth in Section 13.06 hereof) stating that, in the opinion of
such counsel, all such conditions precedent and covenants have been satisfied.




     Section 13.06 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this



144









 




Indenture (other than a certificate provided pursuant to Section 4.04 hereof or Trust Indenture Act
Section 314(a)(4)) shall comply with the provisions of Trust Indenture Act Section 314(e) and shall
include:




          (a) a statement that the Person making such certificate or opinion has read such covenant or
condition;




          (b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;




          (c) a statement that, in the opinion of such Person, he or she has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may
be limited to reliance on an Officer’s Certificate as to matters of fact); and




          (d) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been complied with.




     Section 13.07 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions.



     Section 13.08 No Personal Liability of Directors, Officers, Employees, Managers and Stockholders. No
director, officer, employee, manager, incorporator, or holder of any Equity Interest in the Issuer
or any Guarantor or any of their direct or indirect parent companies, as such, shall have any
liability for any obligations of the Issuer or the Guarantors under the Notes, the Guarantees or
this Indenture or for any claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.



     Section 13.09 Governing Law. THIS INDENTURE, THE NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.



     Section 13.10 Waiver of Jury Trial. EACH OF THE ISSUER, THE GUARANTORS, THE COLLATERAL AGENT AND THE
TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE
NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.



     Section 13.11 Force Majeure. In no event shall the Trustee or the Collateral Agent be responsible or
liable for any failure or delay in the performance of its obligations under this Indenture arising
out of or caused by, directly or indirectly, forces



145









 




beyond its reasonable control, including without limitation strikes, work stoppages, accidents,
acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts
of God, and interruptions, loss or malfunctions of utilities, communications or computer (software
or hardware) services.




     Section 13.12 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret
any other indenture, loan or debt agreement of the Issuer or its Restricted Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.



     Section 13.13 Successors. All agreements of the Issuer in this Indenture and the Notes shall bind its
successors. All agreements of the Trustee and the Collateral Agent in this Indenture shall bind
their respective successors. All agreements of each Guarantor in this Indenture shall bind its
successors, except as otherwise provided in Section 10.06 hereof.



     Section 13.14 Severability. In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.



     Section 13.15 Counterpart Originals. The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same agreement.



     Section 13.16 Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and
headings of the Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in no way modify or
restrict any of the terms or provisions hereof.



     Section 13.17 Qualification of Indenture. The Issuer and the Guarantors shall qualify this Indenture
under the Trust Indenture Act in accordance with the terms and conditions of the Registration
Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees and
expenses for the Issuer, the Guarantors and the Trustee) incurred in connection therewith,
including, but not limited to, costs and expenses of qualification of this Indenture and the Notes
and printing this Indenture and the Notes. The Trustee shall be entitled to receive from the
Issuer and the Guarantors any such Officer’s Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such qualification of this
Indenture under the Trust Indenture Act.



     Section 13.18 Currency of Account; Conversion of Currency; Foreign Exchange Restrictions.



          (a) U.S. dollars are the sole currency of account and payment for all sums payable by the
Issuer and the Guarantors under or in connection with the Notes, the Guarantees of the Notes or
this Indenture, including damages related thereto or hereto. Any amount received or recovered in a
currency other than U.S. dollars by a Holder of






146









 







Notes (whether as a result of, or of the enforcement of, a judgment or order of a court of any
jurisdiction, in the winding-up or dissolution of the Issuer or otherwise) in respect of any sum
expressed to be due to it from the Issuer shall only constitute a discharge to the Issuer to the
extent of the U.S. dollar amount, which the recipient is able to purchase with the amount so
received or recovered in that other currency on the date of that receipt or recovery (or, if it is
not practicable to make that purchase on that date, on the first date on which it is practicable to
do so). If that U.S. dollar amount is less than the U.S. dollar amount expressed to be due to the
recipient under the applicable Notes, the Issuer shall indemnify it against any loss sustained by
it as a result as set forth in Section 13.18(b). In any event, the Issuer and the Guarantors shall
indemnify the recipient against the cost of making any such purchase. For the purposes of this
Section 13.18, it will be sufficient for the Holder of a Note to certify in a satisfactory manner
(indicating sources of information used) that it would have suffered a loss had an actual purchase
of U.S. dollars been made with the amount so received in that other currency on the date of receipt
or recovery (or, if a purchase of U.S. dollars on such date had not been practicable, on the first
date on which it would have been practicable, it being required that the need for a change of date
be certified in the manner mentioned above).




          (b) The Issuer and the Guarantors, jointly and severally, covenant and agree that the
following provisions shall apply to conversion of currency in the case of the Notes, the Guarantees
and this Indenture:





          (i) (A) If for the purpose of obtaining judgment in, or enforcing the judgment of, any
court in any country, it becomes necessary to convert into a currency (the “Judgment
Currency”) an amount due in any other currency (the “Base Currency”), then the conversion
shall be made at the rate of exchange prevailing on the Business Day before the day on
which the judgment is given or the order of enforcement is made, as the case may be (unless
a court shall otherwise determine).




               (B) If there is a change in the rate of exchange prevailing between the Business Day
before the day on which the judgment is given or an order of enforcement is made, as the
case may be (or such other date as a court shall determine), and the date of receipt of the
amount due, the Issuer and the Guarantors will pay such additional (or, as the case may be,
such lesser) amount, if any, as may be necessary so that the amount paid in the Judgment
Currency when converted at the rate of exchange prevailing on the date of receipt will
produce the amount in the Base Currency originally due.




          (ii) In the event of the winding-up of the Issuer or any Guarantor at any time while
any amount or damages owing under the Notes, the Guarantees and this Indenture, or any
judgment or order rendered in respect thereof, shall remain outstanding, the Issuer and the
Guarantors shall indemnify and hold the Holders and the Trustee harmless against any
deficiency arising or resulting from any variation in rates of exchange between (x) the
date as of which the Applicable Currency Equivalent of the amount due or contingently due
under the Notes, the Guarantees and this Indenture (other than under this subsection



147









 






(b)(ii)) is calculated for the purposes of such winding-up and (y) the final date for
the filing of proofs of claim in such winding-up. For the purpose of this subsection
(b)(ii), the final date for the filing of proofs of claim in the winding-up of the Issuer
or any Guarantor shall be the date fixed by the liquidator or otherwise in accordance with
the relevant provisions of applicable law as being the latest practicable date as at which
liabilities of the Issuer or such Guarantor may be ascertained for such winding-up prior to
payment by the liquidator or otherwise in respect thereto.



          (c) The obligations contained in this Section 13.18 shall constitute separate and independent
obligations from the other obligations of the Issuer and the Guarantors under this Indenture, shall
give rise to separate and independent causes of action against the Issuer and the Guarantors, shall
apply irrespective of any waiver or extension granted by any Holder or the Trustee or either of
them from time to time and shall continue in full force and effect notwithstanding any judgment or
order or the filing of any proof of claim in the winding-up of the Issuer or any Guarantor for a
liquidated sum in respect of amounts due hereunder (other than under subsection (b)(ii) above) or
under any such judgment or order. Any such deficiency as aforesaid shall be deemed to constitute a
loss suffered by the Holders or the Trustee, as the case may be, and no proof or evidence of any
actual loss shall be required by the Issuer or any Guarantor or the liquidator or otherwise or any
of them. In the case of subsection (b)(ii) above, the amount of such deficiency shall not be
deemed to be reduced by any variation in rates of exchange occurring between the said final date
and the date of any liquidating distribution.




          (d) The term “rate(s) of exchange” shall mean the rate of exchange quoted by Reuters at 10:00
a.m. (New York City time) for spot purchases of the Base Currency with the Judgment Currency other
than the Base Currency referred to in subsections (b)(i) and (b)(ii) above and includes any
premiums and costs of exchange payable.




     Section 13.19 Consent to Jurisdiction and Service. Any Subsidiary Guarantor that is a Foreign Subsidiary
shall appoint the Company as its agent for actions relating to the Notes, this Indenture, the
Registration Rights Agreement, any Security Document, or the Intercreditor Agreement or brought
under U.S. Federal or state securities laws brought in any U.S. Federal or state court located in
the Borough of Manhattan in The City of New York and shall submit to such jurisdiction.



     Section 13.20 Effectiveness of Provisions for the Company and the Guarantors. The provisions of this
Indenture shall not be effective for the Company and the Guarantors, with the exception of Sections
4.05, 4.17, 4.19 and 4.20, until the Escrow Release Date. On the Escrow Release Date, (i) the
Issuer will merge with and into the Company with the Company as the surviving entity and (ii) the
Company and BMS Distributing Corp., CBI Distributing Corp., Claire’s Boutiques, Inc., Claire’s
Canada Corp., Claire’s Puerto Rico Corp., and CSI Canada LLC (the “Assumption Guarantors”) will
execute and deliver to the Trustee and the Collateral Agent a supplemental indenture, the form of
which is attached as Exhibit D hereto, pursuant to which: (x) the Company



148









 




will assume all the obligations of the Issuer hereunder; (y) the Guarantees of the Notes by the
Assumption Guarantors pursuant to Section 10.01 herein will automatically become effective; and (z)
the obligations of the Company and the Guarantors under this Indenture will be in full force and
effect.




[Signature pages follow]



149









 





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




	 	 	 	 	 
	 	CLAIRE’S ESCROW CORPORATION

as Issuer

 	 
	 	By:  	/s/ J. Per Brodin	 
	 	 	Name:  	J. Per Brodin	 
	 	 	Title:  	Executive Vice President &

Chief Financial Officer	 
	 



[Signature Page to the Indenture]



 









 





	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON

TRUST COMPANY, N.A.

as Trustee

 	 
	 	By:  	/s/ Geraldine Creswell	 
	 	 	Name:  	Geraldine Creswell	 
	 	 	Title:  	Vice President	 
	 
	 	THE BANK OF NEW YORK MELLON

TRUST COMPANY, N.A.

as Collateral Agent

 	 
	 	By:  	/s/ Geraldine Creswell	 
	 	 	Name:  	Geraldine Creswell	 
	 	 	Title:  	Vice President	 
	 



[Signature Page to the Indenture]



	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 




 












 





EXHIBIT A



[Global Note Legend]



THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
ISSUER. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR
BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.



[Private Placement Legend]



THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.



THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,





A-1









 







ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.



[Regulation S Temporary Global Note Legend]



THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT of 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE TRANSFERRED IN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE
STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.







A-2









 








CUSIP [         ]

ISIN [         ]1




[RULE 144A][REGULATION S] GLOBAL NOTE

representing up to

$450,000,000



No. ___                                    
                                        
                                   
                    
                            
                                  
                                  
                            
                    
                      
                                    
                                    
[$______________]




CLAIRE’S ESCROW CORPORATION


promises to pay to Cede & Co., or registered assigns, the principal sum [set forth on the Schedule
of Exchanges of Interests in the Global Note attached hereto] [of ________________________ United
States Dollars] on March 15, 2019.



Interest Payment Dates: March 15 and September 15, commencing September 15, 2011



Record Dates: March 1 and September 1




[SIGNATURE PAGE FOLLOWS]





 




			
	1 	 	144A CUSIP: 179583 AA7

144A ISIN: US179583AA70

Regulation S CUSIP: U1792P AA9

Regulation S ISIN: USU1792PAA94




A-3









 









     IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed.




Dated: __________________




	 	 	 	 	 
	 	CLAIRE’S ESCROW CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A-4









 






	 	 	 	 	 


This is one of the Notes referred to in the within-mentioned Indenture:



Dated: __________________




	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST COMPANY,

N.A.,

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 



A-5









 






	 	 	 	 	 



[REVERSE OF NOTE]




CLAIRE’S ESCROW CORPORATION



8.875% SENIOR SECURED SECOND LIEN NOTES DUE 2019



          Capitalized terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.




          1. INTEREST. Claire’s Escrow Corporation, a Delaware corporation (the “Issuer”),
promises to pay interest on the principal amount of this Note at a rate per annum of 8.875% from
March 4, 2011 until maturity and to pay the Additional Interest, if any, payable pursuant to the
Registration Rights Agreement referred to below. The Issuer will pay interest on this Note
semi-annually in arrears on March 15 and September 15 of each year commencing on September 15,
2011, or if any such day is not a Business Day, on the next succeeding Business Day (each, an
“Interest Payment Date”). The Issuer will make each interest payment to the Holder of
record of this Note on the immediately preceding March 1 and September 1 (each, a “Record
Date”). Interest on this Note will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from and including March 4, 2011. The Issuer will pay
interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the rate borne by this Note; it shall
pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace periods) from time to time
on demand at the rate borne by this Note. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.




          2. METHOD OF PAYMENT. The Issuer will pay interest on this Note to the Person who is the
registered Holder of this Note at the close of business on March 1 or September 1 (whether or not a
Business Day), as the case may be, next preceding the Interest Payment Date, even if this Note is
canceled after such record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. Payment of interest may be made
by check mailed to the Holders at their addresses set forth in the Note Register; provided that (a)
all payments of principal, premium, if any, and interest on, Notes represented by Global Notes
registered in the name of or held by DTC or its nominee will be made by wire transfer of
immediately available funds to the accounts specified by the Holder or Holders thereof and (b) all
payments of principal, premium, if any, and interest with respect to certificated Notes will be
made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United
States if such Holder elects payment by wire transfer by giving written notice to the Trustee or
the Paying Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee may accept in its
discretion). Such payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.







A-6









 








          3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust Company, N.A.,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any
Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Subsidiaries may
act in any such capacity.




          4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of March 4, 2011 (the
“Indenture”), between the Issuer, the Trustee, and The Bank of New York Mellon Trust
Company, N.A., as Collateral Agent (the “Collateral Agent”). This Note is one of a duly authorized
issue of notes of the Issuer designated as its 8.875% Senior Secured Second Lien Notes due 2019.
The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 and 4.09 of the
Indenture. The terms of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture
Act”). The Notes are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling.




          5. OPTIONAL REDEMPTION.




          (a) Except as described below under clauses 5(b), 5(c) and 5(d) hereof, the Notes will not be
redeemable at the Issuer’s option.




          (b) On or after March 15, 2015, the Issuer may redeem the Notes at its option, in whole at any
time or in part from time to time, at the following redemption prices (expressed as a percentage of
principal amount), plus accrued and unpaid interest and Additional Interest, if any, to the date of
redemption (the “Redemption Date”), if redeemed during the 12-month period commencing on
March 15 of the years set forth below:




	 	 	 	 	 
	Period	 	Redemption Price	 
	2015
	 	 	104.438	%
	2016
	 	 	102.219	%
	2017 and thereafter
	 	 	100.000	%






          (c) After the Assumption and prior to March 15, 2015, the Issuer may redeem the Notes at its
option, in whole at any time or in part from time to time, at a redemption price equal to 100% of
the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and
unpaid interest and Additional Interest, if any, to the Redemption Date (subject to the right of
the Holders of record on the Record Date to receive interest due on the Interest Payment Date).




          (d) At any time and from time to time after the Assumption and on or prior to March 15, 2014,
the Issuer may redeem in the aggregate up to 35% of the original aggregate principal amount of the
Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash
proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent
of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the
common equity capital of the Issuer or used to purchase Capital Stock (other






A-7









 







than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a
percentage of principal amount thereof) of 108.875%, plus accrued and unpaid interest and
Additional Interest, if any, to the Redemption Date (subject to the right of Holders of record on
the Record Date to receive interest due on the Interest Payment Date); provided, however, that at
least 65% of the original aggregate principal amount of the Notes (calculated after giving effect
to any issuance of Additional Notes) must remain outstanding after each such redemption; provided,
further, that such redemption shall occur within 90 days after the date on which any such Equity
Offering is consummated.




          (e) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 of the Indenture.




          6. MANDATORY REDEMPTION. Except as set forth in Section 7 herein, the Issuer shall not be
required to make any mandatory redemption or sinking fund payments with respect to the Notes.




          7. SPECIAL MANDATORY REDEMPTION. If the Escrow Conditions shall not have been fulfilled, or
the Escrow Agent shall not have received the Disbursement Request described in Section 4(a) of the
Escrow Agreement by March 31, 2011, the Escrow Agent, pursuant to the Escrow Agreement, shall,
without the requirement of notice to or action by the Issuer, the Trustee or any other Person,
notify the Trustee in writing that all of the Notes shall be subject to a special mandatory
redemption (the “Special Redemption”) in accordance with this Section 7 on the second
Business Day after delivery of such notice but in any event on or prior to April 2, 2011 (the
“Special Redemption Date”). In the case of a Special Redemption, the Issuer shall, not
later than 11:00 A.M. New York City time (or such other time of day acceptable to the Trustee which
will permit it to give the notice referred to in the second paragraph of Section 3.03 of the
Indenture) at least two Business Days prior to the Special Redemption Date, deliver an Officers’
Certificate to the Trustee setting forth (i) that a Special Redemption will occur, (ii) the Special
Redemption Date, (iii) the Special Redemption Price and (iv) the other information specified in
Section 3.03 of the Indenture. The Trustee shall deliver to each Holder a written notice
(specifying the information set forth in such Officers’ Certificate) of the Special Redemption at
least two Business Days prior to the Special Redemption Date. On the Special Redemption Date, the
Issuer shall instruct the Escrow Agent to release cash to the Paying Agent for the purposes of the
Special Redemption. On the Special Redemption Date, the Notes shall be redeemed, in whole but not
in part, at a redemption price equal to the Special Redemption Price.




          8. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, notice of redemption will
be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date
(except that redemption notices may be mailed more than 60 days prior to a redemption date if the
notice is issued in connection with Article VIII or Article XI of the Indenture) to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations larger than
$2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held
by a Holder are to be redeemed. On and after the Redemption Date, interest ceases to accrue on
this Note or portions thereof called for redemption.







A-8









 








          9. OFFERS TO REPURCHASE. Upon the occurrence of a Change of Control, the Issuer shall make a
Change of Control Offer in accordance with Section 4.13 of the Indenture. In connection with
certain Asset Sales, the Issuer shall make an Asset Sale Offer as and when provided in accordance
with Section 4.10 of the Indenture.




          10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in
denominations of $2,000 and integral multiples of $1,000 thereafter. The transfer of Notes may be
registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Issuer may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed.




          11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for
all purposes.




          12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees, the Notes, the
Intercreditor Agreement and the Security Documents may be amended or supplemented as provided in
the Indenture.




          13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section
6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 30% in principal amount of the then outstanding Notes may declare the
principal, premium, if any, interest and any other monetary obligations on all the then outstanding
Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable immediately without further action or notice. Holders may not enforce the
Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of
the Notes notice of any continuing Default (except a Default relating to the payment of principal,
premium, if any, or interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing Default or and its
consequences under the Indenture except a continuing Default in payment of the principal of,
premium, if any, or interest on, any of the Notes held by a non-consenting Holder. The Issuer is
required to deliver to the Trustee and the Collateral Agent annually a statement regarding
compliance with the Indenture, and the Issuer is required, after becoming aware of any Default, to
deliver to the Trustee and the Collateral Agent a statement specifying such Default and what action
the Issuer proposes to take with respect thereto.







A-9









 








          14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose until authenticated by the manual signature of the Trustee or
an authentication agent.




          15. TRUSTEE DEALINGS WITH ISSUER. The Trustee, in its individual or any other capacity, may
make loans to, accept deposits from, and perform services for the Issuer or its Affiliates, and may
otherwise deal with the Issuer or its Affiliates, as if it were not the Trustee.




          16. NO RECOURSE AGAINST OTHERS. No director, officer, employee, manager, incorporator, or
holder of any Equity Interest in the Issuer or any Guarantor or any of their direct or indirect
parent companies, as such, shall have any liability for any obligations of the Issuer or the
Guarantors under this Note, the Guarantees or the Indenture or for any claim based on, in respect
of, or by reason of such obligations or their creation. Each Holder by accepting this Note waives
and releases all such liability. The waiver and release are part of the consideration for issuance
of this Note.




          17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES.
In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted
Global Notes and Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement, dated as of March 4, 2011, among the Issuer, Claire’s Stores, Inc.,
the Guarantors named therein and the other parties named on the signature pages thereof (the
“Registration Rights Agreement”), including the right to receive Additional Interest (as
defined in the Registration Rights Agreement).




          18. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE
INDENTURE, THE NOTES AND THE GUARANTEES.




          19. CUSIP AND ISIN NUMBERS. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuer has caused CUSIP and ISIN numbers to be
printed on the Notes and the Trustee may use CUSIP and ISIN numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.




          20. RANKING AND COLLATERAL. The Notes and the Guarantees are secured by a second-priority
security interest in the Collateral pursuant to certain Security Documents. The Notes Liens upon
any and all Collateral are, to the extent and in the manner provided in the Intercreditor
Agreement, subordinate in ranking to all present and future First-Priority Lien Obligations and
will be of equal ranking with all present and future Liens securing Other Second-Lien Obligations
as set forth in the Intercreditor Agreement.





A-10









 








     The Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement. Requests may be made to the Issuer at the
following address:


Claire’s Escrow Corporation

c/o Claire’s Stores, Inc.

2400 West Central Road

Hoffman Estates, IL 60192

Fax No.: (847) 765-6747

Attention: Chief Financial Officer







A-11









 








ASSIGNMENT FORM




          To assign this Note, fill in the form below:



(I) or (we) assign and transfer this Note to:





 





(Insert assignee’s legal name)




  
 (Insert assignee’s social security number or taxpayer identification number.)




 





 





 





  

(Print or type assignee’s name, address and zip code)



and irrevocably appoint_______________________________________________________________
to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.



Date: _____________________




Your Signature:_____________________

                         (Sign exactly as your name appears on

                         the face of this Note)



Signature(s) must be guaranteed by an “eligible

guarantor institution” meeting the requirements of

the Registrar, which requirements include membership

or participation in the Security Transfer Agent

Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the
Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.



______________________________

Signature Guarantee










A-12









 








OPTION OF HOLDER TO ELECT PURCHASE




          If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or
4.13 of the Indenture, check the appropriate box below:




[ ] Section 4.10      [ ] Section 4.13


If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section
4.10 or Section 4.13 of the Indenture, state the amount you elect to have purchased:




$_______________


Date: _____________________



Your Signature:_____________________

                          (Sign exactly as your name appears on

                          the face of this Note)



Tax Identification No.:_____________________



Signature(s) must be guaranteed by an “eligible

guarantor institution” meeting the requirements of

the Registrar, which requirements include membership

or participation in the Security Transfer Agent

Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the
Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.



____________________

Signature Guarantee







A-13









 








SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*




The following increases or decreases in the principal amount of this Global Note have been
made:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Amount of increase	 	 	Principal Amount of	 	 	Signature of	 
	 	 	Amount of decrease	 	 	in Principal	 	 	this Global Note	 	 	authorized officer	 
	Date of	 	in Principal Amount	 	 	Amount of this	 	 	following such	 	 	of Trustee or	 
	Exchange	 	of this Global Note	 	 	Global Note	 	 	decrease or increase	 	 	Custodian	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 







 




			
	*	 	This schedule should be included only if the Note is issued in global form.




A-14









 










EXHIBIT B




FORM OF CERTIFICATE OF TRANSFER




Claire’s Escrow Corporation

c/o Claire’s Stores, Inc.

2400 West Central Road

Hoffman Estates, IL 60192

Fax No.: (847) 765-6747

Attention: Chief Financial Officer




The Bank of New York Mellon Trust Company, N.A.

10161 Centurion Parkway

Jacksonville, FL 32256

Fax No.: (904) 645-1921

Attention: Corporate Trust Administration




          Re: 8.875% Senior Secured Second Lien Notes due 2019




          Reference is hereby made to the Indenture, dated as of March 4, 2011 (the
“Indenture”), between Claire’s Escrow Corporation and The Bank of New York Mellon Trust
Company, N.A. as trustee and collateral agent. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.




          _______________ (the “Transferor”) owns and proposes to transfer the Note[s] or
interest in such Note[s] in the principal amount of $___________ (the “Transfer”), to
_______________ (the “Transferee”). In connection with the Transfer, the Transferor hereby
certifies that:




[CHECK ALL THAT APPLY]



          1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT 144A
GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected
pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as
amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies
that the beneficial interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a “qualified institutional buyer” within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted
Definitive Note and in the Indenture and the Securities Act.







B-1









 








          2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT
REGULATION S GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made
to a person in the United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities market and neither
such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with
a buyer in the United States, (ii) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the
Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of
a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed
on the Regulation S Global Note and/or the Restricted Definitive Note and in the Indenture and the
Securities Act.




          3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
RELEVANT DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR
REGULATION S. The Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further certifies that
(check one):





     (a) [ ] such Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act;



or




     (b) [ ] such Transfer is being effected to the Issuer or a subsidiary thereof;



or




     (c) [ ] such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus delivery
requirements of the Securities Act.



          4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED
GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.







B-2









 








          (a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected
pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.




          (b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance
with the transfer restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.




          (c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected
pursuant to and in compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities laws of any State of
the United States and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.







B-3









 








          This certificate and the statements contained herein are made for your benefit and the benefit
of the Issuer.




	 	 	 	 	 
	 	[Insert Name of Transferor]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Dated: _______________________





B-4









 





EXHIBIT C




FORM OF CERTIFICATE OF EXCHANGE




Claire’s Escrow Corporation

c/o Claire’s Stores, Inc.

2400 West Central Road

Hoffman Estates, IL 60192

Fax No.: (847) 765-674

Attention: Chief Financial Officer




The Bank of New York Mellon Trust Company, N.A.

10161 Centurion Parkway

Jacksonville, FL 32256

Fax No.: (904) 645-1921

Attention: Corporate Trust Administration




          Re: 8.875% Senior Secured Second Lien Notes due 2019




          Reference is hereby made to the Indenture, dated as of March 4, 2011 (the
“Indenture”), between Claire’s Escrow Corporation and The Bank of New York Mellon Trust
Company, N.A., as trustee and collateral agent. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.




          ___________ (the “Owner”) owns and proposes to exchange the Note[s] or interest in
such Note[s] specified herein, in the principal amount of $__________ in such Note[s] or interests
(the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:




          (1) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL
NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE OF
THE SAME SERIES




          (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the
Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest
in an Unrestricted Global Note of the same series in an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner’s own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state of the United
States.






C-1









 








          (b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO
UNRESTRICTED DEFINITIVE NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note of the same
series, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act and (iv)
the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.




          (c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Owner’s Exchange of a
Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note of the same
series, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s
own account without transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act and (iv)
the beneficial interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.




          (d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE
OF THE SAME SERIES. In connection with the Owner’s Exchange of a Restricted Definitive Note for an
Unrestricted Definitive Note of the same series, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the United States.




          (2) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
FOR RESTRICTED DEFINITIVE NOTES OF THE SAME SERIES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL
NOTES OF THE SAME SERIES




          (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO
RESTRICTED DEFINITIVE NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a Restricted Definitive Note of the same series
with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is
being acquired for the Owner’s own account without transfer. Upon consummation of the proposed
Exchange in accordance






C-2









 

\





with the terms of the Indenture, the Restricted Definitive Note issued will continue to be
subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the
Restricted Definitive Note and in the Indenture and the Securities Act.




          (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s
Restricted Definitive Note for a beneficial interest in the [CHECK ONE] [ ] 144A Global Note [
] Regulation S Global Note of the same series, with an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner’s own account without
transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities
Act, and in compliance with any applicable blue sky securities laws of any state of the United
States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture,
the beneficial interest issued will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and
the Securities Act.




          This certificate and the statements contained herein are made for your benefit and the benefit
of the Issuer and are dated _____________________.







C-3









 








	 	 	 	 	 
	 	[Insert Name of Transferor]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Dated: _______________________





C-4









 





EXHIBIT D




FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED

IN CONNECTION WITH THE ASSUMPTION




          SENIOR SECURED SECOND LIEN NOTES SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated
as of [_], by and among Claire’s Stores, Inc., a Florida corporation (the “Company”), BMS
Distributing Corp., a Delaware corporation, CBI Distributing Corp., a Delaware corporation,
Claire’s Boutiques, Inc., a Colorado corporation, Claire’s Canada Corp., a Delaware corporation,
Claire’s Puerto Rico Corp., a Delaware corporation, and CSI Canada LLC, a Delaware limited
liability company, as guarantors (the “Guarantors”), and The Bank of New York Mellon Trust Company,
N.A., as Trustee (the “Trustee”) and Collateral Agent (the “Collateral Agent”), to the Indenture
(the “Indenture”), dated as of March 4, 2011, among Claire’s Escrow Corporation, a Delaware
corporation (the “Issuer”), the Trustee, and the Collateral Agent.




W I T N E S S E T H:



          WHEREAS, the Issuer has heretofore executed and delivered to the Trustee and the Collateral
Agent the Indenture providing for the issuance of $450,000,000 aggregate principal amount of 8.875%
Senior Secured Second Lien Notes due 2019 (the “Notes”);




          WHEREAS, the Issuer has merged with and into the Company (the “Merger”), with the Company as
the surviving entity in the Merger;




          WHEREAS, as a result of the Merger and pursuant to Section 13.20 of the Indenture, the Company
is assuming, by and under this Supplemental Indenture, the obligations of the Issuer for the due
and punctual payment of the principal of, premium, if any, and interest on all the Notes and the
performance and observance of the Indenture on the part of the Issuer;




          WHEREAS, pursuant to Section 13.20 of the Indenture, the Guarantors are, by and under this
Supplemental Indenture, unconditionally guaranteeing the obligations of the Issuer for the due and
punctual payment of the principal of, premium, if any, and interest on all the Notes and the
performance and observance of the Indenture on the part of the Issuer on the terms and conditions
set forth herein;




          WHEREAS, Sections 5.01 and 9.01 of the Indenture provide that the Trustee, the Collateral
Agent, the Company and each of the Guarantors are authorized to execute and deliver this
Supplemental Indenture; and




          WHEREAS, this Supplemental Indenture has been duly authorized by all necessary corporate or
other action on the part of the Trustee, the Collateral Agent, the Company and each of the
Guarantors.




          NOW, THEREFORE, for and in consideration of the foregoing premises and for good and valuable
consideration, the receipt of which is hereby acknowledged, it is mutually covenanted and agreed,
for the equal and ratable benefit of the Holders of the Notes, as follows:







D-1









 








          Section 1. Capitalized Terms. Capitalized terms used herein but not defined shall
have the meanings assigned to them in the Indenture.




          Section 2. Assumption by the Company. The Company hereby assumes the obligations of
the Issuer for the due and punctual payment of the principal of, premium, if any, and interest on
all outstanding Notes issued pursuant to the Indenture and the performance and observance of each
other obligation and covenant set forth in the Indenture to be performed or observed on the part of
the Issuer. The Company is hereby substituted for, and may exercise every right and power of, the
Issuer under the Indenture with the same effect as if the Company had been named as the Issuer in
the Indenture, and the Company is a Successor Issuer under the Indenture.




          Section 3. Agreement to Guarantee. Each of the Guarantors, by its execution of this
Supplemental Indenture, agrees to be a Guarantor under the Indenture and to be bound by the terms
of the Indenture applicable to Guarantors, including but not limited to Article X thereof.




          Section 4. Ratification of Indenture; Supplemental Indenture Part of Indenture.
Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of
Notes heretofore or hereafter authenticated and delivered shall be bound hereby.




          Section 5. The Trustee and the Collateral Agent. Neither the Trustee nor the
Collateral Agent shall be responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein.
Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are
assumed, or shall be construed to be assumed by the Trustee or the Collateral Agent by reason of
this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee
and the Collateral Agent subject to all the terms and conditions set forth in the Indenture with
the same force and effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee and the Collateral Agent with respect hereto. In entering into this
Supplemental Indenture, the Trustee and the Collateral Agent shall be entitled to the benefit of
every provision of the Indenture relating to the conduct or affecting the liability or affording
protection to the Trustee and the Collateral Agent, whether or not elsewhere herein so provided.




          Section 6. Notices. For purposes of the Indenture, the address for notices to the
Company and/or any Guarantor shall be as set forth below:



Claire’s Stores, Inc.

2400 West Central Road

Hoffman Estates, IL 60192

Attention: Chief Financial Officer




          Section 7. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.




          Section 8. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together represent
the same agreement.







D-2









 








          Section 9. Effect of Headings. The Section headings herein are for convenience only
and shall not effect the construction of this Supplemental Indenture and shall in no way modify or
restrict any of the terms or provisions hereof.




          Section 10. Severability. In case any provision of this Supplemental Indenture shall
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.




          Section 11. Benefits Acknowledged. The Guarantors’ guarantees are subject to the
terms and conditions set forth in the Indenture. Each of the Guarantors acknowledges that it will
receive direct and indirect benefits from the financing arrangements contemplated by the Indenture
and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this
Supplemental Indenture are knowingly made in contemplation of such benefits.




[Signatures on following page]



D-3









 





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




	 	 	 	 	 
	 	Claire’s Stores, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	BMS Distributing Corp.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CBI Distributing Corp.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Claire’s Boutiques, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Claire’s Canada Corp.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Claire’s Puerto Rico Corp.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CSI Canada LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



D-4









 






	 	 	 	 	 



	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON 
TRUST COMPANY, N.A.,

AS TRUSTEE

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE BANK OF NEW YORK MELLON 
TRUST COMPANY, N.A.,

AS COLLATERAL AGENT

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



D-5









 






	 	 	 	 	 



EXHIBIT E




FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS




          SENIOR SECURED SECOND LIEN NOTES SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated
as of __________, by and among [GUARANTOR] (the “New Guarantor”), a subsidiary of Claire’s Escrow
Corporation (or its permitted successor), a Delaware corporation (the “Issuer”) and The Bank of New
York Mellon Trust Company, N.A., as Trustee (the “Trustee”) and Collateral Agent (the “Collateral
Agent”), to the Indenture (the “Indenture”), dated as of March 4, 2011, among the Issuer, the
Trustee and the Collateral Agent.




W I T N E S S E T H:



          WHEREAS, the Issuer and the existing Guarantors have heretofore executed and delivered to the
Trustee and the Collateral Agent the Indenture, providing for the issuance of $450,000,000 in
aggregate principal amount of the Issuer’s 8.875% Senior Secured Second Lien Notes due 2019 (the
“Notes”);




          WHEREAS, Section 4.14 and Section 10.03 of the Indenture provide that under certain
circumstances the Issuer is required to cause certain of its Subsidiaries to execute and deliver to
the Trustee and the Collateral Agent a supplemental indenture pursuant to which that Subsidiary
shall unconditionally guarantee the obligations of the Issuer for the due and punctual payment of
the principal of, premium, if any, and interest on all the Notes and the performance and observance
of the Indenture on the part of the Issuer on the terms and conditions set forth herein;; and




          WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the Collateral Agent, the
Issuer and the existing Guarantors are authorized to execute and deliver this Supplemental
Indenture;




          WHEREAS, this Supplemental Indenture has been duly authorized by all necessary corporate or
other action on the part of the Trustee, the Collateral Agent, the Company, each of the existing
Guarantors, and the New Guarantor.




          NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Issuer, the
Existing Guarantors, the Trustee and the Collateral Agent mutually covenant and agree for the equal
and ratable benefit of the Holders as follows:




          Section 1. Capitalized Terms. Capitalized terms used herein but not defined shall
have the meanings assigned to them in the Indenture.




          Section 2. Agreement to Guarantee. The New Guarantor, by its execution of this
Supplemental Indenture, agrees to be a Guarantor under the Indenture and to be bound by the terms
of the Indenture applicable to Guarantors, including but not limited to Article X thereof.




          Section 3. Notices. All notices or other communications to the New Guarantor shall be
given as provided in Section 13.02 of the Indenture.







E-1









 








          Section 4. Ratification of Indenture; Supplemental Indenture Part of Indenture.
Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of
Notes heretofore or hereafter authenticated and delivered shall be bound hereby.




          Section 5. The Trustee and the Collateral Agent. Neither the Trustee nor the
Collateral Agent shall be responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein.
Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are
assumed, or shall be construed to be assumed by the Trustee or the Collateral Agent by reason of
this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee
and the Collateral Agent subject to all the terms and conditions set forth in the Indenture with
the same force and effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee and the Collateral Agent with respect hereto. In entering into this
Supplemental Indenture, the Trustee and the Collateral Agent shall be entitled to the benefit of
every provision of the Indenture relating to the conduct or affecting the liability or affording
protection to the Trustee and the Collateral Agent, whether or not elsewhere herein so provided.




          Section 6. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.




          Section 7. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.




          Section 8. Effect of Headings. The Section headings herein are for convenience only and shall
not effect the construction of this Supplemental Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.




          Section 9. Severability. In case any provision of this Supplemental Indenture shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.




          Section 10. Benefits Acknowledged. The New Guarantor’s guarantees are subject to the terms
and conditions set forth in the Indenture. The New Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by the Indenture and this
Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Supplemental
Indenture are knowingly made in contemplation of such benefits.




[Signatures on following page]




E-2









 





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




	 	 	 	 	 
	 	CLAIRE’S ESCROW CORPORATION

(or its permitted successor)

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[EXISTING GUARANTORS]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[NEW GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



E-3









 






	 	 	 	 	 



	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON 
TRUST COMPANY, N.A.,

AS TRUSTEE

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE BANK OF NEW YORK MELLON 
TRUST COMPANY, N.A.,

AS COLLATERAL AGENT

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



E-4









 





EXHIBIT F



 FORM OF COLLATERAL AGREEMENT TO BE DELIVERED IN CONNECTION WITH THE ASSUMPTION



COLLATERAL AGREEMENT




dated and effective as of March 4, 2011,



among



CLAIRE’S STORES, INC.,

as Issuer,



THE PLEDGORS PARTY HERETO,



and



THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Collateral Agent


Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to
the Collateral Agent pursuant to this Agreement are expressly subject and subordinate to the liens
and security interests granted to Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse,
Cayman Islands Branch), as collateral agent (and its permitted successors), for the benefit of the
secured parties referred to below, pursuant to the Guarantee and Collateral Agreement dated as of
May 29, 2007 (as amended, amended and restated, supplemented or otherwise modified from time to
time), from the Issuer and the other “Pledgors” referred to therein, in favor of Credit Suisse AG,
Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as collateral agent for the
benefit of the secured parties referred to therein, and (ii) the exercise of any right or remedy by
the Collateral Agent hereunder is subject to the limitations and provisions of the Intercreditor
Agreement dated as of March 4, 2011 (as amended, restated, supplemented or otherwise modified from
time to time, the “Intercreditor Agreement”), by and among Credit Suisse AG, Cayman Islands
Branch, in its capacity as Credit Agreement Agent, The Bank of New York Mellon Trust Company, N.A.,
in its capacity as Trustee and Collateral Agent, Claire’s Inc., the Issuer and the Subsidiaries
party thereto. In the event of any conflict between the terms of the Intercreditor Agreement and
the terms of this agreement, the terms of the Intercreditor Agreement shall govern.




F-1









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I
DEFINITIONS

	 
	 	 	 	 
	Section 1.01. Indenture
	 	 	F-4	 
	Section 1.02. Other Defined Terms
	 	 	F-5	 
	 
	 	 	 	 
	ARTICLE II
PLEDGE OF SECURITIES

	 
	 	 	 	 
	Section 2.01. Pledge
	 	 	F-10	 
	Section 2.02. Delivery of the Pledged Collateral
	 	 	F-11	 
	Section 2.03. Representations, Warranties and Covenants
	 	 	F-12	 
	Section 2.04. Registration in Nominee Name; Denominations
	 	 	F-14	 
	Section 2.05. Voting Rights; Dividends and Interest, Etc
	 	 	F-14	 
	 
	 	 	 	 
	ARTICLE III
SECURITY INTERESTS IN OTHER PERSONAL PROPERTY

	 
	 	 	 	 
	Section 3.01. Security Interest:
	 	 	F-16	 
	Section 3.02. Representations and Warranties
	 	 	F-18	 
	Section 3.04. Other Actions
	 	 	F-21	 
	Section 3.05. Covenants Regarding Patent, Trademark and Copyright Collateral
	 	 	F-22	 
	Section 3.06. Further Assurances; Additional Security
	 	 	F-25	 
	 
	 	 	 	 
	ARTICLE IV
REMEDIES

	 
	 	 	 	 
	Section 4.01. Remedies Upon Default
	 	 	F-27	 
	Section 4.02. Application of Proceeds
	 	 	F-29	 
	Section 4.03. Securities Act, Etc
	 	 	F-30	 
	 
	 	 	 	 
	ARTICLE V
MISCELLANEOUS

	 
	 	 	 	 
	Section 5.01. Notices
	 	 	F-31	 
	Section 5.02. Security Interest Absolute
	 	 	F-31	 
	Section 5.03. Limitation By Law
	 	 	F-31	 
	Section 5.04. Binding Effect; Several Agreement
	 	 	F-31	 
	Section 5.05. Successors and Assigns
	 	 	F-31	 
	Section 5.06. Collateral Agent’s Fees and Expenses; Indemnification
	 	 	F-32	 
	Section 5.07. Collateral Agent Appointed Attorney-in-Fact
	 	 	F-32	 






F-2









 






	 	 	 	 	 
	 	 	Page	 
	Section 5.08. GOVERNING LAW
	 	 	F-33	 
	Section 5.09. Waivers; Amendment
	 	 	F-33	 
	Section 5.10. WAIVER OF JURY TRIAL
	 	 	F-34	 
	Section 5.11. Severability
	 	 	F-34	 
	Section 5.12. Counterparts
	 	 	F-34	 
	Section 5.13. Headings
	 	 	F-34	 
	Section 5.14. Jurisdiction; Consent to Service of Process
	 	 	F-34	 
	Section 5.15. Termination or Release
	 	 	F-35	 
	Section 5.16. Additional Subsidiaries
	 	 	F-36	 
	 
	 	 	 	 
	ARTICLE VI
INTERCREDITOR AGREEMENT

	 
	 	 	 	 
	Section 6.01. Intercreditor Agreement Controls
	 	 	F-36	 
	Section 6.02. Discharge.
	 	 	F-36	 
	 
	 	 	 	 
	ARTICLE VII
THE COLLATERAL AGENT







	 	 	 

	Schedules
	 
	 	 
	Schedule I

	 	Subsidiary Parties
	Schedule II

	 	Pledged Stock; Debt Securities
	Schedule III

	 	Intellectual Property
	Schedule IV

	 	Filing Jurisdictions
	Schedule V

	 	Commercial Tort Claims
	Schedule VI

	 	Matters Relating to Accounts and Inventory
	 
	 	 
	Exhibits
	 
	 	 
	Exhibit I

	 	Form of Supplement to the Collateral Agreement






F-3









 





          COLLATERAL AGREEMENT dated and effective as of March 4, 2011 (this “Agreement”), among
CLAIRE’S STORES, INC., a Florida corporation (the “Issuer”), each Subsidiary of the Company
identified on Schedule I hereto (each such Subsidiary, together with the Issuer and any Subsidiary
of the Company that becomes a party hereto pursuant to Section 5.16 hereof, the “Pledgors,”
and each, a “Pledgor”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as collateral
agent (in such capacity, the “Collateral Agent”) for the Indenture Secured Parties (as
defined below).




          Pursuant to the terms, conditions and provisions of (a) the Indenture dated as of March 4,
2011, among Claire’s Escrow Corporation, a Delaware corporation (“Claire’s Escrow”), and
The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity, the
“Trustee”) and Collateral Agent, as supplemented by the Supplemental Indenture dated March
4, 2011 among the Issuer, the Issuer’s Subsidiaries named therein, the Trustee and the Collateral
Agent (such agreement, as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Indenture”), and (b) the Purchase Agreement dated February 17, 2011 (as
amended, amended and restated, supplemented or otherwise modified from time to time, the
“Purchase Agreement”) among Claire’s Escrow, the Issuer, the Issuer’s Subsidiaries named
therein and the representatives of the several parties named in Schedule A thereto, the Issuer has
assumed the obligations of Claire’s Escrow with respect to $450,000,000 in aggregate principal
amount of 8.875% Senior Secured Second Lien Notes due 2019 (as such notes may be amended, amended
and restated, supplemented or otherwise modified from time to time, the “Notes”) upon the
terms and subject to the conditions contained therein.




          The Issuer and each other Pledgor will receive substantial benefits from the execution,
delivery and performance of the obligations under the Indenture and the other Noteholder Documents
and each is, therefor, willing to enter into this Agreement.




          This Agreement is given by each Pledgor in favor of the Collateral Agent for the benefit of
the Indenture Secured Parties to secure the payment and performance of all of the Noteholder Claims
(as hereinafter defined).




          It is a requirement of the Indenture and the Purchase Agreement that each Pledgor execute and
deliver the applicable Noteholder Documents, including this Agreement.




          Accordingly, the parties hereto agree as follows:




ARTICLE I




DEFINITIONS



          Section 1.01. Indenture. (a) Capitalized terms used in this Agreement and not
otherwise defined herein have the respective meanings assigned thereto in the Indenture. All
capitalized terms defined in the New York UCC (as defined herein) and not defined in this Agreement
have the meanings specified therein. The term “instrument” shall have the meaning specified in
Article 9 of the New York UCC.







F-4









 








          (b) The rules of construction specified in Section 1.04 of the Indenture also apply to this
Agreement.




          Section 1.02. Other Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:




          “Account Debtor” means any person who is or who may become obligated to any Pledgor
under, with respect to or on account of an Account, Chattel Paper, General Intangibles, Instruments
or Investment Property.




          “Article 9 Collateral” has the meaning assigned to such term in Section 3.01.




          “Claire’s Escrow” has the meaning assigned to such term in the preliminary statement
of this Agreement.




          “Collateral” means the collective reference to Article 9 Collateral and Pledged
Collateral.




          “Collateral Requirement” shall mean the requirement that:




     (a) in the case of any person that becomes a Guarantor under the Indenture after the Issue
Date, the Collateral Agent shall have received a supplement to this Agreement, in the form attached
hereto as Exhibit I, duly executed and delivered on behalf of such Guarantor;



     (b) in the case of any person that becomes a “first tier” Foreign Subsidiary directly owned by
the Issuer or any Pledgor after the Issue Date, subject to Section 3.06(f) hereof, the Collateral
Agent shall have received, as promptly as practicable following such event (unless the Collateral
Agent, in its sole discretion, shall have waived such requirement), a Foreign Pledge Agreement,
duly executed and delivered on behalf of such Foreign Subsidiary and the direct parent company of
such Foreign Subsidiary; provided, that such a pledge would not violate any applicable law
or agreements with other shareholders or joint venture partners;



     (c) after the Issue Date, (i) all the outstanding Equity Interests of (A) any person that
becomes a Guarantor under the Indenture after the Issue Date and (B) subject to Section 3.06(f)
hereof, all the Equity Interests that are acquired by any Pledgor after the Issue Date shall have
been pledged pursuant to this Agreement or a Foreign Pledge Agreement; provided, that in no
event shall more than 65% of the issued and outstanding voting Equity Interests of (1) any “first
tier” Foreign Subsidiary or (2) any “first tier” Qualified CFC Holding Company directly owned by
such Pledgor be pledged to secure the Noteholder Claims, and in no event shall any of the issued
and outstanding Equity Interests of any Foreign Subsidiary that is not a “first tier” Foreign
Subsidiary of a Pledgor or any Qualified CFC Holding Company that is not a “first tier” Subsidiary
of a Pledgor be pledged to secure the Noteholder Claims, and (ii) subject to the Intercreditor
Agreement, 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;



     (d) except as otherwise contemplated by any Security Document, all documents and instruments,
including Uniform Commercial Code financing statements, required by law or



F-5









 




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;




     (e) within 30 days after the date hereof, the Collateral Agent shall be listed as a co-loss
payee on property and casualty insurance policies and as an additional insured on liability
insurance policies;



     (f) after the Issue Date, the Collateral Agent shall have received (i) such other Security
Documents as may be required to be delivered pursuant to Section 3.06 hereof, and (ii) upon
reasonable request by the Collateral Agent, evidence of compliance with any other requirements of
Section 3.06 hereof;



     (g) all Indebtedness of the Borrower and each Subsidiary having, in the case of each instance
of Indebtedness, an aggregate principal amount in excess of $5.0 million (other than (A)
intercompany current liabilities incurred in the ordinary course of business in connection with the
cash management operations of the Borrower and the Subsidiaries or (B) to the extent that a pledge
of such promissory note or instrument would violate applicable law) that is owing to any Pledgor
shall be evidenced by a promissory note or an instrument and shall have been pledged pursuant to
this Agreement, and (ii) subject to the Intercreditor Agreement, the Collateral Agent (or a bailee
on behalf of the Collateral Agent) shall have received all such promissory notes or instruments,
together with note powers or other instruments of transfer with respect thereto endorsed in blank;
and



     (h) except as otherwise contemplated by any Security Document, each Pledgor shall have
obtained all consents and approvals required to be obtained by it in connection with (i) the
execution and delivery of all Security Documents (or supplements thereto) to which it is a party
and the granting by it of the Liens thereunder and (ii) the performance of its obligations
thereunder.



          “Copyright License” means any written agreement, now or hereafter in effect, granting
any right to any Pledgor under any Copyright now or hereafter owned by any third party, and all
rights of any Pledgor under any such agreement (including, without limitation, any such rights that
such Pledgor has the right to license).




          “Copyrights” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all copyright rights in any work subject to the copyright laws of the United States
or any other country, whether as author, assignee, transferee or otherwise, (b) all registrations
and applications for registration of any such Copyright in the United States or any other country,
including registrations, supplemental registrations and pending applications for registration in
the United States Copyright Office and the right to obtain all renewals thereof, including those
listed on Schedule III, (c) all claims for, and rights to sue for, past or future
infringements of any of the foregoing and (d) all income, royalties, damages and payments now or
hereafter due and payable with respect to any of the foregoing, including damages and payments for
past or future infringement thereof.







F-6









 








          “Credit Agreement Agent” has the meaning assigned to such term in the Intercreditor
Agreement.




          “Discharge” shall mean the satisfaction and discharge (pursuant to Article XII of the
Indenture), defeasance (pursuant to Article VIII of the Indenture) or other satisfaction in full of
the Noteholder Claims.




          “Discharge of Senior Lender Claims” has the meaning assigned to such term in the
Intercreditor Agreement.




          “Federal Securities Laws” has the meaning assigned to such term in Section 4.03.




          “First Priority Designated Agent” has the meaning assigned to such term in the
Intercreditor Agreement.




          “Foreign Pledge Agreement” shall mean a pledge agreement with respect to the Pledged
Collateral that constitutes Equity Interests of a “first tier” Foreign Subsidiary;
provided, that in no event shall more than 65% of the issued and outstanding voting Equity
Interests of such Foreign Subsidiary be pledged to secure the Noteholder Claims.




          “General Intangibles” means all “General Intangibles” as defined in the New York UCC,
including all choses in action and causes of action and all other intangible personal property of
any Pledgor of every kind and nature (other than Accounts) now owned or hereafter acquired by any
Pledgor, including corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee, Swap Agreements and other
agreements), Intellectual Property (but excluding “intent-to-use” applications for trademark or
service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051,
unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of
the Lanham Act has been filed, to the extent that, and solely during the period for which, any
assignment of an “intent-to-use” application prior to such filing would violate the Lanham Act),
goodwill, registrations, franchises, tax refund claims and any guarantee, claim, security interest
or other security held by or granted to any Pledgor to secure payment by an Account Debtor of any
of the Accounts.




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




          “Indenture” has the meaning assigned to such term in the preliminary statement of this
Agreement.




          “Indenture Secured Parties” has the meaning assigned to such term in the Intercreditor
Agreement.




          “Intellectual Property” means all intellectual property of every kind and nature now
owned or hereafter acquired by any Pledgor, including inventions, designs, Patents, Copyrights,
Trademarks, Patent Licenses, Copyright Licenses, Trademark Licenses, trade secrets, domain names,
confidential or proprietary technical and business information, know-how, show-how or other data or
information and all related documentation.




F-7









 





          “Intellectual Property Security Agreement” means a security agreement in the form
hereof or a short form hereof.




          “Intercreditor Agreement” means the intercreditor agreement dated as of March 4,
2011, among Claire’s Inc., the Issuer, the other Pledgors, the Credit Agreement Agent, the Trustee
and the Collateral Agent.




          “IP Agreements” means all material Copyright Licenses, Patent Licenses, Trademark
Licenses, and all other agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any material Intellectual Property to which a Pledgor,
now or hereafter, is a party or a beneficiary.




          “Issuer” has the meaning assigned to such term in the preliminary statement of this
Agreement.




          “Material Adverse Effect” means a material adverse effect on the business, property,
operations or condition of the Issuer and the Subsidiaries, taken as a whole, or the validity or
enforceability of any of the material Noteholder Documents or the rights and remedies of the
Collateral Agent, the Trustee and the Holders thereunder.




          “New York UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York.




          “Noteholder Claims” has the meaning assigned to such term in the Intercreditor
Agreement.




          “Noteholder Documents” has the meaning assigned to such term in the Intercreditor
Agreement.




          “Notes” has the meaning assigned to such term in the preliminary statement of this
Agreement.




          “Patent License” means any written agreement, now or hereafter in effect, granting to
any Pledgor any right to make, use or sell any invention covered by a Patent, now or hereafter
owned by any third party (including, without limitation, any such rights that such Pledgor has the
right to license).




          “Patents” means all of the following now owned or hereafter acquired by any Pledgor:
(a) all letters patent of the United States or the equivalent thereof in any other country or
jurisdiction, including those listed on Schedule III, and all applications for letters
patent of the United States or the equivalent thereof in any other country or jurisdiction,
including those listed on Schedule III, (b) all provisionals, reissues, extensions,
continuations, divisions, continuations-in- part, reexaminations or revisions thereof, and the
inventions disclosed or claimed therein, including the right to make, use, import and/or sell the
inventions disclosed or claimed therein, (c) all claims for, and rights to sue for, past or future
infringements of any of the foregoing and (d) all income, royalties, damages and payments now or
hereafter due and payable with respect to any of the foregoing, including damages and payments for
past or future infringement thereof.




F-8









 





          “Permitted Liens” has the meaning assigned to such term in the Indenture.




          “Pledged Collateral” has the meaning assigned to such term in Section 2.01.




          “Pledged Debt Securities” has the meaning assigned to such term in Section 2.01.




          “Pledged Securities” means any promissory notes, stock certificates or other
certificated securities now or hereafter included in the Pledged Collateral, including all
certificates, instruments or other documents representing or evidencing any Pledged Collateral.




          “Pledged Stock” has the meaning assigned to such term in Section 2.01.




          “Pledgor” has the meaning assigned to such term in the preliminary statement of this
Agreement.




          “Qualified CFC Holding Company” shall mean a Wholly-owned Subsidiary of the Issuer (a)
that is a Delaware limited liability company that is treated as a disregarded entity for U.S.
federal income tax purposes, (b) the primary asset of which consists of Equity Interests in either
(i) one or more Foreign Subsidiaries or (ii) one or more other Qualified CFC Holding Companies and
(c) has no outstanding Guarantee of Indebtedness of the Issuer or any Domestic Subsidiary.




          “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 any Pledgor, 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.




          “Security Interest” has the meaning assigned to such term in Section 3.01.




          “Senior Lender Claims” has the meaning assigned to such term in the Intercreditor
Agreement.




          “Senior Lender Documents” has the meaning assigned to such term in the Intercreditor
Agreement.




          “Trademark License” means any written agreement, now or hereafter in effect, granting
to any Pledgor any right to use any Trademark now or hereafter owned by any third party (including,
without limitation, any such rights that such Pledgor has the right to license).




          “Trademarks” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all trademarks, service marks, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations thereof (if any), and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the United States Patent and
Trademark Office or any similar offices in any State of the United States or any other country or
any political subdivision thereof (except for “intent-to-use” applications for trademark or service




F-9









 




mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless
and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of the
Lanham Act has been filed, to the extent that any assignment of an “intent-to-use” application
prior to such filing would violate the Lanham Act), and all renewals thereof, including those
listed on Schedule III, (b) all goodwill associated therewith or symbolized thereby, (c)
all claims for, and rights to sue for, past or future infringements of any of the foregoing and (d)
all income, royalties, damages and payments now or hereafter due and payable with respect to any of
the foregoing, including damages and payments for past or future infringement thereof.




ARTICLE II




PLEDGE OF SECURITIES



          Section 2.01. Pledge. Subject to the immediately following paragraph, as security for
the payment or performance, as the case may be, in full of the Noteholder Claims, each Pledgor
hereby assigns and pledges to the Collateral Agent, its successors and permitted assigns, for the
ratable benefit of the Indenture Secured Parties, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the ratable benefit of the Indenture Secured Parties, a
security interest in all of such Pledgor’s right, title and interest in, to and under (a) the
Equity Interests directly owned by it (including those listed on Schedule II) and any other Equity
Interests obtained in the future by such Pledgor and any certificates representing all such Equity
Interests (the “Pledged Stock”); provided that the Pledged Stock shall not include (i)(A)
more than 65% of the issued and outstanding voting Equity Interests of any “first tier” Foreign
Subsidiary directly owned by such Pledgor, (B) more than 65% of the issued and outstanding voting
Equity Interests of any “first tier” Qualified CFC Holding Company directly owned by such Pledgor,
(C) any issued and outstanding Equity Interest of any Foreign Subsidiary that is not a first tier
Foreign Subsidiary, or (D) any issued and outstanding Equity Interests of any Qualified CFC Holding
Company that is not a “first tier” Qualified CFC Holding Company, (ii) to the extent applicable
law  requires that a Subsidiary of such Pledgor issue directors’ qualifying shares or
similar shares, such shares or nominee or other similar shares, (iii) any Equity Interests with
respect to which a grant of security is not required by reason of Section 3.06 hereof, or (iv) any
Equity Interests of a Subsidiary to the extent that, as of the Issue Date, and for so long as, such
a pledge of such Equity Interests would violate applicable law or an enforceable contractual
obligation binding on or relating to such Equity Interests; (b)(i) the debt obligations listed
opposite the name of such Pledgor on Schedule II, (ii) any debt securities in the future issued to
such Pledgor and (iii) the certificates, promissory notes and any other instruments, if any,
evidencing such debt securities (the “Pledged Debt Securities”); (c) subject to Section
2.05 hereof, 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 property referred to in
clauses (a) and (b) above; (d) subject to Section 2.05 hereof, all rights and privileges of such
Pledgor 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
(e) above being collectively referred to as the “Pledged Collateral”).







F-10









 








          The securities of a Subsidiary of the Company will constitute Pledged Collateral only to the
extent that such securities can secure the Noteholder Claims without Rule 3-16 of Regulation S-X
under the Securities Act (or any other law, rule or regulation) requiring separate financial
statements of such Subsidiary to be filed with the SEC (or any other governmental agency). In
addition, notwithstanding anything to the contrary provided herein, in the event that Rule 3-16 of
Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to require
(or is replaced with another rule or regulation, or any other law, rule or regulation is adopted,
which would require) the filing with the SEC (or any other governmental agency) of separate
financial statements of any Subsidiary of the Company due to the fact that such Subsidiary’s
securities secure the Noteholder Claims, then the securities of such Subsidiary will not be subject
to the Liens securing the Noteholder Claims and will automatically be deemed not to be part of the
Pledged Collateral but only to the extent necessary not to be subject to such requirement and only
for so long as required to not be subject to the requirement. In such event, this Agreement may be
amended or modified, without the consent of any Indenture Secured Party, to the extent necessary to
release the security interests in favor of the Collateral Agent on the Equity Interests or other
securities that are so deemed to no longer constitute part of the Pledged Collateral for the
relevant Noteholder Claim. In the event that Rule 3-16 of Regulation S-X under the Securities Act
is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or
regulation, or any other law, rule or regulation is adopted, which would permit) such Subsidiary’s
securities to secure the Noteholder Claims in excess of the amount then pledged without the filing
with the SEC (or any other governmental agency) of separate financial statements of such
Subsidiary, then the securities of such Subsidiary will automatically be deemed to be a part of the
Pledged Collateral but only to the extent permitted to not be subject to any such financial
statement requirement. In such event, this Agreement may be amended or modified, without the
consent of any Indenture Secured Party, to the extent necessary to subject to the Liens under the
Pledged Collateral such additional securities. In accordance with the limitations set forth
herein, as of the date hereof, the Pledged Collateral will include the securities of the
Subsidiaries only to the extent that the applicable value of such securities (on a
Subsidiary-by-Subsidiary basis) is less than twenty percent (20%) of the aggregate principal amount
of the Notes (including any additional Notes) outstanding.




          TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its
successors and permitted assigns, for the ratable benefit of the Indenture Secured Parties,
forever; subject, however, to the terms, covenants and conditions hereinafter set
forth.




          Section 2.02. Delivery of the Pledged Collateral. (a) Subject to the terms of the
Intercrditor Agreement, each Pledgor agrees promptly to deliver or cause to be delivered to the
Collateral Agent, for the ratable benefit of the Indenture Secured Parties, any and all Pledged
Securities to the extent such Pledged Securities are either (i) Equity Interests or (ii) promissory
notes or other instruments evidencing Indebtedness required to be delivered pursuant to paragraph
(b) of this Section 2.02. Subject to the terms of the Intercreditor Agreement, if any Pledged
Stock that is uncertificated on the date hereof shall hereafter become certificated, the applicable
Pledgor shall promptly cause the certificate or certificates representing Pledged Stock to be
delivered to the Collateral Agent, as agent for the Indenture Secured Parties, together with the
accompanying stock powers or other documentation required by Section 2.02(c). None of the Pledgors
shall permit any other party to “control” (for purposes of Section 8-106 of the New






F-11









 







York UCC (or any analogous provision of the Uniform Commercial Code in effect in the
jurisdiction whose law applies)) any uncertificated securities that constitute Pledged Collateral
other than the Collateral Agent, as agent for the Indenture Secured Parties, and the First Priority
Designated Agent.




          (b) To the extent permitted by and subject to the terms of the Intercreditor Agreement, each
Pledgor will cause any Indebtedness for borrowed money having an aggregate principal amount in
excess of $5.0 million (other than (i) intercompany current liabilities incurred in the ordinary
course of business in connection with the cash management operations of the Issuer and its
Subsidiaries or (ii) to the extent that a pledge of such promissory note or instrument would
violate applicable law) owed to such Pledgor by any person to be evidenced by a duly executed
promissory note that is pledged and delivered to the Collateral Agent, for the ratable benefit of
the Indenture Secured Parties, pursuant to the terms hereof. Subject to the terms of the
Intercreditor Agreement, to the extent any such promissory note is a demand note, each Pledgor
party thereto agrees, if requested by the Collateral Agent, to immediately demand payment
thereunder upon an Event of Default specified under Section 6.01(i), (ii), (iv), (vii) or (viii) of
the Indenture unless such demand would not be commercially reasonable or would otherwise expose
such Pledgor to liability to the maker.




          (c) Subject to the terms of the Intercreditor Agreement, upon delivery to the Collateral
Agent, (i) any Pledged Securities required to be delivered pursuant to the foregoing paragraphs (a)
and (b) of this Section 2.02 shall be accompanied by stock powers or note powers, as applicable,
duly executed in blank or other instruments of transfer and such other instruments and documents as
the Collateral Agent may reasonably request and (ii) all other property comprising part of the
Pledged Collateral delivered pursuant to the terms of this Agreement shall be accompanied to the
extent necessary to perfect the security interest in or allow realization on the Pledged Collateral
by proper instruments of assignment duly executed by the applicable Pledgor and such other
instruments or documents (including issuer acknowledgments in respect of uncertificated securities)
as the Collateral Agent may reasonably request. Each delivery of Pledged Securities shall be
accompanied by a schedule describing the securities, which schedule shall be attached hereto as
Schedule II (or a supplement to Schedule II, as applicable) and made a part hereof;
provided that failure to attach any such schedule hereto shall not affect the validity of
such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior
schedules so delivered.




          (d) To the extent permitted by and subject to the terms of the Intercreditor Agreement, in the
event any Pledged Securities constitute uncertificated securities, each Pledgor shall either (i)
cause the issuer to agree to comply with instructions from the Collateral Agent without further
consent of any Pledgor or (ii) cause the issuer to register the Collateral Agent as the registered
owner of such uncertificated security.




          Section 2.03. Representations, Warranties and Covenants. The Pledgors, jointly and
severally, represent, warrant and covenant to and with the Collateral Agent, for the ratable
benefit of the Indenture Secured Parties, that:




          (a) Schedule II correctly sets forth the percentage of the issued and outstanding
shares of each class of the Equity Interests of the issuer thereof represented by such




F-12









 




Pledged Stock and includes all Equity Interests, debt securities and promissory notes or
instruments evidencing Indebtedness required to be (i) pledged in order to satisfy the Collateral
Requirement, or (ii) delivered pursuant to Section 2.02(b);




          (b) the Pledged Stock and Pledged Debt Securities (solely with respect to Pledged Debt
Securities issued by a person that is not a Subsidiary of the Issuer or an Affiliate of any such
subsidiary, to the best of each Pledgor’s knowledge) have been duly and validly authorized and
issued by the issuers thereof and (i) in the case of Pledged Stock, are fully paid and
nonassessable (other than with respect to Pledged Stock consisting of membership interests of
limited liability companies to the extent provided in Sections 18-502 and 18-607 of the Delaware
Limited Liability Company Act) and (ii) in the case of Pledged Debt Securities (solely with respect
to Pledged Debt Securities issued by a person that is not a Subsidiary of the Issuer or an
Affiliate of any such subsidiary, to the best of each Pledgor’s knowledge) are legal, valid and
binding obligations of the issuers thereof, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether considered in a proceeding at
law or in equity) and an implied covenant of good faith and fair dealing;




          (c) except for the security interests granted hereunder, each Pledgor (i) is and, subject to
any transfers made in compliance with the Indenture, will continue to be the direct owner,
beneficially and of record, of the Pledged Securities indicated on Schedule II as owned by
such Pledgor, (ii) holds the same free and clear of all Liens, other than Permitted Liens, (iii)
will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any
security interest in or other Lien on, the Pledged Collateral, other than pursuant to a transaction
permitted by the Indenture and other than Permitted Liens and (iv) subject to the rights of such
Pledgor under the Noteholder Documents to dispose of Pledged Collateral, will use commercially
reasonable efforts to defend its title or interest hereto or therein against any and all Liens
(other than Permitted Liens), however arising, of all persons;




          (d) other than as set forth in the Indenture, and except for restrictions and limitations
imposed by the Noteholder Documents or securities laws generally or otherwise permitted to exist
pursuant to the terms of the Indenture, the Pledged Stock (other than partnership interests) is and
will continue to be freely transferable and assignable, and none of the Pledged Stock 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 affect the
pledge of such Pledged Stock hereunder, the sale or disposition thereof pursuant hereto or the
exercise by the Collateral Agent of rights and remedies hereunder;




          (e) each Pledgor has the power and authority to pledge the Pledged Collateral pledged by it
hereunder in the manner hereby done or contemplated;




          (f) other than as set forth in the Indenture, 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 (other than such as have been obtained and are in full force and effect);




F-13









 





          (g) by virtue of the execution and delivery by the Pledgors of this Agreement and the Foreign
Pledge Agreements, when any Pledged Securities (including Pledged Stock of any Domestic Subsidiary,
any Qualified CFC Holding Company or any foreign stock covered by a Foreign Pledge Agreement) are
delivered to the Collateral Agent, for the ratable benefit of the Indenture Secured Parties, in
accordance with this Agreement and a financing statement covering such Pledged Securities is filed
in the appropriate filing office, the Collateral Agent will obtain, for the ratable benefit of the
Indenture Secured Parties, a legal, valid and perfected lien upon and security interest in such
Pledged Securities under the New York UCC, subject only to Permitted Liens, as security for the
payment and performance of the Noteholder Claims;




          (h) each Pledgor that is an issuer of the Pledged Collateral confirms that it has received
notice of the security interest granted hereunder and consents to such security interest and agrees
to transfer record ownership of the securities issued by it in connection with any request by the
Collateral Agent; and




          (i) the Pledgors shall not amend, or permit to be amended, the limited liability company
agreement (or operating agreement or similar agreement) or partnership agreement of any Subsidiary
of any Pledgor whose Equity Interests are, or are required to be, Collateral in a manner to cause
such Equity Interests to not constitute a security under Section 8-103 of the New York UCC or the
corresponding code or statute of any other applicable jurisdiction unless such Pledgor shall have
first delivered 30 days written notice to the Collateral Agent and shall have taken all actions
contemplated hereby and as otherwise reasonably required by the Collateral Agent to maintain the
security interest of the Collateral Agent therein as a valid, perfected, second priority security
interest.




          Section 2.04. Registration in Nominee Name; Denominations. To the extent permitted by
and subject to the Intercreditor Agreement, the Collateral Agent, on behalf of the Indenture
Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged
Securities in the name of the applicable Pledgor, endorsed or assigned in blank or in favor of the
Collateral Agent or, if an Event of Default shall have occurred and be continuing, in its own name
as pledgee or the name of a nominee (as pledgee or as sub-agent). Each Pledgor will promptly give
to the Collateral Agent copies of any notices or other communications received by it with respect
to Pledged Securities registered in the name of such Pledgor. To the extent permitted by and
subject to the Intercreditor Agreement, if an Event of Default shall have occurred and be
continuing, the Collateral Agent shall have the right to exchange the certificates representing
Pledged Securities for certificates of smaller or larger denominations for any purpose consistent
with this Agreement. To the extent permitted by and subject to the Intercreditor Agreement, each
Pledgor shall use its commercially reasonable efforts to cause any issuer of Pledged Securities
that is not a party to this Agreement to comply with a request by the Collateral Agent, pursuant to
this Section 2.04, to exchange certificates representing Pledged Securities of such issuer for
certificates of smaller or larger denominations.




          Section 2.05. Voting Rights; Dividends and Interest, Etc. (a) Unless and until an
Event of Default shall have occurred and be continuing and the Collateral Agent shall have given
notice to the relevant Pledgors of the Collateral Agent’s intention to exercise its rights
hereunder (to the extent permitted by the Intercreditor Agreement):







F-14









 









     (i) Each Pledgor 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 Indenture and the other
Noteholder Documents; provided that, except as permitted under the Indenture, 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 Collateral, the rights and remedies of
any of the Collateral Agent or the other Indenture Secured Parties under this Agreement, the
Indenture or any other Noteholder Document or the ability of the Indenture Secured Parties
to exercise the same.




     (ii) The Collateral Agent shall promptly execute and deliver to each Pledgor, or cause
to be executed and delivered to such Pledgor, all such proxies, powers of attorney and other
instruments as such Pledgor may reasonably request for the purpose of enabling such Pledgor
to exercise the voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above.




     (iii) Each Pledgor 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 Indenture, the other Noteholder Documents and applicable
laws; provided that (A) any noncash dividends, interest, principal or other
distributions, payments or other consideration in respect thereof, including any rights to
receive the same to the extent not so distributed or paid, that would constitute Pledged
Securities, whether resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged Securities, received in exchange
for Pledged Securities or any part thereof, or in redemption thereof, as a result of any
merger, consolidation, acquisition or other exchange of assets to which such issuer may be a
party or otherwise and (B) any non-cash dividends and other distributions paid or payable in
respect of any Pledged Securities that would constitute Pledged Securities in connection
with a partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid in surplus, shall be and become part of the Pledged
Collateral, and, if received by any Pledgor, shall not be commingled by such Pledgor with
any of its other funds or property but, subject to the Intercreditor Agreement, shall be
held separate and apart therefrom, shall be held in trust for the benefit of the Collateral
Agent, for the ratable benefit of the Indenture Secured Parties, and shall be forthwith
delivered to the Collateral Agent, for the ratable benefit of the Indenture Secured Parties,
in the same form as so received (duly endorsed by such Pledgor).



          (b) Subject to the terms of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default and after notice by the Collateral Agent to the Issuer of the
Collateral Agent’s intention to exercise its rights hereunder, all rights of any Pledgor to
dividends, interest, principal or other distributions that such Pledgor is authorized to receive
pursuant to paragraph (a)(iii) of this Section 2.05 shall cease, and all such rights shall
thereupon become vested, for the ratable benefit of the Indenture Secured Parties, in the
Collateral Agent which shall have the sole and exclusive right and authority to receive and retain






F-15









 







such dividends, interest, principal or other distributions; provided, however, that
even after the occurrence of an Event of Default, any Pledgor may continue to exercise dividend and
distribution rights solely to the extent permitted under Sections 4.07(b)(xii) and 4.07(b)(xiii)(A)
of the Indenture. Subject to the Intercreditor Agreement, all dividends, interest, principal or
other distributions received by any Pledgor contrary to the provisions of this Section 2.05 shall
not be commingled by such Pledgor 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 ratable benefit of the Indenture Secured Parties, and shall be forthwith delivered to the
Collateral Agent, for the ratable benefit of the Indenture Secured Parties, in the same form as so
received (endorsed by such Pledgor). 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 4.02 hereof.
After all Events of Default have been cured or waived and the Issuer has delivered to the
Collateral Agent a certificate to that effect, the Collateral Agent shall promptly repay to each
Pledgor (without interest) all dividends, interest, principal or other distributions that such
Pledgor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this
Section 2.05 and that remain in such account.




          (c) Subject to the terms of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default and after notice by the Collateral Agent to the Issuer of the
Collateral Agent’s intention to exercise its rights hereunder, all rights of any Pledgor to
exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 2.05, and the obligations of the Collateral Agent under paragraph
(a)(ii) of this Section 2.05, shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, for the ratable benefit of the Indenture Secured Parties, which shall have the
sole and exclusive right and authority to exercise such voting and consensual rights and powers;
provided that, subject to the terms of the Intercreditor Agreement and the Indenture,
unless the Collateral Agent shall have received written objections from at least a majority of the
Holders of the Notes then outstanding, the Collateral Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit the Pledgors to exercise such
rights. After all Events of Default have been cured or waived and the Issuer has delivered to the
Collateral Agent a certificate to that effect, each Pledgor shall have the right to exercise the
voting and/or consensual rights and powers that such Pledgor would otherwise be entitled to
exercise pursuant to the terms of paragraph (a)(i) above.




ARTICLE III




SECURITY INTERESTS IN OTHER PERSONAL PROPERTY



          Section 3.01. Security Interest. (a) As security for the payment or performance when
due (whether at the stated maturity, by acceleration or otherwise), as the case may be, in full of
the Noteholder Claims, each Pledgor hereby assigns and pledges to the Collateral Agent, its
successors and permitted assigns, for the ratable benefit of the Indenture Secured Parties, and
hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable
benefit






F-16









 







of the Indenture Secured Parties, a security interest (the “Security Interest”) in all
right, title and interest in or to any and all of the following assets and properties now owned or
at any time hereafter acquired by such Pledgor or in which such Pledgor now has or at any time in
the future may acquire any right, title or interest (collectively, the “Article 9
Collateral”):





     (i) all Accounts;




     (ii) all Chattel Paper;




     (iii) all Documents;




     (iv) all Equipment;




     (v) all General Intangibles;




     (vi) all Instruments;




     (vii) all Inventory;




     (viii) all Investment Property;




     (ix) all Letter of Credit Rights;




     (x) all Commercial Tort Claims;




     (xi) all other personal property not otherwise described above (except for property
specifically excluded from any defined term used in any of the foregoing clauses);




     (xii) all books and records pertaining to the Article 9 Collateral; and




     (xiii) to the extent not otherwise included, all proceeds, Supporting Obligations and
products of any and all of the foregoing and all collateral security and guarantees given by
any person with respect to any of the foregoing.


Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute a
grant of a security interest in (a) any vehicle covered by a certificate of title or ownership,
whether now owned or hereafter acquired, (b) any assets (including Equity Interests), whether now
owned or hereafter acquired, with respect to which the Collateral Requirement or the other
paragraphs of Section 3.06 hereof would not be required to be satisfied by reason of Section
3.06(f) hereof if hereafter acquired, (c) any property excluded from the definition of Pledged
Collateral by virtue of the proviso to Section 2.01 hereof, (d) any Letter of Credit Rights to the
extent any Pledgor is required by applicable law to apply the proceeds of a drawing of such Letter
of Credit for a specified purpose, (e) any Pledgor’s right, title or interest in any license,
contract or agreement to which such Pledgor is a party or any of its right, title or interest
thereunder to the extent, but only to the extent, that such a grant would, under the terms of such
license, contract or agreement, result in a breach of the terms of, or constitute a default under,
or result in the abandonment, invalidation or unenforceability of, any license, contract or
agreement






F-17









 







to which such Pledgor is a party (other than to the extent that any such term would be rendered
ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other
applicable law (including, without limitation, Title 11 of the United States Code) or principles of
equity); provided that immediately upon the ineffectiveness, lapse or termination of any
such provision, the Collateral shall include, and such Pledgor shall be deemed to have granted a
security interest in, all such rights and interests as if such provision had never been in effect;
(f) any Equipment owned by any Pledgor that is subject to a purchase money lien or a Capital Lease
Obligation if the contract or other agreement in which such Lien is granted (or the documentation
providing for such Capital Lease Obligation) prohibits or requires the consent of any person other
than the Pledgors as a condition to the creation of any other security interest on such Equipment
or (g) any Equity Interests or other securities of any of the Pledgors to the extent that the
pledge of such securities results in the Issuer’s being required to file separate financial
statements of such Pledgor with the SEC, but only to the extent necessary not to be subject to such
requirement and only for so long as such requirement is in existence.




          (b) Each Pledgor hereby irrevocably authorizes the Collateral Agent at any time and from time
to time to file in any relevant jurisdiction any initial financing statements (including fixture
filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that
contain the information required by Article 9 of the Uniform Commercial Code of each applicable
jurisdiction for the filing of any financing statement or amendment, including (i) whether such
Pledgor is an organization, the type of organization and any organizational identification number
issued to such Pledgor, (ii) in the case of a financing statement filed as a fixture filing, a
sufficient description of the real property to which such Article 9 Collateral relates and (iii) a
description of collateral that describes such property in any other manner as the Collateral Agent
may reasonably determine is necessary or advisable to ensure the perfection of the security
interest in the Article 9 Collateral granted under this Agreement, including describing such
property as “all assets” or “all property”. Each Pledgor agrees to provide such information to the
Collateral Agent promptly upon request.




          The Collateral Agent is further authorized to file with the United States Patent and Trademark
Office or United States Copyright Office (or any successor office) such documents as may be
reasonably necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing
or protecting the Security Interest granted by each Pledgor, without the signature of such Pledgor,
and naming such Pledgor or the Pledgors as debtors and the Collateral Agent as secured party.
Notwithstanding anything to the contrary herein, no Pledgor shall be required to take any action
under the laws of any jurisdiction other than the United States (or any political subdivision
thereof) and its territories and possessions for the purpose of perfecting the Security Interest in
any Article 9 Collateral of such Pledgor constituting Patents, Trademarks or Copyrights unless
required by the Collateral Agent in its reasonable discretion.




          (c) The Security Interest is granted as security only and shall not subject the Collateral
Agent or any other Indenture Secured Party to, or in any way alter or modify, any obligation or
liability of any Pledgor with respect to or arising out of the Article 9 Collateral.




          Section 3.02. Representations and Warranties. The Pledgors jointly and severally
represent and warrant to the Collateral Agent and the Indenture Secured Parties that:







F-18









 








          (a) Each Pledgor has good and valid rights in and title to the Article 9 Collateral 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 the Security Interest in such Article 9 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 and is in full force and effect or has otherwise been disclosed
herein or in the Indenture.




          (b) The information set forth in the schedules attached hereto is correct and complete, in all
material respects, as of the Issue Date. The Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Article 9 Collateral that have been prepared by the
Collateral Agent for filing in each governmental, municipal or other office specified in
Schedule IV (or specified by notice from the Issuer to the Collateral Agent after the Issue
Date in the case of filings, recordings or registrations required by Section 3.06 hereof)
constitute all the filings, recordings and registrations (except to the extent that filings are
required to be made in the United States Patent and Trademark Office and the United States
Copyright Office, or any similar office in any other jurisdiction, in order to perfect the Security
Interest in Article 9 Collateral consisting of United States Patents, United States registered
Trademarks and United States registered Copyrights) that are necessary to publish notice of and
protect the validity of and to establish a legal, valid and perfected security interest in favor of
the Collateral Agent (for the ratable benefit of the Indenture Secured Parties) in respect of all
Article 9 Collateral in which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements or amendments. Each Pledgor represents and
warrants that a fully executed Intellectual Property Security Agreement containing a description of
all Article 9 Collateral consisting of Intellectual Property with respect to United States Patents
(and Patents for which United States applications are pending), United States registered Trademarks
(and Trademarks for which United States registration applications are pending) and United States
registered Copyrights (and Copyrights for which United States registration applications are
pending) has been delivered to the Collateral Agent for recording with the United States Patent and
Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. §
1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, and reasonably requested by
the Collateral Agent, to protect the validity of and to establish a legal, valid and perfected
security interest in favor of the Collateral Agent, for the ratable benefit of the Indenture
Secured Parties, in respect of all Article 9 Collateral consisting of such Intellectual Property in
which a security interest may be perfected by recording with the United States Patent and Trademark
Office and the United States Copyright Office, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary (other than the Uniform
Commercial Code financings statements referred to above, and other than such actions as are
necessary to perfect the Security Interest with respect to any Article 9 Collateral consisting of
United States Patents, Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof).







F-19









 








          (c) The Security Interest constitutes (i) a legal and valid security interest in all the
Article 9 Collateral securing the payment and performance of the Noteholder Claims, (ii) subject to
the filings described in Section 3.02(b), a perfected security interest in all Article 9 Collateral
in which a security interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other applicable law in such
jurisdictions and (iii) a security interest that shall be perfected in all Article 9 Collateral in
which a security interest may be perfected upon the receipt and recording of the Intellectual
Property Security Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable. The Security Interest is and shall be prior to any other
Lien on any of the Article 9 Collateral other than Permitted Liens.




          (d) The Article 9 Collateral is owned by the Pledgors free and clear of any Lien, other than
Permitted Liens. None of the Pledgors has filed or consented to the filing of (i) any financing
statement or analogous document under the Uniform Commercial Code or any other applicable laws
covering any Article 9 Collateral, (ii) any assignment in which any Pledgor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article 9 Collateral with
the United States Patent and Trademark Office or the United States Copyright Office or (iii) any
assignment in which any Pledgor assigns any Article 9 Collateral or any security agreement or
similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Permitted Liens.




          (e) None of the Pledgors holds any Commercial Tort Claim individually in excess of $5.0
million as of the Issue Date except as indicated on Schedule V.




          (f) Except as set forth in Schedule VI, as of the Issue Date, all Accounts have been
originated by the Pledgors and all Inventory has been produced or acquired by the Pledgors in the
ordinary course of business.




          (g) As to itself and its Article 9 Collateral consisting of Intellectual Property (the
“Intellectual Property Collateral”), to the best of each Pledgor’s knowledge:





     (i) Schedule III hereto includes all of the material Patents, Trademarks,
Copyrights owned by such Pledgor as of the date hereof.




     (ii) The Intellectual Property Collateral is subsisting and has not been adjudged
invalid or unenforceable in whole or part (except for office actions issued in the ordinary
course by the United States Patent and Trademark Office or any similar office in any foreign
jurisdiction), and, to the best of such Pledgor’s knowledge, is valid and enforceable,
except as would not reasonably be expected to have a Material Adverse Effect. Such Pledgor
is not aware of any uses of any item of Intellectual Property Collateral that would be
expected to lead to such item becoming invalid or unenforceable, except as would not
reasonably be expected to have a Material Adverse Effect.



F-20









 






     (iii) Such Pledgor has made or performed all commercially reasonable acts, including
without limitation filings, recordings and payment of all required fees and taxes, required
to maintain and protect its interest in each and every item of Intellectual Property
Collateral in full force and effect in the United States and such Pledgor has used proper
statutory notice in connection with its use of each Patent, Trademark and Copyright in the
Intellectual Property Collateral, in each case, except to the extent that the failure to do
so would not reasonably be expected to have a Material Adverse Effect.




     (iv) With respect to each IP Agreement, the absence, termination or violation of which
would reasonably be expected to have a Material Adverse Effect: (A) such Pledgor has not
received any notice of termination or cancellation under such IP Agreement; (B) such Pledgor
has not received any notice of a breach or default under such IP Agreement, which breach or
default has not been cured or waived; and (C) neither such Pledgor nor any other party to
such IP Agreement is in breach or default thereof in any material respect, and no event has
occurred that, with notice or lapse of time or both, would constitute such a breach or
default or permit termination, modification or acceleration under such IP Agreement.




     (v) Except as would not reasonably be expected to have a Material Adverse Effect, no
Pledgor or Intellectual Property Collateral is subject to any outstanding consent,
settlement, decree, order, injunction, judgment or ruling restricting the use of any
Intellectual Property Collateral or that would impair the validity or enforceability of such
Intellectual Property Collateral.



          Section 3.03. Covenants. (a) Each Pledgor agrees to provide at least 10 days’ prior
written notice to the Collateral Agent of any change (i) in its corporate or organization name,
(ii) in its identity or type of organization or corporate structure, (iii) in its Federal Taxpayer
Identification Number or organizational identification number or (iv) in its “location” (determined
as provided in UCC Section 9-307). Each Pledgor agrees promptly to provide the Collateral Agent
with certified organizational documents reflecting any of the changes described in the immediately
preceding sentence. Each Pledgor agrees not to effect or permit any change referred to in the
first sentence of this paragraph (a) unless all filings have been made, or will have been made
within any applicable statutory period, under the Uniform Commercial Code or otherwise that are
required in order for the Collateral Agent to continue at all times following such change to have a
valid, legal and perfected second priority security interest in all the Article 9 Collateral, for
the ratable benefit of the Indenture Secured Parties. Each Pledgor agrees promptly to notify the
Collateral Agent if any material portion of the Article 9 Collateral owned or held by such Pledgor
is damaged or destroyed.




          (b) Subject to the rights of such Pledgor under the Noteholder Documents to dispose of
Collateral, each Pledgor shall, at its own expense, use commercially reasonable efforts to defend
title to the Article 9 Collateral against all persons and to defend the Security Interest of the
Collateral Agent, for the ratable benefit of the Indenture Secured Parties, in the Article 9
Collateral and the priority thereof against any Lien that is not a Permitted Lien.




          (c) Each Pledgor agrees, at its own expense, to execute, acknowledge, deliver and cause to be
duly filed all such further instruments and documents and take all such actions as






F-21









 







the Collateral Agent may from time to time reasonably request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and delivery of this
Agreement and the granting of the Security Interest and the filing of any financing statements
(including fixture filings) or other documents in connection herewith or therewith. Subject to the
Intercreditor Agreement, any amount payable under or in connection with any of the Article 9
Collateral that is in excess of $5.0 million shall be or become evidenced by any promissory note or
other instrument, such note or instrument shall be promptly pledged and delivered to the Collateral
Agent, for the ratable benefit of the Indenture Secured Parties, duly endorsed by the applicable
Pledgor.




          Without limiting the generality of the foregoing, each Pledgor hereby authorizes the
Collateral Agent, with prompt notice thereof to the Pledgors, to supplement this Agreement by
supplementing Schedule III or adding additional schedules hereto to specifically identify
any asset or item that may constitute material Copyrights, Patents, Trademarks, Copyright Licenses,
Patent Licenses or Trademark Licenses; provided that any Pledgor shall have the right,
exercisable within 30 days after the Issuer has been notified by the Collateral Agent of the
specific identification of such Article 9 Collateral, to advise the Collateral Agent in writing of
any inaccuracy of the representations and warranties made by such Pledgor hereunder with respect to
such Article 9 Collateral. Each Pledgor agrees that it will use its commercially reasonable
efforts to take such action as shall be necessary in order that all representations and warranties
hereunder shall be true and correct with respect to such Article 9 Collateral within 30 days after
the date it has been notified by the Collateral Agent of the specific identification of such
Article 9 Collateral.




          (d) Subject to the Intercreditor Agreement, after the occurrence of an Event of Default and
during the continuance thereof, the Collateral Agent shall have the right to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition and status of, or
any other matter relating to, the Article 9 Collateral, including, in the case of Accounts or
Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the
third person possessing such Article 9 Collateral for the purpose of making such a verification.
The Collateral Agent shall have the right to share any information it gains from such inspection or
verification with any Indenture Secured Party.




          (e) Subject to the Intercreditor Agreement, at its option, 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 Article 9 Collateral and not a Permitted Lien, and may pay for the
maintenance and preservation of the Article 9 Collateral to the extent any Pledgor fails to do so
as required by the Indenture or this Agreement, and each Pledgor 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 Section 3.03(e) shall be interpreted as excusing any Pledgor
from the performance of, or imposing any obligation on the Collateral Agent or any Indenture
Secured Party to cure or perform, any covenants or other promises of any Pledgor with respect to
taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Noteholder Documents.







F-22









 








          (f) Each Pledgor (rather than the Collateral Agent or any Indenture Secured Party) shall
remain liable for the observance and performance of all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument relating to the Article 9
Collateral and each Pledgor jointly and severally agrees to indemnify and hold harmless the
Collateral Agent and the Indenture Secured Parties from and against any and all liability for such
performance.




          (g) None of the Pledgors shall make or permit to be made an assignment, pledge or
hypothecation of the Article 9 Collateral or shall grant any other Lien in respect of the Article 9
Collateral, except as permitted by the Indenture and the other provisions hereof. None of the
Pledgors shall make or permit to be made any transfer of the Article 9 Collateral and each Pledgor
shall remain at all times in possession of the Article 9 Collateral owned by it, except as
permitted by the Indenture and the other provisions hereof.




          (h) None of the Pledgors will, without the Collateral Agent’s prior written consent (which
consent shall not be unreasonably withheld), grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or settle the same for less
than the full amount thereof, release, wholly or partly, any person liable for the payment thereof
or allow any credit or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business and consistent with
prudent business practices or as otherwise permitted under the Indenture.




          (i) Subject to the Intercreditor Agreement, each Pledgor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral
Agent) as such Pledgor’s true and lawful agent (and attorney-in-fact) for the purpose, during the
continuance of an Event of Default, of making, settling and adjusting claims in respect of Article
9 Collateral under policies of insurance, endorsing the name of such Pledgor on any check, draft,
instrument or other item of payment for the proceeds of such policies of insurance and for making
all determinations and decisions with respect thereto. Subject to the Intercreditor Agreement, in
the event that any Pledgor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or under the Indenture or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any obligation or
liability of the Pledgors hereunder or any Event of Default, in its sole discretion, obtain and
maintain such policies of insurance and pay such premium and take any other actions with respect
thereto as the Collateral Agent reasonably deems advisable. All sums disbursed by the Collateral
Agent in connection with this Section 3.03(i), including reasonable attorneys’ fees, court costs,
expenses and other charges relating thereto, shall be payable, upon demand, by the Pledgors to the
Collateral Agent and shall be additional Noteholder Claims secured hereby.




          Section 3.04. Other Actions. Subject to the terms of the Intercreditor Agreement, in
order to further ensure the attachment, perfection and priority of, and the ability of the
Collateral Agent to enforce, for the ratable benefit of the Indenture Secured Parties, the
Collateral Agent’s security interest in the Article 9 Collateral, each Pledgor agrees, in each case
at such Pledgor’s own expense, to take the following actions with respect to the following Article
9 Collateral:







F-23









 








          (a) Instruments and Tangible Chattel Paper. If any Pledgor shall at any time hold or
acquire any Instruments (other than checks received and processed in the ordinary course of
business) or Tangible Chattel Paper evidencing an amount in excess of $5.0 million, such Pledgor
shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time
to time reasonably request.




          (b) Investment Property. Except to the extent otherwise provided in Article
II, if any Pledgor shall at any time hold or acquire any Certificated Security, such Pledgor
shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time
to time reasonably specify. If any security of a domestic issuer now owned or hereafter acquired
by any Pledgor is uncertificated and is issued to such Pledgor or its nominee directly by the
issuer thereof, such Pledgor shall promptly notify the Collateral Agent of such uncertificated
securities and (i) upon the Collateral Agent’s reasonable request or (ii) upon the occurrence and
during the continuance of an Event of Default, such Pledgor shall either (x) cause the issuer to
agree to comply with instructions from the Collateral Agent as to such security, without further
consent of any Pledgor or such nominee, or (y) cause the issuer to register the Collateral Agent as
the registered owner of such security.




          (c) Commercial Tort Claims. If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim in an amount reasonably estimated to exceed $5.0 million, such Pledgor shall
promptly notify the Collateral Agent thereof in a writing signed by such Pledgor, including a
summary description of such claim, and grant to the Collateral Agent in writing a security interest
therein and in the proceeds thereof, all under the terms and provisions of this Agreement.




          Section 3.05.
Covenants Regarding Patent, Trademark and Copyright
Collateral. Except as permitted by the Indenture: (a) Each Pledgor agrees that it will not knowingly do any act or
omit to do any act (and will exercise commercially reasonable efforts to prevent its licensees from
doing any act or omitting to do any act) whereby any Patent that is material to the normal conduct
of such Pledgor’s business may become prematurely invalidated, abandoned, lapsed or dedicated to
the public, and agrees that it shall take commercially reasonable steps with respect to any
material products covered by any such Patent as necessary and sufficient to establish and preserve
its rights under applicable patent laws.




          (b) Each Pledgor will, and will use its commercially reasonable efforts to cause its licensees
or its sublicensees to, for each material Trademark necessary to the normal conduct of such
Pledgor’s business, (i) maintain such Trademark in full force free from any adjudication of
abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered
under such Trademark, (iii) display such Trademark with notice of federal or foreign registration
or claim of trademark or service mark as required under applicable law and (iv) not knowingly use
or knowingly permit its licensees’ use of such Trademark in violation of any third-party rights.




          (c) Each Pledgor will, and will use its commercially reasonable efforts to cause its licensees
or its sublicensees to, for each work covered by a material Copyright






F-24









 







necessary to the normal conduct of such Pledgor’s business that it publishes, displays and
distributes, use a copyright notice as necessary and sufficient to establish and preserve its
rights under applicable copyright laws.




          (d) Each Pledgor shall notify the Collateral Agent promptly if it knows that any Patent,
Trademark or Copyright material to the normal conduct of such Pledgor’s business may imminently
become abandoned, lapsed or dedicated to the public, or of any materially adverse determination or
development, excluding office actions and similar determinations or developments in the United
States Patent and Trademark Office, United States Copyright Office, any court or any similar office
of any country, regarding such Pledgor’s ownership of any such material Patent, Trademark or
Copyright or its right to register or to maintain the same.




          (e) Each Pledgor, either itself or through any agent, employee, licensee or designee, shall
(i) inform the Collateral Agent on an annual basis of each application by itself, or through any
agent, employee, licensee or designee, for any Patent with the United States Patent and Trademark
Office and each registration of any Trademark or Copyright with the United States Patent and
Trademark Office, the United States Copyright Office or any comparable office or agency in any
other country filed during the preceding twelve-month period, and (ii) upon the reasonable request
of the Collateral Agent, execute and deliver any and all agreements, instruments, documents and
papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s security
interest in such Patent, Trademark or Copyright.




          (f) Each Pledgor shall exercise its reasonable business judgment consistent with the practice
in any proceeding before the United States Patent and Trademark Office, the United States Copyright
Office or any comparable office or agency in any other country with respect to maintaining and
pursuing each application relating to any Patent, Trademark and/or Copyright (and obtaining the
relevant grant or registration) material to the normal conduct of such Pledgor’s business and to
maintain (i) each issued Patent and (ii) the registrations of each Trademark and each Copyright
that is material to the normal conduct of such Pledgor’s business, including, when applicable and
necessary in such Pledgor’s reasonable business judgment, timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if
any Pledgor believes necessary in its reasonable business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.




          (g) In the event that any Pledgor knows or has reason to know that any Article 9 Collateral
consisting of a Patent, Trademark or Copyright material to the normal conduct of its business has
been or is about to be materially infringed, misappropriated or diluted by a third party, such
Pledgor shall promptly notify the Collateral Agent and shall, if such Pledgor deems it necessary in
its reasonable business judgment, promptly sue and recover any and all damages, and take such other
actions as are reasonably appropriate under the circumstances.




          Section 3.06. Further Assurances; Additional Security




          (a) Each Pledgor agrees to 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, fixture filings, mortgages and other documents and




F-25









 





recordings of Liens in
stock registries), that may be required under any applicable law, or that the
Collateral Agent may reasonably request, to satisfy the Collateral Requirement and to cause
the Collateral Requirement to be and remain satisfied, all at the expense of the Issuer and provide
to the Collateral Agent, from time to time upon reasonable request, evidence as to the perfection
and priority of the Liens created or intended to be created by this Agreement and the other
Noteholder Documents.




          (b) If any asset (including any owned Real Property (other than owned Real Property covered by
paragraph (c) below) or improvements thereto or any interest therein) that has an individual fair
market value in an amount greater than $5.0 million is acquired by the Issuer or any other Pledgor
after the Issue Date or owned by an entity at the time it becomes a Pledgor (in each case other
than (x) assets constituting Collateral under a Security Document that become subject to the Lien
of such Security Document upon acquisition thereof and (y) assets that are not required to become
subject to Liens in favor of the Collateral Agent pursuant to clause (f) below or the Security
Documents) the Issuer will (i) notify the Collateral Agent thereof and (ii) cause such asset to be
subjected to a Lien securing the Noteholder Claims and take, and cause the other Pledgors to take,
such actions as shall be necessary or reasonably requested by the Collateral Agent to grant and
perfect such Liens, including actions described in paragraph (a) of this Section 3.06, all at the
expense of the Issuer, subject to paragraph (f) below.




          (c) The Issuer or the applicable Pledgors shall promptly notify the Collateral Agent of the
acquisition of, and grant and cause each of the other applicable Pledgors to grant to the
Collateral Agent security interests and mortgages in, such owned Real Property of the Issuer or any
such Pledgor, to the extent acquired after the Issue Date and having a value at the time of
acquisition in excess of $5.0 million, pursuant to a mortgage, deed of trust or similar agreement
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 other applicable Pledgor to
record or file, such 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 granted pursuant to such mortgage or instrument and pay, and cause each such other applicable
Pledgor to pay, in full, all taxes, fees and other charges payable in connection therewith, in each
case subject to paragraph (f) below.




          (d) If any additional direct or indirect Subsidiary of the Issuer is formed or acquired after
the Issue Date (with any Subsidiary redesignation resulting in an Unrestricted Subsidiary becoming
a Restricted Subsidiary being deemed to constitute the acquisition of a Subsidiary) and if such
Subsidiary is a Guarantor under the Indenture, within five Business Days after the date such
Subsidiary is formed or acquired, notify the Collateral Agent and the Holders thereof and, within
20 Business Days after the date such Subsidiary is formed or acquired or such longer period as the
Collateral Agent shall agree, cause the Collateral Requirement to be satisfied with respect to such
Subsidiary and with respect to any Equity Interest in or Indebtedness of such Subsidiary owned by
or on behalf of any Pledgor, subject to paragraph (f) below.




          (e) If any additional Foreign Subsidiary of the Issuer is formed or acquired after the Issue
Date (with any Subsidiary redesignation resulting in an Unrestricted Subsidiary becoming a
Restricted Subsidiary being deemed to constitute the acquisition of a Subsidiary) and




F-26









 




if such
Subsidiary is a “first tier” Foreign Subsidiary, within five Business Days after the date
such Foreign Subsidiary is formed or acquired, notify the Collateral Agent and the Holders
thereof and, within 20 Business Days after the date such Foreign Subsidiary is formed or acquired
(or such longer period as the Credit Agreement Agent shall agree), cause the Collateral a
Requirement to be satisfied with respect to any Equity Interest in such Foreign Subsidiary owned by
or on behalf of any Pledgor, subject to paragraph (f) below.




          (f) The Collateral Requirement and the other provisions of this Section 3.06 need not be
satisfied with respect to (i) any interests in Real Property held by the Issuer or any of its
Subsidiaries as a lessee under a lease or that has an individual fair market value in an amount
less than $5.0 million, (ii) any vehicle, (iii) cash, deposit accounts and securities accounts,
(iv) any Equity Interests (other than in the case of any person which is a Restricted Subsidiary,
Equity Interests in such person issued or acquired after such person became a Restricted
Subsidiary) if, and to the extent that, and for so long as (A) doing so would violate applicable
law or a contractual obligation binding on such Equity Interests and (B) with respect to
contractual obligations applicable to Equity Interests acquired after May 29, 2007, such obligation
existed at the time of the acquisition thereof and was not created or made binding on such Equity
Interests in contemplation of or in connection with the acquisition of such Restricted Subsidiary,
(v) any other assets to the extent that, and for so long as, taking such actions would violate
applicable law or an enforceable contractual obligation binding on such assets, provided, in the
case of contractual obligations applicable to assets acquired after May 29, 2007, that such
contractual obligation existed at the time of the acquisition thereof and was not created or made
binding on such assets in contemplation or in connection with the acquisition of such assets
(except in the case of assets acquired with Indebtedness permitted pursuant to Section 4.09(b)(iv)
of the Indenture that is secured by a Permitted Lien) or (vi) assets covered by a certificate of
title or ownership title to the extent that a Lien therein cannot be perfected by the filing of a
UCC financing statement in the jurisdiction of organization of the Issuer or the applicable
Pledgor; provided, that, upon the reasonable request of the Collateral Agent, the Issuer
shall, and shall cause any applicable Restricted Subsidiary to, use commercially reasonable efforts
to have waived or eliminated any contractual obligation of the types described in clauses (iv) and
(v) above. Further, the Security Interest shall not be required to be perfected in any other
assets to the extent the Credit Agreement Agent has not perfected a security interest therein.




ARTICLE IV




REMEDIES



          Section 4.01. Remedies Upon Default. Upon the occurrence and during the continuance
of an Event of Default and subject to the Intercreditor Agreement, each Pledgor 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 Article 9 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 Article 9 Collateral by the applicable Pledgors to the Collateral Agent or to license
or sublicense, whether general, special or otherwise, and whether on an exclusive or a






F-27









 







nonexclusive
basis, any such Article 9 Collateral throughout the world on such terms and
conditions and in such manner as the Collateral Agent shall determine (other than in violation
of any then-existing licensing arrangements to the extent that waivers thereunder cannot be
obtained with the use of commercially reasonable efforts, which each Pledgor hereby agrees to use)
and (b) with or without legal process and with or without prior notice or demand for performance,
to take possession of the Article 9 Collateral and without liability for trespass to the applicable
Pledgor to enter any premises where the Article 9 Collateral may be located for the purpose of
taking possession of or removing the Article 9 Collateral and, generally, to exercise any and all
rights afforded to a secured party under the applicable Uniform Commercial Code or other applicable
law. Without limiting the generality of the foregoing, each Pledgor 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 in connection
with any sale of a security (if it deems it advisable to do so) pursuant to the foregoing to
restrict the prospective bidders or purchasers to persons who represent and agree that they are
purchasing such security for their own account, for investment, and not with a view to the
distribution or sale thereof. Upon consummation of any such sale of Collateral pursuant to this
Section 4.01, 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 such sale shall
hold the property sold absolutely, free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives and releases (to the extent permitted by law) all rights of redemption,
stay, valuation and appraisal that such Pledgor 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 the applicable Pledgors 10 Business Days’ written notice
(which each Pledgor 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. 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 the 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 the case of any sale of all or any part of the Collateral 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 the event that any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in the case of any such failure, such Collateral may be sold again upon
notice given in accordance with provisions above. At any public (or, to the extent permitted by






F-28









 







law, private) sale made pursuant to this Section 4.01, any Indenture Secured Party may bid for or
purchase in cash, free (to the extent permitted by law) from any right of redemption, stay,
valuation or appraisal on the part of any Pledgor (all such rights being also hereby waived and
released to the extent permitted by 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 Indenture
Secured Party from any Pledgor as a credit against the purchase price, and may make payment on
account thereof by using any claim then due and payable to such Indenture Secured Party from any
Pledgor as a credit against the purchase price, and such Indenture Secured Party may, upon
compliance with the terms of sale, hold, retain and dispose of such property in accordance with
Section 4.02 hereof without further accountability to any Pledgor 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 Pledgor 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 Noteholder Claims have been
Discharged. 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 4.01 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.




          Section 4.02. Application of Proceeds. Subject to the Intecreditor Agreement, the
Collateral Agent shall promptly apply the proceeds, moneys or balances of any collection or sale of
Collateral, as well as any Collateral consisting of cash, as follows: FIRST, to the payment of all
costs and expenses and indemnification obligations incurred by the Collateral Agent or the Trustee
in connection with such collection or sale or otherwise in connection with this Agreement, any
other Noteholder Documents or any of the Noteholder Claims, including without limitation all court
costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made
by the Collateral Agent or the Trustee hereunder or under any other Noteholder Document on behalf
of any Pledgor, any other costs or expenses incurred in connection with the exercise of any right
or remedy hereunder or under any other Noteholder Document, and all other fees, indemnities and
other amounts owing or reimbursable to the Collateral Agent or the Trustee under any Noteholder
Document in its capacity as such; SECOND, to the payment in full of the Noteholder Claims (the
amounts so applied to be distributed among the Indenture Secured Parties pro rata in accordance
with the respective amounts of the Noteholder Claims owed to them on the date of any such
distribution); and THIRD, to the Issuer, its successors or assigns or as a court of competent
jurisdiction may otherwise direct.




          Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of the purchase money by the
Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser
or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the Collateral Agent or such
officer or be answerable in any way for the misapplication thereof.







F-29









 








          If, after receipt of any payment which is applied to the payment of all or any part of any
Noteholder Claims, the Collateral Agent, Trustee or any Holder is for any reason compelled to
surrender such payment or proceeds to any person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference,
impermissible set-off, or a diversion of trust funds, or for any other reason, then the Noteholder
Claims or part thereof intended to be satisfied shall be revived and continued and this Agreement
shall continue in full force as if such payment or proceeds had not been received by such
Collateral Agent, Trustee or Holder and the Issuer shall be liable to pay to such Collateral Agent,
Trustee and the Holders, and shall indemnify the Collateral Agent, Trustee and the Holders and
holds the Collateral Agent, Trustee and the Holders harmless for the amount of such payment or
proceeds surrendered. The provisions of this paragraph shall be and remain effective
notwithstanding any contrary action which may have been taken by the Collateral Agent, Trustee or
any Holder in reliance upon such payment or application of proceeds, and any such contrary action
so taken shall be without prejudice to the Collateral Agent’s, Trustee’s and the Holders’ rights
under this Agreement and shall be deemed to have been conditioned upon such payment or application
of proceeds having become final and irrevocable. The provisions of this paragraph shall survive
the termination of this Agreement.




          Section 4.03. Securities Act, Etc. In view of the position of the Pledgors in
relation to the Pledged Collateral, or because of other current or future circumstances, a question
may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar federal
statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as
from time to time in effect being called the “Federal Securities Laws”) with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Pledgor understands that
compliance with the Federal Securities Laws might very strictly limit the course of conduct of the
Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the
Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent
transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other
legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all
or part of the Pledged Collateral under applicable Blue Sky or other state securities laws or
similar laws analogous in purpose or effect. Each Pledgor acknowledges and agrees that in light of
such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion, (a)
may proceed to make such a sale whether or not a registration statement for the purpose of
registering such Pledged Collateral or part thereof shall have been filed under the Federal
Securities Laws or, to the extent applicable, Blue Sky or other state securities laws and (b) may
approach and negotiate with a single potential purchaser to effect such sale. Each Pledgor
acknowledges and agrees that any such sale might result in prices and other terms less favorable to
the seller than if such sale were a public sale without such restrictions. In the event of any
such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any
part of the Pledged Collateral at a price that the Collateral Agent, in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were approached. The
provisions of this Section 4.03 will apply notwithstanding the existence of a public or private
market upon which the quotations or sales prices may exceed substantially the price at which the
Collateral Agent sells.








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ARTICLE V




MISCELLANEOUS



          Section 5.01. Notices. All communications and notices hereunder shall (except as
otherwise permitted herein) be in writing and given as provided in Section 13.02 of the Indenture.
All communications and notices hereunder to any Pledgor shall be given to it in care of the Issuer,
with such notice to be given as provided in Section 13.02 of the Indenture.




          Section 5.02. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest in the Article 9 Collateral, the security interest in the Pledged
Collateral and all obligations of each Pledgor hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Indenture, any other Noteholder
Document, any agreement with respect to any of the Noteholder Claims 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 other term of, all or any of the Noteholder Claims, or any other amendment or waiver
of or any consent to any departure from the Indenture, any other Noteholder Document or any other
agreement or instrument, (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 Noteholder Claims or (d) any other
circumstance that might otherwise constitute a defense available to, or a discharge of, any Pledgor
in respect of the Noteholder Claims or this Agreement (other than a defense of payment or
performance).




          Section 5.03. Limitation By Law. All rights, remedies and powers provided in this
Agreement may be exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions of this Agreement are intended to be subject to
all applicable mandatory provisions of law that may be controlling and to be limited to the extent
necessary so that they shall not render this Agreement invalid, unenforceable, in whole or in part,
or not entitled to be recorded, registered or filed under the provisions of any applicable law.




          Section 5.04. Binding Effect; Several Agreement. This Agreement shall become
effective as to any party to this Agreement when a counterpart hereof executed on behalf of such
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 party and the
Collateral Agent and their respective permitted successors and assigns, and shall inure to the
benefit of such party, the Collateral Agent and the other Indenture Secured Parties and their
respective permitted successors and assigns, except that no 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 by this Agreement or
the Indenture. This Agreement shall be construed as a separate agreement with respect to each
party and may be amended, modified, supplemented, waived or released with respect to any party
without the approval of any other party and without affecting the obligations of any other party
hereunder.




          Section 5.05. 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






F-31









 







and assigns of such party; and all covenants, promises and agreements by or on behalf of any
Pledgor or the Collateral Agent that are contained in this Agreement shall bind and inure to the
benefit of their respective permitted successors and assigns; provided that no Pledgor may assign,
transfer or delegate any of its rights or obligations under this Agreement without the prior
written consent of the Collateral Agent. The Collateral Agent hereunder shall at all times be the
same person that is the Collateral Agent under the Indenture. Written notice of resignation by the
Collateral Agent pursuant to the Indenture shall also constitute notice of resignation as the
Collateral Agent under this Agreement. Upon the acceptance of any appointment as the Collateral
Agent under the Indenture by a successor Collateral Agent, that successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent pursuant hereto.




          Section 5.06. Collateral Agent’s Fees and Expenses; Indemnification. (a) The parties
hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses incurred
hereunder as provided in Section 7.07 of the Indenture.




          (b) Without limitation of its indemnification obligations under the other Noteholder
Documents, each Pledgor jointly and severally agrees to indemnify the Collateral Agent, the
Trustee, the Holders, each of their respective Affiliates and each of their respective directors,
trustees, officers, employees, agents and advisors (each such Person being called an
“Indemnitee”) and the other Indemnitees against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel
fees, charges and disbursements, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of, (i) the execution, delivery or performance of this Agreement or
any other Noteholder 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 by the Indenture and hereby, (ii) the use of proceeds
of the Notes or (iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, or to the Collateral, whether or not any Indemnitee is a party thereto; 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 court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee.




          (c) Any such amounts payable as provided hereunder shall be additional Noteholder Claims
secured hereby and by the other Security Documents. The provisions of this Section 5.06 shall
remain operative and in full force and effect regardless of the termination of this Agreement or
any other Noteholder Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Noteholder Claims, the invalidity or unenforceability of any term or
provision of this Agreement or any other Noteholder Document, or any investigation made by or on
behalf of the Collateral Agent or any other Indenture Secured Party. All amounts due under this
Section 5.06 shall be payable on written demand therefor. All obligations of each Pledgor under
this Section 5.06 shall survive termination of this Agreement.




          Section 5.07. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor hereby
appoints the Collateral Agent the attorney-in-fact of such Pledgor for the purpose of carrying out
the provisions of this Agreement and taking any action and executing any






F-32









 







instrument that the Collateral Agent may deem necessary or advisable to accomplish the
purposes hereof, which appointment is irrevocable and coupled with an interest. Subject to the
Intercreditor Agreement, 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 Pledgor, (a) to receive, endorse, assign 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 ask for, demand, sue for,
collect, receive and give acquittance for any and all moneys due or to become due under and by
virtue of any Collateral, (d) to sign the name of any Pledgor on any invoice or bill of lading
relating to any of the Collateral, (e) to send verifications of Accounts to any Account Debtor, (f)
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, (g) to settle, compromise, compound, adjust
or  defend any actions, suits or proceedings relating to all or any of the Collateral 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, as fully and completely as though the Collateral Agent were the
absolute owner of the Collateral for all purposes; provided 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 Indenture 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 Pledgor for any
act or failure to act hereunder, except for their own gross negligence or willful misconduct.




          Section 5.08. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.




          Section 5.09. Waivers; Amendment. (a) No failure or delay by the Collateral Agent or
any Holder in exercising any right, power or remedy hereunder or under any other Noteholder
Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy, or any abandonment or discontinuance of steps to enforce such a right,
power or remedy, preclude any other or further exercise thereof or the exercise of any other right,
power or remedy. The rights, powers and remedies of the Collateral Agent and the Holders hereunder
and under the other Noteholder Documents are cumulative and are not exclusive of any rights, powers
or remedies that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Pledgor therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section 5.09, 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 any Pledgor in any case shall entitle any Pledgor to any other or further notice or demand in
similar or other circumstances.







F-33









 








          (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
Pledgor or Pledgors with respect to which such waiver, amendment or modification is to apply,
subject to any consent required in accordance with the Indenture.




          Section 5.10. 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
OTHER NOTEHOLDER 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 BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.10.




          Section 5.11. Severability. In the event any one or more of the provisions contained
in this Agreement or in any other Noteholder 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 5.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section 5.04 hereof.
Delivery of an executed counterpart to this Agreement by facsimile transmission or electronic mail
shall be as effective as delivery of a manually signed original.




          Section 5.13. 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 5.14. Jurisdiction; Consent to Service of Process. (a) Each party to this
Agreement hereby irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the United States of
America sitting in New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Noteholder 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 may be heard and
determined in such New York State or, to the extent permitted by law, in such federal court. 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 shall affect any






F-34









 







right that the Collateral Agent or any Holder may otherwise have to bring any action or
proceeding relating to this Agreement or any other Noteholder Document against any Pledgor, or its
properties, in the courts of any jurisdiction.




          (b) Each party to this Agreement 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 any other Noteholder Document in any New York State or federal court. 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.




          Section 5.15. Termination or Release. (a) Subject to the terms of the Intercreditor
Agreement, this Agreement, the pledges made herein, the Security Interest and all other security
interests granted hereby shall terminate when all the Noteholder Claims (other than contingent or
unliquidated obligations or liabilities not then due) have been Discharged.




          (b) Subject to the terms of the Intercreditor Agreement, a Pledgor (other than the Issuer)
shall automatically be released from its obligations hereunder and the security interests in the
Collateral of such Pledgor shall be automatically released upon the consummation of any transaction
permitted by the Indenture as a result of which such Pledgor ceases to be a Restricted Subsidiary
of the Issuer or otherwise ceases to be a Guarantor; provided that such portion of the
Holders as shall be required by the terms of the Indenture to have consented to such transaction
(to the extent such consent is required by the Indenture) shall have consented thereto and the
terms of such consent did not provide otherwise.




          (c) Subject to the terms of the Intercreditor Agreement, upon any sale or other transfer by
any Pledgor of any Collateral that is permitted under the Indenture to any person that is not a
Pledgor, or upon the effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to the Indenture, the security interest in such
Collateral shall be automatically released.




          (d) Upon the transfer by any Pledgor of Equity Interests in a “first tier” Foreign Subsidiary
or “first tier” Qualified CFC Holding Company to a “first tier” Foreign Subsidiary or “first tier”
Qualified CFC Holding Company in a transaction permitted under the Indenture and subject to the
terms of the Intercreditor Agreement, the pledge of Equity Interests so transferred shall be
automatically released.




          (e) Subject to the terms of the Intercreditor Agreement, upon the release of any property or
assets securing the Senior Lender Claims (including all commitments and letters of credit
thereunder), the Security Interest and all other security interests granted hereby shall be
automatically released; provided, however, that if the Issuer or any Pledgor subsequently
incurs Senior Lender Claims that are secured by liens on property or assets of the Issuer or any
Pledgor of the type constituting the Collateral and the related Liens are incurred in reliance on
clause 6(C) of the definition of Permitted Liens, then the Issuer and its Restricted Subsidiaries
shall reinstitute the Security Interest and any other security interests granted hereby, which, in
the case of any subsequent Senior Lender Claims will be second-priority Liens on the Collateral
securing






F-35









 







such Senior Lender Claims to the same extent provided by the Security Documents and on the
terms and conditions of the security documents relating to such Senior Lender Claims, with the
second-priority Lien held by either the administrative agent, collateral agent or other
representative for such Senior Lender Claims or by a collateral agent or other representative
designated by the Issuer to hold the second-priority Liens for the benefit of the Holders of the
Notes and subject to an intercreditor agreement providing such administrative agent or collateral
agent substantially the same rights and powers afforded under the Intercreditor Agreement.




          (f) In connection with any termination or release pursuant to paragraphs (a) through (e) of
this Section 5.15, the Collateral Agent shall execute and deliver to any Pledgor, at such Pledgor’s
expense, all documents that such Pledgor shall reasonably request to evidence such termination or
release (including, without limitation, UCC termination statements) and will duly assign and
transfer to such Pledgor such of the Pledged Collateral that may be in the possession of the
Collateral Agent and has not theretofore been sold or otherwise applied or released pursuant to
this Agreement; provided that the Collateral Agent shall not be required to take any action
under this Section 5.15(f) unless such Pledgor shall have delivered to the Collateral Agent
together with such request, which may be incorporated into such request, (i) a reasonably detailed
description of the Collateral, which in any event shall be sufficient to effect the appropriate
termination or release without affecting any other Collateral, and (ii) a certificate of a
Responsible Officer of the Issuer or such Pledgor certifying that the transaction giving rise to
such termination or release is permitted by the Indenture and was consummated in compliance with
the Noteholder Documents. Any execution and delivery of documents pursuant to this Section 5.15
shall be without recourse to or warranty by the Collateral Agent.




          Section 5.16. Additional Subsidiaries. Upon execution and delivery by the Collateral
Agent and any Subsidiary that is required to become a party hereto by Section 3.06 hereof of an
instrument in the form of Exhibit I hereto, such Subsidiary shall become a Pledgor hereunder with
the same force and effect as if originally named as a Pledgor herein. The execution and delivery
of any such instrument shall not require the consent of any other party to this Agreement. The
rights and obligations of each party to this Agreement shall remain in full force and effect
notwithstanding the addition of any new party to this Agreement.




ARTICLE VI




INTERCREDITOR AGREEMENT



          Section 6.01. Intercreditor Agreement Controls. Notwithstanding anything herein to
the contrary, the lien and security interests granted to the Collateral Agent hereunder are subject
to the provisions of the Intercreditor Agreement. In the event of any conflict between the terms
of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall
govern and control.




          Section 6.02. Discharge. Notwithstanding anything herein to the contrary, for so long
as a Discharge of Senior Lender Claims shall not have occurred and the Senior Lender Documents
shall require the delivery of possession and control to the First Priority Designated






F-36









 







Agent of Collateral, any covenant hereunder requiring (or any representation or warranty
hereunder to the extent that it would have the effect of requiring) the delivery of possession and
control to the Collateral Agent of Collateral shall be deemed to have been satisfied (or, in the
case of any representation and warranty, shall be deemed to be true) if, prior to the Discharge of
Senior Lender Claims, such possession or control shall have been delivered to the First Priority
Designated Agent, as provided in the Intercreditor Agreement.




ARTICLE VII




THE COLLATERAL AGENT



          The Collateral Agent shall not have any duties or obligations except those expressly set forth
herein. Without limiting the generality of the foregoing, the Collateral Agent:





     (a) shall not be subject to any fiduciary or other implied duties, regardless of
whether an Event of Default has occurred and is continuing;




     (b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby
that the Collateral Agent is required to exercise as directed in writing by the Trustee;
provided that the Collateral Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Collateral Agent to liability, or for
which it is not indemnified to its satisfaction, or that is contrary to this Agreement,
applicable law;




     (c) shall not be liable for any action taken or not taken by it (1) with the consent or
at the request of any Indenture Secured Party or (2) in the absence of its own gross
negligence or willful misconduct or (3) in reliance on a certificate of an authorized
officer of the Issuer stating that such action is permitted by the terms of this Agreement;




     (d) shall not be responsible for or have any duty to ascertain or inquire into (1) any
statement, warranty or representation made in or in connection with this Agreement, (2) the
contents of any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (3) the performance or observance by any other Person
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, (4) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Security Document or any other
agreement, instrument or document, or the creation, perfection or priority of any Lien
purported to be created by the Security Interest, (5) the value or the sufficiency of any
Collateral or (6) the satisfaction of any condition set forth in any agreement, other than
to confirm receipt of items expressly required to be delivered to the Collateral Agent.



          In addition:







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     (a) The duties and obligations of the Collateral Agent shall be determined solely by
the express provisions of this Agreement and the Collateral Agent shall not be liable except
for the performance of such duties and obligations as are specifically set out in this
Agreement. The Collateral Agent shall be under no liability to any party hereto by reason
of any failure on the part of any other party hereto or any maker, guarantor, endorser or
other signatory of any document or any other Person to perform such Person’s obligations
under any such document.




     (b) The Collateral Agent shall not be responsible in any manner for the validity,
enforceability or sufficiency of this Agreement, the Security Interest or any Collateral
delivered to it, or for the value or collectability of any Obligations or other instrument,
if any, so delivered, or for any representations made or obligations assumed by any party
other than the Collateral Agent. The Collateral Agent shall not be bound to examine or
inquire into or be liable for any defect or failure in the right or title of the Issuer to
all or any of the assets whether such defect or failure was known to the Collateral Agent or
might have been discovered upon examination or inquiry and whether capable of remedy or not.




     (c) The Collateral Agent shall not be responsible for any unsuitability, inadequacy,
expiration or unfitness of any security interest created hereunder or pursuant to any other
document pertaining to this matter nor shall it be obligated to make any investigation into,
and shall be entitled to assume, the adequacy and fitness of any security interest created
hereunder or pursuant to any other document pertaining to this matter.




     (d) The Collateral Agent shall not be liable for any error of judgment, or for any act
done or step taken or omitted by it in good faith.




     (e) The Collateral Agent may seek the advice, at the expense of the Issuer, of legal
counsel in the event of any dispute or question as to the construction of any of the
provisions of this Agreement or its duties hereunder or under any document or applicable
law, and it shall incur no liability and shall be fully protected in respect of any action
taken, omitted or suffered by it in good faith in accordance with the advice or written
opinion of such counsel.




     (f) The Collateral Agent shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, approval or other paper or document.




     (g) In no event shall the Collateral Agent be liable for any indirect, special,
punitive or consequential loss or damage of any kind whatsoever, including, but not limited
to, lost profits, even if such loss or damage was foreseeable or it has been advised of the
likelihood of such loss or damage and regardless of the form of action.




     (h) In no event shall the Collateral Agent be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond its control,
including, but not limited to, acts of God, flood, war (whether declared or undeclared),



F-38









 







terrorism, strikes, work stoppages, civil or military disturbances, nuclear or natural
catastrophes, fire, riot, embargo, loss or malfunctions of utilities, communications or
computer (software and hardware) services, government action, including any laws,
ordinances, regulations, governmental action or the like which delay, restrict or prohibit
the providing of the services contemplated by this Agreement.




     (i) The Collateral Agent shall be entitled to seek written directions from the Trustee
prior to taking any action under this Agreement, or any Collateral instrument or any of the
other Loan Documents.




     (j) The Collateral Agent shall have no responsibility for or liability with respect to
monitoring compliance of any other party to this Agreement or any other document related
hereto or thereto. The Collateral Agent has no duty to monitor the value or rating of any
Collateral on an ongoing basis.




     (k) No provision of this Agreement shall require the Collateral Agent to expend,
advance or risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or powers hereunder
unless it is indemnified to its satisfaction and the Collateral Agent shall have no
liability to any person for any loss occasioned by any delay in taking or failure to take
any such action while it is awaiting an indemnity satisfactory to it.




     (l) Whenever in the administration of this Agreement the Collateral Agent shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Collateral Agent (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, may conclusively rely upon
instructions from the Trustee.




     (m) The Collateral Agent may act and rely and shall be protected in acting and relying
in good faith on the opinion or advice of, or information obtained from, any counsel,
accountant, investment banker, appraiser or other expert or adviser, whether retained or
employed by the Trustee or by the Collateral Agent.




     (n) The Collateral Agent may employ or retain such counsel, accountants, sub-agent,
agent or attorney in fact, appraisers or other experts or advisers as it may reasonably
require for the purpose of determining and discharging its rights and duties hereunder and
shall not be responsible for the actions of any parties it appoints with due care.




     (o) The Collateral Agent may request that the Issuer or other parties deliver a
certificate setting forth the names of individuals and/or titles of officers authorized at
such time to take specified actions pursuant to this Agreement.




     (p) Money held by the Collateral Agent in trust hereunder need not be segregated from
other funds except to the extent required by law. The Collateral Agent shall be under no
liability for interest on any money received by it hereunder except as otherwise agreed in
writing.



F-39









 






     (q) Beyond the exercise of reasonable care in the custody thereof, the Collateral Agent
shall have no duty as to any Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to preservation of rights against
prior parties or any other rights pertaining thereto and the Collateral Agent shall not be
responsible for filing any financing or continuation statements or recording any documents
or instruments in any public office at any time or times or otherwise perfecting or
maintaining the perfection of any security interest in the Collateral. All such duties
shall be the duty of the Issuer. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which it accords similar collateral and shall
not be liable or responsible for any loss or diminution in the value of any of the
Collateral, by reason of the act or omission of any carrier, forwarding agency or other
agent or bailee.




     (r) The Collateral Agent shall have no duty to ascertain or inquire as to or monitor
the performance or observance of any of the terms of the Indenture, this Agreement or
documents by any other Person.




     (s) The Issuer shall defend, indemnify, and hold harmless the Collateral Agent (which
for purposes of this paragraph (s) shall be deemed to include its officers, directors,
employees and agents) from and against any claims, demands, penalties, fines, liabilities,
settlements, damages or reasonable costs or expenses of whatever kind or nature, known or
unknown, contingent or otherwise, arising out of the following in respect of the Collateral:
(w) the presence, disposal, release, or threatened release of any Hazardous Materials which
are on, from, or affecting the soil, water, vegetation, buildings, personal property,
persons or animals; (x) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to such Hazardous Materials; (y) any lawsuit
brought or threatened, settlement reached, or government order relating to such Hazardous
Materials, and/or (z) any violation of laws, orders, regulations, requirements or demands of
government authorities, which are based upon or in any way related to such Hazardous
Materials including, reasonable attorney and consultant fees and expenses, reasonable
investigation and laboratory fees, court costs, and reasonable litigation expenses, except,
in each case, where such claims, demands, penalties, fines, liabilities, settlements,
damages, costs or expenses arise solely from the gross negligence, bad faith or willful
misconduct of the Collateral Agent as determined in a final, non-appealable order of a court
of competent jurisdiction. For purposes of this paragraph, “Hazardous Materials” includes
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances
defined in the U.S. Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. §9601, et. seq.) (“CERCLA”), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 5108, et seq.), the Resource Conservation
and Recovery Act, as amended (42 U.S.C. Sections 6901, et seq.), and in the regulations
adopted and publications promulgated pursuant thereto, or any other Federal, state or local
environmental law, ordinance, rule, or regulation. The provisions of this paragraph shall
be in addition to any and all other obligations and liabilities Holdings may have to the
Collateral Agent at common law, and shall survive the termination of this Agreement, and the
resignation or removal of the Trustee.



F-40









 






     (t) The Collateral Agent reserves the right to conduct an environmental audit prior to
foreclosing on any real estate Collateral or mortgage Collateral. The Collateral Agent
reserves the right to forebear from foreclosing in its own name if to do so may expose it to
undue risk.




     (u) Upon any payment or distribution of assets hereunder, the Collateral Agent, and the
Indenture Secured Parties shall be entitled to conclusively rely upon any order or decree
entered by any court of competent jurisdiction in which an Insolvency or Liquidation
Proceeding is pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution in the Insolvency or Liquidation Proceeding, delivered to the
Collateral Agent, for the purpose of ascertaining the persons entitled to participate in
such payment or distribution, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto.




     (v) In the event that, following a foreclosure in respect of any mortgaged Real
Property, the Collateral Agent acquires title to any portion of such mortgaged Real Property
or takes any managerial action of any kind in regard thereto in order to carry out any
fiduciary or trust obligation for the benefit of another, which in the Collateral Agent’s
sole discretion may cause the Collateral Agent to be considered an “owner or operator” under
the provisions of CERCLA or otherwise cause the Collateral Agent to incur liability under
CERCLA or any other Federal, state or local law, the Collateral Agent reserves the right,
instead of taking such action, to either resign as Collateral Agent or arrange for the
transfer of the title or control of the asset to a court-appointed receiver.




     (w) The rights and protections of the Collateral Agent set forth herein shall also be
applicable to the Collateral Agent in its roles as mortgagee, beneficiary, pledgee or any of
its other roles (including as Collateral Agent) under any documents related to the
Collateral.




     (x) Nothing in this Agreement, expressed or implied, is intended to or shall be so
construed as to impose upon the Collateral Agent any obligations in respect of any
Noteholder Document or any Collateral except as expressly set forth herein or therein.




     (y) The Collateral Agent may resign at any time by giving written notice thereof to the
Issuer and the Trustee, provided that no such resignation shall take effect until a
successor Collateral Agent has been appointed and has agreed to act as such under this
Agreement. Upon any such resignation, the Issuer shall promptly (and no later than within
30 days) appoint a successor to the Collateral Agent. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations. After any retiring Collateral Agent’s
resignation as Collateral Agent, the provisions of this Agreement shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Collateral Agent. If the
Issuer fails to appoint a successor Collateral Agent within 30 days, the Collateral Agent
may petition a court of competent jurisdiction to do so.



F-41









 






     (z) The Collateral Agent may act through its agents and attorneys and shall not be
liable for the acts or omissions of any such agent or attorney appointed with due care by it
hereunder.




     (aa) No failure to exercise nor any delay in exercising on the part of the Collateral
Agent, any right, power or privilege hereunder, shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege hereunder preclude any other
or future exercise thereof or the exercise or any other right, power or privilege. The
rights and remedies hereunder provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by law.



[Signature Page Follows]









F-42









 








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




	 	 	 	 	 
	 	CLAIRE’S STORES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CLAIRE’S BOUTIQUES, INC.

CSI CANADA LLC

CLAIRE’S PUERTO RICO CORP.

CBI DISTRIBUTING CORP.

CLAIRE’S CANADA CORP.

BMS DISTRIBUTING CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Collateral Agreement]





 









 





	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Collateral Agreement]









 









 








ACKNOWLEDGEMENT AND CONSENT




March 4, 2011



          The undersigned hereby acknowledges receipt of a copy of the Collateral Agreement dated as of
March 4, 2011 (the “Agreement”), made by the Pledgors parties thereto for the benefit of
The Bank of New York Mellon Trust Company, N.A., as Collateral Agent. The undersigned agrees for
the benefit of the Collateral Agent and the Holders as follows:




          The undersigned acknowledges that its Equity Interests (as defined in the Agreement) have been
pledged pursuant to the terms of the Agreement and will comply with all actions that may be
required of it pursuant to Section 2.05 and 2.04(b) of the Agreement.




[Signature on the following page]




[Acknowledgement and Consent]




 









 





          IN WITNESS WHEREOF, the undersigned has duly executed this acknowledgement and consent as
of the first date written above.




	 	 	 	 	 
	 	CLAIRE’S STORES CANADA CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 

	 

	 	Address for Notices:
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Fax:	 	 






[Acknowledgement and Consent]









 









 





EXHIBIT G




FORM OF SECOND LIEN TRADEMARK SECURITY AGREEMENT TO BE DELIVERED IN CONNECTION WITH THE ASSUMPTION




          SECOND LIEN TRADEMARK SECURITY AGREEMENT (as amended, restated, supplemented, waived or
otherwise modified from time to time) (this “Agreement”), dated as of March 4, 2011,
between CBI Distributing Corp., a Delaware corporation (the “Grantor”), and The Bank of New
York Mellon Trust Company, N.A., as collateral agent for the Indenture Secured Parties (as
hereinafter defined) (in such capacity, the “Collateral Agent”).




          Reference is made to (x) the Collateral Agreement dated March 4, 2011 (as amended, restated,
supplemented, waived or otherwise modified from time to time, the “Security Agreement”)
among Claire’s Stores, Inc., a Florida corporation (the “Issuer”), the other Pledgors (as
defined below) party thereto from time to time, and the Collateral Agent, and (y) the Indenture
dated as of March 4, 2011, among Claire’s Escrow Corporation, a Delaware corporation (“Claire’s
Escrow”), and The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity,
the “Trustee”) and Collateral Agent, as supplemented by the Supplemental Indenture dated
March 4, 2011 among the Issuer, the Issuer’s Subsidiaries named therein and the Trustee and
Collateral Agent (such agreement, as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Indenture”).




          The Issuer and each other Pledgor (including the Grantor) will receive substantial benefits
from the execution, delivery and performance of the obligations under the Indenture and the other
Noteholder Documents and each is, therefor, willing to enter into this Agreement. This Agreement
is given by the Grantor in favor of the Collateral Agent for the benefit of the Indenture Secured
Parties to secure the payment and performance of all of the Noteholder Claims (as hereinafter
defined).




          Accordingly the parties hereto agree as follows:




          SECTION 1. Terms. Capitalized terms used in this Agreement and not otherwise defined herein
shall have the meanings specified in the Security Agreement. The rules of construction specified
in Section 1.02 of the Security 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 Noteholder Claims, the Grantor, pursuant to the Security Agreement, did
and hereby does grant to the Collateral Agent, its successors and assigns, for the benefit of the
Indenture 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 the
Grantor or in which the Grantor now has or at any time in the future may acquire any right, title
or interest (collectively, the “Trademark Collateral”):





     (a) all trademarks, service marks, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations thereof (if any), and all registration and recording
applications filed in connection therewith, including registrations and registration
applications in the United States Patent and Trademark Office or any similar offices in any
State of the United States or any other country or any political subdivision thereof (except
for “intent to use” applications for trademark or service mark registrations filed pursuant
to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an



G-1









 







Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of the
Lanham Act has been filed, to the extent that, and solely during the period for which, any
assignment of an “intent to use” application prior to such filing would violate the Lanham
Act), and all renewals thereof, including those listed on Schedule I (the
“Trademarks”);




     (b) all goodwill associated with or symbolized by the Trademarks;




     (c) all claims for, and rights to sue for, past or future infringements of any of the
foregoing; and




     (d) all income, royalties, damages and payments now or hereafter due and payable with
respect to any of the foregoing, including damages and payments for past or future
infringement thereof.



          SECTION 3. Security 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 Security Agreement. The 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 Security Agreement, the terms and provisions of which, including
without limitation, all rights, privileges, protections, benefits, immunities and indemnities
provided the Collateral Agent, 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 Security
Agreement, the terms of the Security Agreement shall govern.




          SECTION 4. Choice of Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.




          SECTION 5. Intercreditor Agreement Controls. Notwithstanding anything herein to the
contrary, (i) the liens and security interests granted to the Collateral Agent pursuant to this
Agreement are expressly subject and subordinate to the liens and security interests granted to
Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as collateral
agent (and its permitted successors), for the benefit of the secured parties referred to below,
pursuant to the Guarantee and Collateral Agreement dated as of May 29, 2007 (as amended, amended
and restated, supplemented or otherwise modified from time to time), from the Issuer and the other
“Pledgors” referred to therein, in favor of Credit Suisse AG, Cayman Islands Branch (f/k/a Credit
Suisse, Cayman Islands Branch), as collateral agent for the benefit of the secured parties referred
to therein, and (ii) the exercise of any right or remedy by the Collateral Agent hereunder is
subject to the limitations and provisions of the Intercreditor Agreement dated as of March 4, 2011
(as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor
Agreement”), by and among Credit Suisse AG, Cayman Islands Branch, in its capacity as Credit
Agreement Agent, The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent,
Claire’s Inc., the Issuer and the Subsidiaries party thereto. In the event of any conflict between
the terms of the Intercreditor Agreement and the terms of this agreement, the terms of the
Intercreditor Agreement shall govern.






G-2









 








          IN WITNESS WHEREOF, the Grantor and the Indenture Secured Parties have caused this Agreement
to be duly executed and delivered as of the date first written above.




	 	 	 	 	 	 	 

	 	 	CBI DISTRIBUTING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title	 	 	 	 






[Second Lien Trademark Security Agreement]




 









 





	 	 	 	 	 	 	 

	 	 	THE BANK OF NEW YORK MELLON	 	 
	 	 	TRUST COMPANY, N.A., as Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title	 	 	 	 






[Second Lien Trademark Security Agreement]




 









 





Schedule I




Trademark Registrations




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trademark	 	Reg. No.	 	Owner	 	Classes	 	Status
	...IT’S AT CLAIRE’S
	 	 	3,817,929	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	C Swirl
	 	 	3,512,546	 	 	CBI Distributing Corp.	 	 	4, 14, 16, 20, 26	 	 	Registered
	CLAIRE
	 	 	2,813,344	 	 	CBI Distributing Corp.	 	 	28	 	 	Registered
	CLAIRE’S
	 	 	2,908,860	 	 	CBI Distributing Corp.	 	 	20	 	 	Registered
	CLAIRE’S
	 	 	2,978,984	 	 	CBI Distributing Corp.	 	 	16	 	 	Registered
	CLAIRE’S
	 	 	2,967,212	 	 	CBI Distributing Corp.	 	 	20	 	 	Registered
	CLAIRE’S
	 	 	2,908,861	 	 	CBI Distributing Corp.	 	 	26	 	 	Registered
	CLAIRE’S
	 	 	3,190,840	 	 	CBI Distributing Corp.	 	 	21	 	 	Registered
	CLAIRE’S
	 	 	3,190,839	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	CLAIRE’S
	 	 	2,925,470	 	 	CBI Distributing Corp.	 	 	25	 	 	Registered
	CLAIRE’S
	 	 	1,891,172	 	 	CBI Distributing Corp.	 	 	25	 	 	Registered
	CLAIRE’S
	 	 	2,919,171	 	 	CBI Distributing Corp.	 	 	21	 	 	Registered
	CLAIRE’S
	 	 	2,951,866	 	 	CBI Distributing Corp.	 	 	3	 	 	Registered
	CLAIRE’S
	 	 	2,908,858	 	 	CBI Distributing Corp.	 	 	11	 	 	Registered
	CLAIRE’S
	 	 	2,908,859	 	 	CBI Distributing Corp.	 	 	16	 	 	Registered
	CLAIRE’S
	 	 	2,996,103	 	 	CBI Distributing Corp.	 	 	14	 	 	Registered
	CLAIRE’S
	 	 	2,908,857	 	 	CBI Distributing Corp.	 	 	9	 	 	Registered
	CLAIRE’S
	 	 	2,900,024	 	 	CBI Distributing Corp.	 	 	24	 	 	Registered
	CLAIRE’S
	 	 	2,974,652	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	CLAIRE’S
	 	 	1,890,335	 	 	CBI Distributing Corp.	 	 	42	 	 	Registered
	CLAIRE’S
	 	 	1,925,359	 	 	CBI Distributing Corp.	 	 	14	 	 	Registered
	CLAIRE’S
	 	 	3,319,826	 	 	CBI Distributing Corp.	 	 	3	 	 	Registered
	CLAIRE’S
	 	 	1,929,317	 	 	CBI Distributing Corp.	 	 	5	 	 	Registered
	CLAIRE’S ACCESSORIES
	 	 	1,946,557	 	 	CBI Distributing Corp.	 	 	42	 	 	Registered
	CLAIRE’S ACCESSORIES
	 	 	1,956,047	 	 	CBI Distributing Corp.	 	 	42	 	 	Registered
	CLAIRE’S ACCESSORIES & Design
	 	 	2,294,937	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	CLAIRE’S BOUTIQUES & Design
	 	 	1,514,045	 	 	CBI Distributing Corp.	 	 	42	 	 	Registered
	CLAIRE’S CLUB
	 	 	2,908,867	 	 	CBI Distributing Corp.	 	 	20	 	 	Registered
	CLAIRE’S CLUB
	 	 	2,908,191	 	 	CBI Distributing Corp.	 	 	26	 	 	Registered
	CLAIRE’S CLUB
	 	 	2,908,868	 	 	CBI Distributing Corp.	 	 	25	 	 	Registered
	CLAIRE’S CLUB
	 	 	2,908,863	 	 	CBI Distributing Corp.	 	 	9	 	 	Registered
	CLAIRE’S CLUB
	 	 	2,908,862	 	 	CBI Distributing Corp.	 	 	3	 	 	Registered
	CLAIRE’S CLUB
	 	 	3,343,775	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	CLAIRE’S CLUB
	 	 	2,908,866	 	 	CBI Distributing Corp.	 	 	18	 	 	Registered
	CLAIRE’S CLUB
	 	 	2,908,865	 	 	CBI Distributing Corp.	 	 	14	 	 	Registered
	CLAIRE’S CLUB
	 	 	2,992,613	 	 	CBI Distributing Corp.	 	 	21	 	 	Registered
	CLAIRE’S CLUB
	 	 	2,908,864	 	 	CBI Distributing Corp.	 	 	11	 	 	Registered
	CLAIRE’S ETC.
	 	 	2,064,149	 	 	CBI Distributing Corp.	 	 	42	 	 	Registered






[Second Lien Trademark Security Agreement]




 









 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trademark	 	Reg. No.	 	Owner	 	Classes	 	Status
	CLAIRE’S ETC.
	 	 	2,065,959	 	 	CBI Distributing Corp.	 	 	42	 	 	Registered
	CLAIRE’S (logo)
	 	 	3,602,239	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	CLAIRE’S (stylized)
	 	 	2,623,039	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	ICING
	 	 	3,743,653	 	 	CBI Distributing Corp.	 	 	3, 9, 14, 18,

20, 25, 26, 35	 	 	Registered
	ICING BY CLAIRE’S
	 	 	3,050,863	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	ICING BY CLAIRE’S
	 	 	3,475,495	 	 	CBI Distributing Corp.	 	 	14	 	 	Registered
	THE ICING
	 	 	3,461,876	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	THE ICING
	 	 	1,466,727	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	THE ICING
	 	 	2,762,642	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	THE ICING ACCESSORIES & Design
	 	 	2,234,841	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	SENSITIVE SOLUTIONS
	 	 	1,951,435	 	 	CBI Distributing Corp.	 	 	14	 	 	Registered
	WHERE GETTING READY IS HALF THE FUN
	 	 	2,664,513	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered
	WHERE THROWING A PARTY IS ALL THE FUND
	 	 	3,136,920	 	 	CBI Distributing Corp.	 	 	41	 	 	Registered
	BEE WHO YOU WANNA BE
	 	 	2,888,867	 	 	CBI Distributing Corp.	 	 	35	 	 	Registered






[Second Lien Trademark Security Agreement]



 











 






EXHIBIT
H


FORM OF INTERCREDITOR AGREEMENT TO BE DELIVERED IN CONNECTION WITH THE ASSUMPTION




          THIS INTERCREDITOR AGREEMENT is dated as of March 4, 2011, among (i) CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH (f/k/a Credit Suisse, Cayman Islands Branch), in its capacity as Credit
Agreement Agent, and each Other First Lien Obligations Agent from time to time party hereto, each
in its capacity as First Lien Agent, (ii) THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as
Trustee and collateral agent, and each collateral agent for any Future Second Lien Indebtedness
from time to time party hereto, each in its capacity as Second Priority Agent, and (iii) CLAIRE’S
INC., a Delaware corporation (“Holdings”), CLAIRE’S STORES, INC., a Florida corporation (the
“Company”), and each Subsidiary of the Company listed on Schedule I hereto or that becomes a party
hereto pursuant to Section 8.21 below.




          A. The Company is party to the Credit Agreement dated as of May 29, 2007 (as amended, amended
and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among Holdings, the Company, the lenders and other parties party thereto from
time to time, and Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands
Branch), as administrative agent for the lenders. The Obligations pursuant to the Credit Agreement
has been designated by the Company as Senior Lender Claims hereunder.




          B. The Company is party to the Indenture dated as of March 4, 2011, among Claire’s Escrow
Corporation, a Delaware corporation (“Claire’s Escrow”), and The Bank of New York Mellon Trust
Company, N.A., as Trustee, as supplemented by the Supplemental Indenture dated March 4, 2011 among
Claire’s Escrow, the Company, the Company’s Subsidiaries named therein and the Trustee (such
agreement, as amended, amended and restated, supplemented or otherwise modified from time to time,
the “Second Priority Senior Secured Notes Indenture”). The Obligations of the Company and certain
of the Company’s Subsidiaries under the Second Priority Senior Secured Notes Indenture, the Notes
and the other Noteholder Documents constitute Second Priority Claims hereunder.




          Accordingly, in consideration of the foregoing, the mutual covenants and obligations herein
set forth and for other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:




          SECTION 1. Definitions.




          1.1. Defined Terms. As used in this Agreement, the following terms have the meanings
specified below:




          “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.




          “Agreement” shall mean this Agreement, as amended, renewed, extended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.




          “Bankruptcy Law” shall mean Title 11 of the United States Code and any similar Federal, state
or foreign law for the relief of debtors.




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          “Closing Date” shall mean March 4, 2011.




          “Common Collateral” shall mean all of the assets of any Grantor, whether real, personal or
mixed, constituting both Senior Lender Collateral and Second Priority Collateral, including without
limitation any assets in which the First Lien Agents are automatically deemed to have a Lien
pursuant to the provisions of Section 2.3.




          “Company” shall have the meaning set forth in the preamble.




          “Comparable Second Priority Collateral Document” shall mean, in relation to any Common
Collateral subject to any Lien created under any Senior Collateral Document, those Second Priority
Collateral Documents that create a Lien on the same Common Collateral, granted by the same Grantor.




          “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.




          “Credit Agreement” shall have the meaning set forth in the recitals.




          “Credit Agreement Agent” shall mean Credit Suisse AG, Cayman Islands Branch, in its capacity
as administrative agent for the Senior Lenders under the Credit Agreement and the other Senior
Lender Documents entered into pursuant to the Credit Agreement, together with its successors in
such capacity.




          “Domestic Subsidiary” shall have the meaning set forth in the Term Credit Agreement.




          “DIP Financing” shall have the meaning set forth in Section 6.1.




          “Discharge of Senior Lender Claims” shall mean, except to the extent otherwise provided in
Section 5.7 below, payment in full in cash (except for contingent indemnities and cost and
reimbursement obligations to the extent no claim has been made) of (a) all Obligations in respect
of all outstanding Senior Lender Claims and, with respect to letters of credit or letter of credit
guaranties outstanding thereunder, delivery of cash collateral or backstop letters of credit in
respect thereof in compliance with the Credit Agreement, in each case after or concurrently with
the termination of all commitments to extend credit thereunder and (b) any other Senior Lender
Claims that are due and payable or otherwise accrued and owing at or prior to the time such
principal and interest are paid; provided that the Discharge of Senior Lender Claims shall not be
deemed to have occurred if such payments are made with the proceeds of other Senior Lender Claims
that constitute an exchange or replacement for or a refinancing of such Obligations or Senior
Lender Claims. In the event the Senior Lender Claims are modified and the Obligations are paid
over time or otherwise modified pursuant to Section 1129 of the Bankruptcy Code, the Senior Lender
Claims shall be deemed to be discharged when the final payment is made, in cash, in respect of such
indebtedness and any obligations pursuant to such new indebtedness shall have been satisfied.




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          “First Lien Agent” shall mean each of (a) the Credit Agreement Agent and (b) any Other First
Priority Lien Obligations Agent.




          “First Lien Designated Agent” shall mean such agent or trustee as is designated “First
Priority Designated Agent” by Senior Lenders holding a majority in principal amount of the Senior
Lender Claims then outstanding; it being understood that as of the date of this Agreement and for
so long as any Obligations under the Credit Agreement remain outstanding, the Credit Agreement
Agent shall be so designated First Priority Designated Agent.




          “Future Second Lien Indebtedness” shall mean Indebtedness or Obligations (other than
Noteholder Claims) of the Company and its Subsidiaries that are to be equally and ratably secured
with the Noteholder Claims and are so designated by the Company as Future Second Lien Indebtedness
in accordance with Section 8.22 hereof; provided, however, that such Future Second Lien
Indebtedness is permitted to be so incurred in accordance with any Senior Lender Documents and any
Second Priority Documents, as applicable.




          “Grantors” shall mean the Company, Holdings and each of the Company’s Subsidiaries that has
executed and delivered a Second Priority Collateral Document or a Senior Collateral Document.




          “Indebtedness” shall mean and include all obligations that constitute “Indebtedness” within
the meaning of the Second Priority Senior Secured Notes Indenture, the Credit Agreement or the
Other First Priority Lien Obligations Credit Documents.




          “Indenture Secured Parties” shall mean the Persons holding Noteholder Claims, including the
Trustee.




          “Insolvency or Liquidation Proceeding” shall mean (a) any voluntary or involuntary case or
proceeding under any Bankruptcy Law with respect to any Grantor, (b) any other voluntary or
involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with
respect to any of its assets, (c) any liquidation, dissolution, reorganization or winding up of any
Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or
(d) any assignment for the benefit of creditors or any other marshalling of assets and liabilities
of any Grantor.




          “Joinder Agreement” shall mean an agreement in form and substance substantially similar to
Exhibit A hereto, including with appropriate adjustments as permitted by Section 8.22
hereof.




          “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 an financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset.




          “Loan Documents” means the Credit Agreement and the other “Loan Documents” as defined in the
Credit Agreement.




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          “Noteholder Claims” shall mean all Obligations in respect of the Notes or arising under the
Noteholder Documents or any of them, including all fees and expenses of the Trustee thereunder.




          “Noteholder Collateral” shall mean all of the assets of any Grantor, whether real, personal or
mixed, with respect to which a Lien is granted as security for any Noteholder Claim.




          “Noteholder Collateral Agreement” shall mean the Collateral Agreement dated as of March 4,
2011, among the Company, certain other Grantors and The Bank of New York Mellon Trust Company,
N.A., as collateral agent, in respect of the Second Priority Senior Secured Notes Indenture, as the
same may be amended, restated, supplemented or otherwise modified from time to time.




          “Noteholder Collateral Documents” shall mean the Noteholder Collateral Agreement and any other
document or instrument pursuant to which a Lien is granted by any Grantor to secure any Noteholder
Claims or under which rights or remedies with respect to any such Lien are governed.




          “Noteholder Documents” shall mean (a) the Second Priority Senior Secured Notes Indenture, the
Notes, the Noteholder Collateral Documents and (b) any other related document or instrument
executed and delivered pursuant to any Noteholder Document described in clause (a) above evidencing
or governing any Obligations thereunder.




          “Notes” shall mean the Second Lien Notes and any additional notes issued under the Second
Priority Senior Secured Notes Indenture by the Company, to the extent permitted by the Second
Priority Senior Secured Notes Indenture, the Credit Agreement, the Other First Priority Lien
Obligations Credit Documents, any other Senior Lender Documents and any Second Priority Document,
as applicable.




          “Obligations” shall mean, with respect to any Person, any payment, performance or other
obligations of such Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or
otherwise affected by any Insolvency or Liquidation Proceeding. Without limiting the generality of
the foregoing, the Obligations of any Grantor under any Senior Lender Document or Second Priority
Document include the obligations to pay principal, interest (including interest accrued on or
accruing after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim
for post-filing interest is allowed in such proceeding) or premium on any Indebtedness, letter of
credit commissions (if applicable), charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by such Grantor to reimburse any amount in respect of any of
the foregoing that any Senior Lender or Second Priority Secured Party, in its sole discretion, many
elect to pay or advance on behalf of such Grantor.




          “Officers’ Certificate” shall have the meaning set forth in the Second Priority Senior Secured
Notes Indenture.






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          “Other First Priority Lien Obligations ” means all Obligations owing under any Other First
Priority Lien Obligations Document; provided, however, for the avoidance of doubt, none of the
Obligations under the Credit Agreement or any other Loan Document shall constitute Other First
Priority Lien Obligations.




          “Other First Priority Lien Obligations Agent ” shall mean, with respect to any Other First
Priority Lien Obligations Credit Document, the Person elected, designated or appointed as the
administrative agent, trustee, collateral agent or similar representative with respect to such
Other First Priority Lien Obligations Credit Document by or on behalf of the holders of such Other
First Priority Lien Obligations, and its respective successors in such capacity.




          “Other First Priority Lien Obligations Credit Document ” means any (a) instruments, agreements
or documents evidencing debt facilities or commercial paper facilities, providing for revolving
credit loans, term loans, receivables financing (including through the sale of receivables to
lenders or to special purpose entities formed to borrow from lenders against such receivables) or
letters of credit, (b) debt securities, indentures and/or other forms of debt financing (including
convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (c)
instruments or agreements evidencing any other indebtedness, in each case in respect of which a
First Lien Agent has become a party hereto in accordance with Section 8.22 hereof.




          “Other First Priority Lien Obligations Documents ” means each Other First Priority Lien
Obligations Credit Document and each Other First Priority Lien Obligations Security Document
related thereto.




          “Other First Priority Lien Obligations Security Documents ” means any security agreement or
any other document now existing or entered into after the date hereof that create Liens on any
assets or properties of any Grantor to secure any Other First Priority Lien Obligations.




          “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.




          “Pledged Collateral” shall mean the Common Collateral in the possession of any First Lien
Agent (or its agents or bailees), to the extent that possession thereof perfects a Lien thereon
under the Uniform Commercial Code.




          “Recovery” shall have the meaning set forth in Section 6.4.




          “Required Lenders” shall mean, with respect to any Senior Lender Documents, those Senior
Lenders the approval of which is required to approve an amendment or modification of, termination
or waiver of any provision of or consent to any departure from such Senior Lender Documents (or
would be required to effect such consent under this Agreement if such consent were treated as an
amendment of the Senior Lender Documents).




          “Second Lien Notes” shall mean the Company’s 8.875% Senior Secured Second Lien Notes due 2019,
issued pursuant to the Second Priority Senior Secured Notes Indenture and




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any notes issued by the Company in exchange for, and as contemplated by, the Second Lien Notes
and the related registration rights agreement with substantially identical terms as the Second Lien
Notes.




          “Second Priority Agents” shall mean (a) the Trustee as agent for the Indenture Secured Parties
and (b) the collateral agent for any Future Second Lien Indebtedness (including the Trustee).




          “Second Priority Claims” shall mean the Noteholder Claims and all other Obligations in respect
of, or arising under, the Second Priority Documents, including all fees and expenses of the
collateral agent for any Future Second Lien Indebtedness.




          “Second Priority Collateral” shall mean the Noteholder Collateral and all of the assets of any
Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for
any Second Priority Claim.




          “Second Priority Collateral Agreements” shall mean the Noteholder Collateral Agreement and any
comparable agreement with respect to any Future Second Lien Indebtedness.




          “Second Priority Collateral Documents” shall mean the Noteholder Collateral Documents and any
other agreement, document or instrument pursuant to which a Lien is now or hereafter granted
securing any Second Priority Claims or under which rights or remedies with respect to such Liens
are at any time governed.




          “Second Priority Designated Agent” shall mean such agent or trustee as is designated “Second
Priority Designated Agent” by Second Priority Secured Parties holding a majority in principal
amount of the Second Priority Claims then outstanding; it being understood that as of the date of
this Agreement and for so long as any Obligations under the Second Priority Senior Secured Notes
Indenture remain outstanding, the Trustee shall be so designated Second Priority Designated Agent.




          “Second Priority Documents” shall mean the Noteholder Documents and any other document or
instrument evidencing or governing any Future Second Lien Indebtedness.




          “Second Priority Lien” shall mean any Lien on any assets of the Company or any other Grantor
securing any Second Priority Claims.




          “Second Priority Secured Parties” shall mean the Indenture Secured Parties and all other
Persons holding any Second Priority Claims, including the collateral agent for any Future Second
Lien Indebtedness.




          “Second Priority Senior Secured Notes Indenture” shall have the meaning set forth in the
recitals.




          “Secured Hedge Agreements” shall mean each Swap Agreement that (i) is in effect on the Closing
Date with a counterparty that is a Senior Lender or an agent or an Affiliate of a Senior Lender as
of the Closing Date or (ii) is entered into after the Closing Date with any




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counterparty that is a Senior Lender or an agent or an Affiliate of a Senior Lender at the
time such Swap Agreement is entered into.




          “Senior Collateral Agreement” shall mean the Guarantee and Collateral Agreement dated as of
May 29, 2007, among the Company, Holdings, the other Grantors party thereto, and Credit Suisse AG,
Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as administrative agent for the
secured parties referred to therein.




          “Senior Collateral Documents” shall mean the Senior Collateral Agreement, the Other First
Priority Lien Obligations Security Documents and any security agreement, mortgage or other
agreement, document or instrument pursuant to which a Lien is now or hereafter granted securing any
Senior Lender Claims or under which rights or remedies with respect to such Lien are at any time
governed.




          “Senior Lender Cash Management Obligations” shall mean, with respect to any Grantor, the due
and punctual payment and performance of all obligations of such Grantor in respect of overdrafts
and related liabilities owed to a Senior Lender under the Credit Agreement or any of its Affiliates
(or any other Person designated by the Company as a provider of cash management services and
entitled to the benefit of the Senior Collateral Agreement) and arising from cash management
services (including treasury, depository, overdraft, credit or debit card, electronic funds
transfer, Automated Clearing House services and other cash management arrangements).




          “Senior Lender Claims” shall mean all Obligations arising under the Credit Agreement, the
Other First Priority Lien Obligations Credit Documents and any other Senior Lender Documents,
whether or not such Obligations constitute Indebtedness, including, without limitation, (a)
Obligations arising under Secured Hedge Agreements, (b) Senior Lender Cash Management Obligations
and (c) Obligations under any credit agreement that is an exchange or replacement for or an
extension, increase or refinancing of any other Senior Lender Claims. Senior Lender Claims shall
include all interest and expenses accrued or accruing (or that would, absent the commencement of an
Insolvency or Liquidation Proceeding, accrue) after the commencement of an Insolvency or
Liquidation Proceeding in accordance with and at the rate specified in the relevant Senior Lender
Documents whether or not the claim for such interest or expenses is allowed or allowable as a claim
in such Insolvency or Liquidation Proceeding.




          “Senior Lender Collateral” shall mean all of the assets of any Grantor, whether real, personal
or mixed, with respect to which a Lien is granted as security for any Senior Lender Claim.




          “Senior Lender Documents” shall mean the Loan Documents, the Other First Priority Lien
Obligations Documents, the Senior Collateral Documents and each of the other agreements, documents
and instruments (including each agreement, document or instrument providing for or evidencing a
Senior Lender Hedging Obligation or Senior Lender Cash Management Obligation) providing for,
evidencing or securing any Senior Lender Claim, including, without limitation, any Obligation under
the Credit Agreement and any other related document or instrument executed or delivered pursuant to
any such document at any time or otherwise evidencing or securing any Indebtedness arising under
any such document.




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          “Senior Lender Hedging Obligations” shall mean any Obligations under Secured Hedge Agreements.




          “Senior Lenders” shall mean the Persons holding Senior Lender Claims, including the First Lien
Agents.




          “Subsidiary” shall mean any “Subsidiary” of the Company as defined in the Credit Agreement.




          “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 Holdings, the Company or any of the
Subsidiaries shall be a Swap Agreement.




          “Trustee” shall mean The Bank of New York Mellon Trust Company, N.A., in its capacity as
trustee under the Second Priority Senior Secured Notes Indenture and as collateral agent under the
Noteholder Collateral Documents, and its successors in such capacity.




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




          1.2. Terms Generally. The definitions of terms herein shall apply equally to 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”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified in accordance with this Agreement,
(b) any reference herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Sections shall be construed to refer to Sections of this Agreement and
(e) the words “asset” and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.




          SECTION 2. Lien Priorities.




          2.1. Subordination of Liens. Notwithstanding (i) the date, time, method, manner or
order of filing or recordation of any document or instrument or grant, attachment or perfection
(including any defect or deficiency or alleged defect or deficiency in any of the foregoing) of any
Liens granted to the Second Priority Secured Parties on the Common Collateral or of any Liens
granted to any First Lien Agent or Senior Lenders on the Common Collateral, (ii) any provision




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of the UCC, the Bankruptcy Code, or any applicable law or the Second Priority Documents or the
Senior Lender Documents, (iii) whether any First Lien Agent, either directly or through agents,
holds possession of, or has control over, all or any part of the Common Collateral, (iv) the fact
that any such Liens may be subordinated, voided, avoided, invalidated or lapsed or (v) any other
circumstance of any kind or nature whatsoever, each Second Priority Agent, on behalf of itself and
each applicable Second Priority Secured Party, hereby agrees that: (a) any Lien on the Common
Collateral securing any Senior Lender Claims now or hereafter held by or on behalf of any First
Lien Agent or any Senior Lenders or any agent or trustee therefor regardless of how acquired,
whether by grant, statute, operation of law, subrogation or otherwise, shall have priority over and
be senior in all respects and prior to any Lien on the Common Collateral securing any Second
Priority Claims and (b) any Lien on the Common Collateral securing any Second Priority Claims now
or hereafter held by or on behalf of the Trustee or any Second Priority Secured Parties or any
agent or trustee therefor regardless of how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the
Common Collateral securing any Senior Lender Claims. All Liens on the Common Collateral securing
any Senior Lender Claims shall be and remain senior in all respects and prior to all Liens on the
Common Collateral securing any Second Priority Claims for all purposes, whether or not such Liens
securing any Senior Lender Claims are subordinated to any Lien securing any other obligation of the
Company, any other Grantor or any other Person.




          2.2. Prohibition on Contesting Liens. Each Second Priority Agent, for itself and on
behalf of each applicable Second Priority Secured Party, and each First Lien Agent, for itself and
on behalf of each Senior Lender in respect of which it serves as First Lien Agent, agrees that it
shall not (and hereby waives any right to) take any action to challenge, contest or support any
other Person in contesting or challenging, directly or indirectly, in any proceeding (including any
Insolvency or Liquidation Proceeding), the validity, perfection, priority or enforceability of (a)
a Lien securing any Senior Lender Claims held (or purported to be held) by or on behalf of any
First Lien Agent or any of the Senior Lenders or any agent or trustee therefor in any Senior Lender
Collateral or (b) a Lien securing any Second Priority Claims held (or purported to be held) by or
on behalf of any Second Priority Secured Party in the Common Collateral, as the case may be;
provided, however, that nothing in this Agreement shall be construed to prevent or impair the
rights of any First Lien Agent or any Senior Lender to enforce this Agreement (including the
priority of the Liens securing the Senior Lender Claims as provided in Section 2.1) or any of the
Senior Lender Documents.




          2.3. No New Liens. So long as the Discharge of Senior Lender Claims has not occurred
and subject to Section 6, each Second Priority Agent agrees, for itself and on behalf of each
applicable Second Priority Secured Party, whether or not any Insolvency or Liquidation Proceeding
has been commenced by or against the Company or any other Grantor, that it shall not acquire or
hold any Lien on any assets of the Company or any other Grantor securing any Second Priority Claims
that are not also subject to the first-priority Lien in respect of the Senior Lender Claims under
the Senior Lender Documents. If any Second Priority Agent or any Second Priority Secured Party
shall (nonetheless and in breach hereof) acquire or hold any Lien on any collateral that is not
also subject to the first-priority Lien in respect of the Senior Lender Claims under the Senior
Lender Documents, then such Second Priority Agent shall, without the need for any further consent
of any party and notwithstanding anything to the contrary in any other




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document, be deemed to also hold and have held such lien for the benefit of the First Lien
Agents as security for the Senior Lender Claims (subject to the lien priority and other terms
hereof) and shall promptly notify each First Lien Agent in writing of the existence of such Lien
and in any event take such actions as may be requested by any First Lien Agent to assign or release
such Liens to the First Lien Agents (and/or each of its designee) as security for the applicable
Senior Lender Claims.




          2.4. Perfection of Liens. Neither the First Lien Agents nor the Senior Lenders shall
be responsible for perfecting and maintaining the perfection of Liens with respect to the Common
Collateral for the benefit of the Second Priority Agents and the Second Priority Secured Parties.
Neither the Second Priority Agents nor the Second Priority Secured Parties shall be responsible for
perfecting and maintaining the perfection of Liens with respect to the Common Collateral for the
benefit of the First Lien Agents and the Senior Lenders. The provisions of this Agreement are
intended solely to govern the respective Lien priorities as between the Senior Lenders and the
Second Priority Secured Parties and shall not impose on the First Lien Agents, the Second Priority
Agents, the Second Priority Secured Parties or the Senior Lenders or any agent or trustee therefor
any obligations in respect of the disposition of proceeds of any Common Collateral which would
conflict with prior perfected claims therein in favor of any other Person or any order or decree of
any court or governmental authority or any applicable law.




          2.5. Waiver of Marshalling. Until the Discharge of Senior Lender Claims, each Second
Priority Agent, on behalf of itself and the applicable Second Priority Secured Parties, agrees not
to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request,
plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation
or other similar right that may otherwise be available under applicable law with respect to the
Common Collateral or any other similar rights a junior secured creditor may have under applicable
law.




          SECTION 3. Enforcement.




          3.1. Exercise of Remedies.




     (a) So long as the Discharge of Senior Lender Claims has not occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other
Grantor, (i) no Second Priority Agent or any Second Priority Secured Party will (x) exercise or
seek to exercise any rights or remedies (including setoff or recoupment) with respect to any Common
Collateral or any other security in respect of any applicable Second Priority Claims, or exercise
any right under any lockbox agreement, control agreement, landlord waiver or bailee’s letter or
similar agreement or arrangement, or institute any action or proceeding with respect to such rights
or remedies (including any action of foreclosure), (y) contest, protest or object to any
foreclosure proceeding or action brought with respect to the Common Collateral or any other
collateral by any First Lien Agent or any Senior Lender in respect of the Senior Lender Claims, the
exercise of any right by any First Lien Agent or any Senior Lender (or any agent or sub-agent on
their behalf) in respect of the Senior Lender Claims under any lockbox agreement, control
agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which any
Second Priority Agent or any Second Priority Secured


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Party
either is a party or may have rights as a third party beneficiary, or any other exercise by any such party, of any
rights and remedies relating to the Common Collateral or any other collateral under the Senior
Lender Documents or otherwise in respect of Senior Lender Claims, or (z) object to the forbearance
by the Senior Lenders from bringing or pursuing any foreclosure proceeding or action or any other
exercise of any rights or remedies relating to the Common Collateral or any other collateral in
respect of Senior Lender Claims and (ii) except as otherwise provided herein, each First Lien Agent
and the Senior Lenders shall have the exclusive right to enforce rights, exercise remedies
(including setoff and the right to credit bid their debt) and make determinations regarding the
release, disposition or restrictions with respect to the Common Collateral without any consultation
with or the consent of any Second Priority Agent or any Second Priority Secured Party; provided,
however, that (A) in any Insolvency or Liquidation Proceeding commenced by or against the Company
or any other Grantor, each Second Priority Agent may file a proof of claim or statement of interest
with respect to the applicable Second Priority Claims (B) each Second Priority Agent may take any
action (not adverse to the prior Liens on the Common Collateral securing the Senior Lender Claims,
or the rights of either First Lien Agent or the Senior Lenders to exercise remedies in respect
thereof) in order to create, prove, perfect, preserve or protect (but not enforce) its rights in,
and perfection and priority of its Lien on, the Common Collateral and (C) each Second Priority
Agent may file any pleadings, objections, motions or agreements which assert rights available to
unsecured creditors of the Company or any other Grantor arising under any Insolvency or Liquidation
Proceeding or applicable non-bankruptcy law. In exercising rights and remedies with respect to the
Senior Lender Collateral, each First Lien Agent and the Senior Lenders may enforce the provisions
of the Senior Lender Documents and exercise remedies thereunder, all in such order and in such
manner as they may determine in the exercise of their sole discretion. Such exercise and
enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of
Common Collateral or other collateral upon foreclosure, to incur expenses in connection with such
sale or disposition, and to exercise all the rights and remedies of a secured lender under the
uniform commercial code of any applicable jurisdiction and of a secured creditor under Bankruptcy
Laws of any applicable jurisdiction.




     (b) So long as the Discharge of Senior Lender Claims has not occurred, each Second Priority
Agent, on behalf of itself and each applicable Second Priority Secured Party, agrees that it will
not take or receive any Common Collateral or other collateral or any proceeds of Common Collateral
or other collateral in connection with the exercise of any right or remedy (including setoff or
recoupment) with respect to any Common Collateral or other collateral in respect of the applicable
Second Priority Claims. Without limiting the generality of the foregoing, unless and until the
Discharge of Senior Lender Claims has occurred, except as expressly provided in the proviso in
clause (ii) of Section 3.1(a), the sole right of the Second Priority Agents and the Second Priority
Secured Parties with respect to the Common Collateral or any other collateral is to hold a Lien on
the Common Collateral or such other collateral in respect of the applicable Second Priority Claims
pursuant to the Second Priority Documents, as applicable, for the period and to the extent granted
therein and to receive a share of the proceeds thereof, if any, after the Discharge of Senior
Lender Claims has occurred.



     (c) Subject to the proviso in clause (ii) of Section 3.1(a) above, (i) each Second Priority
Agent, for itself and on behalf of each applicable Second Priority Secured Party, agrees that no
Second Priority Agent or any Second Priority Secured Party will take any action that would



H-11









 




hinder any exercise of remedies undertaken by any First Lien Agent or Senior Lenders with
respect to the Common Collateral or any other collateral under the Senior Lender Documents,
including any sale, lease, exchange, transfer or other disposition of the Common Collateral or such
other collateral, whether by foreclosure or otherwise, and (ii) each Second Priority Agent, for
itself and on behalf of each applicable Second Priority Secured Party, hereby waives any and all
rights it or any Second Priority Secured Party may have as a junior lien creditor or otherwise to
object to the manner in which any First Lien Agent or Senior Lenders seek to enforce or collect the
Senior Lender Claims or the Liens granted in any of the Senior Lender Collateral, regardless of
whether any action or failure to act by or on behalf of any First Lien Agent or Senior Lenders is
adverse to the interests of the Second Priority Secured Parties.




     (d) Each Second Priority Agent hereby acknowledges and agrees that no covenant, agreement or
restriction contained in any applicable Second Priority Document shall be deemed to restrict in any
way the rights and remedies of any First Lien Agent or Senior Lenders with respect to the Senior
Lender Collateral as set forth in this Agreement and the Senior Lender Documents.



          3.2. Cooperation. Subject to the proviso in clause (ii) of Section 3.1(a), each
Second Priority Agent, on behalf of itself and each applicable Second Priority Secured Party,
agrees that, unless and until the Discharge of Senior Lender Claims has occurred, it will not
commence, or join with any Person (other than the Senior Lenders and any First Lien Agent upon the
request thereof) in commencing, any enforcement, collection, execution, levy or foreclosure action
or proceeding with respect to any Lien held by it in the Common Collateral or any other collateral
under any of the applicable Second Priority Documents or otherwise in respect of the applicable
Second Priority Claims relating to the Common Collateral.




          3.3. Actions Upon Breach. If any Second Priority Secured Party, in contravention of
the terms of this Agreement, in any way takes, attempts to or threatens to take any action with
respect to the Common Collateral (including, without limitation, any attempt to realize upon or
enforce any remedy with respect to this Agreement), this Agreement shall create an irrebuttable
presumption and admission by such Second Priority Secured Party that relief against such Second
Priority Secured Party by injunction, specific performance and/or other appropriate equitable
relief is necessary to prevent irreparable harm to the Senior Lenders, it being understood and
agreed by each Second Priority Agent on behalf of each applicable Second Priority Secured Party
that (i) the Senior Lenders’ damages from its actions may at that time be difficult to ascertain
and may be irreparable, and (ii) each Second Priority Secured Party waives any defense that the
Grantors and/or the Senior Lenders cannot demonstrate damage and/or can be made whole by the
awarding of damages.




          SECTION 4. Payments.




          4.1. Application of Proceeds. So long as the Discharge of Senior Lender Claims has
not occurred, the Common Collateral and any other collateral in respect of the Second Priority
Claims or proceeds thereof received in connection with the sale or other disposition of, or
collection on, such Common Collateral or other collateral upon the exercise of remedies as a
secured party, shall be applied by the First Lien Agents to the Senior Lender Claims in such order
as specified in the relevant Senior Lender Documents until the Discharge of Senior Lender




H-12









 




Claims has occurred. Upon the Discharge of Senior Lender Claims, subject to Section 5.7
hereof, each of the First Lien Agents shall deliver promptly to the Second Priority Designated
Agent any Common Collateral or proceeds thereof held by it in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise direct to be applied
by the Second Priority Designated Agent ratably to the Second Priority Claims in such order as
specified in the Second Priority Documents.




          4.2. Payments Over. Any Common Collateral or other collateral in respect of the
Second Priority Claims or proceeds thereof received by any Second Priority Agent or any Second
Priority Secured Party in connection with the exercise of any right or remedy (including setoff or
recoupment) relating to the Common Collateral or such other collateral prior to the Discharge of
Senior Lender Claims shall be segregated and held in trust for the benefit of and forthwith paid
over to the First Priority Designated Agent (and/or its designees) for the benefit of the Senior
Lenders in the same form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The First Lien Agents are each hereby individually authorized
to make any such endorsements as agent for any Second Priority Agent or any such Second Priority
Secured Party. This authorization is coupled with an interest and is irrevocable.




          SECTION 5. Other Agreements.




          5.1. Releases.




     (a) If, at any time any Grantor or the holder of any Senior Lender Claim delivers notice to
each Second Priority Agent that any specified Common Collateral (including all or substantially all
of the equity interests of a Grantor or any of its Subsidiaries) (including for such purpose, in
the case of the sale of equity interests in any Subsidiary, any Common Collateral held by such
Subsidiary or any direct or indirect Subsidiary thereof) is (A) sold, transferred or otherwise
disposed of:



        (i) by the owner of such Common Collateral in a transaction permitted under each Credit
Agreement, the Other First Priority Lien Obligations Credit Documents, the Second Priority Senior
Secured Notes Indenture and each other Senior Lender Document and Second Priority Document (if
any); or



        (ii) during the existence of any Event of Default under (and as defined in) any Credit
Agreement or the Other First Priority Lien Obligations Credit Documents to the extent that any of
the First Lien Agents has consented to such sale, transfer or disposition; or


(B) or otherwise released as permitted by each Credit Agreement and the Other First Priority Lien
Obligations Credit Documents,



then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens in
favor of the Second Priority Secured Parties upon such Common Collateral will automatically be
released and discharged as and when, but only to the extent, such Liens on such Common Collateral
securing Senior Lender Claims are released and discharged. Upon delivery to each Second Priority
Agent of a notice from any First Lien Agent stating that any release of Liens securing or
supporting the Senior Lender Claims has become effective (or shall become effective






H-13









 







upon each Second Priority Agent’s release) (whether in connection with a sale of such assets by the
relevant Grantor pursuant to the preceding sentence or otherwise), each Second Priority Agent will
promptly execute and deliver such instruments, releases, termination statements or other documents
delivered to it confirming such release on customary terms at the expense of the Company. In the
case of the sale of all or substantially all of the capital stock of a Grantor or any of its
Subsidiaries, the guarantee in favor of the Second Priority Secured Parties, if any, made by such
Grantor or Subsidiary will automatically be released and discharged as and when, but only to the
extent, the guarantee by such Grantor or Subsidiary of Senior Lender Claims is released and
discharged.




     (b) Each Second Priority Agent, until Discharge of Senior Lender Claims, for itself and on
behalf of each applicable Second Priority Secured Party, hereby irrevocably constitutes and
appoints each First Lien Agent and any officer or agent of such First Lien Agent, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of each Second Priority Agent or such holder or in such First Lien Agent’s
own name, from time to time in such First Lien Agent’s discretion, for the purpose of carrying out
the terms of this Section 5.1, to take any and all appropriate action and to execute any and all
documents and instruments that may be necessary or desirable to accomplish the purposes of this
Section 5.1, including any termination statements, endorsements or other instruments of transfer or
release.



     (c) Unless and until the Discharge of Senior Lender Claims has occurred, each Second Priority
Agent, for itself and on behalf of each applicable Second Priority Secured Party, hereby consents
to the application, whether prior to or after a default, of proceeds of Common Collateral or other
collateral to the repayment of Senior Lender Claims pursuant to the Senior Lender Documents;
provided that nothing in this Section 5.1(c) shall be construed to prevent or impair the rights of
the Second Priority Agents or the Second Priority Secured Parties to receive proceeds in connection
with the Second Priority Claims not otherwise in contravention of this Agreement.



          5.2. Insurance. Unless and until the Discharge of Senior Lender Claims has occurred,
each First Lien Agent and the Senior Lenders shall have the sole and exclusive right, subject to
the rights of the Grantors under the Senior Lender Documents, to adjust settlement for any
insurance policy covering the Common Collateral or any other collateral in respect of the Second
Priority Claims in the event of any loss thereunder and to approve any award granted in any
condemnation or similar proceeding affecting the Common Collateral or such other collateral. Unless
and until the Discharge of Senior Lender Claims has occurred, all proceeds of any such policy and
any such award if in respect of the Common Collateral or such other collateral shall be paid (a)
first, prior to the occurrence of the Discharge of Senior Lender Claims, to the First Lien Agents
for the benefit of Senior Lenders pursuant to the terms of the Senior Lender Documents, (b) second,
after the occurrence of the Discharge of Senior Lender Claims, to the Second Priority Agents for
the benefit of the Second Priority Secured Parties pursuant to the terms of the applicable Second
Priority Documents and (c) third, if no Second Priority Claims are outstanding, to the owner of the
subject property, such other person as may be entitled thereto or as a court of competent
jurisdiction may otherwise direct. If any Second Priority Agent or any Second Priority Secured
Party shall, at any time, receive any proceeds of






H-14









 







any such insurance policy or any such award in contravention of this Agreement, it shall pay
such proceeds over to any First Lien Agent in accordance with the terms of Section 4.2.




          5.3. Amendments to Second Priority Collateral Documents.




     (a) So long as the Discharge of Senior Lender Claims has not occurred, without the prior
written consent of the First Lien Agents, no Second Priority Collateral Document may be amended,
supplemented or otherwise modified or entered into to the extent such amendment, supplement or
modification, or the terms of any new Second Priority Collateral Document, would be prohibited by
or inconsistent with any of the terms of this Agreement. Each applicable Second Priority
Collateral Document executed as of the date hereof shall include the following language (or
language to similar effect approved by the First Lien Agents):



     “Notwithstanding anything herein to the contrary, (i) the liens and security interests granted
to the [applicable Second Priority Agent] pursuant to this agreement are expressly subject and
subordinate to the liens and security interests granted to Credit Suisse AG, Cayman Islands Branch
(f/k/a Credit Suisse, Cayman Islands Branch), as collateral agent (and its permitted successors),
for the benefit of the secured parties referred to below, pursuant to the Guarantee and Collateral
Agreement dated as of May 29, 2007 (as amended, amended and restated, supplemented or otherwise
modified from time to time), from the Company and the other “Pledgors” referred to therein, in
favor of Credit Suisse, AG Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as
collateral agent for the benefit of the secured parties referred to therein, [and to the liens and
security interests granted to [Other First Priority Lien Obligations Collateral Agent] pursuant to
[Other First Priority Lien Obligations Security Document] (as amended, supplemented or otherwise
modified from time to time)], and (ii) the exercise of any right or remedy by the [applicable
Second Priority Agent] hereunder is subject to the limitations and provisions of the Intercreditor
Agreement dated as of March 4, 2011 (as amended, restated, supplemented or otherwise modified from
time to time, the “Intercreditor Agreement”), by and among Credit Suisse AG, Cayman Islands Branch,
in its capacity as Credit Agreement Agent, The Bank of New York Mellon Trust Company, N.A., in its
capacity as Trustee, Holdings, the Company and the subsidiaries party thereto. In the event of any
conflict between the terms of the Intercreditor Agreement and the terms of this agreement, the
terms of the Intercreditor Agreement shall govern.”



     (b) In the event that the First Lien Agents or the Senior Lenders enter into any amendment,
waiver or consent in respect of or replace any of the Senior Collateral Document for the purpose of
adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any
Senior Collateral Document or changing in any manner the rights of the First Lien Agents, the
Senior Lenders, the Company or any other Grantor thereunder (including the release of any Liens in
Senior Lender Collateral), then such amendment, waiver or consent shall apply automatically to any
comparable provision of each Comparable Second Priority Collateral Document without the consent of
any Second Priority Agent or any Second Priority Secured Party and without any action by any Second
Priority Agent, any Second Priority Senior Secured Party, the Company or any other Grantor;
provided, that such amendment, waiver or consent does not materially adversely affect the rights of
the Second Priority Secured Parties or the interests of the Second Priority Secured Parties in the
Second Priority Collateral and not the other creditors of the Company or such Grantor, as the case
may be, that have a security interest



H-15









 




in the affected collateral in a like or similar manner (without regard to the fact that the
Lien of such Senior Collateral Document is senior to the Lien of the Comparable Second Priority
Collateral Document). The relevant First Lien Agent may give written notice of such amendment,
waiver or consent to each Second Priority Agent; provided that the failure to give such notice
shall not affect the effectiveness of such amendment, waiver or consent with respect to the
provisions of any Second Priority Collateral Document as set forth in this Section 5.3(b).




     (c) Anything contained herein to the contrary notwithstanding, until the Discharge of Senior
Lender Claims has occurred, no Second Priority Collateral Document shall be entered into unless the
collateral covered thereby is also subject to a perfected first-priority interest in favor of the
First Lien Agents for the benefit of the Senior Lenders pursuant to the Senior Collateral
Documents.



          5.4. Rights As Unsecured Creditors. Notwithstanding anything to the contrary in this
Agreement, the Second Priority Agents and the Second Priority Secured Parties may exercise rights
and remedies as an unsecured creditor against the Company or any Grantor that has guaranteed the
Second Priority Claims in accordance with the terms of the applicable Second Priority Documents and
applicable law, in each case to the extent not inconsistent with the provisions of this Agreement.
Nothing in this Agreement shall prohibit the receipt by any Second Priority Agent or any Second
Priority Secured Party of the required payments of interest and principal so long as such receipt
is not the direct or indirect result of (a) the exercise by any Second Priority Agent or any Second
Priority Secured Party of rights or remedies as a secured creditor in respect of Common Collateral
or other collateral or (b) enforcement in contravention of this Agreement of any Lien in respect of
Second Priority Claims held by any of them. In the event any Second Priority Agent or any Second
Priority Secured Party becomes a judgment lien creditor or other secured creditor in respect of
Common Collateral or other collateral as a result of its enforcement of its rights as an unsecured
creditor in respect of Second Priority Claims or otherwise, such judgment or other lien shall be
subordinated to the Liens securing Senior Lender Claims on the same basis as the other Liens
securing the Second Priority Claims are so subordinated to such Liens securing Senior Lender Claims
under this Agreement. Nothing in this Agreement impairs or otherwise adversely affects any rights
or remedies the First Lien Agents or the Senior Lenders may have with respect to the Senior Lender
Collateral.




          5.5. First Lien Agents as Gratuitous Bailees for Perfection.




     (a) Each First Lien Agent agrees to hold the Pledged Collateral that is part of the Common
Collateral that is in its possession or control (or in the possession or control of its agents or
bailees) as gratuitous bailee for each Second Priority Agent and any assignee solely for the
purpose of perfecting the security interest granted in such Pledged Collateral pursuant to the
Second Priority Collateral Agreements, subject to the terms and conditions of this Section 5.5
(such bailment being intended, among other things, to satisfy the requirements of Sections
8-106(d)(3), 8-301(a)(2) and 9-313(c) of the UCC).



     (b) In the event that any First Lien Agent (or its agent or bailees) has Lien filings against
Intellectual Property (as defined in the Senior Collateral Agreement) that is part of the Common
Collateral that are necessary for the perfection of Liens in such Common Collateral, such First
Lien Agent agrees to hold such Liens as gratuitous bailee for each Second Priority Agent and any



H-16









 




assignee solely for the purpose of perfecting the security interest granted in such Liens
pursuant to the Second Priority Collateral Agreements, subject to the terms and conditions of this
Section 5.5.




     (c) Except as otherwise specifically provided herein (including Sections 3.1 and 4.1), until
the Discharge of Senior Lender Claims has occurred, any First Lien Agent shall be entitled to deal
with the Pledged Collateral in accordance with the terms of the Senior Lender Documents as if the
Liens under the Second Priority Collateral Documents did not exist. The rights of the Second
Priority Agents and the Second Priority Secured Parties with respect to such Pledged Collateral
shall at all times be subject to the terms of this Agreement.



     (d) The First Lien Agents shall have no obligation whatsoever to any Second Priority Agent or
any Second Priority Secured Party to assure that the Pledged Collateral is genuine or owned by the
Grantors or to protect or preserve rights or benefits of any Person or any rights pertaining to the
Common Collateral except as expressly set forth in this Section 5.5. The duties or responsibilities
of the First Lien Agents under this Section 5.5 shall be limited solely to holding the Pledged
Collateral as gratuitous bailee for each Second Priority Agent for purposes of perfecting the Lien
held by the Second Priority Secured Parties.



     (e) The First Lien Agents shall not have by reason of the Second Priority Collateral
Documents or this Agreement or any other document a fiduciary relationship in respect of any Second
Priority Agent or any Second Priority Secured Party and the Second Priority Agents and the Second
Priority Secured Parties hereby waive and release the First Lien Agents from all claims and
liabilities arising pursuant to the First Lien Agents’ role under this Section 5.5, as agent and
gratuitous bailee with respect to the Common Collateral.



     (f) Upon the Discharge of Senior Lender Claims, the relevant First Lien Agent shall deliver
to the Second Priority Designated Agent the remaining Pledged Collateral (if any) and to the extent
such Pledged Collateral is in the possession or control of such First Lien Agent (or its agents or
bailees) together with any necessary endorsements (or otherwise allow the Second Priority
Designated Agent to obtain control of such Pledged Collateral) or as a court of competent
jurisdiction may otherwise direct. The Company shall take such further action as is required to
effectuate the transfer contemplated hereby and shall indemnify the First Lien Agents for loss or
damage suffered by any First Lien Agent as a result of such transfer except for loss or damage
suffered by any First Lien Agent as a result of its own willful misconduct, gross negligence or bad
faith. The First Lien Agents have no obligation to follow instructions from any Second Priority
Agent in contravention of this Agreement.



     (g) Neither the First Lien Agents nor the Senior Lenders shall be required to marshal any
present or future collateral security for the Company’s or its Subsidiaries’ obligations to the
First Lien Agents or the Senior Lenders under the Credit Agreement or the Senior Collateral
Documents or any assurance of payment in respect thereof or to resort to such collateral security
or other assurances of payment in any particular order, and all of their rights in respect of such
collateral security or any assurance of payment in respect thereof shall be cumulative and in
addition to all other rights, however existing or arising.



H-17









 





          5.6. Second Priority Designated Agent as Gratuitous Bailee for Perfection.




     (a) Upon the Discharge of Senior Lender Claims, the Second Priority Designated Agent agrees
to hold the Pledged Collateral that is part of the Common Collateral in its possession or control
(or in the possession or control of its agents or bailees) as gratuitous bailee for the other
Second Priority Agents and any assignee solely for the purpose of perfecting the security interest
granted in such Pledged Collateral pursuant to the applicable Second Priority Collateral Agreement,
subject to the terms and conditions of this Section 5.6.



     (b) In the event that the Second Priority Designated Agent (or its agent or bailees) has Lien
filings against Intellectual Property (as defined in the Senior Collateral Agreement) that is part
of the Common Collateral that are necessary for the perfection of Liens in such Common Collateral,
upon the Discharge of Senior Lender Claims, the Second Priority Designated Agent agrees to hold
such Liens as gratuitous bailee for the other Second Priority Agents and any assignee solely for
the purpose of perfecting the security interest granted in such Liens pursuant to the applicable
Second Priority Collateral Agreement, subject to the terms and conditions of this Section 5.6.



     (c) The Second Priority Designated Agent, in its capacity as gratuitous bailee, shall have no
obligation whatsoever to the other Second Priority Agents to assure that the Pledged Collateral is
genuine or owned by the Grantors or to protect or preserve rights or benefits of any Person or any
rights pertaining to the Common Collateral except as expressly set forth in this Section 5.6. The
duties or responsibilities of the Second Priority Designated Agent under this Section 5.6 upon the
Discharge of Senior Lender Claims shall be limited solely to holding the Pledged Collateral as
gratuitous bailee for the other Second Priority Agents for purposes of perfecting the Lien held by
the applicable Second Priority Secured Parties.



     (d) The Second Priority Designated Agent shall not have by reason of the Second Priority
Collateral Documents or this Agreement or any other document a fiduciary relationship in respect of
the other Second Priority Agents (or the Second Priority Secured Parties for which such other
Second Priority Agents are agents) and the other Second Priority Agents hereby waive and release
the Second Priority Designated Agent from all claims and liabilities arising pursuant to the Second
Priority Designated Agent’s role under this Section 5.6, as agent and gratuitous bailee with
respect to the Common Collateral.



     (e) In the event that the Second Priority Designated Agent shall cease to be so designated
the Second Priority Designated Agent pursuant to the definition of such term, the then Second
Priority Designated Agent shall deliver to the successor Second Priority Designated Agent, to the
extent that it is legally permitted to do so, the remaining Pledged Collateral (if any), together
with any necessary endorsements (or otherwise allow the successor Second Priority Designated Agent
to obtain control of such Pledged Collateral) or as a court of competent jurisdiction may otherwise
direct, and such successor Second Priority Designated Agent shall perform all duties of the Second
Priority Designated Agent as set forth herein. The Company shall take such further action as is
required to effectuate the transfer contemplated hereto and shall indemnify the Second Priority
Designated Agent for loss or damage suffered by the Second Priority Designated Agent as a result of
such transfer except for loss or damage suffered by the Second Priority Designated Agent as a
result of its own willful misconduct, gross negligence or bad



H-18









 




faith. The Second Priority Designated Agent has no obligation to follow instructions from the
successor Second Priority Designated Agent in contravention of this Agreement.




          5.7. Release Upon Discharge of Senior Lender Claims; No Release If Event of Default;
Reinstatement.




     (a) Except as otherwise provided in clause (b) and (c) of this Section 5.7, upon the
Discharge of Senior Lender Claims and the concurrent release of the Liens securing Senior Lender
Claims, the Liens in favor of the Second Priority Secured Parties shall automatically be released
and discharged.



     (b) Notwithstanding any other provisions contained in this Agreement, if an Event of Default
(as defined in the Second Priority Senior Secured Notes Indenture or any other Second Priority
Document, as applicable) exists on the date of Discharge of Senior Lender Claims, the Second
Priority Liens on the Second Priority Collateral securing the Second Priority Claims relating to
such Event of Default will not be released, except to the extent such Second Priority Collateral or
any portion thereof was disposed of in order to repay Senior Lender Claims secured by such Second
Priority Collateral, and thereafter the applicable Second Priority Agent will have the right to
foreclose upon such Second Priority Collateral (but in such event, the Liens on such Second
Priority Collateral securing the applicable Second Priority Claims will be released when such Event
of Default and all other Events of Default under the Second Priority Senior Secured Notes Indenture
or any other Second Priority Document, as applicable, cease to exist).



     (c) If, at any time after the Discharge of Senior Lender Claims has occurred, the Company
incurs and designates any Senior Lender Claims, then such Discharge of Senior Lender Claims shall
automatically be deemed not to have occurred for all purposes of this Agreement (other than with
respect to any actions taken prior to the date of such designation as a result of the occurrence of
such first Discharge of Senior Lender Claims), and the applicable agreement governing such Senior
Lender Claims shall automatically be treated as the Credit Agreement for all purposes of this
Agreement, including for purposes of the Lien priorities and rights in respect of Common Collateral
set forth herein and the granting by the First Lien Agents of amendments, waivers and consents
hereunder. Upon receipt of notice of such designation (including the identity of any new First
Lien Agent), each Second Priority Agent shall promptly (i) enter into such documents and agreements
(at the expense of the Company), including amendments or supplements to this Agreement, as the
Company or such new First Lien Agent shall reasonably request in writing in order to provide the
new First Lien Agent the rights of the First Lien Agents contemplated hereby and (ii) to the extent
then held by any Second Priority Agent, deliver to either First Lien Agent the Pledged Collateral
that is Common Collateral together with any necessary endorsements (or otherwise allow such First
Lien Agent to obtain possession or control of such Pledged Collateral).



          SECTION 6. Insolvency or Liquidation Proceedings.




          6.1. Financing Issues. If the Company or any other Grantor shall be subject to any
Insolvency or Liquidation Proceeding and any First Lien Agent shall desire to permit the use of
cash collateral or to permit the Company or any other Grantor to obtain financing under Section 363
or Section 364 of Title 11 of the United States Code or any similar provision in any






H-19









 







Bankruptcy Law (“DIP Financing”), then each Second Priority Agent, on behalf of itself and
each applicable Second Priority Secured Party, agrees that it will raise no objection to, and will
not support any objection to, and will not otherwise contest (a) such use of cash collateral or DIP
Financing and will not request adequate protection or any other relief in connection therewith
(except to the extent permitted by Section 6.3) and, to the extent the Liens securing the Senior
Lender Claims under the Senior Lender Documents are subordinated or pari passu with such DIP
Financing, will subordinate its Liens in the Common Collateral and any other collateral to such DIP
Financing (and all Obligations relating thereto) on the same basis as the other Liens securing the
Second Priority Claims are so subordinated to Liens securing Senior Lender Claims under this
Agreement, (b) any motion for relief from the automatic stay or from any injunction against
foreclosure or enforcement in respect of Senior Lender Claims made by any First Lien Agent or any
holder of Senior Lender Claims, (c) any lawful exercise by any holder of Senior Lender Claims of
the right to credit bid Senior Lender Claims at any sale in foreclosure of Senior Lender
Collateral, (d) any other request for judicial relief made in any court by any holder of Senior
Lender Claims relating to the lawful enforcement of any Lien on Senior Lender Collateral or (e) any
order relating to a sale of assets of any Grantor for which any First Lien Agent has consented that
provides, to the extent the sale is to be free and clear of Liens, that the Liens securing the
Senior Lender Claims and the Second Priority Claims will attach to the proceeds of the sale on the
same basis of priority as the Liens securing the Senior Lender Collateral do to the Liens securing
the Second Priority Collateral in accordance with this Agreement.




          6.2. Relief from the Automatic Stay. Until the Discharge of Senior Lender Claims has
occurred, each Second Priority Agent, on behalf of itself and each applicable Second Priority
Secured Party, agrees that none of them shall seek relief from the automatic stay or any other stay
in any Insolvency or Liquidation Proceeding in respect of the Common Collateral or any other
collateral, without the prior written consent of all First Lien Agents.




          6.3. Adequate Protection. Each Second Priority Agent, on behalf of itself and each
applicable Second Priority Secured Party, agrees that none of them shall contest (or support any
other Person contesting) (a) any request by any First Lien Agent or Senior Lenders for adequate
protection or (b) any objection by any First Lien Agent or Senior Lenders to any motion, relief,
action or proceeding based on such First Lien Agent’s or the Senior Lenders’ claiming a lack of
adequate protection. Notwithstanding the foregoing, in any Insolvency or Liquidation Proceeding,
(i) if the Senior Lenders (or any subset thereof) are granted adequate protection in the form of
additional collateral in connection with any DIP Financing or use of cash collateral under Section
363 or Section 364 of Title 11 of the United States Bankruptcy Code or any similar Bankruptcy Law,
then each Second Priority Agent, on behalf of itself and any applicable Second Priority Secured
Party, (A) may seek or request adequate protection in the form of a replacement Lien on such
additional collateral, which Lien is subordinated to the Liens securing the Senior Lender Claims
and such DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens
securing the Second Priority Claims are so subordinated to the Liens securing Senior Lender Claims
under this Agreement and (B) agrees that it will not seek or request, and will not accept, adequate
protection in any other form, and (ii) in the event any Second Priority Agent, on behalf of itself
or any applicable Second Priority Secured Party, seeks or requests adequate protection and such
adequate protection is granted in the form of additional collateral, then such Second Priority
Agent, on behalf of itself or each such Second Priority Secured Party, agrees that the First Lien
Agents shall also be granted a senior Lien on






H-20









 







such additional collateral as security for the applicable Senior Lender Claims and any such
DIP Financing and that any Lien on such additional collateral securing the Second Priority Claims
shall be subordinated to the Liens on such collateral securing the Senior Lender Claims and any
such DIP Financing (and all Obligations relating thereto) and any other Liens granted to the Senior
Lenders as adequate protection on the same basis as the other Liens securing the Second Priority
Claims are so subordinated to such Liens securing Senior Lender Claims under this Agreement.




          6.4. Avoidance Issues. If any Senior Lender is required in any Insolvency or
Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of the Company or
any other Grantor (or any trustee, receiver or similar person therefor), because the payment of
such amount was declared to be fraudulent or preferential in any respect or for any other reason,
any amount (a “Recovery”), whether received as proceeds of security, enforcement of any right of
setoff or otherwise, then as among the parties hereto the Senior Lender Claims shall be deemed to
be reinstated to the extent of such Recovery and to be outstanding as if such payment had not
occurred and the Senior Lenders shall be entitled to a Discharge of Senior Lender Claims with
respect to all such recovered amounts and shall have all rights hereunder until such time. If this
Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in
full force and effect, and such prior termination shall not diminish, release, discharge, impair or
otherwise affect the obligations of the parties hereto.




          6.5. Application. This Agreement shall be applicable prior to and after the
commencement of any Insolvency or Liquidation Proceeding. All references herein to any Grantor
shall apply to any trustee for such Person and such Person as debtor in possession. The relative
rights as to the Common Collateral and other collateral and proceeds thereof shall continue after
the filing thereof on the same basis as prior to the date of the petition, subject to any court
order approving the financing of, or use of cash collateral by, any Grantor.




          6.6. Waivers. Until the Discharge of Senior Lender Claims has occurred, each Second
Priority Agent, on behalf of itself and each applicable Second Priority Secured Party, (a) will not
assert or enforce any claim under Section 506(c) of the United States Bankruptcy Code senior to or
on a parity with the Liens securing the Senior Lender Claims for costs or expenses of preserving or
disposing of any Common Collateral or other collateral, and (b) waives any claim it may now or
hereafter have arising out of the election by any Senior Lender of the application of Section
1111(b)(2) of the Bankruptcy Code.




          SECTION 7. Reliance; Waivers; etc.




          7.1. Reliance. The consent by the Senior Lenders to the execution and delivery of
the Second Priority Documents to which the Senior Lenders have consented and all loans and other
extensions of credit made or deemed made on and after May 29, 2007 by the Senior Lenders to the
Company or any Subsidiary shall be deemed to have been given and made in reliance upon this
Agreement. Each Second Priority Agent, on behalf of itself and each applicable Second Priority
Secured Party, acknowledges that it and the applicable Second Priority Secured Parties is not
entitled to rely on any credit decision or other decisions made by any First Lien Agent or any
Senior Lender in taking or not taking any action under the applicable Second Priority Document or
this Agreement.




H-21









 





          7.2. No Warranties or Liability. Neither any First Lien Agent nor any Senior Lender
shall have been deemed to have made any express or implied representation or warranty upon which
the Second Priority Agent or the Second Priority Secured Parties may rely, including with respect
to the execution, validity, legality, completeness, collectibility or enforceability of any of the
Senior Lender Documents, the ownership of any Common Collateral or the perfection or priority of
any Liens thereon. The Senior Lenders will be entitled to manage and supervise their respective
loans and extensions of credit under the Senior Lender Documents in accordance with law and as they
may otherwise, in their sole discretion, deem appropriate, and the Senior Lenders may manage their
loans and extensions of credit without regard to any rights or interests that any Second Priority
Agent or any of the Second Priority Secured Parties have in the Common Collateral or otherwise,
except as otherwise provided in this Agreement. Neither any First Lien Agent nor any Senior Lender
shall have any duty to any Second Priority Agent or any Second Priority Secured Party to act or
refrain from acting in a manner that allows, or results in, the occurrence or continuance of an
event of default or default under any agreements with the Company or any Subsidiary thereof
(including the Second Priority Documents), regardless of any knowledge thereof that they may have
or be charged with. Except as expressly set forth in this Agreement, the First Lien Agents, the
Senior Lenders, the Second Priority Agents and the Second Priority Secured Parties have not
otherwise made to each other, nor do they hereby make to each other, any warranties, express or
implied, nor do they assume any liability to each other with respect to (a) the enforceability,
validity, value or collectibility of any of the Second Priority Claims, the Senior Lender Claims or
any guarantee or security which may have been granted to any of them in connection therewith, (b)
the Company’s title to or right to transfer any of the Common Collateral or (c) any other matter
except as expressly set forth in this Agreement.




          7.3. Obligations Unconditional. All rights, interests, agreements and obligations of
the First Lien Agents and the Senior Lenders, and the Second Priority Agents and the Second
Priority Secured Parties, respectively, hereunder shall remain in full force and effect
irrespective of:




     (a) any lack of validity or enforceability of any Senior Lender Documents or any Second
Priority Documents;



     (b) any change in the time, manner or place of payment of, or in any other terms of, all or
any of the Senior Lender Claims or Second Priority Claims, or any amendment or waiver or other
modification, including any increase in the amount thereof, whether by course of conduct or
otherwise, of the terms of the Credit Agreement or any other Senior Lender Document or of the terms
of the Second Priority Senior Secured Notes Indenture or any other Second Priority Document;



     (c) any exchange of any security interest in any Common Collateral or any other collateral, or
any amendment, waiver or other modification, whether in writing or by course of conduct or
otherwise, of all or any of the Senior Lender Claims or Second Priority Claims or any guarantee
thereof;



     (d) the commencement of any Insolvency or Liquidation Proceeding in respect of the Company or
any other Grantor; or



H-22









 





     (e) any other circumstances that otherwise might constitute a defense available to, or a
discharge of, the Company or any other Grantor in respect of the Senior Lender Claims, or of any
Second Priority Agent or any Second Priority Secured Party in respect of this Agreement.



          SECTION 8. Miscellaneous.




          8.1. Conflicts. Subject to Section 8.19, in the event of any conflict between the
provisions of this Agreement and the provisions of any Senior Lender Document or any Second
Priority Document, the provisions of this Agreement shall govern.




          8.2. Continuing Nature of this Agreement; Severability. Subject to Section 6.4, this
Agreement shall continue to be effective until the Discharge of Senior Lender Claims shall have
occurred or such later time as all the Obligations in respect of the Second Priority Claims shall
have been paid in full. This is a continuing agreement of lien subordination and the Senior Lenders
may continue, at any time and without notice to each Second Priority Agent or any Second Priority
Secured Party, to extend credit and other financial accommodations and lend monies to or for the
benefit of the Company or any other Grantor constituting Senior Lender Claims in reliance hereon.
The terms of this Agreement shall survive, and shall continue in full force and effect, in any
Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.




          8.3. Amendments; Waivers. No amendment, modification or waiver of any of the
provisions of this Agreement by any Second Priority Agent or any First Lien Agent shall be deemed
to be made unless the same shall be in writing signed on behalf of the party making the same or its
authorized agent and each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the parties making such waiver or the
obligations of the other parties to such party in any other respect or at any other time. The
Company and the other Grantors shall not have any right to consent to or approve any amendment,
modification or waiver of any provision of this Agreement except to the extent their rights are
adversely affected. Notwithstanding anything in this Section 8.3 to the contrary, this Agreement
may be amended from time to time at the request of the Company, at the Company’s expense, and
without the consent of any Second Priority Agent, any First Lien Agent, any Senior Lender or any
Second Priority Secured Party to (i) add other parties holding Future Second Lien Indebtedness (or
any agent or trustee therefor) to the extent such Indebtedness is not prohibited by the Credit
Agreement, the Other First Priority Lien Obligations Credit Documents, the Second Priority Senior
Secured Notes Indenture or any other Second Priority Document governing Future Second Lien
Indebtedness, (ii) add other parties holding Obligations arising under the Other First Priority
Lien Obligations Credit Documents (or any agent or trustee thereof) to the extent such Obligations
are not prohibited by the Credit Agreement, the Other First Priority Lien Obligations Credit
Documents, the Second Priority Senior Secured Notes Indenture or any other Second Priority Document
governing Future Second Lien Indebtedness and (iii) in the case of Future Second Lien Indebtedness,
(a) establish that the Lien on the Common Collateral securing such Future Second Lien Indebtedness
shall be junior and subordinate in all respects to all Liens on the Common Collateral securing any
Senior Lender Claims and shall share in the benefits of the Common Collateral equally and ratably
with all






H-23









 







Liens on the Common Collateral securing any Second Priority Claims, and (b) provide to the
holders of such Future Second Lien Indebtedness (or any agent or trustee thereof) the comparable
rights and benefits (including any improved rights and benefits that have been consented to by the
First Lien Agents) as are provided to the holders of Second Priority Claims under this Agreement.
Any such additional party, each First Lien Agent and each Second Priority Agent shall be entitled
to rely on the determination of officers of the Company that such modifications do not violate the
Credit Agreement, the Other First Priority Lien Obligations Credit Documents, the Second Priority
Senior Secured Notes Indenture or any other Second Priority Document governing Future Second Lien
Indebtedness if such determination is set forth in an Officers’ Certificate delivered to such
party, the First Lien Agents and each Second Priority Agent; provided, however, that such
determination will not affect whether or not the Company has complied with its undertakings in the
Credit Agreement, the Other First Priority Lien Obligations Credit Documents, the Senior Collateral
Documents, the Second Priority Senior Secured Notes Indenture, any other Second Priority Document
governing Future Second Lien Indebtedness, the Second Priority Collateral Documents or this
Agreement.




          8.4. Information Concerning Financial Condition of the Company and the Subsidiaries.
Neither any First Lien Agent nor any Senior Lender shall have any obligation to the Second Priority
Agent or any Second Priority Secured Party to keep the Second Priority Agent or any Second Priority
Secured Party informed of, and the Second Priority Agent and the Second Priority Secured Parties
shall not be entitled to rely on the First Lien Agents or the Senior Lenders with respect to, (a)
the financial condition of the Company and the Subsidiaries and all endorsers, pledgors and/or
guarantors of the Second Priority Claims or the Senior Lender Claims and (b) all other
circumstances bearing upon the risk of nonpayment of the Second Priority Claims or the Senior
Lender Claims. Neither any Second Priority Agent nor any Second Priority Secured Party shall have
any obligation to any First Lien Agent or any Senior Lender to keep any First Lien Agent or any
Senior Lender informed of, and the First Lien Agents and the Senior Lenders shall not be entitled
to rely on the Second Priority Agents or the Second Priority Secured Parties with respect to, (a)
the financial condition of the Company and the Subsidiaries and all endorsers, pledgors and/or
guarantors of the Second Priority Claims or the Senior Lender Claims and (b) all other
circumstances bearing upon the risk of nonpayment of the Second Priority Claims or the Senior
Lender Claims. The First Lien Agents, the Senior Lenders, each Second Priority Agent and the
Second Priority Secured Parties shall have no duty to advise any other party hereunder of
information known to it or them regarding such condition or any such circumstances or otherwise.
In the event that any First Lien Agent, any Senior Lender, any Second Priority Agent or any Second
Priority Secured Party, in its or their sole discretion, undertakes at any time or from time to
time to provide any such information to any other party, it or they shall be under no obligation
(w) to make, and the First Lien Agents, the Senior Lenders, the Second Priority Agents and the
Second Priority Secured Parties shall not make, any express or implied representation or warranty,
including with respect to the accuracy, completeness, truthfulness or validity of any such
information so provided, (x) to provide any additional information or to provide any such
information on any subsequent occasion, (y) to undertake any investigation or (z) to disclose any
information that, pursuant to accepted or reasonable commercial finance practices, such party
wishes to maintain confidential or is otherwise required to maintain confidential.







H-24









 








          8.5. Subrogation. Each Second Priority Agent, on behalf of itself and each
applicable Second Priority Secured Party, hereby waives any rights of subrogation it may acquire as
a result of any payment hereunder until the Discharge of Senior Lender Claims has occurred.




          8.6. Application of Payments. Except as otherwise provided herein, all payments
received by the Senior Lenders may be applied, reversed and reapplied, in whole or in part, to such
part of the Senior Lender Claims as the Senior Lenders, in their sole discretion, deem appropriate,
consistent with the terms of the Senior Lender Documents. Except as otherwise provided herein,
each Second Priority Agent, on behalf of itself and each applicable Second Priority Secured Party,
assents to any such extension or postponement of the time of payment of the Senior Lender Claims or
any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or
release of any security that may at any time secure any part of the Senior Lender Claims and to the
addition or release of any other Person primarily or secondarily liable therefor.




          8.7. Consent to Jurisdiction; Waivers. The parties hereto consent to the
nonexclusive jurisdiction of any state or federal court located in New York, New York (the “New
York Courts”), and consent that all service of process may be made by registered mail directed to
such party as provided in Section 8.8 for such party. Service so made shall be deemed to be
completed three days after the same shall be posted as aforesaid. The parties hereto waive any
objection to any action instituted hereunder in any such court based on forum non conveniens, and
any objection to the venue of any action instituted hereunder in any such court. Each of the
parties hereto waives any right it may have to trial by jury in respect of any litigation based on,
or arising out of, under or in connection with this Agreement, or any course of conduct, course of
dealing, verbal or written statement or action of any party hereto in connection with the subject
matter hereof.




          8.8. Notices. All notices to the Second Priority Secured Parties and the Senior
Lenders permitted or required under this Agreement may be sent to the Trustee, the First Lien
Agents or any Second Priority Agent as provided in the Second Priority Senior Secured Notes
Indenture, the Credit Agreement, the Other First Priority Lien Obligations Credit Documents, the
other relevant Senior Lender Documents or the other relevant Second Priority Documents, as
applicable. Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and may be personally served,
telecopied, electronically mailed or sent by courier service or U.S. mail and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of a telecopy or
electronic mail or upon receipt via U.S. mail (registered or certified, with postage prepaid and
properly addressed). For the purposes hereof, the addresses of the parties hereto shall be as set
forth below each party’s name on the signature pages hereto, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the other parties. The
First Lien Agents hereby agree to promptly notify each Second Priority Agent upon payment in full
in cash of all Obligations under the applicable Senior Lender Documents (except for contingent
indemnities and cost and reimbursement obligations to the extent no claim therefor has been made).




          8.9. Further Assurances. Each of the Second Priority Agents, on behalf of itself and
each applicable Second Priority Secured Party, and each applicable First Lien Agent, on




H-25









 




behalf of itself and each Senior Lender, agrees that each of them shall take such further
action and shall execute and deliver to each other First Lien Agent and Second Priority Agent, the
Second Priority Secured Parties and the Senior Lenders such additional documents and instruments
(in recordable form, if requested) as each other First Lien Agent and Second Priority Agent, the
Second Priority Secured Parties or the Senior Lenders may reasonably request, at the expense of the
Company, to effectuate the terms of and the lien priorities contemplated by this Agreement.




          8.10. Governing Law. This Agreement has been delivered and accepted in and shall be
deemed to have been made in New York, New York and shall be interpreted, and the rights and
liabilities of the parties bound hereby determined, in accordance with the laws of the State of New
York.




          8.11. Binding on Successors and Assigns. This Agreement shall be binding upon the
First Lien Agents, the Senior Lenders, the Second Priority Agents, the Second Priority Secured
Parties, Holdings, the Company, the Company’s Subsidiaries party hereto and their respective
permitted successors and assigns.




          8.12. Specific Performance. Each First Lien Agent may demand specific performance of
this Agreement. Each Second Priority Agent, on behalf of itself and each applicable Second
Priority Secured Party, hereby irrevocably waives any defense based on the adequacy of a remedy at
law and any other defense that might be asserted to bar the remedy of specific performance in any
action that may be brought by either First Lien Agent.




          8.13. Section Titles. The section titles contained in this Agreement are and shall
be without substantive meaning or content of any kind whatsoever and are not a part of this
Agreement.




          8.14. Counterparts. This Agreement may be executed in one or more counterparts,
including by means of facsimile, each of which shall be an original and all of which shall together
constitute one and the same document.




          8.15. Authorization. By its signature, each Person executing this Agreement on
behalf of a party hereto represents and warrants to the other parties hereto that it is duly
authorized to execute this Agreement. The First Lien Agents represent and warrant that this
Agreement is binding upon the Senior Lenders. The Trustee represents and warrants that this
Agreement is binding upon the Indenture Secured Parties.




          8.16. No Third Party Beneficiaries; Successors and Assigns. This Agreement and the
rights and benefits hereof shall inure to the benefit of, and be binding upon, each of the parties
hereto and their respective successors and assigns and shall inure to the benefit of each of, and
be binding upon, the holders of Senior Lender Claims and Second Priority Claims. No other Person
shall have or be entitled to assert rights or benefits hereunder.




          8.17. Effectiveness. This Agreement shall become effective when executed and
delivered by the parties hereto. This Agreement shall be effective both before and after the
commencement of any Insolvency or Liquidation Proceeding. All references to the Company or any
other Grantor shall include the Company or any other Grantor as debtor and debtor-in-




H-26









 




possession and any receiver or trustee for the Company or any other Grantor (as the case may
be) in any Insolvency or Liquidation Proceeding.




          8.18. First Lien Agents and Second Priority Agents. It is understood and agreed that
(a) Credit Suisse AG, Cayman Islands Branch, is entering into this Agreement in its capacity as
administrative agent under the Credit Agreement and the provisions of Article VIII of the Credit
Agreement applicable to Credit Suisse AG, Cayman Islands Branch, as administrative agent thereunder
shall also apply to Credit Suisse AG, Cayman Islands Branch, as Credit Agreement Agent hereunder,
and (b) The Bank of New York Mellon Trust Company, N.A. is entering into this Agreement in its
capacity as Trustee pursuant to the Indenture and Collateral Agent pursuant to the Noteholder
Collateral Agreement and, as such is entitled to all rights, privileges, protections, benefits,
immunities and indemnities provided in the Indenture and the Noteholder Collateral Agreement.




          8.19. Relative Rights. Notwithstanding anything in this Agreement to the contrary
(except to the extent contemplated by Section 5.3(b)), nothing in this Agreement is intended to or
will (a) amend, waive or otherwise modify the provisions of the Credit Agreement, the Other First
Priority Lien Obligations Credit Documents, the Second Priority Senior Secured Notes Indenture or
any other Senior Lender Documents or Second Priority Documents entered into in connection with the
Credit Agreement, tthe Other First Priority Lien Obligations Credit Documents, the Second Priority
Senior Secured Notes Indenture or any other Senior Lender Document or Second Priority Document or
permit Holdings, the Company or any Subsidiary to take any action, or fail to take any action, to
the extent such action or failure would otherwise constitute a breach of, or default under, the
Credit Agreement or any other Senior Lender Documents entered into in connection with the Credit
Agreement, the Other First Priority Lien Obligations Credit Documents, the Second Priority Senior
Secured Notes Indenture or any other Second Priority Documents, (b) change the relative priorities
of the Senior Lender Claims or the Liens granted under the Senior Lender Documents on the Common
Collateral (or any other assets) as among the Senior Lenders, (c) otherwise change the relative
rights of the Senior Lenders in respect of the Common Collateral as among such Senior Lenders or
(d) obligate Holdings, the Company or any Subsidiary to take any action, or fail to take any
action, that would otherwise constitute a breach of, or default under, the Credit Agreement, the
Other First Priority Lien Obligations Credit Documents or any other Senior Lender Document entered
into in connection with the Credit Agreement, the Other First Priority Lien Obligations Credit
Documents, the Second Priority Senior Secured Notes Indenture or any other Second Priority
Documents.




          8.20. References. Notwithstanding anything to the contrary in this Agreement, any
references contained herein to any Section, clause, paragraph, definition or other provision of the
Second Priority Senior Secured Notes Indenture (including any definition contained therein) shall
be deemed to be a reference to such Section, clause, paragraph, definition or other provision as in
effect on the date of this Agreement; provided that any reference to any such Section, clause,
paragraph or other provision shall refer to such Section, clause, paragraph or other provision of
the Second Priority Senior Secured Notes Indenture, as applicable (including any definition
contained therein), as amended or modified from time to time if such amendment or modification has
been (1) made in accordance with the Second Priority Senior Secured Notes Indenture, and (2)
approved in writing by, or on behalf of, the requisite Senior Lenders as are






H-27









 







needed under the terms of the Credit Agreement and the Other First Priority Lien Obligations
Credit Documents, to approve such amendment or modification.




          8.21. Supplements. Upon the execution by any Subsidiary of the Company of a
supplement hereto in form and substance satisfactory to the First Lien Agent, such Subsidiary shall
be a party to this Agreement and shall be bound by the provisions hereof to the same extent as the
Company and each other Grantor are so bound.




          8.22. Joinder Requirements. The Company may designate additional obligations as
Other First Priority Lien Obligations or Future Second Lien Indebtedness only if the incurrence of
such obligations is permitted under each of the Credit Agreement, the Second Priority Senior
Secured Notes Indenture and this Agreement. If so permitted, the Company shall (i) notify each
First Lien Agent and Second Priority Agent in writing of such designation and (ii) cause the
applicable Other First Priority Lien Obligations Administrative Agent and the applicable Other
First Priority Lien Obligations Collateral Agent or the administrative agent or trustee and
collateral agent for such Future Second Lien Indebtedness to execute and deliver to each First Lien
Agent and Second Priority Agent, a Joinder Agreement substantially in the form of Exhibit A hereto
(with appropriate adjustments in the case of Future Second Lien Indebtedness). Notwithstanding
anything to the contrary set forth in this Section 8.22 or in Section 8.3 hereof, any First Lien
Agent and/or any Second Priority Agent may, and, at the request of the Company, shall, in each
case, without the consent of any other First Lien Agent or Second Priority Agent, any Senior Lender
or any Second Priority Secured Party, enter into a supplemental agreement (which may take the form
of an amendment, an amendment and restatement or a supplement of this Agreement) to facilitate the
designation of such additional obligations as Other First Priority Lien Obligations or Future
Second Lien Indebtedness. Any such amendment may, among other things, (i) add other parties holding
Future Second Lien Indebtedness (or any agent or trustee therefor) to the extent such Indebtedness
is not prohibited by the Credit Agreement, the Other First Priority Lien Obligations Credit
Documents, the Second Priority Senior Secured Notes Indenture or any other Second Priority Document
governing Future Second Lien Indebtedness, (ii) add other parties holding Obligations arising under
the Other First Priority Lien Obligations Credit Documents (or any agent or trustee thereof) to the
extent such Obligations are not prohibited by the Credit Agreement, the Other First Priority Lien
Obligations Credit Documents, the Second Priority Senior Secured Notes Indenture or any other
Second Priority Document governing Future Second Lien Indebtedness, (iii) in the case of Future
Second Lien Indebtedness, (a) establish that the Lien on the Common Collateral securing such Future
Second Lien Indebtedness shall be junior and subordinate in all respects to all Liens on the Common
Collateral securing any Senior Lender Claims and shall share in the benefits of the Common
Collateral equally and ratably with all Liens on the Common Collateral securing any Second Priority
Claims, and (b) provide to the holders of such Future Second Lien Indebtedness (or any agent or
trustee thereof) the comparable rights and benefits (including any improved rights and benefits
that have been consented to by the First Lien Agents) as are provided to the holders of Second
Priority Claims under the foregoing Agreement prior to the incurrence of such Future Second Lien
Indebtedness, and (iv) in the case of Obligations arising under Other First Priority Lien
Obligations Credit Documents, (a) establish that the Lien on the Common Collateral securing such
Obligations shall be superior in all respects to all Liens on the Common Collateral securing any
Second Priority Claims and any Future Second Lien Indebtedness and shall share in the benefits of
the Common Collateral






H-28









 







equally and ratably with all Liens on the Common Collateral securing any other Senior Lender
Claims, and (b) provide to the holders of such Obligations arising under the Other First Priority
Lien Obligations Credit Documents (or any agent or trustee thereof) the comparable rights and
benefits as are provided to the holders of Senior Lender Claims under the foregoing Agreement prior
to the incurrence of such Obligations. Any such additional party, each First Lien Agent and each
Second Priority Agent shall be entitled to rely on the determination of officers of the Company
that such modifications do not violate the Credit Agreement, the Other First Priority Lien
Obligations Credit Documents, the Second Priority Senior Secured Notes Indenture or any other
Second Priority Document governing Future Second Lien Indebtedness if such determination is set
forth in an officers’ certificate delivered to such party, the First Lien Agents and each Second
Priority Agent; provided, however, that such determination will not affect whether or not the
Company has complied with its undertakings in the Credit Agreement, the Other First Priority Lien
Obligations Credit Documents, the Senior Collateral Documents, the Second Priority Senior Secured
Notes Indenture, any other Second Priority Document governing Future Second Lien Indebtedness or
the Second Priority Collateral Documents.




          8.23. Intercreditor Agreements. Each party hereto agrees that the Senior Lenders (as
among themselves) and the Second-Priority Secured Parties (as among themselves) may each enter into
intercreditor agreements (or similar arrangements) with the applicable First Lien Agent or Second
Priority Agent governing the rights, benefits and privileges as among the Senior Lenders or the
Second-Priority Secured Parties, as the case may be, in respect of the Common Collateral, this
Agreement and the other Senior Collateral Documents or Second Priority Collateral Documents, as the
case may be, including as to application of proceeds of the Common Collateral, voting rights,
control of the Common Collateral and waivers with respect to the Common Collateral, in each case so
long as (A) the terms thereof do not violate or conflict with the provisions of this Agreement or
the other Senior Collateral Documents or Second Priority Collateral Documents, as the case maybe,
(B) in the case of any such intercreditor agreement (or similar arrangement) affecting any Senior
Lenders, the First Lien Agent acting on behalf of such Senior Lenders agrees in its sole discretion
to enter into any such intercreditor agreement (or similar arrangement) and (C) in the case of any
such intercreditor agreement (or similar arrangement) affecting the Senior Lenders holding Senior
Lender Claims under the Credit Agreement, such intercreditor agreement (or similar arrangement) is
permitted under the Credit Agreement or the Required Lenders otherwise authorize the applicable
First Lien Agent to enter into any such intercreditor agreement (or similar arrangement).
Notwithstanding the preceding clauses (B) and (C), to the extent that the applicable First Lien
Agent is not authorized to enter into any such intercreditor agreement (or similar arrangement) or
does not agree to enter into such intercreditor agreement (or similar arrangement ), such
intercreditor agreement (or similar arrangement) shall not be binding upon the applicable First
Lien Agent but, subject to the immediately succeeding sentence, may still bind the other parties
party thereto. In any event, if a respective intercreditor agreement (or similar arrangement)
exists, the provisions thereof shall not be (or be construed to be) an amendment, modification or
other change to this Agreement or any other Senior Collateral Document or Second Priority
Collateral Document, and the provisions of this Agreement and the other Senior Collateral Documents
and Second Priority Collateral Documents shall remain in full force and effect in accordance with
the terms hereof and thereof (as such provisions may be amended, modified or otherwise supplemented
from time to time in accordance with the terms thereof, including to give effect to any
intercreditor agreement (or similar arrangement)).







H-29









 








[Remainder of page intentionally left blank]






H-30









 







IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.




	 	 	 	 	 	 	 	 	 

	 	 	CREDIT SUISSE AG, CAYMAN ISLANDS

BRANCH (f/k/a Credit Suisse, Cayman Islands Branch),

as Credit Agreement Agent	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 
Name:
	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 
Name:
	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Address:
	 	Eleven Madison Avenue	 	 
	 

	 	 	 	 	 	New York, NY 10010	 	 
	 

	 	Attention:
	 	Agency Group	 	 
	 

	 	Telecopier:
	 	(212) 325-8304	 	 






Intercreditor Agreement Signature Page














 





	 	 	 	 	 	 	 

	 	 	THE BANK OF NEW YORK MELLON TRUST
 COMPANY, N.A.,

as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	Address: 10161 Centurion Parkway

Jacksonville, FL 32256

Attention: Corporate Trust Administration

Telecopier: (904) 645-1921	 	 






Intercreditor Agreement Signature Page



















 











	 	 	 	 	 	 	 

	 	 	CLAIRE’S INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	CLAIRE’S STORES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	CLAIRE’S BOUTIQUES, INC.	 	 
	 	 	CSI CANADA LLC	 	 
	 	 	CLAIRE’S PUERTO RICO CORP.	 	 
	 	 	CBI DISTRIBUTING CORP.	 	 
	 	 	CLAIRE’S CANADA CORP.	 	 
	 	 	BMS DISTRIBUTING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






Intercreditor Agreement














 





SCHEDULE I




CLAIRE’S BOUTIQUES, INC.

CSI CANADA LLC

CLAIRE’S PUERTO RICO CORP.

CBI DISTRIBUTING CORP.

CLAIRE’S CANADA CORP.

BMS DISTRIBUTING CORP.














 





EXHIBIT A

Joinder Agreement




JOINDER AGREEMENT




          JOINDER AGREEMENT (this “Agreement”) dated as of [___] [__], [____], among [____________]
(the “New Agent”), as an Other First Priority Lien Obligations Agent, CREDIT SUISSE AG, CAYMAN
ISLANDS BRANCH as Credit Agreement Agent, The Bank of New York Mellon Trust Company, N.A., as
Trustee, and CLAIRE’S STORES, INC. (on behalf of itself and its subsidiaries), and any other First
Lien Agent and other Second Priority Agent from time to time a party hereto.




          This Agreement is supplemental to that certain Intercreditor Agreement, dated as of March 4,
2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time,
the “Intercreditor Agreement”), between [________]. This Agreement has been entered into to record
the accession of the New Agent as Other First Priority Lien Obligations Agent under the
Intercreditor Agreement.




Definitions




          Capitalized terms used but not defined herein shall have the meanings assigned thereto in the
Intercreditor Agreement.




SECTION 1.




Accession



          1.1. The New Agent agrees to become, with immediate effect, a party to and agrees to be bound
by the terms of, the Intercreditor Agreement as an Other First Priority Lien Obligations Agent as
if it had originally been party to the Intercreditor Agreement as an Other First Priority Lien
Obligations Agent.




          1.2. The New Agent confirm that its address details for notices pursuant to the Intercreditor
Agreement are as follows: [_____________].




          1.3. Each party to this Agreement (other than the New Agent) confirms the acceptance of the
New Agent as an Other First Priority Lien Obligations Agent for purposes of the Intercreditor
Agreement.




          1.4. [________] is acting in the capacity of Other First Priority Lien Obligations Agent
solely for the Secured Parties under [_____________].




Intercreditor Agreement Signature Page














 





SECTION 2.

Miscellaneous




          2.1. This Agreement shall be construed in accordance with and governed by the law of the
State of New York.




          2.2. This Agreement may be executed in counterparts, each of which shall constitute an
original but all of which when taken together shall constitute a single contract. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.




          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.




[INSERT SIGNATURE BLOCKS]

















 








Exhibit I

to Collateral Agreement




          SUPPLEMENT NO. ______ dated as of _____________ (this “Supplement”), to the Collateral
Agreement dated as of March 4, 2011 (the “Collateral Agreement”), among CLAIRE’S STORES,
INC., a Florida corporation (the “Issuer”), each Pledgor party thereto from time to time
and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as collateral agent (in such capacity, the
“Collateral Agent”) for the Indenture Secured Parties (as defined in the Collateral
Agreement).




     A. Reference is made to the Indenture dated as of March 4, 2011 (as supplemented by the
Supplemental Indenture dated March 4, 2011 and as further amended, restated, supplemented, waived
or otherwise modified from time to time, the “Indenture”), among the Issuer, the Guarantors
party thereto from time to time, and The Bank of New York Mellon Trust Company, N.A., as trustee
and collateral agent.



     B. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Indenture and the Collateral Agreement.



     C. The Pledgors have entered into the Collateral Agreement pursuant to the Indenture. Section
5.16 of the Collateral Agreement provides that additional Subsidiaries may become Pledgors 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 Collateral Agreement to become a Pledgor under the
Collateral Agreement as consideration for the Notes previously purchased.



          Accordingly, the Collateral Agent and the New Subsidiary agree as follows:




          SECTION 1. In accordance with Section 5.16 of the Collateral Agreement, the New Subsidiary by
its signature below becomes a Pledgor under the Collateral Agreement with the same force and effect
as if originally named therein as a Pledgor, and the New Subsidiary hereby (a) agrees to all the
terms and provisions of the Collateral Agreement applicable to it as a Pledgor thereunder and (b)
represents and warrants that the representations and warranties made by it as a Pledgor thereunder
are true and correct, in all material respects, 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
Noteholder Claims (as defined in the Collateral Agreement), does hereby create and grant to the
Collateral Agent, for the ratable benefit of the Indenture Secured Parties, a security interest in
and Lien on all 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 “Pledgor” 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 and the other
Indenture Secured Parties that this Supplement has been duly authorized, executed and delivered by
it and constitutes its legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other similar laws affecting creditors’




I-1









 




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. This Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute but one contract.
This Supplement shall become effective when (a) the Collateral Agent shall have received a
counterpart of this Supplement that bears the signature of the New Subsidiary and (b) the
Collateral Agent has executed a counterpart hereof.




          SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth on
Schedule I attached hereto is a true and correct schedule of all the Pledged Securities of
the New Subsidiary as of the date hereof, (b) set forth on Schedule II attached hereto is a
true and correct schedule of all of the Patents, Trademarks and Copyrights of the New Subsidiary as
of the date hereof, (c) set forth on Schedule III attached hereto is a true and correct
schedule of all Commercial Tort Claims of the New Subsidiary individually in excess of $5.0 million
as of the date hereof and (d) 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 Collateral Agreement shall remain in
full force and effect.




          SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.




          SECTION 7. In the event 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. 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 8. All communications and notices hereunder shall be in writing and given as provided
in Section 5.01 of the Collateral Agreement.




          SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the reasonable fees,
disbursements and other charges of counsel for the Collateral Agent.







I-2









 








          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:


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
    as Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




I-3









 





Schedule I

to Supplement No. ____ to the

Collateral Agreement




Pledged Securities of the New Subsidiary




EQUITY INTERESTS



	 	 	 	 	 	 	 
	Number of Issuer	 	 	 	Number and Class of	 	Percentage of
	Certificate	 	Registered Owner	 	Equity Interest	 	Equity Interests
	 
	 	 	 	 	 	 





DEBT SECURITIES




	 	 	 	 	 	 	 	 	 
	Issuer	 	Principal Amount	 	Date of Note	 	Maturity Date
	 
	 	 	 	 





 









 





Schedule II

to Supplement No. ____ to the

Collateral Agreement




PATENTS, TRADEMARKS AND COPYRIGHTS







 









 








Schedule III

to Supplement No. ____ to the

Collateral Agreement




COMMERCIAL TORT CLAIMS




 









 





Schedule I

to Collateral Agreement




SUBSIDIARY LOAN PARTIES




1. BMS Distributing Corp.


2. CBI Distributing Corp.


3. Claire’s Boutiques, Inc.


4. Claire’s Canada Corp.


5. Claire’s Puerto Rico Corp.


6. CSI Canada LLC









 









 











Schedule II

to Collateral Agreement




PLEDGED SECURITIES




EQUITY INTERESTS



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Number of
	 	 	Name of	 	Certificate	 	 	 	Shares or Other
	Name of Owner	 	Issuer	 	Number	 	Class of Stock	 	Interests
	Claire’s Stores, Inc.
	 	Claire’s Puerto Rico Corp.	 	001 	 	Common	 	10 
	Claire’s Stores, Inc.
	 	CBI Distributing Corp.	 	1 	 	Common	 	100 
	Claire’s Boutiques, Inc.
	 	CBI Distributing Corp.	 	2 	 	Common	 	80 
	Claire’s Stores, Inc.
	 	Claire’s Boutiques, Inc.	 	1 	 	Common	 	100 
	Claire’s Stores, Inc.
	 	Claire’s Canada Corp.	 	R-1	 	Common	 	100 
	Claire’s Stores, Inc.
	 	Claire’s Canada Corp.	 	R-2	 	Common	 	1 
	Claire’s Canada Corp.
	 	Claire’s Stores Canada Corp.	 	C-4	 	Common	 	6,500,065 
	Claire’s Canada Corp.
	 	Claire’s Stores Canada Corp.	 	C-6	 	Common	 	3,250,000 
	CBI Distributing Corp.
	 	BMS Distributing Corp.	 	01 	 	Common	 	1,000 
	Claire’s Canada Corp.
	 	CSI Canada LLC	 	1 	 	Membership Interests	 	1 Membership Unit
	Claire’s Stores, Inc.
	 	Claire’s Swiss Holdings LLC	 	1 	 	Membership Interests	 	65 Membership Interests






 









 






DEBT SECURITIES




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date of	 	 	Maturity	 
	Name of Issuer	 	Principal Amount	 	 	Note	 	 	Date	 
	Claire’s Stores Canada Corp.
	 	$63,000,000 CAD	 	January 31, 2010	 	January 31, 2020






 









 






Schedule III

to Collateral Agreement




PATENTS, TRADEMARKS AND COPYRIGHTS




Trademark Registrations



	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trademark	 	Reg. No.	 	Owner	 	Classes	 	Status
	...IT’S AT CLAIRE’S

	 	 	3,817,929	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	C Swirl

	 	 	3,512,546	 	 	CBI Distributing Corp.
	 	 	4, 14, 16, 20, 26	 	 	Registered
	CLAIRE

	 	 	2,813,344	 	 	CBI Distributing Corp.
	 	 	28	 	 	Registered
	CLAIRE’S

	 	 	2,908,860	 	 	CBI Distributing Corp.
	 	 	20	 	 	Registered
	CLAIRE’S

	 	 	2,978,984	 	 	CBI Distributing Corp.
	 	 	16	 	 	Registered
	CLAIRE’S

	 	 	2,967,212	 	 	CBI Distributing Corp.
	 	 	20	 	 	Registered
	CLAIRE’S

	 	 	2,908,861	 	 	CBI Distributing Corp.
	 	 	26	 	 	Registered
	CLAIRE’S

	 	 	3,190,840	 	 	CBI Distributing Corp.
	 	 	21	 	 	Registered
	CLAIRE’S

	 	 	3,190,839	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	CLAIRE’S

	 	 	2,925,470	 	 	CBI Distributing Corp.
	 	 	25	 	 	Registered
	CLAIRE’S

	 	 	1,891,172	 	 	CBI Distributing Corp.
	 	 	25	 	 	Registered
	CLAIRE’S

	 	 	2,919,171	 	 	CBI Distributing Corp.
	 	 	21	 	 	Registered
	CLAIRE’S

	 	 	2,951,866	 	 	CBI Distributing Corp.
	 	 	3	 	 	Registered
	CLAIRE’S

	 	 	2,908,858	 	 	CBI Distributing Corp.
	 	 	11	 	 	Registered
	CLAIRE’S

	 	 	2,908,859	 	 	CBI Distributing Corp.
	 	 	16	 	 	Registered
	CLAIRE’S

	 	 	2,996,103	 	 	CBI Distributing Corp.
	 	 	14	 	 	Registered
	CLAIRE’S

	 	 	2,908,857	 	 	CBI Distributing Corp.
	 	 	9	 	 	Registered
	CLAIRE’S

	 	 	2,900,024	 	 	CBI Distributing Corp.
	 	 	24	 	 	Registered
	CLAIRE’S

	 	 	2,974,652	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	CLAIRE’S

	 	 	1,890,335	 	 	CBI Distributing Corp.
	 	 	42	 	 	Registered
	CLAIRE’S

	 	 	1,925,359	 	 	CBI Distributing Corp.
	 	 	14	 	 	Registered
	CLAIRE’S

	 	 	3,319,826	 	 	CBI Distributing Corp.
	 	 	3	 	 	Registered
	CLAIRE’S

	 	 	1,929,317	 	 	CBI Distributing Corp.
	 	 	5	 	 	Registered
	CLAIRE’S ACCESSORIES

	 	 	1,946,557	 	 	CBI Distributing Corp.
	 	 	42	 	 	Registered
	CLAIRE’S ACCESSORIES

	 	 	1,956,047	 	 	CBI Distributing Corp.
	 	 	42	 	 	Registered
	CLAIRE’S ACCESSORIES & Design

	 	 	2,294,937	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	CLAIRE’S BOUTIQUES & Design

	 	 	1,514,045	 	 	CBI Distributing Corp.
	 	 	42	 	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,867	 	 	CBI Distributing Corp.
	 	 	20	 	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,191	 	 	CBI Distributing Corp.
	 	 	26	 	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,868	 	 	CBI Distributing Corp.
	 	 	25	 	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,863	 	 	CBI Distributing Corp.
	 	 	9	 	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,862	 	 	CBI Distributing Corp.
	 	 	3	 	 	Registered
	CLAIRE’S CLUB

	 	 	3,343,775	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,866	 	 	CBI Distributing Corp.
	 	 	18	 	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,865	 	 	CBI Distributing Corp.
	 	 	14	 	 	Registered






 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trademark	 	Reg. No.	 	Owner	 	Classes	 	Status
	CLAIRE’S CLUB

	 	 	2,992,613	 	 	CBI Distributing Corp.
	 	 	21	 	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,864	 	 	CBI Distributing Corp.
	 	 	11	 	 	Registered
	CLAIRE’S ETC.

	 	 	2,064,149	 	 	CBI Distributing Corp.
	 	 	42	 	 	Registered
	CLAIRE’S ETC.

	 	 	2,065,959	 	 	CBI Distributing Corp.
	 	 	42	 	 	Registered
	CLAIRE’S (logo)

	 	 	3,602,239	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	CLAIRE’S (stylized)

	 	 	2,623,039	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	ICING

	 	 	3,743,653	 	 	CBI Distributing Corp.
	 	 	3, 9, 14, 18,

20, 25, 26, 35	 	 	Registered
	ICING BY CLAIRE’S

	 	 	3,050,863	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	ICING BY CLAIRE’S

	 	 	3,475,495	 	 	CBI Distributing Corp.
	 	 	14	 	 	Registered
	THE ICING

	 	 	3,461,876	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	THE ICING

	 	 	1,466,727	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	THE ICING

	 	 	2,762,642	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	THE ICING ACCESSORIES & Design

	 	 	2,234,841	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	SENSITIVE SOLUTIONS

	 	 	1,951,435	 	 	CBI Distributing Corp.
	 	 	14	 	 	Registered
	WHERE GETTING READY IS HALF THE FUN

	 	 	2,664,513	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered
	WHERE THROWING A PARTY IS ALL THE FUND

	 	 	3,136,920	 	 	CBI Distributing Corp.
	 	 	41	 	 	Registered
	BEE WHO YOU WANNA BE

	 	 	2,888,867	 	 	CBI Distributing Corp.
	 	 	35	 	 	Registered






 









 






Schedule IV

to Collateral Agreement




FILING JURISDICTIONS




          COLORADO:




1. Claire’s Boutiques, Inc.




          DELAWARE:




1. BMS Distributing Corp.

2. CBI Distributing Corp.

3. Claire’s Canada Corp.

4. Claire’s Puerto Rico Corp.

5. CSI Canada LLC




          FLORIDA:




1. Claire’s Stores, Inc.




 









 





Schedule V

to Collateral Agreement




COMMERCIAL TORT CLAIMS




NONE.



 









 





Schedule VI

to Collateral Agreement




MATTERS RELATING TO ACCOUNTS AND INVENTORY




NONE.