Document:

d1405714_ex4-5.htm

 Exhibit 4.6

OCEAN RIG UDW INC.

 

FORM OF

SUBORDINATED INDENTURE

Dated as of [                                ], 20[  ]

[                      ]

Trustee

TABLE OF CONTENTS

PAGE

	
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE

	  	
1

	
SECTION 1.01.

	
Definitions.

	
1

	
SECTION 1.02.

	
Other Definitions.

	
5

	
SECTION 1.03.

	
Incorporation by Reference of Trust Indenture Act.

	
5

	
SECTION 1.04.

	
Rules of Construction.

	
6

	
ARTICLE II THE SECURITIES

	  	
6

	
SECTION 2.01.

	
Issuable in Series.

	
6

	
SECTION 2.02.

	
Establishment of Terms of Series of Securities.

	
7

	
SECTION 2.03.

	
Execution and Authentication.

	
9

	
SECTION 2.04.

	
Registrar and Paying Agent.

	
10

	
SECTION 2.05.

	
Paying Agent to Hold Money in Trust.

	
10

	
SECTION 2.06.

	
Securityholder Lists.

	
11

	
SECTION 2.07.

	
Transfer and Exchange.

	
11

	
SECTION 2.08.

	
Mutilated, Destroyed, Lost and Stolen Securities.

	
12

	
SECTION 2.09.

	
Outstanding Securities.

	
12

	
SECTION 2.10.

	
Treasury Securities.

	
13

	
SECTION 2.11.

	
Temporary Securities.

	
13

	
SECTION 2.12.

	
Cancellation.

	
13

	
SECTION 2.13.

	
Defaulted Interest.

	
14

	
SECTION 2.14.

	
Global Securities.

	
14

	
SECTION 2.15.

	
CUSIP Numbers.

	16
	
ARTICLE III REDEMPTION

	  	16  
	
SECTION 3.01.

	
Notice to Trustee.

	16
	
SECTION 3.02.

	
Selection of Securities to be Redeemed.

	16
	
SECTION 3.03.

	
Notice of Redemption.

	17
	
SECTION 3.04.

	
Effect of Notice of Redemption.

	17
	
SECTION 3.05.

	
Deposit of Redemption Price.

	18
	
SECTION 3.06.

	
Securities Redeemed in Part.

	18
	
ARTICLE IV COVENANTS

	  	18
	
SECTION 4.01.

	
Payment of Principal and Interest.

	18
	
SECTION 4.02.

	
SEC Reports.

	18
	
SECTION 4.03.

	
Compliance Certificate.

	19
	
SECTION 4.04.

	
Stay, Extension and Usury Laws.

	20
	
SECTION 4.05.

	
Corporate Existence.

	20
	
SECTION 4.06.

	
Taxes.

	20
	
SECTION 4.07.

	
Additional Interest Notice.

	20
	
SECTION 4.08.

	
Further Instruments and Acts.

	20
	
ARTICLE V SUCCESSORS

	  	21
	
SECTION 5.01.

	
When Company May Merge, Etc.

	21
	
SECTION 5.02.

	
Successor Corporation Substituted.

	21
	
ARTICLE VI DEFAULTS AND REMEDIES

	  	21
	
SECTION 6.01.

	
Events of Default.

	21
	
SECTION 6.02.

	
Acceleration of Maturity; Rescission and Annulment.

	23
	
SECTION 6.03.

	
Collection of Indebtedness and Suits for Enforcement by Trustee.

	25
	
SECTION 6.04.

	
Trustee May File Proofs of Claim.

	25
	
SECTION 6.05.

	
Trustee May Enforce Claims Without Possession of Securities.

	26
	
SECTION 6.06.

	
Application of Money Collected.

	26
	
SECTION 6.07.

	
Limitation on Suits.

	26  
	
SECTION 6.08.

	
Unconditional Right of Holders to Receive Principal and Interest.

	27
	
SECTION 6.09.

	
Restoration of Rights and Remedies.

	27
	
SECTION 6.10.

	
Rights and Remedies Cumulative.

	27
	
SECTION 6.11.

	
Delay or Omission Not Waiver.

	27
	
SECTION 6.12.

	
Control by Holders.

	28
	
SECTION 6.13.

	
Waiver of Past Defaults.

	28
	
SECTION 6.14.

	
Undertaking for Costs.

	28
	
ARTICLE VII TRUSTEE

	  	29
	
SECTION 7.01.

	
Duties of Trustee.

	29
	
SECTION 7.02.

	
Rights of Trustee.

	30
	
SECTION 7.03.

	
Individual Rights of Trustee.

	31
	
SECTION 7.04.

	
Trustee's Disclaimer.

	31
	
SECTION 7.05.

	
Notice of Defaults.

	31
	
SECTION 7.06.

	
Reports by Trustee to Holders.

	31
	
SECTION 7.07.

	
Compensation and Indemnity.

	32
	
SECTION 7.08.

	
Replacement of Trustee.

	32
	
SECTION 7.09.

	
Successor Trustee by Merger, etc.

	33
	
SECTION 7.10.

	
Eligibility; Disqualification.

	33
	
SECTION 7.11.

	
Preferential Collection of Claims Against Company.

	34
	
ARTICLE VIII SATISFACTION AND DISCHARGE; DEFEASANCE

	  	34
	
SECTION 8.01.

	
Satisfaction and Discharge of Indenture.

	34
	
SECTION 8.02.

	
Application of Trust Funds; Indemnification.

	35
	
SECTION 8.03.

	
Legal Defeasance of Securities of any Series.

	36
	
SECTION 8.04.

	
Covenant Defeasance.

	37
	
SECTION 8.05.

	
Repayment to Company.

	38
	
ARTICLE IX AMENDMENTS AND WAIVERS

	  	38
	
SECTION 9.01.

	
Without Consent of Holders.

	38
	
SECTION 9.02.

	
With Consent of Holders.

	39
	
SECTION 9.03.

	
Limitations.

	40
	
SECTION 9.04.

	
Compliance with Trust Indenture Act.

	40
	
SECTION 9.05.

	
Revocation and Effect of Consents.

	41
	
SECTION 9.06.

	
Notation on or Exchange of Securities.

	41
	
SECTION 9.07.

	
Trustee Protected.

	41
	
SECTION 9.08.

	
Effect of Supplemental Indenture.

	41
	
ARTICLE X MISCELLANEOUS

	  	42
	
SECTION 10.01.

	
Trust Indenture Act Controls.

	42
	
SECTION 10.02.

	
Notices.

	42
	
SECTION 10.03.

	
Communication by Holders with Other Holders.

	43
	
SECTION 10.04.

	
Certificate and Opinion as to Conditions Precedent.

	43  
	
SECTION 10.05.

	
Statements Required in Certificate or Opinion.

	43
	
SECTION 10.06.

	
Record Date for Vote or Consent of Holders.

	44
	
SECTION 10.07.

	
Rules by Trustee and Agents.

	44
	
SECTION 10.08.

	
Legal Holidays.

	44
	
SECTION 10.09.

	
No Recourse Against Others.

	44
	
SECTION 10.10.

	
Counterparts.

	44
	
SECTION 10.11.

	
Governing Laws and Submission to Jurisdiction.

	45
	
SECTION 10.12.

	
No Adverse Interpretation of Other Agreements.

	45
	
SECTION 10.13.

	
Successors.

	45
	
SECTION 10.14.

	
Severability.

	45
	
SECTION 10.15.

	
Table of Contents, Headings, Etc.

	45
	
SECTION 10.16.

	
Securities in a Foreign Currency or in ECU.

	46
	
SECTION 10.17.

	
Judgment Currency.

	46
	
SECTION 10.18.

	
Compliance with Applicable Anti-Terrorism and Money Laundering Regulations.

	47
	
ARTICLE XI SINKING FUNDS

	  	47
	
SECTION 11.01.

	
Applicability of Article.

	47
	
SECTION 11.02.

	
Satisfaction of Sinking Fund Payments with Securities.

	48
	
SECTION 11.03.

	
Redemption of Securities for Sinking Fund.

	48

Reconciliation and tie between Trust Indenture Act of 1939 and Indenture,

Dated as of [                                ], 20[  ]

 

	
Section 310(a)(1)

	
7.10

	
(a)(2)

	
7.10

	
(a)(3)

	
Not Applicable

	
(a)(4)

	
Not Applicable

	
(a)(5)

	
7.10

	
(b)

	
7.10

	
(c)

	
Not Applicable

	
Section 311(a)

	
7.11

	
(b)

	
7.11

	
(c)

	
Not Applicable

	
Section 312(a)

	
2.06

	
(b)

	
10.03

	
(c)

	
10.03

	
Section 313(a)

	
7.06

	
(b)(1)

	
7.06

	
(b)(2)

	
7.06

	
(c)(1)

	
7.06

	
(d)

	
7.06

	
Section 314(a)

	
4.02, 10.05

	
(b)

	
Not Applicable

	
(c)(1)

	
10.04

	
(c)(2)

	
10.04

	
(c)(3)

	
Not Applicable

	
(d)

	
Not Applicable

	
(e)

	
10.05

	
(f)

	
Not Applicable

	
Section 315(a)

	
7.01

	
(b)

	
7.05

	
(c)

	
7.01

	
(d)

	
7.01

	
(e)

	
6.14

	
Section 316(a)(1)(A)

	
6.12

	
(a)(1)(B)

	
6.13

	
(a)(2)

	
Not Applicable

	
(b)

	
6.13

	
(c)

	
10.06

	
Section 317(a)(1)

	
6.03

	
(a)(2)

	
6.04

	
(b)

	
2.05

	
Section 318(a)

	
10.01

 

Note:  This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.

Indenture dated as of [                                                      ], 20[  ] between OCEAN RIG UDW INC., a company organized under the laws of the Cayman Islands (the "Company") and [] (the "Trustee").

 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Securities issued under this Indenture.

 

ARTICLE I

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01.  Definitions.

 

"Additional Amounts" means any additional amounts which are required hereby or by any Security, under circumstances specified herein or therein, to be paid by the Company in respect of certain taxes imposed on Holders specified therein and which are owing to such Holders.

 

"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 the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any person, shall mean 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 or by agreement or otherwise.

 

"Agent" means any Registrar or Paying Agent.

 

"Bankruptcy Law" means Title 11 of the United States Code (or any successor thereto) or any similar federal or state law for the relief of debtors.

 

"Board of Directors" means the board of directors of the Company or any duly authorized committee thereof.

 

"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been adopted by the Board of Directors or pursuant to authorization by the Board of Directors and to be in full force and effect on the date of the certificate and delivered to the Trustee.

 

"Business Day" means any day other than a (x) Saturday, (y) Sunday or (z) day on which state or federally chartered banking institutions in New York, New York are not required to be open.

 

"Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, but excluding any debt securities convertible into such equity.

 

1

"Certificated Securities" means Securities in the form of physical, certificated Securities in registered form.

 

"Company" means the party named as such above until a successor replaces it in accordance with the terms of this Indenture and thereafter means the successor.

 

"Company Order" means a written order signed in the name of the Company by two Officers, one of whom must be the Company's principal executive officer, principal financial officer or principal accounting officer.

 

"Company Request" means a written request signed in the name of the Company by its Chairman of the Board, a President or a Vice President, and by its Chief Financial Officer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

 

"Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered which office at the date of the execution of this Indenture is [ ], Attention: [ ], or at such other address as the Trustee may designate from time to time.

 

"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.

 

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

 

"Default Rate" means the default rate of interest specified in the Securities.

 

"Depository" means, with respect to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities, the person designated as Depository for such Series by the Company, which Depository shall be a clearing agency registered under the Exchange Act; and if at any time there is more than one such person, "Depository" as used with respect to the Securities of any Series shall mean the Depository with respect to the Securities of such Series.

 

"Discount Security" means any Security that provides for an amount less than the stated principal amount thereof to be due and payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.02.

 

"Dollars" means the currency of The United States of America.

 

"ECU" means the European Currency Unit as determined by the Commission of the European Union.

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

 

"Foreign Currency" means any currency or currency unit issued by a government other than the government of The United States of America.

 

2

"Foreign Government Obligations" means with respect to Securities of any Series that are denominated in a Foreign Currency, (i) direct obligations of the government that issued or caused to be issued such currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by or acting as an agency or instrumentality of such government the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case under clauses (i) or (ii), are not callable or redeemable at the option of the issuer thereof.

 

"Global Security" or "Global Securities" means a Security or Securities, as the case may be, in the form established pursuant to Section 2.02 evidencing all or part of a Series of Securities, issued to the Depository for such Series or its nominee, and registered in the name of such Depository or nominee.

 

"Holder" or "Securityholder" means a person in whose name a Security is registered.

 

"Indenture" means this Indenture as amended and supplemented from time to time and shall include the form and terms of particular Series of Securities established as contemplated hereunder.

 

"Interest," in respect of the Securities, unless the context otherwise requires, refers to interest payable on the Securities, including any additional interest that may become payable pursuant to Section 6.02(b).

 

"Maturity," when used with respect to any Security or installment of principal thereof, means the date on which the principal of such Security or such installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, notice of option to elect repayment or otherwise.

 

"Officer" means the Chairman of the Board, the President, any Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.

 

"Officers' Certificate" means a certificate signed by two Officers, one of whom must be the Company's principal executive officer, principal financial officer or principal accounting officer.

 

"Opinion of Counsel" means a written opinion of legal counsel who is, and which opinion is, acceptable to the Trustee and its counsel.  Such legal counsel may be an employee of or counsel to the Company or the Trustee.

 

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

 

"Principal" or "principal" of a Security means the principal of the Security plus, when appropriate, the premium, if any, on, and any Additional Amounts in respect of, the Security.

 

3

"Responsible Officer" means any officer of the Trustee in its Corporate Trust Office and also means, any vice president, managing director, director, associate, assistant vice president, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular corporate trust matter, any other officer to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with a particular subject.

 

"SEC" means the Securities and Exchange Commission.

 

"Security" or "Securities" means the debentures, notes or other debt instruments of the Company of any Series authenticated and delivered under this Indenture.

 

"Series" or "Series of Securities" means each series of debentures, notes or other debt instruments of the Company created pursuant to Sections 2.01 and 2.02 hereof.

 

"Stated Maturity" when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

 

"Subordinated Indebtedness" means any indebtedness which is expressly subordinated to the indebtedness evidenced by Securities.

 

"Subsidiary" means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.

 

"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "TIA" means, to the extent required by any such amendment, the Trust Indenture Act as so amended.

 

"Trustee" means the person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each person who is then a Trustee hereunder, and if at any time there is more than one such person, "Trustee" as used with respect to the Securities of any Series shall mean the Trustee with respect to Securities of that Series.

 

"U.S. Government Obligations" means securities which are (i) direct obligations of The United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of The United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by The United States of America, and which in the case of (i) and (ii)

 

4

are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a 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 Obligation evidenced by such depository receipt.

 

SECTION 1.02.   Other Definitions.

 

	
 

TERM

	
 

DEFINED IN SECTION

	
"Applicable Law"

	
10.18

	
"Event of Default"

	
6.01

	
"Instrument"

	
6.01

	
"Journal"

	
10.16

	
"Judgment Currency"

	
10.17

	
"Legal Holiday"

	
10.08

	
"mandatory sinking fund payment"

	
11.01

	
"Market Exchange Rate"

	
10.16

	
"New York Banking Day"

	
10.17

	
"optional sinking fund payment"

	
11.01

	
"Paying Agent"

	
2.04

	
"Registrar"

	
2.04

	
"Required Currency"

	
10.17

	
"successor person"

	
5.01

	
"Temporary Securities"

	
2.11

 

SECTION 1.03.  Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.  This Indenture shall also include those provisions of the TIA required to be included herein by the provisions of the Trust Indenture Reform Act of 1990.  The following TIA terms used in this Indenture have the following meanings:

 

"indenture securities" means the Securities.

 

"indenture security holder" means a Securityholder.

 

"indenture to be qualified" means this Indenture.

 

"indenture trustee" or "institutional trustee" means the Trustee.

 

"obligor" on the indenture securities means the Company and any successor obligor upon the Securities.

 

5

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein are used herein as so defined.

 

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 generally accepted accounting principles;

 

(c)           references to "generally accepted accounting principles" shall mean generally accepted accounting principles in effect as of the time when and for the period as to which such accounting principles are to be applied;

 

(d)           "or" is not exclusive;

 

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

 

(f)           provisions apply to successive events and transactions;

 

(g)           references to agreements and other instruments include subsequent amendments thereto;

 

(h)           the term "merger" includes a statutory share exchange, and the term "merged" has a correlative meaning; and

 

(i)           "herein," "hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

ARTICLE II

 

THE SECURITIES

 

SECTION 2.01.  Issuable in Series.

 

The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.  The Securities may be issued in one or more Series.  All Securities of a Series shall be identical except as may be set forth in a Board Resolution, a supplemental indenture or an Officers' Certificate detailing the adoption of the terms thereof pursuant to the authority granted under a Board Resolution.  In the case of Securities of a Series to be issued from time to time, the Board Resolution, Officers' Certificate or supplemental indenture may provide for the method by which specified terms (such as interest rate, maturity date, record date or date from which interest shall accrue) are to be determined.  Securities may

 

6

differ between Series in respect of any matters, provided that all Series of Securities shall be equally and ratably entitled to the benefits of the Indenture.

 

SECTION 2.02.  Establishment of Terms of Series of Securities.

 

At or prior to the issuance of any Securities within a Series, the following shall be established (as to the Series generally, in the case of Subsection (a), and either as to such Securities within the Series or as to the Series generally in the case of Subsections (b) through (t) by a Board Resolution, a supplemental indenture or an Officers' Certificate pursuant to authority granted under a Board Resolution:

 

(a)           the title, designation, aggregate principal amount and authorized denominations of the Securities of the Series;

 

(b)           the price or prices, (expressed as a percentage of the aggregate principal amount thereof) at which the Securities of the Series will be issued;

 

(c)           the date or dates on which the principal of the Securities of the Series is payable;

 

(d)           the rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to determine such rate or rates (including, but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the Securities of the Series shall bear interest, if any, the date or dates from which such interest, if any, shall commence and be payable and any regular record date for the interest payable on any interest payment date;

 

(e)           any optional or mandatory sinking fund provisions or conversion or exchangeability provisions upon which Securities of the Series shall be redeemed, purchased, converted or exchanged;

 

(f)           the date, if any, after which and the price or prices at which the Securities of the Series may be optionally redeemed or must be mandatorily redeemed and any other terms and provisions of optional or mandatory provisions;

 

(g)           if other than denominations of $1,000 and any integral multiple thereof, the denominations in which the Securities of the Series shall be issuable;

 

(h)           if other than the full principal amount, the portion of the principal amount of the Securities of the Series that shall be payable upon declaration of acceleration pursuant to Section 6.02 or provable in bankruptcy;

 

(i)           any addition to or change in the Events of Default which applies to any Securities of the Series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.02;

 

7

(j)           the currency or currencies, including composite currencies, in which payments of principal of, premium or interest, if any, on the Securities of the Series will be payable, if other than the currency of the United States of America;

 

(k)           if payments of principal of, premium or interest, if any, on the Securities of the Series will be payable, at the Company's election or at the election of any Holder, in a currency other than that in which the Securities of the Series are stated to be payable, the period or periods within which, and the terms and conditions upon which, the election may be made;

 

(l)           if payments of interest, if any, on the Securities of the Series will be payable, at the Company's election or at the election of any Holder, in cash or additional securities, and the terms and conditions upon which the election may be made;

 

(m)           if denominated in a currency or currencies other than the currency of the United States of America, the equivalent price of the Securities of the Series in the currency of the United States of America for purposes of determining the voting rights of Holders of the Securities of the Series;

 

(n)           if the amount of payments of principal, premium or interest may be determined with reference to an index, formula or other method based on a coin or currency other than that in which the Securities of the Series are stated to be payable, the manner in which the amounts will be determined;

 

(o)           any restrictive covenants or other material terms relating to the Securities of the Series;

 

(p)           whether the Securities of the Series will be issued in the form of global securities or certificates in registered form;

 

(q)           any terms with respect to subordination;

 

(r)           any listing on any securities exchange or quotation system;

 

(s)           additional provisions, if any, related to defeasance and discharge of the offered debt securities; and

 

(t)           the applicability of any guarantees, which would be governed by New York law.

 

All Securities of any one Series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the Board Resolution, supplemental indenture or Officers' Certificate referred to above, and the authorized principal amount of any Series may not be increased to provide for issuance of additional Securities of such Series, unless otherwise provided in such Board Resolution, supplemental Indenture or Officers' Certificate.

 

8

SECTION 2.03.  Execution and Authentication.

 

Two Officers shall sign the Securities for the Company by manual or facsimile signature.

 

If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.

 

A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.  The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

 

The Trustee shall at any time, and from time to time, authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or Officers' Certificate, upon receipt by the Trustee of a Company Order.  Such Company Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent or agents, which oral instructions shall be promptly confirmed in writing.  Each Security shall be dated the date of its authentication unless otherwise provided by a Board Resolution, a supplemental indenture hereto or an Officers' Certificate.

 

The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution, supplemental indenture hereto or Officers' Certificate delivered pursuant to Section 2.02, except as provided in Section 2.08.

 

Prior to the issuance of Securities of any Series, the Trustee shall have received and (subject to Section 7.02) shall be fully protected in relying on: (a) the Board Resolution, supplemental indenture hereto or Officers Certificate establishing the form of the Securities of that Series or of Securities within that Series and the terms of the Securities of that Series or of Securities within that Series, (b) an Officers' Certificate complying with Section 10.04, and (c) an Opinion of Counsel complying with Section 10.04.

 

The Trustee shall have the right to decline to authenticate and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines that such action may not lawfully be taken; or (b) if a Responsible Officer of the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to Holders of any then outstanding Series of Securities.

 

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities.  An authenticating agent may authenticate Securities 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 the Company or an Affiliate.

 

If any successor that has replaced the Company in accordance with Article 5 has executed an indenture supplemental hereto with the Trustee pursuant to Section 5.01, any of the Securities authenticated or delivered prior to such transaction may, from time to time, at the request of such successor, be exchanged for other Securities executed in the name of the such

 

9

successor with such changes in phraseology and form as may be appropriate, but otherwise identical to the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon receipt of a Company Order of such successor, shall authenticate and deliver Securities as specified in such order for the purpose of such exchange.  If Securities shall at any time be authenticated and delivered in any new name of such successor pursuant to this provision of Section 2.03 in exchange or substitution for or upon registration of transfer of any Securities, such successor, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities then outstanding for Securities authenticated and delivered in such new name.

 

SECTION 2.04.  Registrar and Paying Agent.

 

The Company shall maintain, with respect to each Series of Securities, at the place or places specified with respect to such Series pursuant to Section 2.02, an office or agency where Securities of such Series may be presented or surrendered for payment ("Paying Agent") and where Securities of such Series may be surrendered for registration of transfer or exchange ("Registrar").  The Registrar shall keep a register with respect to each Series of Securities and to their transfer and exchange.  The Company will give prompt written notice to the Trustee of the name and address, and any change in the name or address, of each Registrar and Paying Agent.  If at any time the Company shall fail to maintain any such required Registrar or Paying Agent or shall fail to furnish the Trustee with the name and address thereof, such presentations and surrenders may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations and surrenders.

 

The Company may also from time to time designate one or more co-registrars or additional paying agents and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligations to maintain a Registrar or Paying Agent in each place so specified pursuant to Section 2.02 for Securities of any Series for such purposes.  The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the name or address of any such co-registrar or additional paying agent.  The term "Registrar" includes any co-registrar; and the term "Paying Agent" includes any additional paying agent.

 

The Company hereby appoints [                                                                ] as the initial Registrar and Paying Agent for each Series unless another Registrar or Paying Agent as the case may be, is appointed prior to the time Securities of that Series are first issued.  Each Registrar and Paying Agent shall be entitled to all of the rights, protections, exculpations and indemnities afforded to the Trustee in connection with its roles as Registrar and Paying Agent.

 

SECTION 2.05.  Paying Agent to Hold Money in Trust.

 

The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust, for the benefit of Securityholders of any Series of Securities, or the Trustee, all money held by the Paying Agent for the payment of principal of or interest on the Series of Securities, and will notify the Trustee of any default by the Company 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 Company at any time may require

 

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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 Company or a Subsidiary) shall have no further liability for the money.  If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of Securityholders of any Series of Securities all money held by it as Paying Agent.

 

SECTION 2.06.  Securityholder 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 Securityholders of each Series of Securities and shall otherwise comply with TIA Section 312(a).  If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least [  ] 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 Securityholders of each Series of Securities.

 

SECTION 2.07.  Transfer and Exchange.

 

Where Securities of a Series are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of the same Series, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met.  To permit registrations of transfers and exchanges, the Trustee shall authenticate Securities at the Registrar's request.  Any exchange or transfer shall be without charge, except that the Company or the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge required by law; provided that this sentence shall not apply to any exchange pursuant to Section 2.11, 2.08, 3.06 or 9.06.

 

Neither the Company nor the Registrar shall be required (a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning at the opening of business [  ] days immediately preceding the mailing of a notice of redemption of Securities of that Series selected for redemption and ending at the close of business on the day of such mailing, or (b) to register the transfer of or exchange Securities of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part.

 

All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Company, evidencing the same debt and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.  Any Registrar appointed pursuant to Section 2.04 shall provide to the Trustee such information as the Trustee may reasonably require in connection with the delivery by such Registrar of Securities upon transfer or exchange of Securities.  Each Holder of a Security agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder's Security in violation of any provision of this Indenture and/or applicable U.S. federal or state securities law.

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SECTION 2.07.  Mutilated, Destroyed, Lost and Stolen Securities.

 

If any mutilated Security is surrendered to the Registrar, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

If there shall be delivered to the Company and the Registrar (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Registrar that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

 

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series duly issued hereunder.

 

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

 

SECTION 2.09.  Outstanding Securities.

 

The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest on a Global Security effected by the Trustee in accordance with the provisions hereof and those described in this Section as not outstanding.

 

If a Security is replaced pursuant to Section 2.08, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser.

 

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds on the Maturity of Securities of a Series money sufficient to pay such Securities

 

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payable on that date, then on and after that date such Securities of the Series cease to be outstanding and interest on them ceases to accrue.

 

A Security does not cease to be outstanding because the Company or an Affiliate holds the Security.

 

In determining whether the Holders of the requisite principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of a Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02.

 

SECTION 2.10.  Treasury Securities.

 

In determining whether the Holders of the required principal amount of Securities of a Series have concurred in any request, demand, authorization, direction, notice, consent or waiver Securities of a Series owned by the Company or an Affiliate shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver only Securities of a Series that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded.

 

SECTION 2.11.  Temporary Securities.

 

Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary securities upon a Company Order ("Temporary Securities").  Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall prepare and the Trustee upon written request shall authenticate definitive Securities of the same Series and date of maturity in exchange for temporary Securities.  Until so exchanged, temporary securities shall have the same rights under this Indenture as the definitive Securities.

 

SECTION 2.12.  Cancellation.

 

The Company at any time may deliver Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee or its agent any Securities surrendered to them for transfer, exchange, payment or conversion.  The Trustee and no one else shall cancel, in accordance with its standard procedures, all Securities surrendered for transfer, exchange, payment, conversion or cancellation and shall deliver the cancelled Securities to the Company.  No Security shall be authenticated in exchange for any Security cancelled pursuant to this Section 2.12.

 

The Company may, to the extent permitted by law, purchase Securities in the open market or by tender offer at any price or by private agreement.  Any Securities purchased or otherwise acquired by the Company or any of its Subsidiaries prior to the final maturity of such Securities may, to the extent permitted by law, be reissued or resold or may, at the option of the Company, be surrendered to the Trustee for cancellation.  Any Securities surrendered for

 

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cancellation may not be reissued or resold and shall be promptly cancelled by the Trustee, and the Company may not hold or resell such Securities or issue any new Securities to replace any such Securities.

 

SECTION 2.13.  Defaulted Interest.

 

If the Company defaults in a payment of interest on a Series of Securities, it shall pay defaulted interest, plus, to the extent permitted by law, any interest payable on the defaulted interest at the Default Rate, to the persons who are Security holders of the Series on a subsequent special record date.  The Company shall fix the record date and payment date.  At least [  ] days before the record date, the Company shall mail to the Trustee and the Paying Agent and to each Securityholder of the Series a notice that states the record date, the payment date and the amount of interest to be paid.  The Company may pay defaulted interest in any other lawful manner.

 

SECTION 2.14.  Global Securities.

 

(a)           A Board Resolution, a supplemental indenture hereto or an Officers' Certificate shall establish whether the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities and the Depository for such Global Security or Securities.

 

(b)            (i)           Notwithstanding any provisions to the contrary contained in Section 2.07 of the Indenture and in addition thereto, any Global Security shall be exchangeable pursuant to Section 2.07 of the Indenture for Securities registered in the names of Holders other than the Depository for such Security or its nominee only if (A) such Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Security or if at any time such Depository ceases to be a clearing agency registered under the Exchange Act, and, in either case, the Company fails to appoint a successor Depository within 90 days of such event, (B) the Company executes and delivers to the Trustee an Officers' Certificate to the effect that such Global Security shall be so exchangeable or (C) an Event of Default with respect to the Securities represented by such Global Security shall have happened and be continuing.

 

(ii)           Except as provided in this Section 2.14(b), a Global Security may not be transferred except as a whole by the Depository with respect to such Global Security to a nominee of such Depository, by a nominee of such Depository to such Depository or another nominee of such Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository.

 

(iii)           Securities issued in exchange for a Global Security or any portion thereof shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the Depository shall designate and shall bear the applicable legends provided for herein.  Any Global Security to be exchanged in whole shall be surrendered by the Depository to the Trustee, as Registrar.  With regard to any Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, if

 

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the Registrar is acting as custodian for the Depository or its nominee with respect to such Global Security, the principal amount thereof shall be reduced by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee.  Upon any such surrender or adjustment, the Trustee shall authenticate and deliver the Security issuable on such exchange to or upon the order of the Depository or an authorized representative thereof.

 

(iv)           The registered Holder may grant proxies and otherwise authorize any Person, including participants in the Depository and persons that may hold interests through participants in the Depository, to take any action which a Holder is entitled to take under this Indenture or the Securities.

 

(v)           In the event of the occurrence of any of the events specified in 2.14(b)(i), the Company will promptly make available to the Trustee a reasonable supply of Certificated Securities in definitive, fully registered form, without interest coupons.  If (A) an event described in Section 2.14(b)(i)(A) or (B) occurs and definitive Certificated Securities are not issued promptly to all beneficial owners or (B) the Registrar receives from a beneficial owner instructions to obtain definitive Certificated Securities due to an event described in Section 2.14(b)(i)(C) and definitive Certificated Securities are not issued promptly to any such beneficial owner, the Company expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to Section 6.07 hereof, the right of any beneficial owner of Securities to pursue such remedy with respect to the portion of the Global Security that represents such beneficial owner's Securities as if such definitive certificated Securities had been issued.

 

(vi)           Notwithstanding any provision to the contrary in this Indenture, so long as a Global Security remains outstanding and is held by or on behalf of the Depository, transfers of a Global Security, in whole or in part, or of any beneficial interest therein, shall only be made in accordance with Section 2.07, this Section 2.14(b) and the rules and procedures of the Depository for such Global Security to the extent applicable to such transaction and as in effect from time to time.

 

(c)           Any Global Security issued hereunder shall bear a legend in substantially the following form:

 

"This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of the Depository or a nominee of the Depository.  This Security is exchangeable for Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Indenture, and may not be transferred except as a whole by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository."

 

(d)           The Depository, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture.

 

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(e)           Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.02, payment of the principal of and interest, if any, on any Global Security shall be made to the Holder thereof at their registered office.

 

(f)           At all times the Securities are held in book-entry form with a Depository, (i) the Trustee may deal with such Depository as the authorized representative of the Holders, (ii) the rights of the Holders shall be exercised only through the Depository and shall be limited to those established by law and agreement between the Holders and the Depository and/or direct participants of the Depository, (iii) the Depository will make book-entry transfers among the direct participants of the Depository and will receive and transmit distributions of principal and interest on the Securities to such direct participants; and (iv) the direct participants of the Depository shall have no rights under this Indenture, or any supplement hereto, under or with respect to any of the Securities held on their behalf by the Depository, and the Depository may be treated by the Trustee and its agents, employees, officers and directors as the absolute owner of the Securities for all purposes whatsoever.

 

SECTION 2.15.  CUSIP Numbers.

 

The Company in issuing the Securities may use "CUSIP", "CCN", "ISIN" or other identification numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP", "CCN", "ISIN" or such other identification 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 Securities or as contained in any notice of a redemption and that reliance may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.

 

ARTICLE III

 

REDEMPTION

 

SECTION 3.01.   Notice to Trustee.

 

The Company may, with respect to any series of Securities, reserve the right to redeem and pay the Series of Securities or may covenant to redeem and pay the Series of Securities or any part thereof prior to the Stated Maturity thereof at such time and on such terms as provided for in such Securities.  If a Series of Securities is redeemable and the Company wants or is obligated to redeem prior to the Stated Maturity thereof all or part of the Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee and Registrar in writing of the redemption date and the principal amount of Series of Securities to be redeemed.  The Company shall give the notice at least [  ] days before the redemption date (or such shorter notice as may be acceptable to the Trustee and Registrar).

 

SECTION 3.02.  Selection of Securities to be Redeemed.

 

Unless otherwise indicated for a particular Series by a Board Resolution, a supplemental indenture or an Officers' Certificate, if less than all the Securities of a Series are to be redeemed, the Registrar shall select the Securities of the Series to be redeemed in accordance

 

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with its customary procedures.  The Registrar shall make the selection from Securities of the Series outstanding not previously called for redemption.  The Registrar may select for redemption portions of the principal of Securities of the Series that have denominations larger than $1,000.  Securities of the Series and portions of them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or, with respect to Securities of any Series issuable in other denominations pursuant to Section 2.02(g), the minimum principal denomination for each Series and integral multiples thereof.  Provisions of this Indenture that apply to Securities of a Series called for redemption also apply to portions of Securities of that Series called for redemption.

 

SECTION 3.03.  Notice of Redemption.

 

Unless otherwise indicated for a particular Series by Board Resolution, a supplemental indenture hereto or an Officers' Certificate, at least [  ] days but not more than [  ] days before a redemption date, the Company shall mail a notice of redemption by first-class mail to each Holder whose Securities are to be redeemed.

 

The notice shall identify the Securities of the Series to be redeemed and shall state:

 

(a)           the redemption date;

 

(b)           the redemption price;

 

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

 

(d)           that Securities of the Series called for redemption must be surrendered to the Paying Agent to collect the redemption price;

 

(e)           that interest on Securities of the Series called for redemption ceases to accrue on and after the redemption date; and

 

(f)           any other information as may be required by the terms of the particular Series or the Securities of a Series being redeemed.

 

At the Company's written request, the Trustee shall distribute the notice of redemption prepared by the Company in the Company's name and at its expense.

 

SECTION 3.04.  Effect of Notice of Redemption.

 

Once notice of redemption is mailed or published as provided in Section 3.03, Securities of a Series called for redemption become due and payable on the redemption date and at the redemption price.  A notice of redemption may not be conditional.  Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price plus accrued interest to the redemption date.

 

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SECTION 3.05.  Deposit of Redemption Price.

 

On or before the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest, if any, on all Securities to be redeemed on that date.

 

SECTION 3.06.  Securities Redeemed in Part.

 

Upon surrender of a Security that is redeemed in part, the Trustee shall authenticate for the Holder a new Security of the same Series and the same maturity equal in principal amount to the unredeemed portion of the Security surrendered.

 

ARTICLE IV

 

COVENANTS

 

SECTION 4.01.  Payment of Principal and Interest.

 

The Company covenants and agrees for the benefit of the Holders of each Series of Securities that it will duly and punctually pay the principal of and interest, if any, on the Securities of that Series in accordance with the terms of such Securities and this Indenture.

Unless otherwise provided under the terms of a particular Series of Securities:

(a)           an installment of principal or interest shall be considered paid on the date it is due if the Paying Agent (other than the Company) holds by [] [a].m., New York City time, on that date money, deposited by the Company or an Affiliate thereof, sufficient to pay such installment.  The Company shall (in immediately available funds), to the fullest extent permitted by law, pay interest on overdue principal and overdue installments of interest at the rate borne by the Securities per annum; and

 

(b)           payment of the principal of and interest on the Securities shall be made at the office or agency of the Company maintained for that purpose in [] (which shall initially be [], the Paying Agent) 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; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address appears in the register; provided, further, that a Holder with an aggregate principal amount in excess of $[] will be paid by wire transfer in immediately available funds at the election of such Holder if such Holder has provided wire transfer instructions to the Company at least [  ] Business Days prior to the payment date.

 

SECTION 4.02.  SEC Reports.

 

So long as any Securities are outstanding, the Company shall (i) file with the SEC within the time periods prescribed by its rules and regulations and (ii) furnish to the Trustee and

 

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the Holders of the Securities within [  ] days after the date on which the Company would be required to file the same with the SEC pursuant to its rules and regulations (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), all quarterly and annual financial information required to be furnished or filed with the SEC pursuant to Section 13 and Section 15(d) of the Exchange Act and, with respect to the annual consolidated financial statements only, a report thereon by the Company's independent auditors.  The Company also shall comply with the other provisions of TIA Section 314(a).

 

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 or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates).  The Company shall not be required to file any report or other information with the SEC if the SEC does not permit such filing, although such reports shall be furnished to the Trustee.  Documents filed by the Company with the SEC via the SEC's EDGAR system (or any successor thereto) will be deemed furnished to the Trustee and the Holders of the Securities as of the time such documents are filed via EDGAR (or such successor).

 

SECTION 4.03.  Compliance Certificate.

 

The Company shall deliver to the Trustee, within [   ] days after the end of each fiscal year of the Company, an officers certificate signed by two of the Company's officers stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he may have knowledge in reasonable detail and the efforts to remedy the same).  For purposes of this Section 4.03, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture.

 

The Company shall deliver to the Trustee, within [  ] days after the occurrence thereof, written notice in the form of an Officers' Certificate of any Event of Default described in Section 6.01(e), (f), (g) or (h) and any event of which it becomes aware that with the giving of notice or the lapse of time would become such an Event of Default, its status and what action the Company is taking or proposes to take with respect thereto.  For the avoidance of doubt, a breach of a covenant under an Instrument that is not a payment default and that has not given rise to a right of acceleration under such Instrument shall not trigger the requirement to provide notice under this paragraph.

 

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SECTION 4.04.  Stay, Extension and Usury Laws.

 

The Company covenants (to the extent that it may lawfully do so) that it will 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, which may affect the covenants or the performance of this Indenture or the Securities; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

 

SECTION 4.05.   Corporate Existence.

 

Subject to Article V, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership or other existence of each Subsidiary in accordance with the respective organizational documents of each Subsidiary and the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any Subsidiary, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole and that the loss thereof is not adverse in any material respect to the Holders.

 

SECTION 4.06.  Taxes.

 

The Company shall, and shall cause each of its Subsidiaries to, pay prior to delinquency all taxes, assessments and governmental levies, except as contested in good faith and by appropriate proceedings.

 

SECTION 4.07.  Additional Interest Notice.

 

In the event that the Company is required to pay additional interest to Holders of Securities pursuant to Section 6.02(b) hereof, the Company shall provide a direction or order in the form of a written notice to the Trustee (and if the Trustee is not the Paying Agent, the Paying Agent) of the Company's obligation to pay such additional interest no later than [   ] Business Days prior to date on which any such additional interest is scheduled to be paid.  Such notice shall set forth the amount of additional interest to be paid by the Company on such payment date and direct the Trustee (or, if the Trustee is not the Paying Agent, the Paying Agent) to make payment to the extent it receives funds from the Company to do so.  The Trustee shall not at any time be under any duty or responsibility to any Holder to determine whether additional interest is payable, or with respect to the nature, extent, or calculation of the amount of additional interest owed, or with respect to the method employed in such calculation of additional interest.

 

SECTION 4.08.  Further Instruments and Acts.

 

The Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

 

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ARTICLE V

 

SUCCESSORS

 

SECTION 5.01.  When Company May Merge, Etc.

 

The Company shall not consolidate with, enter into a binding share exchange, or merge into any other Person in a transaction in which it is not the surviving entity, or sell, assign, convey, transfer or lease or otherwise dispose of all or substantially all of its properties and assets to any Person (a "successor person"), unless:

 

(a)           the successor person (if any) is a corporation, partnership, trust or other entity organized and validly existing under the laws of the Cayman Islands, [], the United States, any state of the United States or the District of Columbia and expressly assumes by a supplemental indenture executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, and any interest on, all Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed;

 

(b)           immediately after giving effect to the transaction, no Default or Event of Default, shall have occurred and be continuing; and

 

(c)           the Company shall have delivered to the Trustee, prior to the consummation of the proposed transaction, an Officers' Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and such supplemental indenture comply with this Indenture.

 

SECTION 5.02.  Successor Corporation Substituted.

 

Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01, the successor person formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor person has been named as the Company herein; provided, however, that the predecessor company in the case of a sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company shall not be released from the obligation to pay the principal of and interest, if any, on the Securities.

 

ARTICLE VI

 

DEFAULTS AND REMEDIES

 

SECTION 6.01.  Events of Default.

 

"Event of Default," wherever used herein with respect to securities of any Series, means any one of the following events, unless in the establishing Board Resolution,

 

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supplemental indenture or Officers' Certificate, it is provided that such Series shall not have the benefit of said Event of Default:

 

(a)           default in the payment of any interest on any Security of that Series when it becomes due and payable, and continuance of such default for a period of 30 days (unless the entire amount of such payment is deposited by the Company with the Trustee or with a Paying Agent prior to the expiration of such period of 30 days); or

 

(b)           default in the payment of any principal of any Security of that Series at its Maturity; or

 

(c)           default in the deposit of any sinking fund payment, when and as due in respect of any Security of that Series; or

 

(d)           the Company fails to perform or comply with any of its other covenants or agreements contained in the Securities or in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is specifically dealt with in clauses (a), (b) or (c) of this Section 6.01) and the default continues for 60 days after notice is given as specified below;

 

(e)           any indebtedness under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company or any Subsidiary or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by, or any other payment obligation of, the Company or any Subsidiary (an "Instrument") with a principal amount then, individually or in the aggregate, outstanding in excess of $[], whether such indebtedness now exists or shall hereafter be created, is not paid at Maturity or when otherwise due or is accelerated, and such indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, within a period of 30 days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least [  ]% in aggregate principal amount of the outstanding Securities of that Series a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such default to be cured or waived or such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder.  A payment obligation (other than indebtedness under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company or any Subsidiary or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company or any Subsidiary) shall not be deemed to have matured, come due, or been accelerated to the extent that it is being disputed by the relevant obligor or obligors in good faith.  For the avoidance of doubt, the Maturity of an Instrument is the Maturity as set forth in that Instrument, as it may be amended from time to time in accordance with the terms of that Instrument;

 

(f)           the Company or any Subsidiary fails to pay one or more final and non-appealable judgments entered by a court or courts of competent jurisdiction, the aggregate uninsured or unbonded portion of which is in excess of $[], if the judgments are not paid, discharged, waived or stayed within [  ] days;

 

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(g)           the Company or any Subsidiary of the Company, pursuant to or within the meaning of any Bankruptcy Law:

 

(i)           commences a voluntary case or proceeding;

 

(ii)           consents to the entry of an order for relief against it in an involuntary case or proceeding;

 

(iii)           consents to the appointment of a Custodian of it or for all or substantially all of its property; or

 

(iv)           makes a general assignment for the benefit of its creditors; or

 

(v)           or generally is unable to pay its debts as the same become due; or

 

(h)           a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)           is for relief against the Company or any of its Subsidiaries in an involuntary case or proceeding;

 

(ii)           appoints a Custodian of the Company or any of its Subsidiaries for all or substantially all of the property of the Company or any such Subsidiary; or

 

(iii)           orders the liquidation of the Company or any of its Subsidiaries;

 

and the case of each of clause (i), (ii) and (iii), the order or decree remains unstayed and in effect for [  ] consecutive days; or

 

(i)           any other Event of Default provided with respect to Securities of that Series, which is specified in a Board Resolution, a supplemental indenture hereto or an Officers' Certificate, in accordance with Section 2.02(i).

 

A default under clause (d) above is not an Event of Default until the Trustee notifies the Company, or the Holders of at least [  ]% in aggregate principal amount of the Securities then outstanding notify the Company and the Trustee, in writing of the default, and the Company does not cure the default within 60 days after receipt of such notice.  The notice given pursuant to this Section 6.01 must specify the default, demand that it be remedied and state that the notice is a "Notice of Default."  When any default under this Section 6.01 is cured, it ceases.

 

The Trustee shall not be charged with knowledge of any Event of Default unless written notice thereof shall have been given to a Trust Officer at the Corporate Trust Office of the Trustee by the Company, a Paying Agent, any Holder or any agent of any Holder.

 

SECTION 6.02.  Acceleration of Maturity; Rescission and Annulment.

 

(a)           If an Event of Default (other than an Event of Default specified in clause (g) or (h) of Section 6.01) occurs and is continuing with respect to any Securities of any Series,

 

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then in every such case, the Trustee may, by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the Securities of that Series (or, if any Securities of that Series are Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) then outstanding may, by notice to the Company and the Trustee, declare all unpaid principal of, and accrued and unpaid interest on to the date of acceleration, the Securities of that Series then outstanding (if not then due and payable) to be due and payable upon any such declaration, and the same shall become and be immediately due and payable.  If an Event of Default specified in clause (g) or (h) of Section 6.01 occurs, all unpaid principal of the Securities then outstanding, and all accrued and unpaid interest thereon to the date of acceleration, shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.  The Holders of a majority in aggregate principal amount of the Securities of that Series then outstanding by notice to the Trustee may rescind an acceleration of such Securities of that Series and its consequences if (a) all existing Events of Default, other than the nonpayment of the principal of the Securities which has become due solely by such declaration of acceleration, have been cured or waived; (b) to the extent the payment of such interest is lawful, interest (calculated at the Default Rate) on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; (c) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (d) all payments due to the Trustee and any predecessor Trustee under Section 7.07 have been made.  No such rescission shall affect any subsequent default or impair any right consequent thereto.

 

(b)           Notwithstanding any of provision of this Article 6, at the election of the Company in its sole discretion, the sole remedy under this Indenture for an Event of Default relating to the failure to comply with Section 4.02, and for any failure to comply with the requirements of Section 314(a)(1) of the TIA, will consist, for the 180 days after the occurrence of such an Event of Default, exclusively of the right to receive additional interest on the Securities at a rate equal to 0.50% per annum of the aggregate principal amount of the Securities then outstanding up to, but not including, the 181st day thereafter (or, if applicable, the earlier date on which the Event of Default relating to Section 4.02 is cured or waived).  Any such additional interest will be payable in the same manner and on the same dates as the stated interest payable on the Securities.  In no event shall additional interest accrue under the terms of this Indenture at a rate in excess of 0.50% per annum, in the aggregate, for any violation or default caused by the failure of the Company to be current in respect of its Exchange Act reporting obligations.  If the Event of Default is continuing on the 181st day after an Event of Default relating to a failure to comply with Section 4.02, the Securities will be subject to acceleration as provided in this Section 6.02.  The provisions of this Section 6.02(b) will not affect the rights of Holders in the event of the occurrence of any other Events of Default.

 

In order to elect to pay additional interest as the sole remedy during the first 180 days after the occurrence of an Event of Default relating to the failure to comply with Section 4.02 in accordance with the immediately preceding paragraph, the Company shall notify all Holders and the Trustee and Paying Agent of such election on or before the close of business on the fifth Business Day after the date on which such Event of Default otherwise would occur.  Upon a failure by the Company to timely give such notice or pay additional interest, the Securities will be immediately subject to acceleration as otherwise provided in this Section 6.02.

 

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SECTION 6.03.  Collection of Indebtedness and Suits for Enforcement by Trustee.

 

If an Event of Default with respect to any Securities of any Series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

 

If an Event of Default in the payment of principal, interest, if any, specified in clause (a) or (b) of Section 6.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company or another obligor on the Securities for the whole amount of principal, and accrued interest remaining unpaid, if any, together with, to the extent that payment of such interest is lawful, interest on overdue principal, on overdue installments of interest, if any, in each case at the Default Rate, 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 6.04.  Trustee May File Proofs of Claim.

 

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,

 

(a)           to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Securities and to file such 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) and of the Holders allowed in such judicial proceeding, and

 

(b)           to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official 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 it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07.

 

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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 Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

SECTION 6.05.  Trustee May Enforce Claims Without Possession of Securities.

 

All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

 

SECTION 6.06.  Application of Money Collected.

 

Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: and

 

First: To the payment of all amounts due the Trustee under Section 7.07;

 

Second: To the payment of the amounts then due and unpaid for principal of and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively; and

 

Third: To the Company.

 

SECTION 6.07.  Limitation on Suits.

 

No Holder of any Security of any Series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder (except actions for payment of overdue principal and interest), unless:

 

(a)           such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that Series;

 

(b)           the Holders of not less than [  ]% in principal amount of the outstanding Securities of that Series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

 

(c)           such Holder or Holders have offered to the Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

 

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(d)           the Trustee for [  ] days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

 

(e)           no direction inconsistent with such written request has been given to the Trustee during such [  ]-day period by the Holders of a majority in principal amount of the outstanding Securities of that Series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders.

 

SECTION 6.08.  Unconditional Right of Holders to Receive Principal and Interest.

 

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Security on the Stated Maturity or Stated Maturities expressed in such Security (or, in the case of redemption, on the redemption date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

 

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 proceeding, the Company, 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 had 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 Securities in Section 2.08, 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 Securities 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

 

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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.  Control by Holders.

 

The Holders of a majority in principal amount of the outstanding Securities of any Series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such Series, provided that

 

(a)           such direction shall not be in conflict with any rule of law or with this Indenture,

 

(b)           the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and

 

(c)           subject to the provisions of Section 6.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability or would be unduly prejudicial to the rights of another Holder or the Trustee.

 

SECTION 6.13.  Waiver of Past Defaults.

 

Subject to Section 9.02, the Holders of not less than a majority in principal amount of the outstanding Securities of any Series may on behalf of the Holders of all the Securities of such Series waive any past Default hereunder with respect to such Series and its consequences, except a Default in the payment of the principal of or interest on any Security of such Series (provided, however, that the Holders of a majority in principal amount of the outstanding Securities of any Series may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration).  Upon any such waiver, such Default shall cease to exist, and any Event of Default arising 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 6.14.  Undertaking for Costs.

 

All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, 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, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than [  ]% in principal amount of the outstanding Securities of any Series, or to any suit instituted by any Holder for the enforcement of the

 

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payment of the principal of or interest on any Security on or after the Stated Maturity or Stated Maturities expressed in such Security (or, in the case of redemption, on the redemption date).

 

ARTICLE VII

 

TRUSTEE

 

SECTION 7.01.  Duties of Trustee.

 

(a)           If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.

 

(b)           Except during the continuance of an Event of Default:

 

(i)           The Trustee  need perform only those duties that are specifically set forth in this Indenture and no implied duties, covenants or obligations shall be deemed to be imposed upon the Trustee.

 

(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 Officers' Certificates or Opinions of Counsel furnished to the Trustee and conforming to the requirements of this Indenture; however, in the case of any such Officers' Certificates or Opinions of Counsel which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officers' Certificates and Opinions of Counsel to determine whether or not they conform on their face to the requirements of this Indenture.

 

(c)           The Trustee may not be relieved from liability for its own its own negligent action, its own negligent failure to act or willful misconduct, except that:

 

(i)           This paragraph does not limit the effect of paragraph (b) of Section 7.01 herein.

 

(ii)           The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer.

 

(iii)           The Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it with respect to Securities of any Series in good faith in accordance with the direction of the Holders of a majority in principal amount of the outstanding Securities of such Series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such Series.

 

(d)           Every provision of this Indenture that in any way relates to the Trustee is subject to paragraph (a), (b) and (c) of this Section.

 

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(e)           The Trustee may refuse to perform any duty or exercise any right or power unless it receives an indemnity satisfactory to it against any loss, liability or expense.

 

(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 Company.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)           No provision of this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur liability, financial or otherwise, in the performance of any of its duties, 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 is not reasonably assured to it.

 

(h)           The Paying Agent, the Registrar and any authenticating agent shall be entitled to the same rights, indemnities, protections and immunities afforded to the Trustee.

 

(i)           The Trustee shall have no duty to monitor the performance or compliance of the Company with its obligations hereunder or any under supplement hereto, nor shall it have any liability in connection with the malfeasance or nonfeasance by the Company.  The Trustee shall have no liability in connection with compliance by the Company with statutory or regulatory requirements related to this Indenture, any supplement or any Securities issued pursuant hereto or thereto.

 

SECTION 7.02.  Rights of Trustee.

 

(a)           The Trustee may conclusively rely on and shall be fully protected in acting or refraining from acting as a result of its reasonable belief that any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, direction, approval or other paper or document was genuine and had 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 sees fit.

 

(b)           Before the Trustee acts or refrains from acting, it may require an Officers' Certificate 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 Officers' Certificate or Opinion of Counsel.

 

(c)           The Trustee may act through agents and shall not be responsible for the misconduct or negligence of, or for the supervision of, any agent appointed with due care.  No Depository shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any act or omission by any Depository.

 

(d)           The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers.

(e)           The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection 

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in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(f)           The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by or pursuant to this Indenture at the request, order or direction of any of the Holders of Securities, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

 

SECTION 7.03.   Individual Rights of Trustee.

 

The Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee.  Any Agent may do the same with like rights.  The Trustee is also subject to Sections 7.10 and 7.11.

 

SECTION 7.04.   Trustee's Disclaimer.

 

The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities and the recitals contained herein and in the Securities shall be taken as statements of the Company and not of the Trustee, and the Trustee has no responsibility for such recitals. The Trustee shall not be accountable for the Company's use or application of the proceeds from the Securities or for monies paid over to the Company pursuant to this Indenture, and it shall not be responsible for any statement in the Securities other than its authentication.

 

SECTION 7.05.  Notice of Defaults.

 

If a Default or Event of Default occurs and is continuing with respect to the Securities of any Series and if a Responsible Officer of the Trustee has knowledge or receives written notice of such event, the Trustee shall mail to each Securityholder of the Securities of that Series, notice of a Default or Event of Default within [  ] days after it occurs or, if later, after a Responsible Officer of the Trustee has actual knowledge of such Default or Event of Default.  Except in the case of a Default or Event of Default in payment of principal of or interest on any Security of any Series, including any additional interest that may become payable pursuant to Section 6.02(b), the Trustee may withhold the notice so long as the Trustee in good faith determines that withholding the notice is in the interests of Securityholders of that Series.

 

SECTION 7.06.   Reports by Trustee to Holders.

 

Within [  ] days after [                                                      ] in each year, the Trustee shall transmit by mail to all Securityholders, as their names and addresses appear on the register kept by the Registrar, a brief report dated as of such [], in accordance with, and to the extent required under, TIA Section 313.

 

A copy of each report at the time of its mailing to Securityholders of any Series shall be filed with the SEC and each stock exchange on which the Securities of that Series are listed.  The Company shall promptly notify the Trustee when Securities of any Series are listed on any stock exchange.

 

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SECTION 7.07.  Compensation and Indemnity.

 

The Company shall pay to the Trustee from time to time such compensation for its services as shall be agreed upon in writing.  The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred by it.  Such expenses shall include the reasonable compensation and expenses of the Trustee's agents, counsel and other persons not regularly in its employ.

 

The Company shall indemnify, defend and hold harmless the Trustee and its officers, directors, employees, representatives and agents, from and against and reimburse the Trustee for any and all claims, expenses, obligations, liabilities, losses, damages, injuries (to person, property, or natural resources), penalties, stamp or other similar taxes, actions, suits, judgments, reasonable costs and expenses (including reasonable attorney's and agent's fees and expenses) of whatever kind or nature regardless of their merit, demanded, asserted or claimed against the Trustee directly or indirectly relating to, or arising from, claims against the Trustee by reason of its participation in the transactions contemplated hereby, including without limitation all reasonable costs required to be associated with claims for damages to persons or property, and reasonable attorneys' and consultants' fees and expenses and court costs except to the extent caused by the Trustee's negligence or willful misconduct.  The provisions of this Section 7.07 shall survive the termination of this Agreement or the earlier resignation or removal of the Trustee.  The Company shall defend any claim and the Trustee shall cooperate in the defense.  The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel.  The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld or delayed.  This indemnification shall apply to officers, directors, employees, shareholders and agents of the Trustee.

 

The Company need not reimburse any expense or indemnify against any loss liability incurred by the Trustee or by any officer, director, employee, shareholder or agent of the Trustee through negligence or bad faith.

 

To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Securities of that Series.

 

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(f) or (g) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.

 

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.

 

       The Trustee may resign with respect to the Securities of one or more Series by so notifying the Company.  The Holders of a majority in principal amount of the Securities of any

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Series may remove the Trustee with respect to that Series by so notifying the Trustee and the Company.  The Company may remove the Trustee with respect to Securities of one or more Series if:

 

(a)           the Trustee fails to comply with Section 7.10;

 

(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 Company shall promptly appoint a successor Trustee.  Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

 

If a successor Trustee with respect to the Securities of any one or more Series does not take office within [  ] days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least [  ]% in principal amount of the Securities of the applicable Series may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Immediately after that, the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee subject to the lien provided for in Section 7.07, and subject to the payment of any and all amounts then due and owing to the retiring Trustee, 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 with respect to each Series of Securities for which it is acting as Trustee under this Indenture.  A successor Trustee shall mail a notice of its succession to each Securityholder of each such Series.  Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring trustee with respect to expenses and liabilities incurred by it prior to such replacement.

 

SECTION 7.09.  Successor Trustee by Merger, etc.

 

If the Trustee consolidates with, 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 with the same effect as if the successor Trustee had been named as the Trustee herein.

 

SECTION 7.10.  Eligibility; Disqualification.

 

       This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5).  The Trustee shall always have a combined capital and surplus of 

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at least $25,000,000 as set forth in its most recent published annual report of condition.  The Trustee shall comply with TIA Section 310(b).

 

SECTION 7.11.  Preferential Collection of Claims Against Company.

 

The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).  A Trustee who has resigned or been removed shall be subject to TTA Section 311(a) to the extent indicated.

 

ARTICLE VIII

 

SATISFACTION AND DISCHARGE; DEFEASANCE

 

SECTION 8.01.  Satisfaction and Discharge of Indenture.

 

This Indenture shall upon Company Order cease to be of further effect (except as hereinafter provided in this Section 8.01), and the Trustee, on the demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

 

(a)           either

 

(i)           all Securities theretofore authenticated and delivered (other than Securities that have been destroyed, lost or stolen and that have been replaced or paid) have been delivered to the Trustee for cancellation; or

 

(ii)           all such Securities not theretofore delivered to the Trustee for cancellation have become due and payable, or

 

(1)           have become due and payable, or

 

(2)           will become due and payable at their Stated Maturity within [], or

 

(3)           are to be called for redemption within [                                                                ] 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 Company, or

 

(4)           are deemed paid and discharged pursuant to section 8.03, as applicable; and the Company, in the case of (1), (2) or (3) above, has deposited or caused to be deposited with the Trustee as trust funds in trust an amount sufficient for the purpose of paying and discharging the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Securities which have become due and payable on or prior to the date of such deposit) or to the Stated Maturity or redemption date, as the case may be;

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(b)           the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

 

(c)           the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each meeting the applicable requirements of Sections 10.04 and 10.05 and each stating that all conditions precedent herein relating to the satisfaction and discharge of this Indenture have been complied with and the Trustee receives written demand from the Company to discharge.

 

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.07, and, if money shall have been deposited with the Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.04, 2.07, 2.08, 8.01 8.02 and 8.05 shall survive.

 

SECTION 8.02.  Application of Trust Funds; Indemnification.

 

(a)           Subject to the provisions of Section 8.05, all money deposited with the Trustee pursuant to Section 8.01, all money and U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.03 or 8.04 and all money received by the Trustee in respect of U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.03 or 8.04, shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the persons entitled thereto, of the principal and interest for whose payment such money has been deposited with or received by the Trustee or to make mandatory sinking fund payments or analogous payments as contemplated by Sections 8.03 or 8.04.

 

(b)           The Company shall pay and shall indemnify the Trustee and the Agents against any tax, fee or other charge imposed on or assessed against U.S. Government Obligations or Foreign Government Obligations deposited pursuant to Sections 8.03 or 8.04 or the interest and principal received in respect of such obligations other than any payable by or on behalf of Holders.

 

(c)           The Trustee shall, in accordance with the terms of this Indenture, deliver or pay to the Company from time to time, upon Company Request and at the expense of the Company any U.S. Government Obligations or Foreign Government Obligations or money held by it pursuant to this Indenture as provided in Sections 8.03 or 8.04 which, in the opinion of a nationally recognized firm of independent certified public accountants, expressed in a written certification thereof and delivered to the Trustee together with such Company Request, are then in excess of the amount thereof which then would have been required to be deposited for the purpose for which such U.S. Government Obligations or Foreign Government Obligations or money were deposited or received.  This provision shall not authorize the sale by the Trustee of any U.S. Government Obligations or Foreign Government Obligations held under this Indenture.

 

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SECTION 8.03.  Legal Defeasance of Securities of any Series.

 

Unless this Section 8.03 is otherwise specified, pursuant to Section 2.02(s), to be inapplicable to Securities of any Series, the Company shall be deemed to have paid and discharged the entire indebtedness on all the outstanding Securities of such Series on the [   ] day after the date of the deposit referred to in subparagraph (d) hereof, and the provisions of this Indenture, as it relates to such outstanding Securities of such Series, shall no longer be in effect (and the Trustee, at the expense of the company, shall, at Company Request, execute proper instruments acknowledging the same), except as to:

 

(a)           the rights of Holders of Securities of such Series to receive, from the trust funds described in subparagraph (d) hereof, (i) payment of the principal of and each installment of principal of and interest on the outstanding Securities of such Series on the Stated Maturity of such principal or installment of principal or interest and (ii) the benefit of any mandatory sinking fund payments applicable to the Securities of such Series on the day on which such payments are due and payable in accordance with the terms of this Indenture and the Securities of such Series;

 

(b)           the provisions of Sections 2.04, 2.07, 2.08, 2.14, 8.02, 8.03 and 8.05; and

 

(c)           the rights, powers, trust and immunities of the Trustee hereunder; provided that, the following conditions shall have been satisfied:

 

(d)           the Company shall have deposited or caused to be deposited irrevocably with the Paying Agent as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of such Securities in the case of Securities of such Series denominated in Dollars, cash in Dollars (or such other money or currencies as shall then be legal tender in the United States) and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof, in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on such Paying Agent), not later than [   ] day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee and the Paying Agent, to pay and discharge each installment of principal (including mandatory sinking fund or analogous payments) of and interest, if any, on all the Securities of such Series on the dates such installments of interest or principal are due;

 

(e)           such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound;

 

(f)           no Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date of such deposit or during the period ending on the [    ] day after such date;

 

(g)           the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel to the effect that (i) the Company has received from, or there has

 

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been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Securities of such Series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred;

 

(h)           the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company;

 

(i)           such deposit shall not result in the trust arising from such deposit constituting an investment company (as defined in the Investment Company Act of 1940, as amended), or such trust shall be qualified under such Act or exempt from regulation thereunder; and

 

(j)           the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance contemplated by this Section have been complied with.

 

SECTION 8.04.  Covenant Defeasance.

 

Unless this Section 8.04 is otherwise specified pursuant to Section 2.02(s) to be inapplicable to Securities of any Series, on and after the [    ] day after the date of the deposit referred to in subparagraph (a) hereof, the Company may omit to comply with any term, provision or condition set forth under Sections 4.02, 4.03, 4.04, 4.05, 4.06, and 5.01 as well as any additional covenants contained in a supplemental indenture hereto for a particular Series of Securities or a Board Resolution or an Officers' Certificate delivered pursuant to Section 2.02(s) (and the failure to comply with any such covenants shall not constitute a Default or Event of Default under Section 6.01) and the occurrence of any event described in clause (e) of Section 6.01 shall not constitute a Default or Event of Default hereunder, with respect to the Securities of such Series, provided that the following conditions shall have been satisfied:

 

(a)           With reference to this Section 8.04, the Company has deposited or caused to be irrevocably deposited (except as provided in Section 8.02(c)) with the Paying Agent as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities (i) in the case of Securities of such Series denominated in Dollars, cash in Dollars (or such other money or currencies as shall then be legal tender in the United States) and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof, in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on such Paying Agent), not later than [   ] day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered

 

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to the Paying Agent, to pay principal and interest, if any, on and any mandatory sinking fund in respect of the Securities of such Series on the dates such installments of interest or principal are due;

 

(b)           Such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound;

 

(c)           No Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date of such deposit or during the period ending on the [    ] day after such date;

 

(d)           the company shall have delivered to the Trustee an Opinion of Counsel confirming that Holders of the Securities of such Series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred;

 

(e)           the Company shall have delivered to the Trustee an Officers' Certificate stating the deposit was not made by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and

 

(f)           The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the defeasance contemplated by this Section have been complied with.

 

SECTION 8.05.  Repayment to Company.

 

The Paying Agent shall pay to the Company upon request any money held by them for the payment of principal and interest that remains unclaimed for two years.  After that, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person and all liability of the Paying Agent with respect to that money shall cease.

 

ARTICLE IX

 

AMENDMENTS AND WAIVERS

 

SECTION 9.01.  Without Consent of Holders.

 

Subject to Section 9.02 and Section 9.03, the Company and the Trustee may amend or supplement this Indenture or the Securities of one or more Series without the consent of any Securityholder:

 

(a)           to cure any ambiguity, defect or inconsistency;

 

(b)           to comply with Article V;

 

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(c)           to provide for uncertificated Securities in addition to or in place of certificated Securities;

 

(d)           to make any change that does not adversely affect the rights of any Securityholder;

 

(e)           to provide for the issuance of and establish the form and terms and conditions of Securities of any Series as permitted by this Indenture;

 

(f)           to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee;

 

(g)           to comply with requirements of the TIA and any rules promulgated under the TIA; and

 

(h)           to add to the covenants of the Company for the equal and ratable benefit of the Holders or to surrender any right, power or option conferred upon the Company.

 

Any amendment or supplement made solely to conform the provisions of this Indenture or the Securities of any Series to the description thereof contained in the final prospectus relating to such Series will be deemed not to adversely affect the rights of any Holder.

 

SECTION 9.02.  With Consent of Holders.

 

Subject to Section 9.03, the Company and the Trustee may enter into a supplemental indenture with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities of all Series affected by such supplemental indenture, taken together as one class (including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series), for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Securityholders of each such Series.  Except as provided in Section 6.13, the Holders of at least a majority in principal amount of the outstanding Securities of all Series affected by such waiver by notice to the Trustee, taken together as one class (including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series) may waive compliance by the Company with any provision of this Indenture or the Securities with respect to such Series.

 

It shall not be necessary for the consent of the Holders of Securities under this Section 9.02 to approve the particular form of any proposed supplemental indenture or waiver, but it shall be sufficient if such consent approves the substance thereof.  After a supplemental indenture or waiver under this section becomes effective, the Company shall mail to the Holders of Securities affected thereby a notice briefly describing the supplemental indenture or waiver.  Any failure by the Company to mail or publish such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

 

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Section 9.03.  Limitations.

 

Without the consent of each Securityholder affected, an amendment or waiver may not:

 

(a)           change the amount of Securities whose Holders must consent to an amendment, supplement or waiver, except to increase any such amount or to provide that certain provisions of this Indenture cannot be modified, amended or waived without the consent of the Holder of each outstanding Security affected thereby;

 

(b)           reduce the amount of interest, or change the interest payment time, on any Security;

 

(c)           waive a redemption payment or alter the redemption provisions (other than any alteration that would not materially adversely affect the legal rights of any Holder under this Indenture) or the price at which the Company is required to offer to purchase the Securities;

 

(d)           reduce the principal or change the Stated Maturity of any Security or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation;

 

(e)           reduce the principal amount payable of any Security upon Maturity;

 

(f)           waive a Default or Event of Default in the payment of the principal of or interest, if any, on any Security (except a rescission of acceleration of the Securities of any Series by the Holders of at least a majority in principal amount of the outstanding Securities of such Series and a waiver of the payment default that resulted from such acceleration);

 

(g)           change the place or currency of payment of principal of or interest, if any, on any Security other than that stated in the Security;

 

(h)           impair the right of any Holder to receive payment of principal or, or interest on, the Securities of such Holder on or after the due dates therefor;

 

(i)           impair the right to institute suit for the enforcement of any payment on, or with respect to, any Security;

 

(j)           make any change in Sections 10.15 or 10.16;

 

(k)           change the ranking of the Securities; or

 

(l)           make any other change which is specified in a Board Resolution, a supplemental indenture hereto or an Officers' Certificate as a limitation under this Section.

 

For the avoidance of doubt, any amendment or waiver shall always be subject to the consent of the Company.

 

SECTION 9.04.  Compliance with Trust Indenture Act.

 

Every amendment to this Indenture or the Securities of one or more Series shall be set forth in a supplemental indenture hereto that complies with the TIA as then in effect.

 

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SECTION 9.05.   Revocation and Effect of Consents.

 

Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security.  However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective.

 

Any amendment or waiver once effective shall bind every Securityholder of each Series affected by such amendment or waiver unless it is of the type described in any of clauses (a) through (g) of Section 9.03 in that case, the amendment or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security.

 

SECTION 9.06.  Notation on or Exchange of Securities.

 

If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee and the Trustee may place an appropriate notation on the Security about the changed terms and return it to the Holder.  Alternatively, if the Company or the Trustee so determines, the Company shall issue and the Trustee shall authenticate upon request new Securities of that Series that reflect the changed terms.

 

SECTION 9.07.  Trustee Protected.

 

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel or an Officer's Certificate, or both stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Trustee shall sign all supplemental indentures, except that the Trustee need not sign any supplemental indenture that adversely affects its rights, duties or indemnities.

 

SECTION 9.08.  Effect of Supplemental Indenture.

 

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and each such supplemental indenture shall form part of this Indenture for all purposes with respect to the relevant Series; and every Holder of Securities of the relevant Series theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

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ARTICLE X

MISCELLANEOUS

SECTION 10.01.  Trust Indenture Act Controls.

 

If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required or deemed to be included in this Indenture by the TIA, such required or deemed provision shall control.

 

SECTION 10.02.  Notices.

 

Any notice or communication by the Company, the Trustee, the Paying Agent or the Registrar to another is duly given if in writing and delivered in person or mailed by first-class mail:

 

if to the Company:

 

OCEAN RIG UDW INC.

[                                ]

Attn: [                      ]

Fax: [                        ]

 

if to the Trustee:

 

[                                ]

Attn: [                      ]

Fax: [                        ]

 

if to the Registrar or Paying Agent:

 

[                                ]

Attn: [                      ]

Fax: [                        ]

with copy to:

[                                ]

Attn: [                      ]

Fax: [                        ]

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

 

Any notice or communication to a Securityholder shall be mailed by first-class mail to his address shown on the register kept by the Registrar.  Failure to mail a notice or 

 

 

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communication to a Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to other Securityholders of that or any other Series.

  

If a notice or communication is mailed or published in the manner provided above, within the time prescribed, it is duly given, whether or not the Securityholder receives it.

 

If the company mails a notice or communication to Securityholders, it will mail a copy to the Trustee and each Agent at the same time.

 

Whenever a notice is required to be given by the Company, such notice may be given by the Trustee or Registrar on the Company's behalf (and the Company will make any notice it is required to give to Holders available on its website).

 

SECTION 10.03.   Communication by Holders with Other Holders.

 

Securityholders of any Series may communicate pursuant to TIA Section 312(b) with other Securityholders of that Series or any other Series with respect to their rights under this Indenture or the Securities of that Series or all Series.  The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

 

SECTION 10.04.  Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

 

(a)           an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(b)           an Opinion of Counsel stating that, in the opinion of counsel, all such conditions precedent (including any covenants, compliance with which constitutes a condition precedent) have been complied with.

 

SECTION 10.05.  Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA 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;

 

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(c)           a statement that, in the opinion of such person, he 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

 

(d)           a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

 

provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials.

 

SECTION 10.06.   Record Date for Vote or Consent of Holders.

 

The Company (or, in the event deposits have been made pursuant to Section 11.02, the Trustee) may set a record date for purposes of determining the identity of Holders entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture, which record date shall not be more than [  ] days prior to the date of the commencement of solicitation of such action.  Notwithstanding the provisions of Section 9.05, if a record date is fixed, those persons who were Holders of Securities at the close of business on such record date (or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons continue to be Holders after such record date.

 

SECTION 10.07.  Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or a meeting of Securityholders of one or more Series.  Any Agent may make reasonable rules and set reasonable requirements for its functions.

 

SECTION 10.08.  Legal Holidays.

 

Unless otherwise provided by Board Resolution, Officers' Certificate or supplemental indenture for a particular Series, a "Legal Holiday" is any day that is not a Business Day.  If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

 

SECTION 10.09.  No Recourse Against Others.

 

A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  Each Securityholder by accepting a Security waives and releases all such liability.  The waiver and release are part of the consideration for the issue of the Securities.

 

SECTION 10.10.  Counterparts.

 

This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

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SECTION 10.11.  Governing Laws and Submission to Jurisdiction.

 

THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK EXCLUDING ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

The Company agrees that any legal suit, action or proceeding arising out of or based upon this Indenture may be instituted in any federal or state court sitting in New York City, and, to the fullest extent permitted by law, waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such court in any suit, action or proceeding.  The Company, as long as any Securities remain outstanding or the parties hereto have any obligation under this Indenture, shall have an authorized agent in the United States upon whom process may be served in any such legal action or proceeding. Service of process upon such agent and written notice of such service mailed or delivered to it shall to the extent permitted by law be deemed in every respect effective service of process upon it in any such legal action or proceeding and, if it fails to maintain such agent, any such process or summons may be served by mailing a copy thereof by registered mail, or a form of mail substantially equivalent thereto, addressed to it at its address as provided for notices hereunder. The Company hereby appoints Seward & Kissel LLP, One Battery Park Plaza, New York, NY,  10004, as its agent for such purposes, and covenants and agrees that service of process in any legal action or proceeding may be made upon it at such office of such agent.

SECTION 10.12.   No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

SECTION 10.13.  Successors.

 

All agreements of the Company in this Indenture and the Securities shall bind its successor.  All agreements of the Trustee in this Indenture shall bind its successor.

 

SECTION 10.14.  Severability.

 

In case any provision in this Indenture or in the Securities 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 10.15.  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 hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

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SECTION 10.16.  Securities in a Foreign Currency or in ECU.

 

Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officers' Certificate delivered pursuant to Section 2.02 of this Indenture with respect to a particular Series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all Series or all Series affected by a particular action at the time outstanding and, at such time, there are outstanding Securities of any Series which are denominated in a coin or currency other than Dollars (including ECUs), then the principal amount of Securities of such Series which shall be deemed to be outstanding for the purpose of taking such action shall be that amount of Dollars that could be obtained for such amount at the Market Exchange Rate at such time.  For purposes of this Section 10.16, "Market Exchange Rate" shall mean the noon Dollar buying rate in New York City for cable transfers of that currency as published by the Federal Reserve Bank of New York; provided, however, in the case of ECUs, Market Exchange Rate shall mean the rate of exchange determined by the Commission of the European Union (or any successor thereto) as published in the Official Journal of the European Union (such publication or any successor publication, the "Journal").  If such Market Exchange Rate is not available for any reason with respect to such currency, the Trustee shall use, without liability on its part, such quotation of the Federal Reserve Bank of New York or, in the case of ECUs, the rate of exchange as published in the Journal, as of the most recent available date, or quotations or, in the case of ECUs, rates of exchange from one or more major banks in The City of New York or in the country of issue of the currency in question or, in the case of ECUs, in Luxembourg or such other quotations or, in the case of ECUs, rates of exchange as the Trustee, upon consultation with the Company, shall deem appropriate.  The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a Series denominated in currency other than Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.

 

All decisions and determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the preceding paragraph shall be in its sole discretion and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and irrevocably binding upon the Company and all Holders.

 

SECTION 10.17.  Judgment Currency.

 

The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of or interest or other amount on the Securities of any Series (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is 

 

46

entered, unless such day is not a New York Banking Day, then, the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable, and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture.  For purposes of the foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.

 

         

	

	
SECTION 10.18.

	
Compliance with Applicable Anti-Terrorism and Money Laundering Regulations.

 

In order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to the funding of terrorist activities and money laundering ("Applicable Law"), the Trustee is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Trustee.  Accordingly, each of the parties agree to provide to the Trustee, upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Trustee to comply with the Applicable Law.

 

ARTICLE XI

 

SINKING FUNDS

 

SECTION 11.01.   Applicability of Article.

 

The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of a Series, except as otherwise permitted or required by any form of Security of such Series issued pursuant to this Indenture.

 

The minimum amount of any sinking fund payment provided for by the terms of the Securities of any Series is herein referred to as a "mandatory sinking fund payment" and any other amount provided for by the terms of Securities of such Series is herein referred to as an "optional sinking fund payment." If provided for by the terms of Securities of any Series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 11.02.  Each sinking fund payment shall be applied to the redemption of Securities of any Series as provided for by the terms of the securities of such Series.

 

47

SECTION 11.02.   Satisfaction of Sinking Fund Payments with Securities.

 

The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of such Securities (1) deliver outstanding Securities of such Series to which such sinking fund payment is applicable (other than any of such Securities previously called for mandatory sinking fund redemption) and (2) apply as credit Securities of such Series to which such sinking fund payment is applicable and which have been redeemed either at the election of the Company pursuant to the terms of such Series of Securities (except pursuant to any mandatory sinking fund) or through the application of permitted optional sinking fund payments or other optional redemptions pursuant to the terms of such Securities, provided that such Securities have not been previously so credited.  Such Securities shall be received by the Registrar, together with an Officers' Certificate with respect thereto, not later than [  ] days prior to the date on which the Registrar begins the process of selecting Securities for redemption, and shall be credited for such purpose by the Registrar at the price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.  If as a result of the delivery or credit of Securities in lieu of cash payments pursuant to this Section 11.02, the principal amount of Securities of such Series to be redeemed in order to exhaust the aforesaid cash payment shall be less than $[], the Registrar need not call Securities of such Series for redemption, except upon receipt of a Company Order that such action be taken, and such cash payment shall be held by the Paying Agent and applied to the next succeeding sinking fund payment, provided, however, that the Paying Agent shall from time to time upon receipt of a Company Order pay over and deliver to the Company any cash payment so being held by the Paying Agent upon delivery by the Company to the Registrar of Securities of that Series purchased by the Company having an unpaid principal amount equal to the cash payment required to be released to the Company.

 

SECTION 11.03.  Redemption of Securities for Sinking Fund.

 

Not less than [  ] days (unless otherwise indicated in the Board Resolution, supplemental indenture hereto or Officers' Certificate in respect of a particular Series of Securities) prior to each sinking fund payment date for any Series of Securities, the Company will deliver to the Trustee and the Paying Agent an Officers' Certificate specifying the amount of the next ensuing mandatory sinking fund payment for that Series pursuant to the terms of that Series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of Securities of that Series pursuant to Section 11.02., and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and the Company shall thereupon be obligated to pay the amount therein specified.  Not less than [  ] days (unless otherwise indicated in the Board Resolution, Officers' Certificate or supplemental indenture in respect of a particular Series of Securities) before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.03.  Such notice having been duly given, the redemption of such Securities shall stated in Sections 3.04, 3.05 and 3.06.

 

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48

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

 

OCEAN RIG UDW INC.

By:__________________________

Name:

Its:

[                      ]

as Trustee

By:__________________________

Name:

Its:

By:__________________________

Name:

Its:

[                      ]

as Registrar and Paying Agent

By:__________________________

Name:

Its:

By:__________________________

Name:

Its:EX-10.1

 Exhibit 10.1 
  

	
	  

THIS AGREEMENT IS NOT, AND SHALL NOT BE DEEMED, A SOLICITATION FOR CONSENTS TO ANY CHAPTER 11 PLAN OF REORGANIZATION PURSUANT TO
SECTIONS 1125 AND 1126 OF THE BANKRUPTCY CODE OR A SOLICITATION TO TENDER OR EXCHANGE ANY OF THE FIRST LIEN CLAIMS. EACH CONSENTING CREDITOR’S VOTE ON THE PLAN SHALL NOT BE SOLICITED UNTIL THE CONSENTING CREDITORS HAVE RECEIVED THE DISCLOSURE
STATEMENTS AND RELATED BALLOT(S), AS APPROVED BY THE BANKRUPTCY COURT
  
  

 RESTRUCTURING SUPPORT AGREEMENT 

This Restructuring Support Agreement dated as of March 19, 2018 (as amended, supplemented, or otherwise modified from time to time, this
“Agreement”), is among: (i) Claire’s Inc. (“Claire’s”) and each of its direct and indirect wholly-owned domestic subsidiaries identified on the signature pages attached hereto
(collectively, the “Company”), (ii) Apollo Management Holdings, L.P., as manager and/or investment advisor of funds that are the owners and/or beneficial holders of interests in and claims against the Company (together with its
affiliates, the “Sponsor”), and (iii) each of the undersigned creditors party hereto from time to time (including Transferees and Joining Parties, collectively the “Consenting Creditors,” and together with the
Sponsor and the Company, each a “Party” and, collectively, the “Parties”). All capitalized terms not defined herein shall have the meanings ascribed to them in the restructuring term sheet attached hereto as
Exhibit A (including exhibits attached thereto, the “Restructuring Term Sheet”), which Restructuring Term Sheet is expressly incorporated by reference herein and made a part of this Agreement as if fully
set forth herein. 
 RECITALS: 

WHEREAS, before the date hereof, the Parties and their representatives have engaged in
arm’s-length, good-faith negotiations regarding a restructuring of the existing debt and other obligations of the Company on the terms and conditions set forth in this Agreement (the
“Restructuring”); 
 WHEREAS, the Parties have agreed to take certain actions in support of the Restructuring on the
terms and conditions set forth in this Agreement and the Restructuring Term Sheet (which Restructuring Term Sheet is expressly incorporated by reference herein and made a part of this Agreement as if fully set forth herein); and 

WHEREAS, the Company will be implementing the Restructuring through a pre-negotiated joint
chapter 11 plan of reorganization and certain other transactions as set forth herein and in the Restructuring Term Sheet. 

 NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for
other valuable consideration, the receipt and sufficiency of which each of the Parties hereby acknowledges, each Party, intending to be legally bound hereby, agrees as follows: 

 

	 	1.	DEFINITIONS; RULES OF CONSTRUCTION. 

 (a) Definitions. The following terms
shall have the following definitions: 
 “Ad Hoc First Lien Group” means that certain ad hoc group of holders of First Lien
Claims, each in their capacities as such, represented by Willkie Farr & Gallagher LLP and Millstein & Co. 

“Agreement” has the meaning set forth in the preamble hereof, and includes, for the avoidance of doubt, the Restructuring
Term Sheet and all exhibits thereto. 
 “Agreement Effective Date” means: (i) with respect to the Consenting
Creditors, the first day on which each of the conditions set forth at Section 37(a) have been satisfied, and (ii) with respect to the Company, the first day on which each of the conditions set forth at
Section 37(b) have been satisfied. 
 “Alternative Proposal” means any plan of reorganization or
liquidation, proposal, term sheet, offer, transaction, dissolution, winding up, liquidation, reorganization, refinancing, recapitalization, restructuring, merger, consolidation, business combination, joint venture, partnership, sale of material
assets or equity involving the majority of the Company’s or one or more of its controlled subsidiaries’ equity, assets or liabilities, other than the Restructuring. 

“Backstop Parties” means the Initial Consenting Creditors and Sponsor. 

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101–1532. 

“Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware, administering the Chapter 11 Cases.

 “Breakup Fee” has the meaning set forth in Section 5(b) hereof. 

“Business Day” means any day other than Saturday, Sunday, and any day that is a legal holiday or a day on which banking
institutions in New York, New York are authorized by law or other governmental action to close. 
 “Chapter 11 Cases” means
the voluntary chapter 11 cases filed by the Debtors. 
 “Claim” means any claim as that term is defined by section 101(5)
of the Bankruptcy Code. 
 “Claire’s” has the meaning set forth in the preamble hereof. 

“Claire’s 2019 1L Notes” means the notes issued pursuant to the Claire’s 2019 1L Notes Indenture.

 “Claire’s 2019 1L Notes Indenture” means that certain Senior Secured First Lien Notes Indenture,
dated as of February 28, 2012, between Claire’s Escrow II Corporation, and the Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent, as amended, modified, or supplemented from time to time. 

  
 - 2 - 

 “Claire’s 2020 1L Notes” means the notes issued pursuant to the
Claire’s 2020 1L Notes Indenture. 
 “Claire’s 2020 1L Notes Indenture” means that certain Senior Secured First
Lien Notes Indenture, dated as of March 15, 2013, between Claire’s Stores, Inc. as the issuer, and the Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent, as amended, modified, or supplemented from time to time.

 “CLSIP Forbearance Agreement” shall have the meaning set forth in the Restructuring Term Sheet. 

“Company” has the meaning set forth in the preamble hereof. 

“Company Termination Event” has the meaning set forth in Section 11 hereof. 

“Confidential Claims Information” has the meaning set forth in Section 4(a)(viii) hereof. 

“Confirmation Order” means an order entered by the Bankruptcy Court confirming the Plan and approving assumption of the New
Money Backstop Commitment Agreement that is consistent with this Agreement and otherwise reasonably acceptable in form and substance to the Company and the Requisite Consenting Creditors (as evidenced by their written approval). 

“Consenting Creditors” has the meaning set forth in the preamble hereof. 

“Creditor Termination Event” has the meaning set forth in Section 8 hereof. 

“Debtors” means those Company entities identified on Schedule A to the Restructuring Term Sheet. 

“Definitive Documentation” means the (i) Plan, (ii) Confirmation Order, (iii) Disclosure Statement,
(iv) Disclosure Statement Order, (v) any intercompany financing agreements (vi) the CLSIP Forbearance Agreement; (vii) New First Lien Term Loan, (viii) New ABL Revolver, (ix) New Money Backstop Commitment Agreement,
(x) Shareholders Agreement, (xi) Plan Supplement, (xii) Organizational Documents, (xiii) any court filings filed by the Debtors in the Chapter 11 Cases to implement the foregoing, and (xiv) any other documents or exhibits
related to or contemplated in the foregoing clause (i) – (xiv), each of which shall be consistent with this Agreement and otherwise reasonably acceptable in form and substance to the Company and the Requisite Consenting Creditors (as evidenced
by their written approval). 
 “DIP Financing” means the DIP Facilities, the DIP Term Sheet and any subsequent debtor-in-possession financing to which the Requisite Consenting Creditors consent. 

  
 - 3 - 

 “DIP Orders” means the orders entered by the Bankruptcy Court approving the DIP
Financing on an interim and final basis. 
 “Disclosure Statement” means the Company’s disclosure statement, including
any exhibits, appendices, related documents, ballots, and procedures related to the solicitation of votes to accept or reject the Plan, in each case, as amended, supplemented, or otherwise modified from time to time in accordance with the terms
hereof, that is consistent with this Agreement and otherwise reasonably acceptable in form and substance to the Company and the Requisite Consenting Creditors (as evidenced by their written approval). 

“Disclosure Statement Order” means an order entered by the Bankruptcy Court approving the Disclosure Statement and
solicitation materials as containing, among other things, “adequate information” as required by sections 1125 and 1126(b) of the Bankruptcy Code that is consistent with this Agreement and otherwise reasonably acceptable in form and
substance to the Company and the Requisite Consenting Creditors (as evidenced by their written approval). 
 “Effective
Date” means the date upon which all conditions precedent to the effectiveness of the Plan have been satisfied or are expressly waived in accordance with the terms thereof, as the case may be, and on which the Restructuring and the other
transactions to occur on the effective date pursuant to the Plan become effective or are consummated. 
 “Eligible
Institution” means (a) a commercial bank (i) organized under the laws of the United States of America, any state thereof, or the District of Columbia, or that is the principal banking subsidiary of a bank holding company organized under the
laws of the United States of America, any state thereof, or the District of Columbia, and is a member of the Federal Reserve System or (ii) organized under the laws of any other country that is a member of the Organization for Economic Cooperation
and Development, or a political subdivision of any such country, provided that such bank is acting through a branch or agency located in the United States or (b) any other lender that does not hold any Claims against or Interests in the Company and
specializes in providing asset-based or cash flow revolving financing to variety of customers as part of its main business and that is (i) organized under the laws of the United States of America, any state thereof or the District of Columbia or
(ii) organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country, provided that such institution is acting through a branch or agency
located in the United States. 
 “Executory Contracts and Leases Information” has the meaning set forth in
Section 4(a)(v) hereof. 
 “Existing ABL Revolver” means that certain ABL Credit Agreement, dated
as of September 20, 2016, between Claire’s Stores, Inc. as borrower, and Credit Suisse AG as Administrative Agent, as amended, modified, or supplemented from time to time. 

“Existing RCF” means that certain Second Amended and Restated Credit Agreement, dated as of September 20, 2016, between
Claire’s Stores, Inc. as borrower, and Credit Suisse AG as Administrative Agent, as amended, modified, or supplemented from time to time. 

“Fee Letters” means (i) that certain letter agreement dated as of January 12, 2018 among Millstein & Co.,
Willkie Farr & Gallagher, LLP, Claire’s Stores, Inc. and certain Initial Consenting Creditors; and (ii) that certain letter agreement dated January 16, 2018 among Willkie Farr & Gallagher LLP to Claire’s Stores,
Inc. 
 “First Lien Claims” means all Claims arising under the First Lien Term Loan Credit Agreement, the Claire’s
2019 1L Notes Indenture, the Claire’s 2020 1L Notes Indenture, and the term loans and notes issued pursuant to the foregoing instruments. 

“First Lien Debt” means all indebtedness arising under the First Lien Term Loan Credit Agreement, the Claire’s 2019 1L
Notes Indenture, the Claire’s 2020 1L Notes Indenture, and the term loans and notes issued pursuant to the foregoing instruments. 

  
 - 4 - 

 “First Lien Fees and Expenses” means the reasonable and documented fees and
expenses of (i) the Initial Consenting Creditors (other than professional fees and expenses) incurred in connection with the negotiation and implementation of the Restructuring; (ii) Paul, Weiss, Rifkind, Wharton & Garrison LLP as
advisor to the Sponsor in its capacity as holder of certain First Lien Claims; and (iii) the First Lien Professionals incurred in their representation of holders of First Lien Claims in such capacity, from January 12, 2018 through and
including the later of either (x) the termination of the applicable fee period in each Fee Letter and (y) the Effective Date; provided that documentation with respect to First Lien Fees and Expenses shall be summary in nature
and shall be redacted to preserve attorney-client privilege. 
 “First Lien Professionals” means (i) Willkie
Farr & Gallagher LLP, Morris Nichols, Arsht & Tunnell LLP, as local counsel, and Millstein & Co., each in their capacities as advisors to the Ad Hoc First Lien Group, (ii) an executive compensation consultant and
(iii) such other legal, consulting, financial, and/or other professional advisors as may be retained from time to time by the Ad Hoc First Lien Group with the Company’s prior written consent (such consent not to be unreasonably withheld,
conditioned or delayed). 
 “First Lien Term Loan” means the Senior Secured First Lien Term Loan due 2021 issued under the
First Lien Term Loan Credit Agreement. 
 “First Lien Term Loan Credit Agreement” means the $40,000,000 Term Loan Credit
Agreement dated as of September 20, 2016, among Claire’s Stores, Inc. as borrower, and Wilmington Trust, National Association as Administrative Agent and Collateral Agent, as amended, modified, or supplemented from time to time. 

“Gibraltar Amendment” has the meaning set forth in Section 4(a)(xiii) hereof. 

“Initial Consenting Creditors” means, collectively, Diameter Capital Partners LP, Elliott Management Corporation, Monarch
Alternative Capital LP, The Cincinnati High Yield Desk of J.P. Morgan Investment Management Inc., The Indianapolis High Yield Desk of J.P. Morgan Investment Management Inc., and Venor Capital Management LP. 

“Interest” means any equity security or other rights, options, warrants, stock appreciation rights, phantom stock rights,
restricted stock units, redemption rights, repurchase rights, convertible, exercisable or exchangeable securities or other agreements, arrangements or commitments of any character relating to, or whose value is related to, any such interest or other
ownership interest in the Company. 
 “Joinder” has the meaning set forth in Section 36 hereof.

 “Joining Party” has the meaning set forth in Section 36 hereof. 

“Material Adverse Change” means any event, change, effect, occurrence, development, circumstance or change of fact occurring
after the date hereof that, individually or in the aggregate, has, had, or would reasonably be expected to have a material adverse effect on the business, results or operations, financial condition, assets, or liabilities of the Company and its
subsidiaries, taken as a whole; provided that “Material Adverse Change” shall not include any event, effect, occurrence, development, circumstance, or change of fact occurring after the date hereof and arising out of or resulting from
(i) conditions or effects that generally affect persons or entities engaged in the industries or markets in which the Company or its subsidiaries operate, 

  
 - 5 - 

 
(ii) general economic conditions in the United States or Europe, (iii) national or international political or social conditions, including the engagement by the United States in hostilities,
whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States or its territories, possessions, diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States, (iv) financial, banking, securities, credit, or commodities markets, prevailing interest rates or general capital markets conditions in the United States, Europe, or globally,
(v) changes in United States generally accepted accounting principles, (vi) changes in laws, rules, regulations, orders, or other binding directives issued by any governmental entity, or (vii) the taking of any action or any inaction
required by this Agreement or the Restructuring, including the commencement of the Chapter 11 Cases and prosecution of the Plan. 

“Milestones” means those milestones set forth in the Restructuring Term Sheet. 

“New Money Backstop Commitment Agreement” shall have the meaning set forth in the Restructuring Term Sheet. 

“Organizational Documents” means the certificate or articles of incorporation and bylaws, certificate of formation and
partnership or operating agreement (as applicable), and any similar documents thereto as may be applicable under applicable law for the reorganized Company. 

“Participating Claims” has the meaning set forth in Section 13(a) hereof. 

“Parties” has the meaning set forth in the preamble hereof. 

“Payout Event” means a chapter 11 plan, other than the Plan, providing for the (i) the indefeasible payment in full in
cash, including any accrued but unpaid interest (including postpetition interest at the default contract rate), of: (A) all of the First Lien Claims and (B) all Claims arising under (I) the DIP Financing, (II) the CLSIP Loan,
(III) the Gibraltar 2019 Term Loan, (IV) the Gibraltar 2021 Term Loan, and (V) the Gibraltar Intermediate Secured Term Loan; and (ii) treatment of all other Claims against the Company on terms that are no less favorable than as
provided in the Restructuring Term Sheet 
 “Payout Event Proposal” means a good faith proposal, offer, or indication of
interest from a Payout Event Sponsor to fund a transaction that contemplates a Payout Event on or prior to November 30, 2018. 

“Payout Event Sponsor” means a Person that the Company’s board of directors believes in good faith has expressed, or
that may express, a legitimate interest in, and has the financial ability to consummate, a Payout Event. 
 “Person” means
an individual, a partnership, a joint venture, a limited liability company, a corporation, a trust, an unincorporated organization, a group or any legal entity or association. 

“Plan” means the chapter 11 plan of reorganization for the Debtors, filed in the Chapter 11 Cases, as it may be amended,
restated or supplemented, consistent with this 

  
 - 6 - 

 
Agreement and the Restructuring Term Sheet, in form and substance consistent with this Agreement and the Restructuring Term Sheet and otherwise reasonably acceptable to the Company and the
Requisite Consenting Creditors (as evidenced by their written approval). 
 “Plan Supplement” means the supplement to the
Plan in the Chapter 11 Cases, that includes the necessary documentation to effect the Plan and shall be filed before confirmation of the Plan, in form and substance consistent with this Agreement and otherwise reasonably acceptable to the Requisite
Consenting Creditors and the Company (as evidenced by their written approval). 
 “Qualified Marketmaker” means an entity
that (i) holds itself out to the market as standing ready in the ordinary course of business to purchase from and sell to customers Claims, or enter with customers into long and/or short positions in Claims, in its capacity as a dealer or
market maker in such Claims, and (ii) is in fact regularly in the business of making a market in claims, interests and/or securities of issuers or borrowers. For the avoidance of doubt, it is acknowledged and agreed that no Initial Consenting
Creditor is a Qualified Marketmaker. 
 “Qualified Marketmaker Joinder Date” has the meaning set forth in
Section 13(d) hereof. 
 “Requisite Consenting Creditors” means, as of any time of determination,
the Initial Consenting Creditors holding greater than 66 2/3% of the aggregate amount of all First Lien Claims held at such time by all of the Initial Consenting Creditors. 

“Restructuring” has the meaning set forth in the recitals hereof. 

“Restructuring Support Period” means the period commencing on the Agreement Effective Date, and ending on the earlier of
(i) the date on which this Agreement is terminated with respect to all Parties, and (ii) the Effective Date. 

“Restructuring Term Sheet” has the meaning set forth in the recitals hereof. 

“Securities Act” has the meaning set forth in Section 7(c) hereof. 

“Security Interest” has the meaning set forth in Section 7(b) hereof. 

“Sponsor Termination Event” has the meaning set forth in Section 9 hereof. 

“Termination Event” means a Creditor Termination Event or a Company Termination Event. 

“Transfer” has the meaning set forth in Section 13(a) hereto. 

(b)    Rules of Construction. Each reference in this Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein”, or words of like import shall mean and be a reference to this Agreement, including, for the avoidance of doubt, the Restructuring Term Sheet and all exhibits thereto. Additionally, for
all references to written notices or other writings described herein, email to the parties set forth in Section 26 shall be sufficient. 

  
 - 7 - 

 (c)    Sponsor. For the avoidance of doubt, each reference in this
Agreement to the “Sponsor” shall not include any employee or member of Apollo Management Holdings, L.P. and/or its affiliates in such employee’s or member’s capacity as a member of the Company’s board of directors. 

 

	 	2.	COMMITMENT OF THE CONSENTING CREDITORS. 

(a)    Affirmative Covenants. Subject to the terms and conditions hereof, for the duration of the Restructuring
Support Period, each Consenting Creditor shall: 
 (i)    use commercially reasonable efforts to support and complete the
Restructuring and all transactions contemplated under this Agreement, in accordance with the Milestones; 
 (ii)    (A)
negotiate in good faith the Definitive Documentation and (B) exercise any and all necessary and appropriate rights, and execute and deliver any and all necessary and appropriate documentation, including any direction letters, in each case, in
its capacity as a holder of Claims in furtherance of the Restructuring and the Definitive Documentation; 

(iii)    timely vote (when solicited to do so in accordance with this Agreement after receipt of a Disclosure Statement
approved by the Bankruptcy Court and by the applicable deadline for doing so) all of its Participating Claims to accept the Plan and not to change or withdraw such vote prior to the voting deadline to accept or reject the Plan; provided
that such vote shall be deemed revoked and void ab initio at any time following termination of this Agreement; 

(iv)    use its commercially reasonable efforts to consent to those actions contemplated by this Agreement or otherwise
required to be taken to effectuate the Restructuring, including entering into all documents and agreements necessary to consummate the Restructuring; 

(v)    use its commercially reasonable efforts to promptly notify the Company, in writing, of any material governmental or
third-party complaints, litigations, investigations, or hearings (or written communications indicating that the same may be contemplated or threatened) with respect to the Restructuring; provided that no such notice need by given if, in the opinion
of counsel, giving such notice is not permitted pursuant to such proceedings; 
 (vi)    upon request by the Company
and/or their advisors, use its commercially reasonable efforts to promptly provide, through the First Lien Professionals, the Company or the Company’s advisors the aggregate principal amount of all Claims held by such Consenting Creditor
against the Company and its subsidiaries or affiliates, on an issuance-by-issuance basis as of the date of such request; 

(vii)    to the extent applicable, (A) not opt-out of any third party release
contemplated by the Plan and/or (B) opt-in to any third party release contemplated by the Plan; and 

  
 - 8 - 

 (viii)    for any Initial Consenting Creditor that is also a CLSIP Creditor,
use its commercially reasonable efforts to enter into the CLSIP Forbearance Agreement. 
 (b)    Negative
Covenants. Subject to the terms and conditions hereof, for the duration of the Restructuring Support Period, each Consenting Creditor shall not: 

(i)    object to, or vote any of such Participating Claims to reject, the Plan; 

(ii)    direct the administrative agents under the Existing ABL Revolver, the Existing RCF, and the First Lien Term Loan,
and the trustees under the Claire’s 2019 1L Notes Indenture and the Claire’s 2020 1L Notes Indenture or any other individual, a partnership, a joint venture, a limited liability company, a corporation, a trust, an unincorporated
organization, a group, a governmental or regulatory authority, or any legal entity or other Person to exercise any right or remedy for the enforcement, collection, or recovery of any Participating Claims against, or Interests in, the Company, its
subsidiaries, or affiliates; 
 (iii)    negotiate, enter into, consummate or otherwise participate in any Alternative
Proposal or take any other action, including, but not limited to, initiating any legal proceeding or enforcing rights as holders of Claims, that is inconsistent with, or that would reasonably be expected to prevent or materially delay consummation
of, the Restructuring; 
 (iv)    enter into any other restructuring support or similar agreement (including any
settlement agreement) with respect to the Restructuring with any material creditor, equity holder, ad hoc group, or statutory committee that would be inconsistent with such Consenting Creditors’ obligations under this Agreement, in each case
without the consent of the Company (such consent not to be unreasonably withheld); 
 (v)    directly or indirectly, take
any actions, or fail to take any actions, where such taking or failing to take actions would be, in either case, (A) inconsistent with this Agreement or the Definitive Documentation or (B) otherwise inconsistent with, or reasonably
expected to prevent, interfere with, delay or impede the implementation or consummation of, the Restructuring; 

(vi)    directly or indirectly, acquire, beneficially own, or control (whether through syndications, assignments,
participations, or otherwise) any DIP ABL Revolving Loans or DIP ABL Revolving Commitments (each as defined in the DIP Term Sheet); or 

(vii)    directly or indirectly, encourage any entity to undertake any action prohibited by this
Section 2(b). 
 Subject in all respects to applicable intercreditor agreements among the parties thereto, nothing in this
Agreement shall prohibit any Consenting Creditor from (x) appearing as a party-in-interest in any matter arising in the Chapter 11 Cases, (y) taking or
directing any action to be taken relating to maintenance, protection, or preservation of any collateral or defending its claims and interests, and (z) enforcing any right, remedy, condition, consent, or approval requirement under this Agreement
or any Definitive Documentation entered into in connection with the Restructuring; provided that, in each case, any such action is not materially inconsistent with such Consenting Creditor’s obligations hereunder. 

  
 - 9 - 

	 	3.	COMMITMENT OF THE SPONSOR. 

 (a)    Affirmative
Covenants. Subject to the terms and conditions hereof, for the duration of the Restructuring Support Period, the Sponsor shall: 

(i)    use commercially reasonable efforts to support and complete the Restructuring and all transactions
contemplated under this Agreement, in accordance with the Milestones; 
 (ii)    (A) negotiate in good
faith the Definitive Documentation and (B) exercise any and all necessary and appropriate rights, and execute and deliver any and all necessary and appropriate documentation, including any direction letters, in each case, in its capacity as a
holder of Claims in furtherance of the Restructuring and the Definitive Documentation; 
 (iii)    timely
vote (to the extent solicited to do so in accordance with this Agreement after receipt of a Disclosure Statement approved by the Bankruptcy Court and by the applicable deadline for doing so) all of its Participating Claims and Interests to accept
the Plan and not to change or withdraw such vote prior to the voting deadline to accept or reject the Plan; provided that such vote shall be deemed revoked and void ab initio at any time following termination of this Agreement;

 (iv)    use commercially reasonable efforts to consent to those actions contemplated by this Agreement
or otherwise required to be taken to effectuate the Restructuring, including entering into all documents and agreements necessary to consummate the Restructuring; 

(v)    use commercially reasonable efforts to promptly notify the Company and the Ad Hoc First Lien Group,
in writing, of any material governmental or third-party complaints, litigations, investigations, or hearings (or written communications indicating that the same may be contemplated or threatened) with respect to the Restructuring; provided
that no such notice need be given if, in the opinion of counsel, giving such notice is not permitted pursuant to such proceedings; 

(vi)    upon request by the Company, the Ad Hoc First Lien Group and/or their respective advisors, use its
commercially reasonable efforts to promptly provide the aggregate principal amount of all Claims held by the Sponsor against the Company and its subsidiaries or affiliates, on an
issuance-by-issuance basis as of the date of such request; 

(vii)    to the extent applicable, (A) not opt-out of any
third party release contemplated by the Plan and/or (B) opt-in to any third party release contemplated by the Plan; and 

(viii)    use commercially reasonably efforts to promptly notify or update the Company and the Ad Hoc First
Lien Group upon becoming aware (A) of a breach by one or more Party of its obligations under this Agreement, (B) that a Termination Event has occurred, and (C) of any developments or any case or controversy that has been

  
 - 10 - 

 
commenced or may be commenced against the Company or any of the Consenting Creditors that would reasonably be expected to impede or prevent consummation of the Restructuring; provided
that, for the avoidance of doubt, none of the obligations in this paragraph (ix) shall apply to any information learned by an employee or member of the Sponsor in his or her capacity as a member of the Company’s board of directors.

 (b)    Negative Covenants. Subject to the terms and conditions hereof, for the duration of the Restructuring
Support Period, the Sponsor shall not: 
 (i)    object to, or vote any of such Claims to reject, the
Plan; 
 (ii)    vote any of its Claims in favor of or support, directly or indirectly, any Alternative
Proposal; 
 (iii)    publicly announce its intention not to pursue the Restructuring or file any
pleading with the Bankruptcy Court inconsistent with this Agreement; 
 (iv)    direct any other
individual, a partnership, a joint venture, a limited liability company, a corporation, a trust, an unincorporated organization, a group, a governmental or regulatory authority, or any legal entity or other Person to exercise any right or remedy for
the enforcement, collection, or recovery of any Claims against, or Interests in, the Company, its subsidiaries, or affiliates; 

(v)    negotiate, enter into, consummate, or assist in the submission or development of or otherwise
participate in any Alternative Proposal or take any other action, including, but not limited to, initiating any legal proceeding or enforcing rights as holders of Claims or Interests, that is inconsistent with, or that would reasonably be expected
to prevent or materially delay consummation of, the Restructuring; for the avoidance of doubt, in no event shall the Sponsor take any action to solicit, initiate, encourage, or assist the submission or development of any Payout Event Proposal; 

(vi)    enter into any other restructuring support or similar agreement (including any settlement
agreement) with respect to the Restructuring with any material creditor, equity holder, ad hoc group, or statutory committee that would be inconsistent with Sponsor’s obligations under this Agreement, in each case without the consent of the
Company and the Requisite Consenting Creditors (such consent not to be unreasonably withheld); 

(vii)    directly or indirectly, take any actions, or fail to take any actions, where such taking or
failing to take actions would be, in either case, (A) inconsistent with this Agreement or the Definitive Documentation or (B) otherwise inconsistent with, or reasonably expected to prevent, interfere with, delay or impede the
implementation or consummation of, the Restructuring; 
 (viii)    solicit, initiate, encourage, assist
the submission or development of, or negotiate any financing for the Debtors that is not the DIP Financing; or 

  
 - 11 - 

 (ix)    directly or indirectly, encourage any entity to
undertake any action prohibited by this Section 3(b). 
 Subject in all respects to applicable intercreditor
agreements among the parties thereto, nothing in this Agreement shall prohibit the Sponsor from (x) appearing as a party-in-interest in any matter arising in the
Chapter 11 Cases, (y) taking or directing any action to be taken relating to maintenance, protection, or preservation of any collateral or defending its claims and interests, and (z) enforcing any right, remedy, condition, consent, or
approval requirement under this Agreement or any Definitive Documentation entered into in connection with the Restructuring; provided that, in each case, any such action is not materially inconsistent with the Sponsor’s
obligations hereunder. 
  

	 	4.	COVENANTS OF THE COMPANY. 

 (a)    Affirmative Covenants of
the Company. Subject to the terms and conditions hereof, for the duration of the Restructuring Support Period, the Company shall: 

(i)    use commercially reasonable efforts to support and complete the Restructuring and all transactions
contemplated under this Agreement, in accordance with the Milestones, including commencing the Chapter 11 Cases, 

(ii)    negotiate in good faith the Definitive Documentation; 

(iii)    use commercially reasonable efforts to obtain any and all required governmental, regulatory,
licensing, Bankruptcy Court, or other approvals (including, without limitation, any necessary third-party consents) necessary to implement and/or consummate the Restructuring; 

(iv)    use commercially reasonable efforts to lift or otherwise reverse the effect of any injunction or
other order or ruling of a court or regulatory body that would impede the consummation of the Restructuring; 

(v)    (1) cause Hilco Real Estate, LLC, the Company’s real estate advisor, to consult weekly with the
First Lien Professionals and the Ad Hoc First Lien Group on the Company’s lease assumption and rejection strategy, (2) consult in good faith with the counsel and financial advisor to the Ad Hoc First Lien Group on the Company’s lease
assumption and rejection strategy, including with respect to negotiations on the rejection, modification, or assumption of leases, (3) consult in good faith with the First Lien Professionals prior to the Company’s entry into, termination,
or modification of any material operational contracts or other arrangements (including without limitation, concessions agreements and European operations); and (4) use commercially reasonable efforts to identify in writing to the First Lien
Professionals the contracts and leases proposed to be assumed, assumed and assigned, or rejected by motion to the Bankruptcy Court or pursuant to the Plan at least 5 business days prior to filing the Plan Supplement (the “Executory Contracts
and Leases Information”). The Company shall make relevant personnel or advisors reasonably available during business hours to provide reasonable assistance to the Initial Consenting Creditors’ review of any such executory contracts and
leases identified in the Executory Contracts and Leases Information; 

  
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 (vi)    use commercially reasonable efforts to operate the
Company in the ordinary course consistent with industry practice and the operations contemplated pursuant to the Company’s business plan (as may be updated from time to time in consultation with the Ad Hoc First Lien Group), taking into account
the Restructuring and the commencement of the Chapter 11 Cases; 
 (vii)    use commercially reasonable
efforts to promptly notify or update the Initial Consenting Creditors upon becoming aware of any of the following occurrences: (A) a Termination Event has occurred; (B) any person has challenged the validity or priority of, or has sought
to avoid, any lien securing the First Lien Claims pursuant to a pleading filed with the Bankruptcy Court or otherwise; (C) any developments, negotiations, or proposals relating to any material contracts or case or controversy against the
Company that has been or may be commenced against the Company that would reasonably be expected to impede or prevent consummation of the Restructuring; or (D) a written proposal with respect to an Alternative Proposal, including a Payout Event
Proposal, with such notice to include the identity of the non-Debtor Person or group of Persons involved as well as a written copy of such Alternative Proposal; 

(viii)    unless the Company obtains the prior written consent of a Consenting Creditor: (x) use the
information regarding any Claims owned at any time by such Consenting Creditor (the “Confidential Claims Information”) solely in connection with this Agreement (including any disputes relating thereto); and (y) except as
required by law, rule, or regulation or by order of a court or as requested or required by the Securities and Exchange Commission or by any other federal or state regulatory, judicial, governmental, or supervisory authority or body, keep the
Confidential Claims Information strictly confidential and not disclose the Confidential Claims Information to any other Person. In the event that the Company is required (by law, rule, regulation, deposition, interrogatories, requests for
information or documents in legal or administrative proceedings, subpoena, civil investigative demand or other similar process, or by any governmental, judicial, regulatory, or supervisory body) to disclose the Confidential Claims Information or the
contents thereof, the Company shall, to the extent legally permissible, provide affected Consenting Creditors with prompt notice of any such request or requirement so that such Consenting Creditors may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this section at such Consenting Creditor’s sole cost and expense. If, in the absence of a protective order or other remedy or the receipt of a waiver from a Consenting Creditor, the Company
believes that it is nonetheless, following consultation with counsel, required to disclose the Confidential Claims Information, the Company may disclose only that portion of the Confidential Claims Information that it believes, following
consultation with counsel, it is required to disclose, provided that it exercises reasonable efforts to preserve the confidentiality of the Confidential Claims Information, including, without limitation, by marking the Confidential Claims
Information “Confidential – Attorneys’ Eyes Only” and by reasonably cooperating with the affected Consenting Creditor to obtain an appropriate protective order or other reliable assurance that confidential and attorneys’
eyes only treatment will be accorded to the Confidential Claims Information. In no event shall this Agreement be construed to impose on a Consenting Creditor an obligation to disclose the price for which it acquired or disposed of any Claim. The
Company’s obligations under this Section 4(a)(viii) shall survive termination of this Agreement; 

  
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 (ix)    use commercially reasonable efforts to cause the
signature pages attached to this Agreement to be redacted to the extent this Agreement is filed on the docket maintained in the Chapter 11 Cases, posted on the Company’s website, or otherwise made publicly available; 

(x)    (A) after the Petition Date, and to the extent authorized by the Bankruptcy Court pursuant to any
order providing adequate protection to holders of First Lien Claims, promptly pay the First Lien Fees and Expenses (which, for the avoidance of doubt, shall not include success fees, transaction fees, or similar fees), other than those fees and
expenses set forth in clause (ii) of the definition of First Lien Fees and Expenses, as adequate protection as provided by the Restructuring Term Sheet so long as a Company Termination Event has not occurred and is not continuing; and
(B) on the Effective Date, pay, in full, all unpaid First Lien Fees and Expenses (which, for the avoidance of doubt, shall include success fees, transaction fees, or similar fees); 

(xi)    use commercially reasonable efforts and work in good faith to finalize the Definitive
Documentation, including, without limitation, the form of the documents in the Plan Supplement so that before the commencement of the hearing on confirmation of the Plan each such document has been filed in forms that are consistent with this
Agreement and otherwise reasonably acceptable in form and substance to the Company and the Requisite Consenting Creditors (as evidenced by their written approval); 

(xii)    use commercially reasonable efforts to provide the Initial Consenting Creditors or the First Lien
Professionals with copies of any information or reporting at the same time such information or reporting is provided to DIP agents and/or lenders pursuant to the DIP Financing or the DIP Orders; 

(xiii)    use commercially reasonable efforts to provide the Initial Consenting Creditors or the First Lien
Professionals with advance copies of any amendment, forbearance agreement or similar document related to the Gibraltar Intermediate Secured Term Loan due 2019 (the “Gibraltar Amendment”), which document shall be reasonably
acceptable in form and substance to the Company and the Requisite Consenting Creditors, it being acknowledged and agreed that the term sheet for the Gibraltar Amendment reviewed as of the date hereof is reasonably acceptable; and 

(xiv)    use commercially reasonable efforts to cause each of its direct and indirect subsidiaries, whether
a Party to this Agreement or not, to comply with the terms of this Agreement as if such entity were a Company entity party hereto. 

(b)    Negative Covenants of the Company. Subject to the terms and conditions hereof, for the duration of the
Restructuring Support Period, the Company (except with the prior written consent of the Requisite Consenting Creditors) shall not, directly or indirectly: 

(i)    Subject to Section 5(a) hereof, take any action to solicit, initiate,
encourage, negotiate, or assist the submission or development of an Alternative Proposal; 

  
 - 14 - 

 (ii)    (A) publicly announce its intention not to pursue the
Restructuring; (B) suspend or revoke the Restructuring; or (C) execute any agreements, instruments, or other documents (including any modifications or amendments to any Definitive Documentation necessary to effectuate the Restructuring)
that, in whole or in part, are not materially consistent with this Agreement; 
 (iii)    directly or
indirectly, take any actions, or fail to take any actions, where such taking or failing to take actions would be, in either case, (A) inconsistent with this Agreement or the Definitive Documentation or (B) otherwise inconsistent with, or
reasonably expected to prevent, interfere with, delay or impede the implementation or consummation of, the Restructuring; 

(iv)    enter into, terminate, or otherwise modify any material operational contracts, leases, or other
arrangements (including without limitation, concessions agreements and European operations) without the prior written consent of the Requisite Consenting Creditors (such consent not to be unreasonably withheld, conditioned, or delayed); 

(v)    (A) redeem, purchase or acquire, or offer to acquire any shares of, or any options, warrants,
conversion privileges, or rights of any kind to acquire any shares of, any of its capital stock or other equity interests, or (B) issue, sell, pledge, dispose of, or grant or incur any encumbrance on, any shares of, or any options, warrants,
conversion privileges, or rights of any kind to acquire any shares of, any of its capital stock or other equity interests (other than issuances of equity interests upon the exercise, exchange, or conversion of options, warrants, or other conversion
privileges that are outstanding as of the date hereof and only in accordance with the terms of such options, warrants, or other conversion privileges as in effect on the date hereof); 

(vi)    other than as required by the Restructuring Term Sheet or the Plan, amend or propose to amend its
respective certificate or articles of incorporation, bylaws, LLC Agreement, or other comparable organizational documents; 

(vii)    (A) split, combine or reclassify any outstanding shares of its capital stock or other equity
interests, or (B) declare, set aside or pay any dividend or other distribution payable in cash, stock, property, a combination thereof, or otherwise with respect to any of its capital stock or other equity interests or any capital stock or
other equity interests of any other Person; 
 (viii)    pay or make any payment, transfer, or other
distribution (whether in cash, securities, or other property) of or in respect of principal of or interest on any funded indebtedness for borrowed money of the Debtors that either (A) is expressly subordinate in right of payment to the First
Lien Claims or (B) secured by an interest in collateral, which interest is subordinate in priority to that securing any of the First Lien Claims, or any payment or other distribution (whether in cash, securities, or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation, or termination in respect of any such funded indebtedness that is not contemplated by the Restructuring Term Sheet; 

  
 - 15 - 

 (ix)    enter into any transaction, or proposed settlement of
any claim, litigation, dispute, controversy, cause of action, proceeding, appeal, determination, investigation, matter, or otherwise that will materially impair the Company’s ability to consummate the Restructuring or the value that the Company
is committing to provide holders of First Lien Claims in accordance with this Agreement; 
 (x)    file,
support, amend or modify the Plan except as provided by this Agreement or otherwise without the consent of the Requisite Consenting Creditors (such consent not to be unreasonably withheld); 

(xi)    enter into any other restructuring support or similar agreement (including any settlement
agreement) with respect to the Restructuring with any material creditor, equity holder, ad hoc group, or statutory committee that would be inconsistent with the Company’s obligations under this Agreement or that would materially impair the
Company’s ability to consummate the Restructuring within the timeframe contemplated by this Agreement, in each case without the consent of the Requisite Consenting Creditors (such consent not to be unreasonably withheld); 

(xii)    without limiting the Company’s rights under Section 5(a) hereof,
solicit, initiate, encourage, assist the submission or development of, negotiate, enter into, file with the Bankruptcy Court, or seek Court approval to enter into any financing that is not the DIP Financing without the written consent of the
Requisite Consenting Creditors, such consent not to be unreasonably withheld, provided that such consent shall not be required if the Company is seeking alternate DIP financing and one or more Initial Consenting Creditors control the exercise
of remedies under the DIP Financing in effect at that time; or 
 (xiii)    consent to any assignments
of, or participations in, the DIP ABL Revolving Loans or DIP ABL Revolving Commitments to any bank or other financial institutions other than an Eligible Institution without first receiving the written consent of the Requisite Consenting Creditors
(such consent not to be unreasonably withheld); provided that this clause (xiii) shall not apply to the extent compliance herewith would otherwise breach the Company’s obligations pursuant to that certain Commitment Letter dated
as of March 11, 2018 by and between Claire’s Stores, Inc. and Citigroup Global Markets; or 

(xiv)    directly or indirectly, encourage any entity to undertake any action prohibited by this
Section 4(b). 
 (c)    The Company acknowledges that it has reviewed this Agreement and has
decided to enter into this Agreement in the exercise of its fiduciary duties. 
  

	 	5.	ADDITIONAL AGREEMENTS; GO-SHOP AND BREAKUP FEE. 

(a)    From and after the Agreement Effective Date, the Company shall be authorized to solicit, develop, and negotiate one
or more Payout Event Proposals, including by furnishing, or causing to be furnished, information concerning the Company in connection with the solicitation, development, and/or negotiation of such proposals or potential proposals following entry
into a customary non-disclosure agreement. 
 (b)     

(i)    If this Agreement is terminated as to all Parties hereto for any reason other than (x) by the
Consenting Creditors following a breach by the Sponsor in respect of which the Consenting Creditors may terminate this Agreement or (y) by the Company upon the breach of Consenting Creditors in respect of which the Company may terminate this
Agreement, the Company shall pay to the Backstop Parties a termination fee equal to $38.75 million upon such termination (the “Breakup Fee”). 

  
 - 16 - 

 (ii)    The Company shall make the payment of the Breakup Fee
to the Backstop Parties or their designees based upon the allocations set forth on Schedule I hereto 

(iii)    Following the termination of this Agreement in a circumstance where the Breakup Fee would be
payable in accordance with Section 5(b)(i), (x) the Consenting Creditors’ rights to seek allowance of the Breakup Fee as an administrative expense of the Debtors’ estates pursuant to section 503(b)(1) of the
Bankruptcy Code and (y) the Company’s and any other party’s rights to oppose such a request are fully reserved. 
  

	 	6.	MUTUAL REPRESENTATIONS, WARRANTIES AND COVENANTS. 

(a)    Each of the Parties, severally and not jointly, represents and warrants to each other Party that the following
statements are true, correct, and complete as of the date hereof (or, if later, the date that such Party first became or becomes a Party) but, solely with respect to the Company, subject to any limitations or approvals arising from, or required by,
the commencement of the Chapter 11 Cases: 
 (i)    it is validly existing and in good standing under the
laws of the state of its organization, and this Agreement is a legal, valid, and binding obligation of such Party, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability; 

(ii)    except as expressly provided in this Agreement or as may be required for disclosure by the
Securities and Exchange Commission, no material consent or approval of, or any registration or filing with, any other Person is required for it to carry out the Restructuring contemplated by, and perform its obligations under, this Agreement; 

(iii)    except as expressly provided in this Agreement, it has all requisite organizational power and
authority to enter into this Agreement and to carry out the Restructuring contemplated by, and perform its obligations under, this Agreement; 

(iv)    the execution and delivery by it of this Agreement, and the performance of its obligations
hereunder, have been duly authorized by all necessary organizational action on its part; 
 (v)    it has
been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement; and 

(vi)    the execution, delivery, and performance by such Party of this Agreement does not and will not
(1) violate any provision of law, rule, or regulation applicable to it or any of its subsidiaries or its charter or bylaws (or other similar governing documents) or those of any of its subsidiaries, (2) conflict with, result in a breach
of, or constitute (with or without notice or lapse of time or both) a default under any material debt for borrowed money to which it or any of its subsidiaries is a party, or (3) violate any order, writ, injunction, decree, statute, rule, or
regulation. 

  
 - 17 - 

 (b)    The Company represents and warrants to the Consenting Creditors and
the Sponsor that there are no pending agreements or understandings (oral or written) and that it has not entered into a definitive agreement (oral or written) with respect to an Alternative Proposal as of the date first written above. 

7.    OWNERSHIP OF CLAIMS. Each Consenting Creditor and Sponsor, severally and not jointly,
represents and warrants as follows: 
 (a)    as of the date of this Agreement, it (i) either (A) is the beneficial
owner of the principal amount of Claims set forth below its signature hereto with the power to vote such Claims or (B) has sole investment or voting discretion with respect to the principal amount of Claims set forth below its signature hereto
and has the power and authority to bind the beneficial owner(s) of such Claims to this Agreement, and (ii) does not beneficially own or control any other Claims for outstanding debt obligations other than those Claims identified below its name
on it signature page hereof; 
 (b)    other than pursuant to this Agreement, such Claims are free and clear of any
pledge, lien, security interest, hypothecation or encumbrance (each, a “Security Interest”), that would materially or adversely affect such Consenting Creditor’s ability to perform its obligations contained in this Agreement at
the time such obligations are required to be performed, it being understood that any Security Interest that is released upon the payment of the underlying obligation and any Security Interest in favor of a broker-dealer in connection with any prime
brokerage account does not materially and adversely affect a Consenting Creditor’s ability to perform its obligations contained in this Agreement at the time such obligations are required to be performed; and 

(c)    (i) it is either (A) a qualified institutional buyer as defined in Rule 144A of the Securities Act,
(B) an institutional accredited investor (as defined in Rule 501(a)(1), (2), (3), or (7) under the Securities Act of 1933, as amended (the “Securities Act”), (C) a non-U.S. person
under Regulation S under the Securities Act, or (D) the foreign equivalent of (A) or (B) above, and (ii) any securities of the Company acquired by the Consenting Creditor in connection with the Restructuring will have been acquired
for investment and not with a view to distribution or resale in violation of the Securities Act. 

8.    TERMINATION BY REQUISITE CONSENTING CREDITORS. The Requisite Consenting Creditors may terminate
this Agreement, in each case, upon delivery of written notice to the Company and the Sponsor in accordance with Section 26 hereof at any time after the occurrence of or during the continuation of any of the following events
(each, a “Creditor Termination Event”): 
 (a)    the breach by the Company of any of its obligations,
representations, warranties, or covenants set forth in this Agreement in any respect, which breach of covenant or obligation (if curable) remains uncured three (3) Business Days after the receipt by the Company of written notice of such breach
from the Requisite Consenting Creditors; 

  
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 (b)    (i) the issuance, promulgation, or enactment by any governmental
entity, including any regulatory or licensing authority or court of competent jurisdiction (including, without limitation, an order of the Bankruptcy Court which has not been stayed), of any statute, regulation, ruling or order declaring this
Agreement or any material portion hereof to be unenforceable or enjoining or otherwise restricting the consummation of any material portion of the Restructuring, and/or (ii) the execution by the Company of a settlement or other agreement in
respect of any of the counts asserted against it that adversely affects (or would adversely affect if consummated) the consummation of any material portion of the Restructuring, and in each case which remains uncured after three (3) Business
Days after receipt by the Company of written notice from the Requisite Consenting Creditors; 
 (c)    a trustee under
section 1104 of the Bankruptcy Code or an examiner shall have been appointed in the Chapter 11 Cases, which order has not been reversed, stayed, or vacated after three (3) Business Days; 

(d)    an order for relief under chapter 7 of the Bankruptcy Code shall have been entered in the Chapter 11 Cases, or the
Chapter 11 Cases shall have been dismissed, in each case by order of the Bankruptcy Court, which order has not been reversed, stayed, or vacated after three (3) Business Days; 

(e)    if any of the Definitive Documentation (including any amendment or modification thereof) filed with the Bankruptcy
Court or otherwise finalized, or has become effective, contains terms and conditions that are inconsistent with this Agreement or otherwise not reasonably acceptable in form and substance to the Requisite Consenting Creditors, and such defect
remains uncured three (3) Business Days after the receipt by the Company of written notice of such inconsistency from the Requisite Consenting Creditors; 

(f)    the Disclosure Statement Order or the Confirmation Order, is (i) amended or modified without the consent of
the Requisite Consenting Creditors; or (ii) reversed, permanently stayed, dismissed, or vacated, unless the Bankruptcy Court enters a new Disclosure Statement Order, or a new Confirmation Order, as applicable; in each case which remains uncured
after three (3) Business Days after receipt by the Company of written notice by the Requisite Consenting Creditors; 

(g)    the Company, Sponsor, or any of their respective affiliates file any motion or pleading with the Bankruptcy Court
that is not consistent in all material respects with this Agreement and such motion or pleading has not been withdrawn within two (2) Business Days of each of the Company’s and/or the applicable filing party’s receiving written notice
from the Requisite Consenting Creditors that such motion or pleading is inconsistent with this Agreement; 
 (h)    the
Company (i) withdraws or revokes the Plan, (ii) files, publicly proposes or otherwise supports (in a manner not permitted pursuant to Section 5(a) hereof), or executes a definitive written agreement with respect
to an Alternative Proposal, including a Payout Event Proposal, or (iii) executes an amendment or written modification to a Definitive Document that is not consistent with this Agreement; 

  
 - 19 - 

 (i)    the Company fails to use commercially reasonable efforts to oppose any
(A) Alternative Proposal filed with the Bankruptcy Court, or (B) amendment or modification filed with the Bankruptcy Court to the Restructuring containing any terms that are inconsistent with this Agreement, unless such amendment or
modification is otherwise consented to in writing by the Requisite Consenting Creditors (such consent not to be unreasonably withheld); 

(j)    the Bankruptcy Court grants relief terminating, annulling, or modifying the automatic stay (as set forth in section
362 of the Bankruptcy Code) with regard to any assets of the Company with an aggregate value in excess of $10,000,000 without the written consent of the Requisite Consenting Creditors, which order has not been reversed, stayed, or vacated after
three (3) Business Days; 
 (k)    the Bankruptcy Court grants relief that is inconsistent in any respect with this
Agreement and such inconsistent relief is not dismissed, vacated or modified to be consistent with this Agreement within five (5) Business Days of the Company’s receiving written notice from the Requisite Consenting Creditors that such
relief is inconsistent with this Agreement; 
 (l)    the Company loses the exclusive right to file and solicit
acceptances of a chapter 11 plan; 
 (m)    the Company files, joins or supports (pursuant to a pleading filed with, or
a statement made before, the Bankruptcy Court) any motion, application, adversary proceeding or cause of action (A) challenging the validity, enforceability, or priority of, or to avoid, the liens on any asset or assets comprising any portion
of the collateral securing the First Lien Claims, (B) seeking to impose liability upon or enjoin the holders of First Lien Claims in their capacity as such, or (C) seeking to restrict the rights of holders of First Lien Claims in their
capacity as such, in each case unless otherwise consented to in writing by the Requisite Consenting Creditors and where such pleading has not been withdrawn within three (3) Business Days of the Company receiving written notice from the
Requisite Consenting Creditors that such motion or pleading is inconsistent with this Agreement; provided, that, the foregoing shall not limit nor be deemed to limit (x) the Company’s rights to enforce this Agreement in any
way or (y) the Company’s rights to seek a determination that any adequate protection payments made on account of First Lien Claims should be recharacterized as payment on account of the secured portion of First Lien Claims as of the
Petition Date; 
 (n)    the occurrence of a Material Adverse Change; 

(o)    there is a failure to achieve any Milestone, unless such Milestone is satisfied prior to a termination of this
Agreement; 
 (p)    the Effective Date has not occurred by September 14, 2018, subject to extension by the
Requisite Consenting Creditors in writing; 
 (q)    the Company executes a definitive written agreement with respect to
a Payout Event Proposal; 
 (r)    the Company or any of its subsidiaries enters into any Gibraltar Amendment that is
not reasonably acceptable to the Requisite Consenting Creditors, it being acknowledged and agreed that the Gibraltar Amendment contemplated by the term sheet reviewed by the Consenting Creditors as of the date hereof is acceptable; or 

  
 - 20 - 

 (s)    the Bankruptcy Court grants relief that is inconsistent in any respect
with this Agreement and such inconsistent relief is not dismissed, vacated or modified to be consistent with this Agreement within five (5) Business Days of the Company’s receiving written notice from the Requisite Consenting Creditors
that such relief is inconsistent with this Agreement. 
 9.    TERMINATION BY THE SPONSOR. The
Sponsor may terminate this Agreement, solely with respect to the Sponsor, at any time after the occurrence of or during the continuation of any of the following events solely to the extent such event adversely impacts the Sponsor (each, a
“Sponsor Termination Event”): 
 (a)    the breach by the Company of any of its obligations,
representations, warranties, or covenants set forth in this Agreement in any respect, which breach of covenant or obligation (if curable) remains uncured three (3) Business Days after the receipt by the Company of written notice of such breach
from the Sponsor; 
 (b)    (i) the issuance, promulgation, or enactment by any governmental entity, including any
regulatory or licensing authority or court of competent jurisdiction (including, without limitation, an order of the Bankruptcy Court which has not been stayed), of any statute, regulation, ruling or order declaring this Agreement or any material
portion hereof to be unenforceable or enjoining or otherwise restricting the consummation of any material portion of the Restructuring, and/or (ii) the execution by the Company of a settlement or other agreement in respect of any of the counts
asserted against it that adversely affects (or would adversely affect if consummated) the consummation of any material portion of the Restructuring, and in each case which remains uncured after three (3) Business Days after receipt by the
Company of written notice from the Sponsor; 
 (c)    a trustee under section 1104 of the Bankruptcy Code or an examiner
shall have been appointed in the Chapter 11 Cases, which order has not been reversed, stayed, or vacated after three (3) Business Days; 

(d)    an order for relief under chapter 7 of the Bankruptcy Code shall have been entered in the Chapter 11 Cases, or the
Chapter 11 Cases shall have been dismissed, in each case by order of the Bankruptcy Court, which order has not been reversed, stayed, or vacated after three (3) Business Days; 

(e)    the Company (i) withdraws or revokes the Plan, or (ii) files, publicly proposes or otherwise supports (in
a manner not permitted pursuant to Section 5(a) hereof), or executes a definitive written agreement with respect to an Alternative Proposal, including a Payout Event Proposal; 

(f)    the Company fails to use commercially reasonable efforts to oppose any Alternative Proposal filed with the
Bankruptcy Court; or 
 (g)    the Bankruptcy Court grants relief that is inconsistent in any respect with this
Agreement and such inconsistent relief is not dismissed, vacated or modified to be consistent with this Agreement within five (5) Business Days of the Company receiving written notice from the Sponsor that such relief is inconsistent with this
Agreement. 

  
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 10.    MUTUAL TERMINATION. This Agreement may be
terminated by mutual, written agreement among (a) the Company, and (b) the Requisite Consenting Creditors. 

11.    COMPANY TERMINATION EVENTS. The Company may terminate this Agreement, upon the occurrence of
any of the following events (each a “Company Termination Event): 
 (a)    a failure by any Consenting
Creditor to timely vote all its Participating Claims (as defined herein) in accordance with Section 2(a)(iii) hereof; provided that the foregoing shall not apply if Consenting Creditors holding in excess of
67.0% of all First Lien Claims have submitted ballots to accept the Plan (and not withdrawn such ballots) in accordance with Section 2(a)(iii) hereof; 

(b)    without limiting Section 11(a) hereof, the breach by one or more Consenting Creditors of
any of the material obligations, representations, warranties, or covenants of such Consenting Creditors set forth in this Agreement, and which breach remains uncured after three (3) Business Days after receipt by the Requisite Consenting
Creditors of written notice from the Company; provided that the foregoing shall not apply if non-breaching Consenting Creditors hold in excess of 67.0% of all First Lien Claims as of such date;

 (c)    the issuance, promulgation, or enactment by any governmental entity, including any regulatory or licensing
authority or court of competent jurisdiction (including, without limitation, an order of the Bankruptcy Court which has not been stayed), of any statute, regulation, ruling or order declaring this Agreement or any material portion hereof to be
unenforceable or enjoining or otherwise restricting the consummation of a portion of the Restructuring and in each case which remains uncured after three (3) Business Days after receipt by the Requisite Consenting Creditors of written notice
from the Company; 
 (d)    a Consenting Creditor or any of its affiliates files any motion or pleading with the
Bankruptcy Court that is not consistent in all material respects with this Agreement and such motion or pleading has not been withdrawn within two (2) Business Days of each of the Consenting Creditor’s and/or the applicable filing
party’s receiving written notice from the Company that such motion or pleading is inconsistent with this Agreement; provided that the foregoing shall not apply if non-breaching Consenting
Creditors hold in excess of 67.0% of all First Lien Claims as of such date; 
 (e)    a Consenting Creditor files,
publicly proposes or otherwise supports any (i) Alternative Proposal (other than a Payout Event Proposal), or (ii) amendment or modification to the Restructuring containing any terms that are inconsistent with this Agreement and such
filing, proposal or support has not been withdrawn within two (2) Business Days of the Consenting Creditor receiving written notice from the Company that such filing, proposal or support violates this Agreement; provided that the
foregoing shall not apply if non-breaching Consenting Creditors hold in excess of 67.0% of all First Lien Claims as of such date; 

  
 - 22 - 

 (f)    the Bankruptcy Court grants relief that is inconsistent in any respect
with this Agreement and such inconsistent relief is not dismissed, vacated or modified to be consistent with this Agreement within five (5) Business Days of the Consenting Creditors’ receiving written notice from the Company that such
relief is inconsistent with this Agreement; 
 (g)    the occurrence of a Material Adverse Change; or 

(h)    if the board of directors of any Debtor at any time determines in good faith that continued performance under this
Agreement would be inconsistent with its fiduciary duties. 
  

	 	12.	TERMINATION. 

 (a)    This Agreement shall terminate if the
New Money Backstop Commitment Agreement terminates for any reason, provided that if the New Money Backstop Commitment Agreement is terminated by the Company upon the breach of Initial Consenting Creditors in respect of which the Company may
terminate that agreement, the Breakup Fee shall not be due and payable hereunder. 
 (b)    Subject to
Section 11(h), no Party may terminate this Agreement based on a Company Termination Event, Creditor Termination Event, or Sponsor Termination Event, as applicable, caused by such Party’s failure to perform or comply in
all material respects with the terms and conditions of this Agreement (unless such failure to perform or comply arises as a result of another Party’s actions or inactions). 

(c)    Upon the termination of this Agreement by the Requisite Consenting Creditors or the Company, (i) all Parties
shall be released from their commitments, undertakings, and agreements under or related to this Agreement other than obligations under this Agreement which by their terms expressly survive a termination date, and (ii) there shall be no
liability or obligation on the part of any Party. 
 (d)    Upon the termination of this Agreement as to the Sponsor
following a Sponsor Termination Event, (i) the Sponsor shall be released from its commitments, undertakings, and agreements under or related to this Agreement other than obligations under this Agreement which by their terms expressly survive a
termination date, and (ii) there shall be no liability or obligation on the part of any Party to the Sponsor. 

(e)    In no event shall any termination of this Agreement relieve a Party from (i) liability for its breach or non-performance of its obligations hereunder prior to the termination date, including but not limited to the Company’s obligations to pay the First Lien Fees and Expenses, and (ii) obligations under this
Agreement which by their terms expressly survive a termination date. 
  

	 	13.	TRANSFER OF CLAIMS 

 (a)    Each Consenting Creditor and the
Sponsor agrees that it shall not sell, assign, grant, transfer, convey, hypothecate or otherwise dispose of (each, a “Transfer”) any Claims, including First Lien Claims, against the Company now owned or hereafter
acquired (collectively, the “Participating Claims”), or any option thereon or any right or interest (voting or 

  
 - 23 - 

 
otherwise) in any or all of its Participating Claims, except to a party that (i) is a Consenting Creditor, or (ii), as a condition subsequent to the effectiveness of any such Transfer,
executes and delivers a Transfer Agreement in the form attached hereto as Exhibit B to counsel to the Ad Hoc First Lien Group, the Company, and to Weil, Gotshal & Manges LLP (“Weil”) no more than two
(2) business days after the settlement of the relevant Transfer in accordance with Section 26 hereof, and any such Participating Claims automatically shall be deemed to be subject to the terms of this Agreement. With
respect to any Transfers effectuated in accordance with clause (ii) above, (A) such transferee shall be deemed to be Consenting Creditor for purposes of this Agreement, and (B) the Company shall be deemed to have acknowledged such
Transfer. 
 (b)    This Agreement shall in no way be construed to preclude any Consenting Creditor from acquiring
additional Claims against the Company other than DIP ABL Revolving Loans or DIP ABL Revolving Commitments; provided, that, (i) any such additional Claims automatically shall be deemed to be Participating Claims and shall be
subject to all of the terms of this Agreement and (ii) each such Consenting Creditor agrees that such additional Participating Claims shall be subject to this Agreement. Each Consenting Creditor agrees to provide to counsel to the Ad Hoc First
Lien Group, the Company, and Weil notice in accordance with Section 26 hereof of (x) the acquisition of any additional Participating Claims and (y) whether such Claims were acquired from an existing Consenting
Creditor, no more than two (2) business days after of the consummation of the transaction acquiring such additional Participating Claims. 

(c)    Notwithstanding anything herein to the contrary, (i) any Consenting Creditor may Transfer any of its
Participating Claims to a Qualified Marketmaker without the requirement that the Qualified Marketmaker be or become a Consenting Creditor; provided, that, the Qualified Marketmaker subsequently Transfers all right, title and interest
in such Participating Claims to a transferee that is or becomes a Consenting Creditor in accordance with this Agreement, and the transfer documentation between the transferring Consenting Creditor and such Qualified Marketmaker shall contain a
requirement that provides as such; and (ii) to the extent any Consenting Creditor is acting in its capacity as a Qualified Marketmaker, it may Transfer any Claims that it acquires from an entity that is not a Consenting Creditor without the
requirement that the transferee be or become a Consenting Creditor. 
 (d)    Notwithstanding the foregoing, if at the
time of a proposed Transfer of such Participating Claims to a Qualified Marketmaker, such Participating Claims (x) may be voted on the Plan or any Alternative Proposal, the proposed transferor Consenting Creditor must first vote such
Participating Claims in accordance with Section 2(a)(iii), or (y) have not yet been and may not yet be voted on the Plan or any Alternative Proposal and such Qualified Marketmaker does not Transfer such Participating
Claims to a subsequent transferee prior to the third (3rd) business day prior to the expiration of the applicable voting deadline (such date, the “Qualified Marketmaker Joinder
Date”), such Qualified Marketmaker shall be required to (and the transfer documentation to the Qualified Marketmaker shall have provided that it shall), on the first (1st) Business Day immediately following the Qualified Marketmaker Joinder
Date, become a Consenting Creditor with respect to such Participating Claims in accordance with the terms hereof; provided, that, the Qualified Marketmaker shall automatically, and without further notice or action, no longer be a
Consenting Creditor with respect to such Participating Claims at such time that the transferee of such Participating Claims becomes a Consenting Creditor with respect to such Participating Claims. 

  
 - 24 - 

 (e)    Any Transfer of Participating Claims that does not comply with this
Section 13 shall be deemed null and void ab initio in all respects and without further action by any Party. 

(f)    Notwithstanding anything herein to the contrary, to the extent that a Consenting Creditor effects the Transfer of
all of its Claims in accordance with this Agreement, including, for the avoidance of doubt, in accordance with the foregoing portion of this Section 13, such Consenting Creditor shall cease to be a Party to this Agreement
in all respects and shall have no further obligations hereunder. 
  

	 	14.	COOPERATION. 

 (a)    The Company shall use commercially
reasonable efforts to provide counsel for the Ad Hoc First Lien Group and the Sponsor drafts of all motions, applications, and other pleadings the company intends to file with the Bankruptcy Court to implement the Restructuring (or that could be
reasonably expected to affect the interests of holders of First Lien Claims, in their capacities as such) at least three (3) business days before the date when the Company intends to file such pleading, unless such advance notice is impossible
or impracticable under the circumstances, in which case the Company shall use commercially reasonable efforts to notify telephonically or by electronic mail counsel to the Ad Hoc First Lien Group and the Sponsor to advise them as such and, in any
event, shall provide such drafts as soon as reasonably practicable. 
 (b)    Each Consenting Creditor shall use
commercially reasonable efforts to provide counsel for the Company drafts of all motions, applications, and other pleadings the Consenting Creditor intends to file with the Bankruptcy Court to implement the Restructuring at least three
(3) business days before the date when such Consenting Creditor intends to file such pleading, unless such advance notice is impossible or impracticable under the circumstances, in which case the Consenting Creditor shall use commercially
reasonable efforts to notify telephonically or by electronic mail counsel to the Company to advise them as such and, in any event, shall provide such drafts as soon as reasonably practicable. 

15.    AMENDMENTS. Unless otherwise specifically provided herein, no amendment, modification, waiver,
or other supplement of the terms of this Agreement (including the Restructuring Term Sheet) shall be valid unless such amendment, modification, waiver, or other supplement is in writing and has been signed by the Company and the Requisite Consenting
Creditors; provided, however, that any amendment to this Agreement to (i) the defined term “Requisite Consenting Creditors,” (ii) the conditions to the effectiveness of this Agreement set forth in Section 37,
and (iii) this Section 15, shall require the written consent of the Company and each Initial Consenting Creditor. 

16.    ENTIRE AGREEMENT. This Agreement, including the Restructuring Term Sheet and the attached
exhibits, constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement, and supersedes all other prior negotiations, agreements and understandings, whether written or oral, among the Parties with respect to
the subject matter of this Agreement; provided, however, that any confidentiality agreement executed by any Consenting Creditor or First Lien Professional and the Fee Letters shall survive this Agreement and shall continue to be in
full force and effect in accordance with their terms. 

  
 - 25 - 

 17.    SURVIVAL OF AGREEMENT. Notwithstanding the
termination of this Agreement, the agreements and obligations of the Parties in Sections 4(a)(viii), 4(a)(x)(A), and 15 through 35 survive such termination and shall continue in full force and effect in accordance with
the terms hereof. Each of the Parties acknowledges and agrees that this Agreement is being executed in connection with negotiations concerning a possible restructuring of the Company, and in contemplation of possible filings by the Company under
Chapter 11 of the Bankruptcy Code, and (a) the exercise of the rights granted in this Agreement (including giving of notice of termination) shall not be a violation of the automatic stay provisions of section 362 of the Bankruptcy Code and
(b) the Company hereby waives its right to assert a contrary position in the Chapter 11 Cases, if any, with respect to the foregoing. 

18.    IPCOs; ADDITIONAL AGREEMENTS. Notwithstanding anything herein to the contrary, it is
acknowledged and agreed that CLSIP Holdings LLC (“CLSIP HoldCo”) and CLSIP LLC (“CLSIPCo” and, collectively, the “IPCos”) shall be Parties to this Agreement only to the extent their respective
obligations or undertakings (including representations, and warranties) do not conflict with, or breach, any material contractual obligation or undertaking of those entities, including the CLSIP Loan Credit Agreement and their formation or
organizational documents, (collectively, the “Non-RSA IPCo Undertakings”); provided further that to the extent any of the Non-RSA IPCo
Undertakings would otherwise conflict with, or breach, any of the IPCos’ respective covenants, obligations, undertakings, representations, or warranties under this Agreement, the applicable covenant, undertaking, representation or warranty
under this Agreement shall be automatically amended and deemed amended without any further action by any Party solely with respect to CLSIP HoldCo and/or CLSIPCo, as applicable, such that no such conflict or breach (including any Consenting Creditor
Termination Event or Sponsor Termination Event that might otherwise occur) shall exist and in no event shall the IPCos have any monetary liability as a result of their status as Parties under this Agreement. 

19.    NO WAIVER OF PARTICIPATION AND PRESERVATION OF RIGHTS. If the transactions contemplated herein
are not consummated, or following the occurrence of the termination of this Agreement with respect to all Parties, if applicable, nothing herein shall be construed as a waiver by any Party of any or all of such Party’s rights, remedies, claims,
and defenses and the Parties expressly reserve any and all of their respective rights, remedies, claims and defenses. 

20.    COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which, when
so executed, shall constitute the same instrument and the counterparts may be delivered by email in portable document format (.pdf). 

21.    HEADINGS. The headings of the Sections, paragraphs, and subsections of this Agreement are
inserted for convenience only and shall not affect the interpretation hereof. 

  
 - 26 - 

 22.    RELATIONSHIP AMONG PARTIES. Notwithstanding
anything herein to the contrary, the duties and obligations of the Consenting Creditors under this Agreement shall be several, not joint. No Consenting Creditor shall, as a result of its entering into and performing its obligations under this
Agreement, be deemed to be part of a “group” (as that term is used in section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder) with any of the other Consenting Creditor. It is
understood and agreed that no Consenting Creditor has any duty of trust or confidence in any kind or form with any other Consenting Creditor, and, except as expressly provided in this Agreement, there are no commitments among or between them. In
this regard, it is understood and agreed that any Consenting Creditor may trade in the Claims or other debt or equity securities of the Company without the consent of the Company or any other Consenting Creditor, but subject to applicable securities
laws, the terms of this Agreement, and the terms of the First Lien Term Loan Credit Agreement and the First Lien Indentures; provided, however, that no Consenting Creditor shall have any responsibility for any such trading to any other
entity by virtue of this Agreement. No prior history, pattern, or practice of sharing confidences among or between the Consenting Creditors shall in any way affect or negate this understanding and agreement. 

23.    REMEDIES. It is understood and agreed by the Parties that, without limiting any other remedies
available at law or equity, money damages would be an insufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or
other equitable relief as a remedy of any such breach, including, without limitation, an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder, without the
necessity of proving the inadequacy of money damages as a remedy. Each of the Parties hereby waives any defense that a remedy at law is adequate and any requirement to post bond or other security in connection with actions instituted for injunctive
relief, specific performance, or other equitable remedies. 
 24.    NO COMMITMENT. Neither any
Consenting Creditor nor the Sponsor shall be obligated to fund or otherwise be committed to provide funding in connection with the Restructuring, except pursuant to a separate commitment letter or definitive documentation relating specifically to
such funding, if any, that has been (i) executed by such Consenting Creditor or the Sponsor and (ii) approved by the Bankruptcy Court, as necessary, along with the satisfaction of any conditions precedent to such funding requirements. 

 

	 	25.	JURY TRIAL, GOVERNING LAW AND DISPUTE RESOLUTION. 

(a)    The Parties waive all rights to trial by jury in any jurisdiction in any action, suit, or proceeding brought
to resolve any dispute between or among the Parties arising out of this Agreement, whether sounding in contract, tort or otherwise. 

(b)    This Agreement shall be governed by and construed in accordance with the Bankruptcy Code and the laws of the State
of New York, without regard to any conflicts of law provision which would require the application of the law of any other jurisdiction. By its execution and delivery of this Agreement, each Party irrevocably and unconditionally agrees for itself
that, subject to Section 25(c), any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment
rendered in any such action, suit or proceeding, may be brought in 

  
 - 27 - 

 
any state or federal court of competent jurisdiction in New York County, State of New York, and by execution and delivery of this Agreement, each of the Parties hereby: (i) irrevocably
accepts and submits itself to the nonexclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding; and (ii) waives any objection to laying venue in any such action, suit or proceeding.

 (c)    Notwithstanding the foregoing, if the Chapter 11 Cases are commenced, nothing in
Section 25(a)–(b) shall limit the authority of the Bankruptcy Court to hear any matter related to or arising out of this Agreement, and each Party irrevocably and unconditionally consents to the jurisdiction and venue
of the Bankruptcy Court to hear and determine such matters during the pendency of the Chapter 11 Cases. 

26.    NOTICES. All notices, requests, documents delivered, and other communications hereunder must
be in writing and will be deemed to have been duly given only if delivered personally, mailed (first class postage prepaid) or by email to the Parties at the below addresses, or e-mail addresses. For the
avoidance of doubt when written notice or approval from Requisite Consenting Creditors is required by this Agreement, email from Requisite Consenting Creditors’ counsel to Company’s counsel shall be sufficient. 

If to the Company: 

Claire’s Stores, Inc. 

2400 West Central Road 
 Hoffman
Estates, IL 60192 
 Attn:    Stephen Sernett 

Facsimile: (312)
 E-mail Address:    Stephen.Sernett@claires.com 
 With a copy to: 

Weil, Gotshal & Manges LLP 

767 Fifth Avenue 
 New York, NY
10153 
 Attn:    Ray C. Schrock, P.C. 

            Matt Barr 

            Ryan Preston Dahl 

Facsimile: (212) 310 8007 
 E-mail Address:    ray.schrock@weil.com 

                       
       matt.barr@weil.com 

                       
       ryan.dahl@weil.com 
 If to a Consenting Creditor, to the address set forth beneath such
lender’s signature block, and, if to an Initial Consenting Creditor, with a copy to: 
 Willkie Farr & Gallagher LLP 

787 Seventh Avenue 
 New York,
NY 10019 

  
 - 28 - 

 Attn:    Matthew A. Feldman 

             Brian S. Lennon 

             Daniel I. Forman 

Telephone: (212) 728-8000 

Facsimile: (212) 728-8111 

E-mail Address:    mfeldman@willkie.com 

                       
        blennon@willkie.com 

                       
        dforman@willkie.com 
 If to the Sponsor: 

Apollo Management Holdings, L.P. 

9 West 57th Street 
 New York,
NY 10019 
 Attn:     Lance Milken 

             John Suydam 

Telephone: (212) 515-3200 

E-mail Address:     milken@apollolp.com 

                       
        suydam@apollolp.com 
 With a copy to: 

Paul, Weiss, Rifkind, Wharton & Garrison LLP 

1285 Avenue of the Americas 

New York, NY 10019 
 Attn:
    Jeffrey D. Saferstein 
 Facsimile: (212) 373-3000 

Email Address:     jsaferstein@paulweiss.com 

27.    NO ASSIGNMENTS; THIRD-PARTY BENEFICIARIES. Except as expressly provided herein, this Agreement
may not be assigned by any Party. In furtherance of the foregoing, the rights of an Initial Consenting Creditor in its capacity as such are personal to it and may not be assigned to any party. The terms and provisions of this Agreement are intended
solely for the benefit of the Parties hereto and their respective successors, and it is not the intention of the Parties to confer third-party beneficiary rights upon any other Person. 

28.    CONFLICTS BETWEEN THE RESTRUCTURING TERM SHEET AND THIS AGREEMENT. In the event of any
conflict among the terms and provisions in the Restructuring Term Sheet and this Agreement, the terms and provisions of the Restructuring Term Sheet shall control. Nothing contained in this Section 28 shall affect, in any
way, the requirements set forth herein for the amendment of this Agreement and the Restructuring Term Sheet as set forth in Section 15 herein. 

29.    SETTLEMENT DISCUSSIONS. This Agreement is part of a proposed settlement of matters that could
otherwise be the subject of litigation among the Parties hereto. Nothing herein shall be deemed an admission of any kind. Pursuant to Federal Rule of Evidence 408 and any applicable state rules of evidence, this Agreement and all negotiations
relating thereto shall not be admissible into evidence in any proceeding other than to prove the existence of this Agreement or in a proceeding to enforce the terms of this Agreement. 

  
 - 29 - 

 30.    GOOD-FAITH COOPERATION; FURTHER ASSURANCES. The
Parties shall cooperate with each other in good faith in respect of matters concerning the implementation and consummation of the Restructuring. 

31.    ACCESS. The Company will promptly provide the First Lien Professionals and Initial Consenting
Creditors access, upon reasonable notice, during normal business hours to relevant properties, books, contracts (including any executory contracts and unexpired leases), commitments, records, management and executive personnel, and advisors of the
Company (other than with respect to materials subject to attorney-client privilege or where granting such access is prohibited by law); provided, however, that the Company’s obligations hereunder shall be conditioned upon such
Party being party to an appropriate confidentiality agreement or undertaking; provided, further, however, that any existing confidentiality agreements entered into between the Company, on one hand, and a Party, on the other hand, shall
be deemed to be appropriate. 
 32.    QUALIFICATION ON CONSENTING CREDITOR REPRESENTATIONS. The
Parties acknowledge that all representations, warranties, covenants, and other agreements made by any Consenting Creditor that is a separately managed account of an investment manager are being made only with respect to the Claims managed by such
investment manager (in the amount identified on the signature pages hereto), and shall not apply to (or be deemed to be made in relation to) any Claims that may be beneficially owned by such Consenting Creditor that are not held through accounts
managed by such investment manager. 
 33.    PUBLICITY. The Company shall use commercially
reasonable efforts to submit drafts to the First Lien Professionals of any press releases and public documents that constitute disclosure of the existence or terms of this Agreement or any amendment to the terms of this Agreement at least three
(3) Business Days prior to making any such disclosure, and shall afford them a reasonable opportunity under the circumstances to comment on such documents and disclosures and shall incorporate any such reasonable comments in good faith. 

34.    SEVERABILITY. If any provision of this Agreement for any reason is held to be invalid,
illegal or unenforceable in any respect, that provision shall not affect the validity, legality or enforceability of any other provision of this Agreement. 
  

	 	35.	COMPANY FIDUCIARY DUTIES 

 (a)    Nothing in this Agreement
shall require the Company or any directors, officers, or members of the Company, each in its capacity as a director, officer, or member of the Company, to take any action, or to refrain from taking any action, to the extent inconsistent with its or
their fiduciary obligations under applicable law (as determined by them after consultation with legal counsel). 

  
 - 30 - 

 (b)    All Consenting Creditors reserve all rights they may have, including
the right to challenge any exercise by the Company, or any directors, officers, or members of the Company of their respective fiduciary duties. 

36.    ADDITIONAL CONSENTING CREDITORS. Any holder of First Lien Claims may at any time become a
party to this Agreement as a Consenting Creditor (a “Joining Party”) by executing a joinder agreement (the “Joinder”) substantially in the form attached as Exhibit C hereto, pursuant to which such Joining
Party represents and warrants to the Company and the other Consenting Creditors that it agrees to be bound by the terms of this Agreement as a Consenting Creditor hereunder. 
  

	 	37.	CONDITION TO EFFECTIVENESS OF RESTRUCTURING SUPPORT AGREEMENT. 

(a)    This Agreement shall be effective and binding upon each Consenting Creditor and Sponsor immediately upon such
Party’s execution and delivery of its signature page to the Company; provided, that, if the Agreement Effective Date with respect to the Company does not occur prior to March 19, 2018, this Agreement shall be null
and void ab initio and of no force and effect and without any further action by any Party. 
 (b)    This
Agreement shall be effective and binding upon the Company immediately upon the execution and delivery of signature pages to the Company of Consenting Creditors holding not less than 67.0% of all First Lien Claims. 

[Signature Pages Follow] 

  
 - 31 - 

 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

  

			
	CLAIRE’S INC.

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	
Senior Vice President and General 
Counsel

 
			
	
	CLAIRE’S STORES, INC.

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	
Senior Vice President and General 
Counsel

 
			
	
	CLAIRE’S BOUTIQUES, INC.

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	
Senior Vice President and General 
Counsel

 
			
	
	CBI DISTRIBUTING CORP.

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	 Senior Vice President and General Counsel

  
 - 32 - 

 
			
	CLAIRE’S PUERTO RICO CORP.

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	
Senior Vice President and General 
Counsel

 
			
	
	CLAIRE’S CANADA CORP.

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	
Senior Vice President and General 
Counsel

 
			
	
	CLSIP HOLDINGS LLC

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	 Senior Vice President and General Counsel

  
 - 33 - 

 
			
	CLSIP LLC

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	
Senior Vice President and General 
Counsel

 
			
	
	BMS DISTRIBUTING CORP.

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	
Senior Vice President and General 
Counsel

 
			
	
	CSI CANADA LLC

 
			
		
	By:	 	 /s/ Stephen Sernett

	Name:	 	 Stephen Sernett

	Title:	 	 Senior Vice President and General Counsel

  
 - 34 - 

			
	[CONSENTING CREDITOR]

			
		
	By:	 	  

	Name:	 	  

	Title:	 	  

		
	Telephone:	 	  

	Facsimile:	 	  

			
	
	ABL Credit Facility Claims

			
		
	 $
	 	  

			
	
	Revolving Credit Facility Claims

			
		
	 $
	 	  

			
	
	First Lien Term Loan Claims

			
		
	 $
	 	  

			
	
	First Lien Notes due 2019

			
		
	 $
	 	  

			
	
	First Lien Notes due 2020

			
		
	 $
	 	  

			
	
	Second Lien Notes Claims

			
		
	 $
	 	  

			
	
	Unsecured Notes Claims

			
		
	 $
	 	  

 NOTICE ADDRESS:     

[                       
         ] 

[                       
         ] 
 Attention:
[                        ] 

Facsimile:
[                        ] 

E-mail:
[                             ] 

  
 Signature Page to
Restructuring Support Agreement 

			
	 APOLLO MANAGEMENT HOLDINGS, L.P.

By Apollo Management Holdings GP, LLC, its general partner

			
		
	By:	 	  

	Name:	 	Laurie D. Medley
	Title:	 	Vice President
		
	Telephone:	 	  

	 Facsimile:
 Email:
	 	  

 

 [List of holdings on following page] 

  
 Signature Page to
Restructuring Support Agreement 

			
	
	ABL Credit Facility Claims

			
		
	 $
	 	  

			
	
	Revolving Credit Facility Claims

			
		
	 $
	 	  

			
	
	First Lien Term Loan Claims

			
		
	 $
	 	  

			
	
	First Lien Notes due 2019

			
		
	 $
	 	  

			
	
	First Lien Notes due 2020

			
		
	 $
	 	  

			
	
	Second Lien Notes Claims

			
		
	 $
	 	  

			
	
	Unsecured Notes Claims

			
		
	 $
	 	  

			
		
	 NOTICE ADDRESS:
	 	
	
[                   
         ]

	
[                   
         ]

	 Attention:
[                    ]

	 Facsimile:
[                    ]

E-mail:
[                         ]

 *    *     *    *    * 

  
 Signature Page to
Restructuring Support Agreement 

 Exhibit A 

Restructuring Term Sheet 

  

CLAIRE’S INC., ET AL. 

RESTRUCTURING TERM SHEET 

March 19, 2018 
  

 
 This term sheet (the “Term Sheet”)
sets forth the principal terms of a comprehensive restructuring of the existing debt and other obligations of the Company (on the terms set forth herein, the “Restructuring”). The Restructuring will be consummated through
prearranged cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”) and as otherwise set forth in the restructuring support agreement to which this Term Sheet is attached as Exhibit A (the “RSA”) and this Term Sheet. 

THIS TERM SHEET DOES NOT CONSTITUTE (NOR SHALL IT BE CONSTRUED AS) AN OFFER WITH RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OR REJECTIONS AS
TO ANY CHAPTER 11 PLAN OF REORGANIZATION, IT BEING UNDERSTOOD THAT SUCH A SOLICITATION, IF ANY, ONLY WILL BE MADE IN COMPLIANCE WITH APPLICABLE PROVISIONS OF SECURITIES, BANKRUPTCY AND/OR OTHER APPLICABLE LAW. 

 

			
	Material Terms of the Restructuring
		
	 Term
	  	
Description

		
	Overview of the Restructuring	  	 This Term Sheet contemplates the Restructuring of Claire’s Inc. and certain of its wholly-owned direct and indirect domestic
subsidiaries that are listed on Schedule A hereto (collectively, the “Debtors”, and together with CLSIP Holdings LLC, CLSIP LLC, Claire’s Stores Canada Corp, and Claire’s Swiss Holdings LLC and its direct and
indirect subsidiaries, the “Company”).
  
 To implement the
Restructuring, the Company will consummate the transactions set forth in this Term Sheet, which include the Debtors filing voluntary petitions for relief under the Bankruptcy Code by March 19, 2018 (the date of commencement of the Chapter 11
Cases, the “Petition Date”) and obtaining confirmation from the Bankruptcy Court of the Plan (as defined in the RSA) within the deadlines set forth in the Milestones set forth below. For the avoidance of doubt, none of
(i) CLSIP Holdings LLC, (ii) CLSIP LLC, (iii) Claire’s Stores Canada Corp., a Canadian corporation, or (iii) Claire’s Swiss Holdings LLC or any of its subsidiaries will file voluntary petitions for relief under the
Bankruptcy Code or commence comparable proceedings under local law.
  
 The initial
parties to the RSA will be:
  
 (i) Claire’s Inc. and each of its direct and
indirect wholly-owned domestic subsidiaries;1
  

(ii) the Initial Consenting Creditors (as defined in the RSA) represented by Willkie Farr & Gallagher LLP and Millstein & Co., LLC (the
“Ad Hoc First Lien Group”)

  

	1 	Including CLSIP Holdings LLC, and CLSIP LLC, but not Claire’s Swiss Holdings LLC, as parties to the RSA. Company parties to the RSA shall cause all direct and indirect subsidiaries to comply with RSA as provided
therein. 

  
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		  	 As of the date hereof, the Ad Hoc First Lien Group beneficially holds or controls: (a) 26.1% of the aggregate principal amount of outstanding
loans under that certain ABL Credit Agreement, dated September 20, 2016 (as amended, modified, or supplemented from time to time, the “Existing ABL Revolver”); (b) 26.1% of the aggregate principal amount of outstanding
loans under that certain Second Amended and Restated Credit Agreement, dated as of September 20, 2016 (as amended, modified, or supplemented from time to time, the “Existing RCF”); (c) 59.5% of the aggregate principal amount of
outstanding Senior Secured First Lien Term Loan due 2021 (the “Claire’s Term Loan”) issued by Claire’s Stores Inc. under that certain Term Loan Credit Agreement, dated September 20, 2016 (as amended, modified, or
supplemented from time to time, the “Claire’s Term Loan Credit Agreement”); (d) 69.6% of the aggregate principal amount of outstanding 9% Senior Secured First Lien Notes due 2019 (the “Claire’s 2019 1L
Notes”) issued by Claire’s Stores Inc. pursuant to that certain Senior Secured First Lien Notes Indenture, dated February 28, 2012 (as amended, modified, or supplemented from time to time, the “Claire’s 2019 1L Notes
Indenture”); (e) 89.4% of the aggregate principal amount of outstanding 6.125% Senior Secured First Lien Notes due 2020 (the “Claire’s 2020 1L Notes”) issued by Claire’s Stores Inc. pursuant to that certain Senior
Secured First Lien Notes Indenture, dated March 15, 2013 (as amended, modified, or supplemented from time to time, the “Claire’s 2020 1L Notes Indenture” and all claims arising under the Claire’s Term Loan Credit
Agreement, the Claire’s 2019 1L Notes Indenture, and the Claire’s 2020 1L Notes Indenture, and the term loans and notes issued pursuant to the foregoing instruments shall be referred to herein collectively as the “First Lien
Claims”)2; (f) 26.1% of the aggregate principal amount of outstanding Gibraltar Unsecured Term Loan due 2019 (the “Gibraltar 2019 Term Loan”) issued by Claire’s
Gibraltar Holdings Limited. pursuant to that certain Credit Agreement, dated as of August 12, 2016 (as amended, modified, or supplemented from time to time, the “Gibraltar 2019 Term Loan Credit Agreement”); (g) 60.2% of the
aggregate principal amount of outstanding 9% Gibraltar Unsecured Term Loan due 2021 (the “Gibraltar 2021 Term Loan”) issued by Claire’s Gibraltar Holdings Limited. pursuant to that certain Term Loan Credit Agreement, dated
September 20, 2016 (as amended, modified, or supplemented from time to time, the “Gibraltar 2021 Term Loan Credit Agreement”); (h) 60.1% of the aggregate principal amount of outstanding CLSIP Senior Secured Term Loan due 2021
(the “CLSIP Loan”) issued by CLSIP LLC pursuant to that certain Term Loan Credit Agreement, dated September 20, 2016 (as amended, modified, or supplemented from time to time, the “CLSIP Loan Credit Agreement”);
and (i) 7.9% of the aggregate principal amount of outstanding 8.875 % Senior Notes Due 2020 (the “Claire’s 2L Notes”) issued by Claire’s Stores, Inc. pursuant to the certain Senior Secured Second Lien Notes Indenture,
dated as of March 4, 2011 (as amended, modified or supplemented from time to time, the “Claire’s 2L Notes Indenture”) (all claims arising under the Claire’s 2L Notes Indenture and the Claire’s 2L Notes shall be
referred to herein collectively as the “Second Lien Claims”); and (j) 83.0% of the aggregate principal amount of outstanding 7.775% Senior Notes Due 2020 (the “Unsecured Notes”) issued by Claire’s Stores, Inc.
pursuant to the certain Senior Notes Indenture, dated as of May 14, 2013 (as amended, modified or supplemented from time to time, the “Unsecured Notes Indenture”) (all claims arising under the Unsecured Notes Indenture and the
Unsecured Notes shall be referred to herein collectively as the “Unsecured Notes Claims) and does not beneficially own or control any other debt claims not disclosed here; and

 
 (iii) Apollo Management Holdings, L.P., as manager and/or investment advisor of funds
that are the owners and/or beneficial holders of interests in and claims against the Company (the “Sponsor”) (“Sponsor”), which, as of the date hereof, consist of approximately 28% of the Claire’s Term Loan,
approximately 28% of the Gibraltar 2021 Term Loan, approximately 28% of the CLSIP Loan, and 97.66% of the outstanding equity interests of the Company and does not beneficially own or control any other debt or equity claims not disclosed here,
(collectively with the Initial Consenting Creditors and the Company, the “Restructuring Support Parties”).

 

	2 	For the avoidance of doubt “First Lien Claims” excludes claims outstanding with respect to the Existing ABL Revolver and the Existing RCF. 

  
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	Financing
		
	DIP Financing	  	Prior to the Petition Date, the Debtors shall have entered into a debt financing commitment letter with Citibank Global Markets Inc. providing for
debtor-in-possession financing on the terms attached hereto as Exhibit 1 (the “DIP Term Sheet”).
		
	Permitted Refinancing Stipulation	  	The Consenting Creditors hereby stipulate that entry into the agreement governing the DIP Facilities (as defined in the DIP Term Sheet) (the “DIP Credit Agreement”) constitutes a “Permitted Refinancing” as
such term is defined by the ABL Intercreditor Agreement.
		
	Adequate Protection	  	 During the Chapter 11 Cases, the Company shall provide adequate protection with respect to First Lien Claims consisting of:

 
 (i) the adequate protection provided by clauses (c), (d), and (e) of the
“Adequate Protection” provision of the DIP Term Sheet;
  
 (ii) customary lien
stipulations, and (iii) timely payment of the reasonable and documented fees and expenses (but not success fees, transaction fees, or similar fees), including reasonable and documented professional fees and expenses, incurred by (A) the Ad
Hoc First Lien Group, and (B) the agents under the Existing ABL Revolver, the Existing RCF, and the Claire’s Term Loan, and the trustees under the Claire’s 2019 1L Notes Indenture and the Claire’s 2020 1L Notes Indenture;
provided that the payment of all such fees and expenses shall be subject to the Debtors’ or any party in interest’s rights to seek a determination that such payments should be recharacterized as repayment on account of the
secured portion of First Lien Claims as of the Petition Date.
  
 Upon the termination
of the RSA by the Requisite Consenting Creditors (as defined in the RSA) in accordance with its terms, the Requisite Consenting Creditors shall have the right to file a motion with the Bankruptcy Court requesting additional adequate protection on
account of First Lien Claims with respect to their interest in the Notes Priority Collateral (as defined in the ABL Intercreditor Agreement), including in the form of cash-pay interest at the default rate on
account of First Lien Claims; provided that the Debtors’ or any party in interest’s rights to contest any such request on any basis whatsoever are fully reserved.

 
 For the avoidance of doubt, in no instance shall the Debtors be required to provide
adequate protection on account of First Lien Claims in the form of cash-pay interest unless otherwise ordered by the Bankruptcy Court after the occurrence of an RSA Milestone Event.

		
	CLSIP Loan Amendment/Refinancing	  	 Not later than seven (7) days following the Petition Date, the Company shall enter into a forbearance with respect to the CLSIP Loan
Credit Agreement, with the holders of the CLSIP Loan other than insiders of the Company (as insider is defined in the Bankruptcy Code) (the “CLSIP Creditors”) on terms consistent with this Term Sheet and otherwise reasonably
acceptable to the Company and the Requisite Consenting Creditors (the “CLSIP Forbearance Agreement”), to provide, among other things, that any “going concern” default arising with respect to the CLSIP Loan, and any other
defaults arising on account of the transactions and agreements contemplated hereby, shall be waived during the pendency of the Chapter 11 Cases.

 

  
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		  	 CLSIP Creditors consenting to the CLSIP Forbearance Agreement and the Sponsor, solely with respect to the Sponsor’s CLSIP Loan
claims, will receive a one-time forbearance fee paid in kind (i.e. additional CLSIP loan principal amount owed) of 2.75% of their holdings under the CLSIP Loan.

 
 Such forbearance fee paid in kind shall accrue interest at the default rate from the
closing date of the CLSIP Forbearance Agreement and be paid interest as set forth below. Additionally, the CLSIP Forbearance Agreement will:
  

•  provide for payment of interest in cash on a regularly scheduled basis while the CLSIP Forbearance
Agreement is in effect at the default rate; and
  

•  provide that the CLSIP Loan, including amounts on account of the forbearance fee and interest on
such forbearance fee, will be repaid in full on the Effective Date (as defined in the RSA).

	
	Chapter 11 Plan Implementation
		
	New Money Investment	  	 On or prior to seven (7) days after the “first day” hearing, the Company, the Initial Consenting Creditors and the Sponsor
shall execute the backstop commitment agreement on terms consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors (the “New Money Backstop Commitment Agreement”)
pursuant to which the Initial Consenting Creditors and the Sponsor will backstop an investment in the Company, in the allocations set forth on Schedule I to the RSA, up to $575 million (the “New Money Investment”) comprised of
(i) a $75 million new exit ABL revolver (the “New ABL Revolver”), (ii) $250 million of a new first lien exit term loan (the “New First Lien Term Loan”) and (iii) up to $250 million of
preferred stock or equity interests of reorganized Claire’s (the “Preferred Equity Interests”). The Backstop Agreement shall further provide for the payment, on the Effective Date, of First Lien Fees and Expenses (as defined in
the RSA) that are accrued but unpaid as of the Effective Date.
  
 As part of the
solicitation of acceptances for the Plan, the Company shall commence a rights offering through which holders of First Lien Claims that are qualified institutional buyers and/or accredited investors (each, an “Eligible Holder”) will
receive rights to participate, on a pro rata basis, in the New Money Investment less the Holdback Amount (defined below) (the “Rights Offering”). The Backstop Parties (defined below) will purchase any and all of the New Money
Investment not subscribed in the Rights Offering. The amount of the New Money Investment each participant purchases through the Rights Offering and the Plan will be allocated as follows (as may be adjusted to account for the adjusted Preferred
Investment Amount): (i) 13.0434782% to commitments under the New ABL Revolver; (ii) 43.4782609% to the purchase of notes issued under the New First Lien Term Loan; and (iii) 43.4782609% to the investment of the Preferred Investment Amount (defined
below).
  
 Each holder of First Lien Claims that executes a joinder to the RSA on or
prior to ten (10) business days after the Petition Date, and subsequently subscribes for their pro rata share of the Rights Offering (collectively, excluding the Backstop Parties, the “Supporting Parties”). Each
Supporting Party shall receive its pro rata allocation of the following, where pro rata allocation is calculated by dividing the amount of such Supporting Party’s First Lien Claims by the total amount of First Lien Claims:

 
 (a) a premium equal to 3.5% of the maximum Preferred Investment Amount (defined below),
or $8.75 million, (the “Preferred Commitment Premium”), which Preferred Commitment Premium shall be paid in additional Preferred Equity Interests issued to the Supporting Parties on the Effective Date; and

 
 (b) a premium equal to 1.5% of the total commitment amount of the New First Lien Term
Loan, or $3.75 million (the “Term Commitment Premium” and together with the Preferred Commitment Premium, the “Commitment Premiums”), which Term Commitment Premium shall be paid in cash on the Effective
Date.
  
 Proceeds of the New Money Investment, together with cash on hand, shall be
used (i) to repay the DIP Facilities, the CLSIP Loan, the Gibraltar 2019 Term Loan, the Gibraltar 2021 Term Loan and the Gibraltar Intermediate Secured Term Loan due 2019, (ii) to fund the costs arising from the administration of the
Debtors’ Chapter 11 Cases (including “emergence” costs), and (iii) for working capital requirements and general corporate purposes.

  
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	New ABL Revolver	  	 Terms for the New ABL Revolver will be on terms consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the
Requisite Consenting Creditors and shall provide that:
  

•  the New ABL Revolver shall be secured by a first lien on assets constituting ABL Priority
Collateral (as defined in that certain [ABL] Intercreditor Agreement, dated as of September 20, 2016) and a second lien on all other assets with respect to the New First Lien Term Loan; and

 
 •  the New ABL Revolver will
(i) mature 4 years after the Effective Date, (ii) bear interest at L+350 bps with no floor, payable in cash quarterly, and (iii) include an undrawn commitment fee 0.75%.

		
	New First Lien Term Loan	  	 Material terms for the New First Lien Term Loan include:
  

The New First Lien Term Loan shall be secured by a first lien on all assets other than ABL Priority Collateral (including all foreign stock that may be pledged
with no material tax consequences, and including at least 65% of the voting stock of top-tier foreign holding companies and 100% of the economic value of top tier foreign holding companies to the extent such
value may be pledged without material adverse tax consequences) subject to customary exceptions and exclusions, and a second lien on assets constituting ABL Priority Collateral with respect to the New ABL Revolver. Additionally, the New First Lien
Term Loan shall permit the company to incur up to $175 million of indebtedness senior in lien priority to the New First Lien Term Loan.
  

The New First Lien Term Loan will (i) mature 20 years from the Effective Date and (ii) bear interest at L+725 bps with a 1.5% LIBOR floor per annum,
payable in cash quarterly. The full principal amount of the New First Lien Term Loan will be due at maturity, and have no amortization.
  

The New First Lien Term Loan will include a make-whole redemption provision (the “Make-Whole Premium”), subject to waiver by two-thirds supermajority of holders of the New First Lien Term Loan, which shall be owed and payable upon a change of control, merger, sale of all or substantially all assets, acceleration, default, bankruptcy,
insolvency, redemption or prepayment whether mandatory or at the reorganized Company’s option. “Make-Whole Premium” means, as of any date on which the New First Lien Term Loan is repaid or prepaid, the greater of (i) 1.0% of the
principal amount of the New First Lien Term Loan and (ii) the excess of (A) the present value at such date of redemption of (1) the principal amount of the New First Lien Term Loan, plus (2) all remaining required interest
payments (assuming that the rate of interest will be equal to (x) the U.S. dollar interest rate swap rate with a duration most nearly equal to the then remaining term of New First Lien Term Loan to the Maturity Date (as quoted by Bloomberg)
plus 7.25% per annum or (y) if such rate in clause (x) is not available, the rate of interest applicable to the New First Lien Term Loan on the date that is two (2) business days prior to the date on which the notice of prepayment is
delivered) due on the New First Lien Term Loan through the Maturity Date (excluding accrued but unpaid interest to the date of repayment or prepayment), computed using a discount rate equal to the applicable treasury rate plus 50 basis points, over
(B) the principal amount of the New First Lien Term Loan.
  
 The terms for the New
First Lien Term Loan shall otherwise be consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors.

  
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	Preferred Equity Interests	  	 The Preferred Equity Interests shall initially be convertible into [●]%3 of the
new common stock or equity interests of reorganized Claire’s (the “New Common Interests”), at holders’ option at any time.
  

The Preferred Equity Interests will bear a 14% annual dividend on its liquidation preference (inclusive of all fees and additional Preferred Equity Interests
issued as part of the Restructuring), payable in cash or, at the option of the holder (which option must be delivered to the Company at least 180 days before each payment date), accrued quarterly.

 
 The Preferred Equity Interests, which shall have an aggregate investment amount equal to
the greater of (x) $200 million and (y) the investment amount of Preferred Equity Interests, not to exceed $250 million, such that the Company’s consolidated cash on the Effective Date shall be not more than $100 million
assuming no draw on the New ABL Revolver and pro forma for all uses of cash associated with the Restructuring4 (the greater of (x) and (y), the “Preferred Investment
Amount”), will be offered at a 37.5% discount to plan equity value, and shall have a maximum initial liquidation preference of $400 million excluding fees (or $426.25 million after accounting for the issuance of additional
Preferred Equity Interests to the Supporting Parties and Backstop Parties on account of the Preferred Commitment Premium and Preferred Equity Backstop Fee).
  

The Preferred Equity Interests shall have an early redemption premium (the “Preferred Redemption Premium”), subject to waiver by two-thirds supermajority of holders of the Preferred Equity Interests, owed and payable upon a change of control, merger, sale of all or substantially all assets, acceleration, default, bankruptcy, insolvency,
redemption or prepayment whether mandatory or at the reorganized Company’s option. “Preferred Redemption Premium” means, as of any date on which Preferred Equity Interests are redeemed, the greater of (i) 1.0% of the liquidation
preference of such Preferred Equity Interests (inclusive of all fees and additional Preferred Equity Interests issued as part of the Restructuring) and (ii) the excess of (A) the present value at such date of redemption of (1) the
liquidation preference of such Preferred Equity Interests (inclusive of all fees and additional Preferred Equity Interests issued as part of the Restructuring), plus (2) all remaining required dividends due on the such Preferred Equity
Interests through the twentieth (20th) anniversary of the Effective Date assuming such dividends would be elected to be paid in cash, computed using a discount rate equal to the applicable
treasury rate plus 50 basis points, over (B) the liquidation preference of such Preferred Equity Interests (inclusive of all fees and additional Preferred Equity Interests issued as part of the Restructuring).

 
 The terms will also include certain standard and customary covenants, among other
provisions, on terms consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors.

  
  

	3 	To be equal to (a) the total initial liquidation preference of the New Preferred Stock, including the Preferred Commitment Premium and Preferred Equity Backstop Fee (as defined below) (the “Aggregate New
Preferred Stock Initial Liquidation Preference”), divided by (b) the sum of: (i) such Aggregate New Preferred Stock Initial Liquidation Preference, plus (ii) the value of the New Common Stock based on a total enterprise value
upon and pro forma for the Effective Date and all payments or accruals related to the Restructuring of $1.4 billion, with such calculation being satisfactory to the Requisite Consenting Creditors in their reasonable discretion.

	4 	Which amount shall be estimated in good faith by the Company prior to commencement of the Rights Offering subject to the reasonable consent of the financial advisors to the Ad Hoc First Lien Group. 

  
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	New Money Backstop Commitment Agreement	  	 Pursuant to the New Money Backstop Commitment Agreement, the Initial Consenting Creditors and Sponsor (the “Backstop
Parties”) shall, in the allocations set forth on Schedule I to the RSA, (i) have the option to purchase up to 50% of the New Money Investment (the amount of the New Money Investment purchased pursuant to this option being the
“Holdback Amount”), and (ii) commit to purchase all of the New Money Investment not purchased by other holders of First Lien Claims in the Rights Offering.

 
 The Backstop Parties shall receive, in the allocations set forth in Schedule I to the
RSA, the remainder of the Commitment Premiums, and:
  
 (a) a backstop fee earned upon
execution of the New Money Backstop Commitment Agreement of 7.0% of the maximum Preferred Investment Amount, or $17.5 million, (the “Preferred Equity Backstop Fee”), which Preferred Equity Backstop Fee shall be paid in
additional Preferred Equity Interests issued to the Initial Consenting Creditors on the Effective Date; and
  

(b) a backstop fee of 3.5% of the total commitment amount of the New First Lien Term Loan, or $8.75 million (the “New Term Loan Backstop
Fee” and together with the Commitment Premiums and the Preferred Equity Backstop Fee, the “Backstop Fee”), which New Term Loan Backstop Fee shall be paid in cash on the Effective Date.

 
 Claire’s Inc. shall have the right to participate in the New Money Investment on
the same terms as the Initial Consenting Creditors and in the allocation set forth on Schedule I to the RSA.

		
	Conditions Precedent to Emergence	  	 The occurrence of the Effective Date shall be subject to the following conditions precedent; provided that any condition could be waived
with the consent of the Debtors and the Requisite Consenting Creditors (as defined in the RSA):
  

•  the RSA shall not have been terminated and remains in full force and effect, other than on account
of a breach by the Sponsor or one or more of the Consenting Creditors;
  

•  the Bankruptcy Court shall have entered:

 
 •  the DIP Orders (defined
below) in form and substance consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors;
  

•  the order approving the disclosure statement (the “Disclosure Statement”) and
solicitation materials related to the Plan (the “Disclosure Statement Order”) in form and substance consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors;
and
  
 •  the order confirming
the Plan, any exhibits or supplements thereto, and approving the assumption of the New Backstop Commitment Agreement (the “Confirmation Order”) in form and substance consistent with this Term Sheet and otherwise reasonably
acceptable to the Company and the Requisite Consenting Creditors;
  

•  the Debtors shall not be in default under the DIP Credit Agreement or the DIP Orders that results
in an acceleration of the obligations outstanding under the DIP Credit Agreement (or, to the extent that the Debtors have been in default or are in default, in each case, that results in the acceleration of outstanding obligations, on the proposed
Effective Date, such default shall have been waived by the DIP Lenders or cured by the Debtors in a manner consistent with the DIP Credit Agreement and/or the DIP Orders);
  

•  (i) the Debtors shall have entered into credit agreements governing the terms of the New ABL
Revolver and the New First Lien Term Loan (with all conditions precedent thereto having been satisfied or waived), and (ii) organizational documents and agreements providing for the terms of the Preferred Equity Interests shall be adopted,
in each case, on terms consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors;

  
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		  	 •  the New Money Backstop Commitment Agreement shall not have been terminated
and remain in full force and effect (with all conditions precedent thereto having been satisfied or waived) on terms consistent with the Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors;

 
 •  the Professional Fee Escrow
shall have been established and funded as provided herein;
  

•  the Company shall have generated consolidated Adjusted EBITDA (which shall be calculated using the
same methodology and definition used in the Company’s financial reporting but exclusive of restructuring costs and charges incurred in connection with the Chapter 11 Cases) of at least $185 million measured as of the last month for which
internal financial statements are available, and adjusted for a 52-week year, if applicable;
  

•  the reorganized Company, shall have minimum consolidated cash on the Effective Date, assuming no
draw on the New ABL Revolver and pro forma for all uses of cash associated with the Restructuring, after giving effect to emergence costs and funding the Professional Fee Escrow, of $75 million; and

 
 •  the Debtors shall have
assumed, rejected, and/or renegotiated their store leases in consultation with the Ad Hoc First Lien Group and in a manner reasonably acceptable to each of the Debtors and the Requisite Consenting Creditors, as evaluated by reference to the
Debtors’ store portfolio as a whole.

	
	Treatment of Claims and Interests Under the Chapter 11 Plan
		
	 Claim
	  	 Proposed
Treatment

		
	Administrative and Priority Claims	  	Allowed administrative, priority, and tax claims shall be satisfied in full, in cash, or otherwise receive treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy Code.
		
	DIP Claims	  	On the Effective Date, the claims under the DIP Facilities shall be repaid in full in cash.
		
	Existing ABL Revolver and Existing RCF Claims	  	Obligations outstanding under the Existing ABL Revolver and the Existing RCF as of the Petition Date, together with accrued but unpaid interest and fees, shall be paid in full, in cash, with proceeds from the DIP
Facilities.
		
	First Lien Claims	  	On the Effective Date, each holder of First Lien Claims (including, for the avoidance of doubt, the Backstop Parties) shall receive its pro rata share of (i) 100% of the New Common Interests, subject to dilution by the
Preferred Equity Interests and the MEIP (as defined below), and (ii) (A) for Eligible Holders, the rights to participate in the Rights Offering, and (B) for holders of First Lien Claims that are not Eligible Holders, the cash value of such
rights.
		
	Unsecured Claims	  	On the Effective Date or as soon as reasonably practicable thereafter, each holder of (i) First Lien Claims (on account of deficiency claims totaling $[●]), (ii) Second Lien Claims, (iii) Unsecured Notes Claims
and (iv) allowed general unsecured claims ((i)-(iv) collectively, the “Unsecured Claims”) shall receive its pro rata distribution from a cash pool in the amount of $[●], with such inputs, calculation and
allocation being satisfactory to the Requisite Consenting Creditors in their reasonable discretion.

  
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	Intercompany Claims	  	Other than funded debt claims held by Claire’s Inc. against other Company entities, on account of which Claire’s Inc. shall be entitled to receive either (i) the same recovery as the Initial Consenting Creditors on
account of the same debt as set forth herein, or (ii) cash consideration in an amount to be agreed by Claire’s Inc. and the Initial Consenting Creditors, intercompany claims may be reinstated or cancelled as may be determined by the
Debtors with the reasonable consent of the Requisite Consenting Creditors.
		
	Existing Claire’s Equity Interests	  	On the Effective Date, each holder of prepetition equity interests (including common stock, preferred stock and any options, warrants, profit interest units, or rights to acquire any equity interests) in Claire’s (the
“Existing Claire’s Equity Interests”) shall receive its pro rata share of any cash or other consideration recovered by Claire’s Inc. on account of its funded debt claims against Company entities that is remaining
after the satisfaction of all senior classes of claims against Claire’s Inc. in full.
	
	Other Terms Relevant to Chapter 11 Plan Implementation
		
	Registration Rights	  	Customary for any holder of claims to the extent it receives any “restricted” or “control” New Common Interests pursuant to the Securities Act, consistent with this Term Sheet and acceptable in form and
substance to the Company and the Requisite Consenting Creditors.
		
	Shareholders Agreement	  	On the Effective Date, holders of the New Common Interests and the Preferred Equity Interests will become party to the shareholders agreement. The provisions of the shareholders agreement shall be determined by and satisfactory
to the Requisite Consenting Creditors in good faith.
		
	Releases and Exculpation	  	The Plan shall provide customary releases (including third party releases) and exculpation provisions, in each case, to the fullest extent permitted by law and effective as of the Effective Date, for the benefit of the Company,
the reorganized Company, the Sponsor, the Initial Consenting Creditors, the DIP Lenders, the Consenting Creditors, and such entities’ respective affiliates, and such entities’ and their affiliates’ officers, managers, directors,
predecessors, successors, and assigns, subsidiaries, and each of their officers, managers, directors, equity holders, principals, members, employees, agents, managed accounts or funds, management companies, fund advisors, advisory board members,
financial advisors, partners, attorneys, accountants, investment bankers, consultants, representatives, and other professionals, each in their capacity as such.
		
	Management Incentive Plan and Management Employment Agreements	  	The Company and the Initial Consenting Creditors will agree on the material terms of a management equity incentive plan (the “MEIP”), on terms and conditions reasonably acceptable to the Company and the Requisite
Consenting Creditors, including with respect to emergence allocations. The terms and conditions of the MEIP will be filed with the Plan Supplement prior to the hearing on confirmation of the Plan.
		
	New Board	  	The post-Restructuring board of directors of Claire’s (the “New Board”) will consist of 7 directors, one of whom will be the Company’s current Chief Executive Officer, one of whom will be designated by
the Company, and the remaining of whom will be designated by the holders of the Preferred Equity Interests and New Common Interests based on each holder’s pro forma share of the New Common Interests (with the Preferred Equity Interests treated
on an as fully-converted basis), and shall be identified at or prior to the hearing on confirmation of the Plan.

  
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	Indemnification Obligations	  	The Company’s indemnification obligations in place as of the Effective Date, whether in the bylaws, certificates of incorporation or formation, limited liability company agreements, other organizational or formation
documents, board resolutions, management or indemnification agreements, employment contracts, or otherwise, for the directors and the officers that are currently employed by, or serving on the Board of Directors of, any of the Company or its
subsidiaries, as of the date immediately prior to the Effective Date, shall be assumed pursuant to the Plan.
		
	Professional Fee Escrow	  	 The Plan shall require the establishment of a professional fee escrow account (the “Professional Fee Escrow”) to be
funded with cash in the amount equal to the Professional Fee Reserve Amount (as defined herein). It shall be a condition precedent to the substantial consummation of the Plan that the Company shall have funded the Professional Fee Escrow in full in
cash in an amount equal to the Professional Fee Reserve Amount.
  
 The Professional Fee
Escrow shall be maintained in trust solely for the benefit of professionals retained by the Company or any official committee appointed in the Chapter 11 Cases (each a “Professional,” and collectively, the
“Professionals”). The Professional Fee Escrow shall not be considered property of the Debtors, their estates, or their affiliates, and no liens, claims, or interests shall encumber the Professional Fee Escrow, or funds held in the
Professional Fee Escrow, in any way.
  
 The “Professional Fee Reserve
Amount” shall consist of the total amount of unpaid compensation and unreimbursed expenses incurred by Professionals retained by the Debtors or any official committee through and including the Effective Date, in each case as determined in
good faith by the applicable Professional.
  
 All accrued and unpaid fees and expenses
of the professionals to the Initial Consenting Creditors shall be paid in cash on the Effective Date.

		
	Tax Attributes	  	To the extent reasonably practicable, the Restructuring shall be structured in a manner which minimizes any current cash taxes payable as a result of the consummation of the Restructuring, and the terms of the Restructuring
contemplated by this Term Sheet shall be structured to maximize the favorable tax attributes of the Company going forward.
		
	Milestones	  	 Subject to the RSA, failure to meet any of the following deadlines (each a “Milestone”) shall enable the Requisite
Consenting Creditors to terminate the RSA unless the Debtors shall have satisfied such Milestone prior to termination of the RSA:
  

•  Commence the Chapter 11 Cases with respect to each of the Debtors and file first day motions no
later than March 19, 2018;
  

•  File the New Money Backstop Commitment Agreement, as executed by the Company and the Initial
Consenting Creditors as soon as reasonably practicable after the Petition Date (but in no event later than seven (7) days after the first day hearing);
  

•  Obtain entry of the interim order approving the DIP Facilities and permitting the Debtors’
use of cash collateral (the “Interim DIP Order”) by the Bankruptcy Court as soon as reasonably practicable after the Petition Date (but in no event later than the first business day that is at least five (5) calendar days after
the Petition Date);
  
 •  File
the Plan, the Disclosure Statement, and the motion for approval of the Disclosure Statement, the rights offering procedures and the solicitation procedures as soon as reasonably practicable after the Petition Date (but in no event later than the
first business day that is at least twenty one (21) calendar days after the Petition Date);
  

•  Obtain entry of the final order approving the DIP Facilities and permitting the Debtors’ use
of cash collateral (the “Final DIP Order” and, together with the Initial DIP Order, the “DIP Orders”) as soon as reasonably practicable after the Petition Date (but in no event later than the first business day that
is at forty five (45) calendar days after the Petition Date);

  
 10 

			
		  	 •  Obtain entry of the Disclosure Statement Order as soon as reasonably
practicable after the Petition Date (but in no event later than the first business day that is at least seventy-five (75) calendar days after the Petition Date);
  

•  Commence the Rights Offering and solicitation of votes in connection with the Plan as soon as
reasonably practicable after the Petition Date (but in no event later than the first business day that is at least seven (7) days after entry of the Disclosure Statement Order);

 
 •  Obtain entry of the
confirmation order as soon as reasonably practicable after the Petition Date (but in no event later than the first business day that is at least sixty (75) calendar days after the Disclosure Statement Order is entered); and

 
 •  Provided that no stay pending
appeal has been granted by any court, cause the Effective Date to occur as soon as reasonably practicable after the Petition Date (but in no event later than the earlier of (a) fifteen (15) calendar days after the entry of the confirmation
order, and (b) one hundred eighty (180) calendar days after the Petition Date).

		
	Fiduciary Duties	  	Notwithstanding anything to the contrary herein, nothing in this Term Sheet, the RSA, or any of the definitive documents implementing the Restructuring (collectively, the “Definitive Documents”) shall require the
Debtors, or any of their directors or officers, to take or refrain from taking any action such person or entity believes is reasonably required to comply with its or their fiduciary duties under applicable law..

  
 11 

 Schedule A 

Debtors 
 BMS Distributing Corp. 

CBI Distributing Corp. 
 Claire’s Inc. 

Claire’s Boutiques, Inc. 
 Claire’s Canada Corp. 

Claire’s Puerto Rico Corp. 
 Claire’s Stores, Inc. 

CSI Canada LLC 

 Exhibit B 

Transfer Agreement 

 PROVISION FOR TRANSFER AGREEMENT 

The undersigned (“Transferee”) (a) hereby acknowledges that it has read and understands the Restructuring Support Agreement,
dated as of                  2018 (the “Agreement”),1 by and among the
Company, the Sponsor, and each of the Consenting Creditors party thereto, (b) desires to acquire the Claims described below (the “Transferred Claims”) from one of the Consenting Creditors (the “Transferor”) and
(c) hereby irrevocably agrees to be bound by the terms and conditions of the Agreement to the same extent Transferor was thereby bound with respect to the Transferred Claims, and shall be deemed a Consenting Creditor for all purposes under the
Agreement. 
 The Transferee hereby specifically and irrevocably agrees (i) to be bound by the terms and conditions of the Agreement,
to the same extent applicable to the Transferred Claims, (ii) to be bound by the vote of the Transferor if cast prior to the effectiveness of the transfer of the Transferred Claims, except as otherwise provided in the Agreement and
(iii) that each of the Parties shall be an express third-party beneficiary of this Provision for Transfer Agreement and shall have the same recourse against the Transferee under the Agreement as such Party would have had against the Transferor
with respect to the Transferred Claims. 
 TRANSFEREE 
  

			
	  

		
	By:	 	
	Name:	 	
	Title:	 	

 Principal amount of First Lien Term Loan $             

Principal amount of Claire’s 2019 1L Notes $             

Principal amount of Claire’s 2020 1L Notes $             

Principal amount of Second Lien Notes $             

Principal amount of Senior Unsecured Notes $             

Principal amount of other Claims against the Company (describe below): $             

 

					
	 Notice Address:

			
		 		 	  

			
	Attn:	 		 	  

			
	Fax:	 		 	  

			
	Email:	 		 	  

			
		 		 	  

  

	1 	Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Agreement. 

 Exhibit C 

Joinder 

 JOINDER 

The undersigned (“Joining Party”) (a) hereby acknowledges that it has read and understands the Restructuring Support
Agreement, dated as of                  2018 (the “Agreement”),1 by and
among the Company, the Sponsor, and each of the Consenting Creditors party thereto, and (b) desires to join and hereby irrevocably agrees to be bound by the terms and conditions of the Agreement in all respects, and shall be deemed a
Consenting Creditor for all purposes under the Agreement. 
 JOINING PARTY 
  

			
	  

		
	By:	 	
	Name:	 	
	Title:	 	

 Principal amount of First Lien Term Loan $             

Principal amount of Claire’s 2019 1L Notes $             

Principal amount of Claire’s 2020 1L Notes $             

Principal amount of Second Lien Notes $             

Principal amount of Unsecured Notes Claims $             

Principal amount of other Claims against the Company (describe below): $             

 

					
	Notice Address:
		 		 	  

			
	Attn:	 		 	  

			
	Fax:	 		 	  

			
	Email:	 		 	  

			
		 		 	  

  
  

	1 	Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Agreement. 

 Schedule I1 

 

			
	 Backstop Party
	 	 Allocation

		 	
		 	
		 	
		 	
		 	
		 	
	Total:	 	100%

  
  

	1 	Schedule I to be redacted when filed.

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