Document:

Ex-4.1 Form of Debt Securities Indenture

 

EXHIBIT 4.1

 

 

BANKATLANTIC BANCORP, INC.

 

 

 

INDENTURE

 

Dated as of ________, _____

 

 

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Trustee

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I.
	 	DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	1	 
	Section 1.1
	 	DEFINITIONS	 	 	1	 
	Section 1.2
	 	OTHER DEFINITIONS	 	 	4	 
	Section 1.3
	 	INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT	 	 	4	 
	Section 1.4
	 	RULES OF CONSTRUCTION	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE II.
	 	THE SECURITIES	 	 	5	 
	Section 2.1
	 	ISSUABLE IN SERIES	 	 	5	 
	Section 2.2
	 	ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES	 	 	5	 
	Section 2.3
	 	EXECUTION AND AUTHENTICATION	 	 	7	 
	Section 2.4
	 	REGISTRAR AND PAYING AGENT	 	 	8	 
	Section 2.5
	 	PAYING AGENT TO HOLD MONEY IN TRUST	 	 	8	 
	Section 2.6
	 	SECURITYHOLDER LISTS	 	 	8	 
	Section 2.7
	 	TRANSFER AND EXCHANGE	 	 	9	 
	Section 2.8
	 	MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES	 	 	9	 
	Section 2.9
	 	OUTSTANDING SECURITIES	 	 	9	 
	Section 2.10
	 	TREASURY SECURITIES	 	 	10	 
	Section 2.11
	 	TEMPORARY SECURITIES	 	 	10	 
	Section 2.12
	 	CANCELLATION	 	 	10	 
	Section 2.13
	 	DEFAULTED INTEREST	 	 	10	 
	Section 2.14
	 	GLOBAL SECURITIES	 	 	11	 
	Section 2.15
	 	CUSIP NUMBERS	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE III.
	 	REDEMPTION	 	 	12	 
	Section 3.1
	 	NOTICE TO TRUSTEE	 	 	12	 
	Section 3.2
	 	SELECTION OF SECURITIES TO BE REDEEMED	 	 	12	 
	Section 3.3
	 	NOTICE OF REDEMPTION	 	 	12	 
	Section 3.4
	 	EFFECT OF NOTICE OF REDEMPTION	 	 	13	 
	Section 3.5
	 	DEPOSIT OF REDEMPTION PRICE	 	 	13	 
	Section 3.6
	 	SECURITIES REDEEMED IN PART	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE IV.
	 	COVENANTS	 	 	13	 
	Section 4.1
	 	PAYMENT OF PRINCIPAL AND INTEREST	 	 	13	 
	Section 4.2
	 	SEC REPORTS	 	 	13	 
	Section 4.3
	 	COMPLIANCE CERTIFICATE	 	 	14	 
	Section 4.4
	 	STAY, EXTENSION AND USURY LAWS	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE V.
	 	SUCCESSOR ENTITY	 	 	14	 
	Section 5.1
	 	COMPANY MAY CONSOLIDATE, ETC.	 	 	14	 
	Section 5.2
	 	SUCCESSOR ENTITY SUBSTITUTED	 	 	15	 
	Section 5.3
	 	EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE VI.
	 	DEFAULTS AND REMEDIES	 	 	15	 
	Section 6.1
	 	EVENTS OF DEFAULT	 	 	15	 
	Section 6.2
	 	ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT	 	 	16	 
	Section 6.3
	 	COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE	 	 	17	 
	Section 6.4
	 	TRUSTEE MAY FILE PROOFS OF CLAIM	 	 	18	 
	Section 6.5
	 	TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES	 	 	18	 
	Section 6.6
	 	APPLICATION OF MONEY COLLECTED	 	 	19	 
	Section 6.7
	 	LIMITATION ON SUITS	 	 	19	 
	Section 6.8
	 	UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST	 	 	19	 
	Section 6.9
	 	RESTORATION OF RIGHTS AND REMEDIES	 	 	20	 
	Section 6.10
	 	RIGHTS AND REMEDIES CUMULATIVE	 	 	20	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 6.11
	 	DELAY OR OMISSION NOT WAIVER	 	 	20	 
	Section 6.12
	 	CONTROL BY HOLDERS	 	 	20	 
	Section 6.13
	 	WAIVER OF PAST DEFAULTS	 	 	20	 
	Section 6.14
	 	UNDERTAKING FOR COSTS	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE VII.
	 	TRUSTEE	 	 	21	 
	Section 7.1
	 	DUTIES OF TRUSTEE	 	 	21	 
	Section 7.2
	 	RIGHTS OF TRUSTEE	 	 	22	 
	Section 7.3
	 	INDIVIDUAL RIGHTS OF TRUSTEE	 	 	22	 
	Section 7.4
	 	TRUSTEE’S DISCLAIMER	 	 	22	 
	Section 7.5
	 	NOTICE OF DEFAULTS	 	 	23	 
	Section 7.6
	 	REPORTS BY TRUSTEE TO HOLDERS	 	 	23	 
	Section 7.7
	 	COMPENSATION AND INDEMNITY	 	 	23	 
	Section 7.8
	 	REPLACEMENT OF TRUSTEE	 	 	24	 
	Section 7.9
	 	SUCCESSOR TRUSTEE BY MERGER, ETC.	 	 	24	 
	Section 7.10
	 	ELIGIBILITY; DISQUALIFICATION	 	 	24	 
	Section 7.11
	 	PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE VIII.
	 	SATISFACTION AND DISCHARGE; DEFEASANCE	 	 	25	 
	Section 8.1
	 	SATISFACTION AND DISCHARGE OF INDENTURE	 	 	25	 
	Section 8.2
	 	APPLICATION OF TRUST FUNDS; INDEMNIFICATION	 	 	26	 
	Section 8.3
	 	LEGAL DEFEASANCE OF SECURITIES OF ANY SERIES	 	 	26	 
	Section 8.4
	 	COVENANT DEFEASANCE	 	 	27	 
	Section 8.5
	 	REPAYMENT TO COMPANY	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE IX.
	 	AMENDMENTS AND WAIVERS	 	 	28	 
	Section 9.1
	 	WITHOUT CONSENT OF HOLDERS	 	 	28	 
	Section 9.2
	 	WITH CONSENT OF HOLDERS	 	 	29	 
	Section 9.3
	 	LIMITATIONS	 	 	29	 
	Section 9.4
	 	COMPLIANCE WITH TRUST INDENTURE ACT	 	 	30	 
	Section 9.5
	 	REVOCATION AND EFFECT OF CONSENTS	 	 	30	 
	Section 9.6
	 	NOTATION ON OR EXCHANGE OF SECURITIES	 	 	30	 
	Section 9.7
	 	TRUSTEE PROTECTED	 	 	30	 
	 
	 	 	 	 	 	 
	ARTICLE X.
	 	MISCELLANEOUS	 	 	31	 
	Section 10.1
	 	TRUST INDENTURE ACT CONTROLS	 	 	31	 
	Section 10.2
	 	NOTICES	 	 	31	 
	Section 10.3
	 	COMMUNICATION BY HOLDERS WITH OTHER HOLDERS	 	 	31	 
	Section 10.4
	 	CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT	 	 	32	 
	Section 10.5
	 	STATEMENTS REQUIRED IN CERTIFICATE OR OPINION	 	 	32	 
	Section 10.6
	 	RULES BY TRUSTEE AND AGENTS	 	 	32	 
	Section 10.7
	 	LEGAL HOLIDAYS	 	 	32	 
	Section 10.8
	 	NO RECOURSE AGAINST OTHERS	 	 	32	 
	Section 10.9
	 	COUNTERPARTS	 	 	32	 
	Section 10.10
	 	GOVERNING LAWS	 	 	32	 
	Section 10.11
	 	NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS	 	 	33	 
	Section 10.12
	 	SUCCESSORS	 	 	33	 
	Section 10.13
	 	SEVERABILITY	 	 	33	 
	Section 10.14
	 	TABLE OF CONTENTS, HEADINGS, ETC.	 	 	33	 
	Section 10.15
	 	SECURITIES IN A FOREIGN CURRENCY	 	 	33	 
	Section 10.16
	 	JUDGMENT CURRENCY	 	 	34	 
	 
	 	 	 	 	 	 
	ARTICLE XI.
	 	SINKING FUNDS	 	 	34	 
	Section 11.1
	 	APPLICABILITY OF ARTICLE	 	 	34	 
	Section 11.2
	 	SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES	 	 	34	 
	Section 11.3
	 	REDEMPTION OF SECURITIES FOR SINKING FUND	 	 	35	 

ii

 

BANKATLANTIC BANCORP, INC.

Reconciliation and tie between Trust Indenture Act of 1939 and

Indenture, dated as of __________, ____

	 	 	 	 	 	 	 
	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
	SECTION 311

	 	(A)
	 	 	7.11
	 

	 	(B)
	 	 	7.11
	 

	 	(C)
	 	NOT APPLICABLE

	SECTION 312

	 	(A)
	 	 	2.6
	 

	 	(B)
	 	 	10.3
	 

	 	(C)
	 	 	10.3
	SECTION 313

	 	(A)
	 	 	7.6
	 

	 	(B)(1)
	 	 	7.6
	 

	 	(B)(2)
	 	 	7.6
	 

	 	(C)(1)
	 	 	7.6
	 

	 	(D)
	 	 	7.6
	SECTION 314

	 	(A)
	 	 	4.2, 10.5
	 

	 	(B)
	 	NOT APPLICABLE

	 

	 	(C)(1)
	 	 	10.4
	 

	 	(C)(2)
	 	 	10.4
	 

	 	(C)(3)
	 	NOT APPLICABLE

	 

	 	(D)
	 	NOT APPLICABLE

	 

	 	(E)
	 	 	10.5
	 

	 	(F)
	 	NOT APPLICABLE

	SECTION 315

	 	(A)
	 	 	7.1
	 

	 	(B)
	 	 	7.5
	 

	 	(C)
	 	 	7.1
	 

	 	(D)
	 	 	7.1
	 

	 	(E)
	 	 	6.14
	SECTION 316

	 	(A)
	 	 	2.10
	 

	 	(A)(1)(A)
	 	 	6.12
	 

	 	(A)(1)(B)
	 	 	6.13
	 

	 	(B)
	 	 	6.8
	SECTION 317

	 	(A)(1)
	 	 	6.3
	 

	 	(A)(2)
	 	 	6.4
	 

	 	(B)
	 	 	2.5
	SECTION 318

	 	(A)
	 	 	10.1

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

iii

 

INDENTURE

     Indenture
dated as of ____________, ___ between BankAtlantic Bancorp, Inc., a Florida
corporation (“Company”), and U.S. Bank Trust National Association, as trustee (“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 1.1 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, Paying Agent or Service Agent.

          “Authorized Newspaper” means a newspaper in an official language of the country of publication
customarily published at least once a day for at least five days in each calendar week and of
general circulation in the place in connection with which the term is used. If it shall be
impractical in the opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is made or given by
the Trustee shall constitute a sufficient publication of such notice.

          “Bearer” means anyone in possession from time to time of a Bearer Security.

          “Bearer Security” means any Security, including any interest coupon appertaining thereto, that
does not provide for the identification of the Holder thereof.

          “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, unless otherwise provided by Board Resolution, Officers’ Certificate or
supplemental indenture hereto for a particular Series, 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.

1

 

          “Company” means the party named as such above until a successor replaces it and thereafter
means the successor.

          “Company Order” means a written order signed in the name of the Company by two Officers.

          “Company Request” means a written request signed in the name of the Company by its Chairman of
the Board, its Chief Executive Officer, its President or any Vice President, and by its Chief
Financial Officer or its Treasurer, any Assistant Treasurer, 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.

          “Debt” of any person as of any date means, without duplication, all indebtedness of such
person in respect of borrowed money, including all interest, fees and expenses owed in respect
thereto (whether or not the recourse of the lender is to the whole of the assets of such person or
only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments.

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

          “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 6.2.

          “Dollars” means the currency of the United States of America.

          “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.

          “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 2.2 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 or the
holder of a Bearer Security.

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

2

 

          “interest” with respect to any Discount Security which by its terms bears interest only after
Maturity, means interest payable after Maturity.

          “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 Chief Executive Officer, any President, any
Vice-President, the Chief Financial Officer, the Treasurer, the Secretary, any Assistant Treasurer
or any Assistant Secretary of the Company.

          “Officers’ Certificate” means a certificate signed by two Officers.

          “Opinion of Counsel” means a written opinion of legal counsel, which counsel may be an
employee of or counsel to the Company.

          “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” 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.

          “Responsible Officer” means any officer of the Trustee in its Corporate Trust Office and also
means, 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.

          “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 2.1 and 2.2 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.

          “Subsidiary” of any specified person means any corporation of which an amount of outstanding
stock representing by the terms thereof at least a majority of the ordinary voting power for the
election of directors of such corporation (irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned by such person, or by one
or more other Subsidiaries, or by such person and one or more other Subsidiaries.

          “TIA” means the Trust Indenture Act of 1939 (15 U.S. Code Section (Section 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

3

 

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) 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 1.2 OTHER DEFINITIONS.

	 	 	 	 	 
	 	 	DEFINED IN
	TERM	 	SECTION
	“Bankruptcy Law”

	 	 	6.1	 
	“Custodian”

	 	 	6.1	 
	“Event of Default”

	 	 	6.1	 
	“Journal”

	 	 	10.15	 
	“Judgment Currency”

	 	 	10.16	 
	“Legal Holiday”

	 	 	10.7	 
	“mandatory sinking fund payment”

	 	 	11.1	 
	“Market Exchange Rate”

	 	 	10.15	 
	“New York Banking Day”

	 	 	10.16	 
	“optional sinking fund payment”

	 	 	11.1	 
	“Paying Agent”

	 	 	2.4	 
	“Registrar”

	 	 	2.4	 
	“Required Currency”

	 	 	10.16	 
	“Service Agent”

	 	 	2.4	 
	“successor person”

	 	 	5.1	 

     Section 1.3 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. The following TIA terms used in this Indenture have
the following meanings:

          “Commission” means the SEC.

          “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.

4

 

          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 1.4 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; and

          (f) provisions apply to successive events and transactions.

ARTICLE II.

THE SECURITIES

     Section 2.1 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 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 2.2 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 2.2.1, and, either as to such
Securities within the Series or as to the Series generally, in the case of Subsections 2.2.2
through 2.2.21) by a Board Resolution, a supplemental indenture or an Officers’ Certificate
pursuant to authority granted under a Board Resolution:

          2.2.1 the title of the Series (which shall distinguish the Securities of that particular
Series from the Securities of any other Series);

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

5

 

          2.2.3 any limit upon the aggregate principal amount of the Securities of the Series which may
be authenticated and delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of
the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);

          2.2.4 the date or dates on which the principal of the Securities of the Series is payable;

          2.2.5 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 accrue, the
date or dates on which such interest, if any, shall commence and be payable and any regular record
date for the interest payable on any interest payment date;

          2.2.6 the place or places where the principal of and interest, if any, on the Securities of
the Series shall be payable, or the method of such payment, if by wire transfer, mail or other
means;

          2.2.7 if applicable, the period or periods within which, the price or prices at which and the
terms and conditions upon which the Securities of the Series may be redeemed, in whole or in part,
at the option of the Company;

          2.2.8 the obligation, if any, of the Company to redeem or purchase the Securities of the
Series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or prices at which and the terms and conditions
upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;

          2.2.9 the dates, if any, on which and the price or prices at which the Securities of the
Series will be repurchased by the Company at the option of the Holders thereof and other detailed
terms and provisions of such repurchase obligations;

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

          2.2.11 the forms of the Securities of the Series in bearer or fully registered form (and, if
in fully registered form, whether the Securities will be issuable as Global Securities);

          2.2.12 if other than the principal amount thereof, the portion of the principal amount of the
Securities of the Series that shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.2;

          2.2.13 the currency of denomination of the Securities of the Series, which may be Dollars or
any Foreign Currency;

          2.2.14 the designation of the currency, currencies or currency units in which payment of the
principal of and interest, if any, on the Securities of the Series will be made;

          2.2.15 if payments of principal of or interest, if any, on the Securities of the Series are to
be made in one or more currencies or currency units other than that or those in which such
Securities are denominated, the manner in which the exchange rate with respect to such payments
will be determined;

          2.2.16 the manner in which the amounts of payment of principal of or interest, if any, on the
Securities of the Series will be determined, if such amounts may be determined by reference to an
index based on a currency or currencies or by reference to a commodity, commodity index, stock
exchange index or financial index;

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          2.2.17 the provisions, if any, relating to any security provided for the Securities of the
Series;

          2.2.18 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 6.2;

          2.2.19 any addition to or change in the covenants set forth in Articles IV or V which applies
to Securities of the Series;

          2.2.20 any other terms of the Securities of the Series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section 9.1, but which may modify or
delete any provision of this Indenture insofar as it applies to such Series); and

          2.2.21 any depositories, interest rate calculation agents, exchange rate calculation agents or
other agents with respect to Securities of such Series if other than those appointed herein.

          2.2.22 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 issuances of
additional Securities of such Series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers’ Certificate.

     Section 2.3 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
2.2, except as provided in Section 2.8.

          Prior to the issuance of Securities of any Series, the Trustee shall have received and
(subject to Section 7.2) 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 10.4, and
(c) an Opinion of Counsel complying with Section 10.4.

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          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.

     Section 2.4 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 2.2, an office or agency where Securities
of such Series may be presented or surrendered for payment (“Paying Agent”), where Securities of
such Series may be surrendered for registration of transfer or exchange (“Registrar”) and where
notices and demands to or upon the Company in respect of the Securities of such Series and this
Indenture may be served (“Service Agent”). 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, Paying Agent or Service Agent. If at any time the Company shall fail to maintain any
such required Registrar, Paying Agent or Service Agent or shall fail to furnish the Trustee with
the name and address thereof, such presentations, surrenders, notices and demands 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, surrenders, notices and demands.

          The Company may also from time to time designate one or more co-registrars, additional paying
agents or additional service 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, Paying Agent and Service Agent in each place so specified
pursuant to Section 2.2 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, additional paying agent or additional service agent. The
term “Registrar” includes any co-registrar; the term “Paying Agent” includes any additional paying
agent; and the term “Service Agent” includes any additional service agent.

          The Company hereby appoints the Trustee the initial Registrar, Paying Agent and Service Agent
for each Series unless another Registrar, Paying Agent or Service Agent, as the case may be, is
appointed prior to the time Securities of that Series are first issued.

     Section 2.5 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 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 2.6 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 ten 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.

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     Section 2.7 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. No service charge shall be made for any
registration of transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer tax or similar governmental
charge payable upon exchanges pursuant to Sections 2.11, 3.6 or 9.6).

          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
fifteen 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.

     Section 2.8 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

          If any mutilated Security is surrendered to the Trustee, 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 Trustee (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 Trustee 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 2.9 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.

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          If a Security is replaced pursuant to Section 2.8, 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 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 shall cease to be outstanding if the Company or any of its Subsidiaries 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 6.2.

     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 the
Trustee 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 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 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 any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee shall cancel all Securities surrendered
for transfer, exchange, payment, replacement or cancellation and shall destroy such canceled
Securities (subject to the record retention requirement of the Exchange Act) and deliver a
certificate of such destruction to the Company, unless the Company otherwise directs. The Company
may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for
cancellation.

     Section 2.13 DEFAULTED INTEREST.

          If the Company defaults in a payment of interest on a Series of Securities, it shall pay the
defaulted interest, plus, to the extent permitted by law, any interest payable on the defaulted
interest, to the persons who are Securityholders of the Series on a subsequent special record date.
The Company shall fix the record date and payment date. At least 30 days before the record date,
the Company shall mail to the Trustee 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.

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     Section 2.14 GLOBAL SECURITIES.

          2.14.1 TERMS OF SECURITIES. 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.

          2.14.2 TRANSFER AND EXCHANGE. Notwithstanding any provisions to the contrary contained in
Section 2.7 of the Indenture and in addition thereto, any Global Security shall be exchangeable
pursuant to Section 2.7 of the Indenture for Securities registered in the names of Holders other
than the Depository for such Security or its nominee only if (i) 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, (ii)
the Company executes and delivers to the Trustee an Officers’ Certificate to the effect that such
Global Security shall be so exchangeable or (iii) an Event of Default with respect to the
Securities represented by such Global Security shall have happened and be continuing. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for
Securities registered in such names as the Depository shall direct in writing in an aggregate
principal amount equal to the principal amount of the Global Security with like tenor and terms.

          Except as provided in this Section 2.14.2, 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.

          2.14.3 LEGEND. 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.”

          2.14.4 ACTS OF HOLDERS. 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.

          2.14.5 PAYMENTS. Notwithstanding the other provisions of this Indenture, unless otherwise
specified as contemplated by Section 2.2, payment of the principal of and interest, if any, on any
Global Security shall be made to the Holder thereof.

          2.14.6 CONSENTS, DECLARATION AND DIRECTIONS. Except as provided in Section 2.14.5, the
Company, the Trustee and any Agent shall treat a person as the Holder of such principal amount of
outstanding Securities of such Series represented by a Global Security as shall be specified in a
written statement of the Depositary with respect to such Global Security, for purposes of obtaining
any consents, declarations, waivers or directions required to be given by the Holders pursuant to
this Indenture.

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     Section 2.15 CUSIP NUMBERS.

          The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and,
if so, the Trustee shall use “CUSIP” 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 3.1 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 of the redemption date and the principal amount of
Series of Securities to be redeemed. The Company shall give the notice at least 30 days before the
redemption date (or such shorter notice as may be acceptable to the Trustee).

     Section 3.2 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 Trustee shall select the Securities of the Series to be redeemed in any manner that
the Trustee deems fair and appropriate. The Trustee shall make the selection from Securities of the
Series outstanding not previously called for redemption. The Trustee 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 2.2.10, 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 3.3 NOTICE OF REDEMPTION.

          Unless otherwise indicated for a particular Series by Board Resolution, a supplemental
indenture hereto or an Officers’ Certificate, at least 30 days but not more than 60 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 and if any Bearer Securities are outstanding, publish on one
occasion a notice in an Authorized Newspaper.

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

          (b) the redemption date;

          (c) the redemption price;

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

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

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

          (g) 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 request, the Trustee shall give the notice of redemption in the Company’s
name and at its expense.

     Section 3.4 EFFECT OF NOTICE OF REDEMPTION.

          Once notice of redemption is mailed or published as provided in Section 3.3, 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.

     Section 3.5 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 3.6 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 4.1 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.

     Section 4.2 SEC REPORTS.

          The Company shall deliver to the Trustee within 45 days after it files them with the SEC
copies of the annual reports and of the information, documents, and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA Section 314(a).

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     Section 4.3 COMPLIANCE CERTIFICATE.

          The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of
the Company, an Officers’ Certificate 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).

          The Company will, so long as any of the Securities are outstanding, deliver to the Trustee,
forthwith upon becoming aware of any Default or Event of Default, an Officers’ Certificate
specifying such Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.

     Section 4.4 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.

ARTICLE V.

SUCCESSOR ENTITY

     Section 5.1 COMPANY MAY CONSOLIDATE, ETC.

          Except as otherwise provided as contemplated by Section 2.2 for a particular Series by a Board
Resolution, a supplemental indenture or an Officers’ Certificate, nothing contained in this
Indenture shall prevent any consolidation or merger of the Company with or into any other Person
(whether or not affiliated with the Company) or successive consolidations or mergers in which the
Company or its successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or other disposition of the property of the Company or its successor or
successors as an entirety, or substantially as an entirety, to any other Person (whether or not
affiliated with the Company or its successor or successors) authorized to acquire and operate the
same; provided, however, (a) the Company hereby covenants and agrees that, upon any such
consolidation or merger (in each case, if the Company is not the survivor of such transaction),
sale, conveyance, transfer or other disposition, the due and punctual payment of the principal of
(premium, if any) and interest on all of the Securities in accordance with the terms of each
Series, according to their tenor, and the due and punctual performance and observance of all the
covenants and conditions of this Indenture with respect to each Series or established with respect
to such Series pursuant to Section 2.2 to be kept or performed by the Company shall be expressly
assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture
Act, as then in effect) executed and delivered to the Trustee by the entity formed by such
consolidation, or into which the Company shall have been merged, or by the entity which shall have
acquired such property and (b) in the event that the Securities of any Series then outstanding are
convertible into or exchangeable for shares of common stock or other securities of the Company,
such entity shall, by such supplemental indenture, make provision so

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that the Holders of Securities of that Series shall thereafter be entitled to receive upon
conversion or exchange of such Securities the number of securities or property to which a holder of
the number of shares of common stock or other securities of the Company deliverable upon conversion
or exchange of those Securities would have been entitled had such conversion or exchange occurred
immediately prior to such consolidation, merger, sale, conveyance, transfer or other disposition.

     Section 5.2 SUCCESSOR ENTITY SUBSTITUTED.

          (a) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition
and upon the assumption by the successor entity by supplemental indenture, executed and delivered
to the Trustee, of the obligations set forth under Section 5.1 on all of the Securities of all
Series outstanding, such successor entity shall succeed to and be substituted for the Company with
the same effect as if it had been named as the Company herein, and thereupon the predecessor
corporation shall be relieved of all obligations and covenants under this Indenture and the
Securities.

          (b) In case of any such consolidation, merger, sale, conveyance, transfer or other
disposition, such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.

          (c) Nothing contained in this Article shall require any action by the Company in the case of a
consolidation or merger of any Person into the Company where the Company is the survivor of such
transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the
property of any other Person (whether or not affiliated with the Company).

     Section 5.3
EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.

          The Trustee may receive an Officers’ Certificate or an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or other disposition, and
any such assumption, comply with the provisions of this Article.

ARTICLE VI.

DEFAULTS AND REMEDIES

     Section 6.1 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, 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 the 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

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          (d) default in the performance or breach of any covenant or warranty of the Company in this
Indenture (other than a covenant or warranty that has been included in this Indenture
solely for the benefit of Series of Securities other than that Series), which default
continues uncured for a period of 60 days after there has 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
25% in principal amount of the outstanding Securities of that Series a written notice specifying
such default or breach and requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder; or

          (e) the Company pursuant to or within the meaning of any Bankruptcy Law:

     (i) commences a voluntary case,

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

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

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

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

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

     (i) is for relief against the Company in an involuntary case,

     (ii) appoints a Custodian of the Company or for all or substantially all of
its property, or

     (iii) orders the liquidation of the Company, and the order or decree remains
unstayed and in effect for 60 days; or

          (g) 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 2.2.18.

          The term “Bankruptcy Law” means Title 11, U.S. Code or any similar Federal or State law for
the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

     Section 6.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

          If an Event of Default with respect to Securities of any Series at the time outstanding occurs
and is continuing (other than an Event of Default referred to in Section 6.1(e) or (f)) then in
every such case the Trustee or the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series may declare the principal amount (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) of and accrued and unpaid interest, if any, on all of the Securities
of that Series to be due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal amount (or specified
amount) and accrued and unpaid interest, if any, shall become immediately due and payable. If an
Event of Default specified in Section 6.1(e) or (f) shall occur, the principal amount (or specified
amount) of and accrued and unpaid interest, if any, on all outstanding Securities 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.

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          At any time after such a declaration of acceleration with respect to any Series has been made
and before a judgment or decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal amount of the
outstanding Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:

          (a) the Company has paid or deposited with the Trustee a sum sufficient to pay:

     (i) all overdue interest, if any, on all Securities of that Series,

     (ii) the principal of any Securities of that Series which have become due
otherwise than by such declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Securities,

     (iii) to the extent that payment of such interest is lawful, interest upon any
overdue principal and overdue interest at the rate or rates prescribed therefor in
such Securities, and

     (iv) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel; and

          (b) all Events of Default with respect to Securities of that Series, other than the
non-payment of the principal of Securities of that Series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 6.13.

          No such rescission shall affect any subsequent Default or impair any right consequent thereon.

     Section 6.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

          The Company covenants that if:

          (a) default is made in the payment of any interest on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or

          (b) default is made in the payment of principal of any Security at the Maturity thereof, or

          (c) default is made in the deposit of any sinking fund payment when and as due by the terms of
a Security,

          then the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders
of such Securities, the whole amount then due and payable on such Securities for principal and
interest and, to the extent that payment of such interest shall be legally enforceable, interest on
any overdue principal or any overdue interest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, 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.

          If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities and collect the
moneys adjudged or
deemed to be payable in the manner provided by law out of the property of the Company or any
other obligor upon such Securities, wherever situated.

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          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.

     Section 6.4 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 7.7.

          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 6.5 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.

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     Section 6.6 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:

          First: To the payment of all amounts due the Trustee under Section 7.7; and

          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 6.7 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, 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 25% 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 reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;

          (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding;

          (e) no direction inconsistent with such written request has been given to the Trustee during
such 60-day period by the Holders of a majority in principal amount of the outstanding Securities
of that Series; and

          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 6.8 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.

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     Section 6.9 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 2.8, 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 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 6.1, 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.

     Section 6.13 WAIVER OF PAST DEFAULTS.

          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.

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     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 10% in principal amount of the outstanding Securities of any
Series, or to any suit instituted by any Holder for the enforcement of the 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 7.1 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 man 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 others.

     (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 to the requirements of this Indenture.

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

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

     (ii) The Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts.

     (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 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 its own funds or
otherwise incur any financial liability 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 adequate indemnity against such risk is not reasonably assured to it.

          (h) The Paying Agent, the Registrar and any authenticating agent shall be entitled to the
protections, immunities and standard of care as are set forth in paragraphs (a), (b) and (c) of
this Section with respect to the Trustee.

     Section 7.2 RIGHTS OF TRUSTEE.

          (a) The Trustee may rely on and shall be protected in acting or refraining from acting upon
any document believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the document.

          (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel. 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 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 and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection 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 this Indenture at the request or direction of any of the Holders of Securities unless such
Holders shall have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such request or
direction.

     Section 7.3 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 7.4 TRUSTEE’S DISCLAIMER.

          The Trustee makes no representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities,
and it shall not be responsible for any statement in the Securities other than its authentication.

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     Section 7.5 NOTICE OF DEFAULTS.

          If a Default or Event of Default occurs and is continuing with respect to the Securities of
any Series and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to
each Securityholder of the Securities of that Series and, if any Bearer Securities are outstanding,
publish on one occasion in an Authorized Newspaper, notice of a Default or Event of Default within
90 days after it occurs or, if later, after a Responsible Officer of the Trustee has 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, the Trustee may withhold the notice if and
so long as its corporate trust committee or a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Securityholders of that Series.

     Section 7.6 REPORTS BY TRUSTEE TO HOLDERS.

          Within 60 days after May 15 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 and, if
any Bearer Securities are outstanding, publish in an Authorized Newspaper, a brief report dated as
of such May 15, 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.

     Section 7.7 COMPENSATION AND INDEMNITY.

          The Company shall pay to the Trustee from time to time reasonable compensation for its
services in amounts agreed to by the Company and the Trustee. 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 incurred by it. Such expenses
shall include the reasonable compensation and expenses of the Trustee’s agents and counsel.

          The Company shall indemnify the Trustee (including the cost of defending itself) against any
loss, liability or expense incurred by it except as set forth in the next paragraph in the
performance of its duties under this Indenture as Trustee or Agent. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have one 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. 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 or 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 6.1(e) or (f) occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.

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     Section 7.8 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 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. If a successor Trustee with
respect to the Securities of any one or more Series does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at
least 10% in principal amount of the Securities of the applicable Series may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

          If the Trustee with respect to the Securities of any one or more Series fails to comply with
Section 7.10, any Securityholder of the applicable Series may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the 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
7.7, 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 and, if any Bearer Securities
are outstanding, publish such notice on one occasion in an Authorized Newspaper. Notwithstanding
replacement of the Trustee pursuant to this Section 7.8, the Company’s obligations under Section
7.7 hereof shall continue for the benefit of the retiring Trustee with respect to expenses and
liabilities incurred by it prior to such replacement.

     Section 7.9 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.

     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 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).

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     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 TIA Section
311(a) to the extent indicated.

ARTICLE VIII.

SATISFACTION AND DISCHARGE; DEFEASANCE

     Section 8.1 SATISFACTION AND DISCHARGE OF INDENTURE.

          This Indenture shall upon Company Order cease to be of further effect (except as hereinafter
provided in this Section 8.1), and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when:

     (a) neither:

     (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:

     (1) have become due and payable, or

     (2) will become due and payable at their Stated Maturity within one year, or

     (3) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company, or

     (4) are deemed paid and discharged pursuant to Section 8.3, 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;

          (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 stating that all
conditions precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.

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          Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 7.7, and, if money shall have been deposited with the Trustee
pursuant to clause (a) of this Section, the provisions of Sections 2.4, 2.7, 2.8, 8.1 8.2 and 8.5
shall survive.

     Section 8.2 APPLICATION OF TRUST FUNDS; INDEMNIFICATION.

          (a) Subject to the provisions of Section 8.5, all money deposited with the Trustee pursuant to
Section 8.1, all money and U.S. Government Obligations or Foreign Government Obligations deposited
with the Trustee pursuant to Section 8.3 or 8.4 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 8.3 or 8.4, 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 8.3 or 8.4.

          (b) The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against U.S. Government Obligations or Foreign Government Obligations
deposited pursuant to Sections 8.3 or 8.4 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 deliver or pay to the Company from time to time upon Company Request any
U.S. Government Obligations or Foreign Government Obligations or money held by it as provided in
Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered to the Trustee, 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.

     Section 8.3 LEGAL DEFEASANCE OF SECURITIES OF ANY SERIES.

          Unless this Section 8.3 is otherwise specified pursuant to Section 2.2.20 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 91st 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 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and

          (c) the rights, powers, trust and immunities of the Trustee hereunder;

          provided that, the following conditions shall have been satisfied:

26

 

          (d) the Company shall have deposited or caused to be deposited irrevocably with the Trustee 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, (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 Trustee), not later than
one 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, 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 91st 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 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 stating that all
conditions precedent provided for relating to the defeasance contemplated by this Section have been
complied with.

     Section 8.4 COVENANT DEFEASANCE.

          Unless this Section 8.4 is otherwise specified pursuant to Section 2.2.20 to be inapplicable
to Securities of any Series, on and after the 91st 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 4.2, 4.3, 4.4, and 5.1 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 2.2.20 (and the failure to comply with any
such covenants shall not constitute a Default or Event of Default under Section 6.1), with respect
to the Securities of such Series, provided that the following conditions shall have been satisfied:

          (a) with reference to this Section 8.4, the Company has deposited or caused to be irrevocably
deposited (except as provided in Section 8.2(c)) with the Trustee 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

27

 

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 Trustee), not later than
one 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 to the Trustee, 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;

          (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 91st 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 stating that all
conditions precedent herein provided for relating to the defeasance contemplated by this Section
have been complied with.

     Section 8.5 REPAYMENT TO COMPANY.

          The Trustee and 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.

ARTICLE IX.

AMENDMENTS AND WAIVERS

     Section 9.1 WITHOUT CONSENT OF HOLDERS.

          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;

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

28

 

          (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; or

          (g) to comply with requirements of the SEC in order to effect or maintain the qualification of
this Indenture under the TIA.

     Section 9.2 WITH CONSENT OF HOLDERS.

          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 each
Series affected by such supplemental indenture (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 each Series affected by such waiver by notice to
the Trustee (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 9.2
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 and, if any Bearer Securities affected thereby are outstanding, publish on one occasion in
an Authorized Newspaper, 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.

     Section 9.3 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;

          (b) reduce the rate of or extend the time for payment of interest (including default interest)
on any Security;

          (c) 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;

          (d) reduce the principal amount of Discount Securities payable upon acceleration of the
maturity thereof;

29

 

          (e) 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);

          (f) make the principal of or interest, if any, on any Security payable in any currency other
than that stated in the Security;

          (g) make any change in Sections 6.8, 6.13, 9.3 (this sentence), 10.15 or 10.16; or

          (h) waive a redemption payment with respect to any Security or change any of the provisions
with respect to the redemption of any Securities.

     Section 9.4 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.

     Section 9.5 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 9.3. 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 9.6 NOTATION ON OR EXCHANGE OF SECURITIES.

          The Trustee may place an appropriate notation about an amendment or waiver on any Security of
any Series thereafter authenticated. The Company in exchange for Securities of that Series may
issue and the Trustee shall authenticate upon request new Securities of that Series that reflect
the amendment or waiver.

     Section 9.7 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 7.1) shall be fully protected in
relying upon, an Opinion of Counsel 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.

30

 

ARTICLE X.

MISCELLANEOUS

     Section 10.1 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 10.2 NOTICES.

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

if to the Company:

BankAtlantic Bancorp, Inc.

2100 West Cypress Creek Road

Fort Lauderdale, Florida 33309

Attention: Chief Financial Officer

if to the Trustee:

U.S. Bank National Association

60 Livingston Avenue

St. Paul, Minnesota 55107

Attn: Richard Prokosch

          The Company or the Trustee by notice to the 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 and, if any Bearer Securities are outstanding,
published in an Authorized Newspaper. Failure to mail a notice or 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 shall mail a copy to the
Trustee and each Agent at the same time.

     Section 10.3 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).

31

 

     Section 10.4 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 or 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.

     Section 10.5 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;

          (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.

     Section 10.6 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 10.7 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 10.8 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 10.9 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.

     Section 10.10 GOVERNING LAWS.

          THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF
LAWS PROVISIONS THEREOF.

32

 

     Section 10.11 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 10.12 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 10.13 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 10.14 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.

     Section 10.15 SECURITIES IN A FOREIGN CURRENCY.

          Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an
Officers’ Certificate delivered pursuant to Section 2.2 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, 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
10.15, “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. If such Market
Exchange Rate is not available for any reason with respect to such currency, the Trustee shall use,
in its sole discretion and without liability on its part, such quotation of the Federal Reserve
Bank of New York as of the most recent available date, or quotations or 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 such other quotations or 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.

33

 

     Section 10.16 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 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.

ARTICLE XI.

SINKING FUNDS

     Section 11.1 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 11.2. 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.

     Section 11.2 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 Trustee, together with an Officers’

34

 

Certificate with respect thereto, not later than 15 days prior to the date on which the
Trustee begins the process of selecting Securities for redemption, and shall be credited for such
purpose by the Trustee 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
11.2, the principal amount of Securities of such Series to be redeemed in order to exhaust the
aforesaid cash payment shall be less than $100,000, the Trustee 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 Trustee or a Paying Agent and applied to the next succeeding
sinking fund payment, provided, however, that the Trustee or such 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 Trustee or such Paying Agent upon delivery by the Company to the Trustee 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 11.3 REDEMPTION OF SECURITIES FOR SINKING FUND.

          Not less than 40 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 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 11.2, 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 30 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 3.2 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 3.3. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.

35

 

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

	 	 	 	 	 
	 	BANKATLANTIC BANCORP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

36EX-10.11 Zimmermann Employment Agreement

 

Exhibit 10.11

EXECUTION VERSION

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered as of March 25, 2008, by and
between Claire’s Boutiques, Inc., a Delaware corporation (the “Company”), and John A.
Zimmermann (the “Executive”).

     WHEREAS, the Company desires to employ the Executive on the terms and subject to the
conditions set forth herein and the Executive has agreed to be so employed.

     NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and
agreements set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:

1. Employment of Executive; Duties.

     1.1 Title. During the Employment Period (as defined in Section 2 hereof), the
Executive shall serve as the President of North America of the Company.

     1.2 Duties.

     (a) During the Employment Period, the Executive shall have such executive and
managerial powers and duties as may be assigned to the Executive by the Chief Executive
Officer or the Board of Directors (the “Board”) of the Company or Claire’s Stores, Inc.
(the “Company Parent”), commensurate with the Executive’s position as President of North
America, and shall report to the Chief Executive Officer or the Board. The Board or the
Chief Executive Officer may adjust the duties and responsibilities of the Executive as
President of North America of the Company, notwithstanding the specific title set forth in
Section 1.1 hereof, based upon the Company’s or Company Parent’s needs from time to time.
Except for sick leave, reasonable vacations and excused leaves of absence, the Executive
shall, throughout the Employment Period, devote the whole of the Executive’s working time,
attention, knowledge and skills faithfully, and to the best of the Executive’s ability, to
the duties and responsibilities of the Executive’s positions in furtherance of the business
affairs and activities of the Company and its subsidiaries and Affiliates (as defined in
Section 5.4(a) hereof).

     (b) During the Employment Period, the Executive’s principal place of employment shall
be at the Company’s office in Hoffman Estates, Illinois. The Executive shall relocate his
principal residence to the greater Chicago metropolitan area.

     (c) The Executive shall at all times be subject to, comply with, observe and carry out
(i) the Company’s rules, regulations, policies and codes of ethics and/or conduct
applicable to its employees generally and in effect from time to time and (ii) such rules,
regulations, policies, codes of ethics and/or conduct, directions and
restrictions as the Board may from time to time reasonably establish or approve
generally for senior executive officers of the Company.

 

 

2. Term of Employment. The Executive’s employment with the Company will commence on or
about April 14, 2008 (the date of such commencement, the “Effective Date”). This Agreement
shall govern the terms and conditions of the Executive’s employment by the Company, and the
termination thereof, during the period that commences on the Effective Date and ends on April 30,
2010 (the “Term”), provided that the Term shall automatically be extended for successive
one year periods unless either party provides written notice (a “Notice of Non-Renewal”) at
least ninety (90) days prior to the expiration of the Term that the Term shall not be further
extended. The portion of the Term during which the Executive is actually employed by the Company
under this Agreement is referred to as the “Employment Period”.

3. Compensation and General Benefits.

     3.1 Base Salary.

     (a) During the Employment Period, the Company agrees to pay to the Executive an annual
base salary in an amount equal to $550,000 (such base salary, as may be adjusted from time
to time pursuant to Section 3.1(b), is referred to herein as the “Base Salary”).
The Executive’s Base Salary, less amounts required to be withheld under applicable law,
shall be payable in equal installments in accordance with the Company’s normal payroll
practices and procedures in effect from time to time for the payment of salaries to
officers of the Company, but in no event less frequently than monthly.

     (b) The Company shall review the Executive’s performance on an annual basis and, based
on such review, may change the Base Salary, as it, acting in its sole discretion, shall
determine to be reasonable and appropriate.

     3.2 Bonus.

     (a) Upon commencement of employment, the Executive will be entitled to receive a
one-time starting bonus of $125,000. This sign-on bonus will be paid with the first
regular payroll date following the Effective Date. If the Executive’s employment
terminates under Section 4.4 prior to the first anniversary of the Effective Date, the
Executive shall be required to repay to the Company 100% of the sign-on-bonus in this
Section 3.2(a), and if such termination occurs on or after the first anniversary of the
Effective Date but prior to the second anniversary of the Effective Date, the Executive
shall be required to repay to the Company 50% of the sign-on-bonus in this Section 3.2(a).

     (b) Pursuant to the Company’s Annual Incentive Plan (the “AIP”), with respect
to each fiscal year of the Company that begins after February 2, 2008 and that ends during
the Employment Period, the Executive shall be eligible to receive from the Company an
annual performance bonus (the “Annual Bonus”), prorated as applicable, based upon
the attainment of annual goals established by the Board, which may include comparable store
sales, earnings before interest, taxes, depreciation and amortization

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(“EBITDA”) and/or cash generation goals. The Executive’s target Annual Bonus
shall be seventy-five percent (75%) of the Executive’s Base Salary if the targeted levels
of performance to be determined by the Company or the Company Parent for the applicable
year are met. Any Annual Bonus earned shall be payable in full as soon as reasonably
practicable following the determination thereof, but in no event later than April 15 of the
following year (unless administratively impracticable to do so because the Company’s
results for the applicable year had not yet been finalized) and in accordance with the
Company’s normal payroll practices and procedures. Notwithstanding the foregoing language,
but subject to the last sentence of this Section 3.2(b), with respect to the fiscal year
ending January 31, 2009, the Executive will receive a minimum Annual Bonus of $225,000.
Except as otherwise expressly provided in the AIP and Section 4 hereof, any Annual Bonus
(or portion thereof) payable under this Section 3.2(b) shall not be earned and payable
unless the Executive is employed by the Company on the day the Annual Bonus is paid by the
Company in accordance with the Company’s normal payroll practices and procedures.

     3.3 Expenses.

     (a) In addition to any amounts to which the Executive may be entitled pursuant to the
other provisions of this Section 3 or elsewhere herein, the Executive shall be entitled to
receive reimbursement from the Company for all reasonable and necessary expenses incurred
by the Executive during the Term in performing the Executive’s duties hereunder on behalf
of the Company or the Company Parent, subject to, and consistent with, the Company’s
policies for expense payment and reimbursement, in effect from time to time.

     (b) The Executive will be entitled to reimbursement for customary relocation expenses
under the Company’s relocation policy. The Executive shall also be entitled to relocation
benefits as mutually agreed to by the parties. If the Executive’s employment terminates
under Section 4.4 prior to the first anniversary of the Effective Date, the Executive shall
be required to repay to the Company 100% of all relocation benefits (including the
customary benefits and any additional benefits mutually agreed upon), and if such
termination occurs on or after the first anniversary of the Effective Date but prior to the
second anniversary of the Effective Date, the Executive shall be required to repay to the
Company 50% of such relocation benefits.

     3.4 Benefits.

     (a) During the Employment Period, in addition to any amounts to which the Executive
may be entitled pursuant to the other provisions of this Section 3 or elsewhere herein, the
Executive shall be entitled to participate in, and to receive benefits under, any benefit
plans, arrangements or policies made available by the Company to its senior executive
officers generally, subject to and on a basis consistent with the terms, conditions and
overall administration of each such plan, arrangement or policy.

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     (b) During the Employment Period, the Company shall provide the Executive with a
Company automobile or pay a monthly automobile allowance
commensurate with other executives at the Executive’s level. The Company shall pay
all operating and maintenance expenses of the automobile during the Executive’s employment.

     3.5 Employee Stock Options.

     (a) Claire’s, Inc. has adopted a stock option plan, in the form attached hereto as
Exhibit A and incorporated herein by reference (the “Plan”), for the grant of stock
options to employees or directors of the Company or of any subsidiary of the Company to
purchase shares of Common Stock of Claire’s, Inc. (the “Common Stock”).

     (b) On or shortly after the Effective Date, pursuant to the Plan, the Executive shall
be granted nonqualified options to purchase 375,000 shares of Common Stock at a price per
share equal to $10 for its shares on the terms set forth in the Option Grant Letter
attached hereto as Exhibit B and incorporated herein by reference (the “Option
Letter”).

     3.6 Stock Investment.

     (a) On or shortly after the Effective Date, the Executive shall have the opportunity
to purchase up to 30,000 shares of Common Stock for aggregate cash consideration of
$300,000 (the “Stock Purchase”). The Stock Purchase shall otherwise be on the
terms set forth in the Stock Letter attached hereto as Exhibit C.

     (b) Upon completion of the Stock Purchase, the Executive shall be granted an
additional fully vested nonqualified stock option to purchase 30,000 shares of Common Stock
at a price per share equal to $10.00 on the terms set forth in the Option Letter.

4. Termination.

     4.1 General. The employment of the Executive hereunder (and the Employment Period)
shall terminate as provided in Section 2 hereof, unless earlier terminated in accordance with the
provisions of this Section 4.

     4.2 Death or Disability of the Executive.

     (a) The employment of the Executive hereunder (and the Employment Period) shall
terminate upon (i) the death of the Executive and (ii) at the option of the Company, upon
not less than fifteen (15) days’ prior written notice to the Executive or the Executive’s
personal representative or guardian, if the Executive suffers a “Total Disability” (as
defined in Section 4.2(b) hereof). Upon termination for death or Total Disability, the
Company shall pay to the Executive, guardian or personal representative, as the case may
be, a prorated share of the Annual Bonus pursuant to Section 3.2(b) hereof (based on the
period of actual employment) that the Executive would have been entitled to had the
Executive worked the full year during which the termination occurred, which bonus shall be
based on actual performance of the Company for the year of such termination. Any bonus
shall be payable as soon as reasonably practicable
following the determination thereof, but in no event later than April 15 of the
following year (unless administratively impracticable to do so because the Company’s
results for the applicable year had not yet been finalized), and in accordance with the
Company’s normal payroll practices and procedures.

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     (b) For purposes of this Agreement, “Total Disability” shall mean (i) if the
Executive is subject to a legal decree of incompetency (the date of such decree being
deemed the date on which such disability occurred), (ii) the written determination by a
physician selected by the Company and acceptable to Executive (which acceptance shall not
be unreasonably withheld), (which expense shall be paid by the Company) that, because of a
medically determinable disease, injury or other physical or mental disability, the
Executive is unable substantially to perform, with or without reasonable accommodation, the
material duties of the Executive required hereby, and that such disability has lasted for
ninety (90) consecutive days or any one hundred twenty (120) days during the immediately
preceding twelve (12)-month period or is, as of the date of determination, reasonably
expected to last six (6) months or longer after the date of determination, in each case
based upon medically available reliable information or (iii) Executive’s qualifying for
benefits under the Company’s long-term disability coverage, if any. In conjunction with
determining mental and/or physical disability for purposes of this Agreement, the Executive
hereby consents to (x) any examinations that the Company reasonably determines are relevant
to a determination of whether the Executive is mentally and/or physically disabled or are
required by the Company physician, (y) furnish such medical information as may be
reasonably requested and (z) waive any applicable physician patient privilege that may
arise because of such examination. All expenses incurred by the Executive under this
subsection shall be paid by the Company.

     4.3 Termination by the Company Without Cause, Non-Renewal of the Agreement  by the
Company, Resignation by the Executive For Good Reason or in the  event of a Change of
Control.

     (a) The Company may terminate the Executive’s employment without “Cause” (as defined
in Section 4.3(f)), and thereby terminate the Executive’s employment (and the Employment
Period) under this Agreement at any time with no requirement for notice to the Executive.
In addition, the Company may terminate the Executive upon expiration of the Term by
providing a Notice of Non-Renewal pursuant to Section 2 hereof.

     (b) The Executive may resign, and thereby terminate the Executive’s employment (and
the Employment Period), at any time for “Good Reason” (as defined in Section 4.3(e)
hereof), upon not less than thirty (30) days’ prior written notice to the Company
specifying in reasonable detail the reason therefore; provided, however,
that the Company shall have a reasonable opportunity to cure any such Good Reason (to the
extent possible) within such thirty (30) day notice period after the Company’s receipt of
such notice; and provided further that, if the Company is not seeking to
cure, the Company shall not be obligated to allow the Executive to continue working during
such period and may, in its sole discretion, accelerate such termination of employment (and

5

 

the Employment Period) to any date during such period. Executive may not terminate
employment under this Agreement for Good Reason regarding any of the Company’s acts or
omissions of which Executive had actual notice for sixty (60) days or more prior to giving
notice of termination for Good Reason.

     (c) In the event the Executive’s employment is terminated pursuant to this Section
4.3, then, subject to Section 4.3(d) hereof, the following provisions shall apply:

     (i) The Company shall continue to pay the Executive the Base Salary to which
the Executive would have been entitled pursuant to Section 3.1 hereof (at the Base
Salary rate during the year of termination) for a twelve (12)-month period following
such date of termination, with all such amounts payable in accordance with the
Company’s normal payroll practices and procedures in the same manner and at the same
time as though the Executive remained employed by the Company.

     (ii) If such termination occurs upon or within eighteen (18) months following a
Change of Control (as defined in Exhibit B attached hereto), the Company shall
continue to pay the Executive the Base Salary to which the Executive would have been
entitled pursuant to Section 3.1 hereof (at the Base Salary rate during the year of
termination) for the greater of (A) a twelve (12)-month period following such date
of termination or (B) the period until the end of the then remaining Term, with all
such amounts payable in accordance with the Company’s normal payroll practices and
procedures in the same manner and at the same time as though the Executive remained
employed by the Company.

     (iii) In the event the Executive’s employment is terminated pursuant to this
Section 4.3 without Cause, and if the Company has previously effected reductions in
the Executive’s Base Salary and the base salary of all senior executives of the
Company, which reductions were substantially similar, then the Base Salary rate for
purposes of Section 4.3(c)(i) or (ii) hereof shall be the Base Salary rate in effect
immediately prior to such reductions.

     (iv) The Company shall pay to the Executive a prorated share of the Annual
Bonus pursuant to Section 3.2(b) hereof (based on the period of actual employment)
that the Executive would have been entitled to had the Executive worked the full
year during which the termination occurred, based on actual performance of the
Company for the year of such termination. The bonus shall be payable as soon as
reasonably practicable following the determination thereof, but in no event later
than April 15 of the following year (unless administratively impracticable to do so
because the Company’s results for the applicable year had not yet been finalized),
and in accordance with the Company’s normal payroll practices and procedures.

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     (v) If the Executive elects continuation coverage (with respect to the
Executive’s coverage and/or any eligible dependent coverage) under the Consolidated
Omnibus Budget Reconciliation Act of 1986 (“COBRA Continuation Coverage”) with respect to the Company’s group health
insurance plan, the Executive shall be responsible for payment of the monthly cost
of COBRA Continuation Coverage. Unless prohibited by law, the Company shall
reimburse the Executive for any portion of the monthly cost of COBRA Continuation
Coverage that exceeds the amount of the monthly health insurance premium (with
respect to the Executive’s coverage and/or any eligible dependent coverage) payable
by the Executive immediately prior to the date of Executive’s termination, such
reimbursements to continue (A) for a period of twelve (12) months or (B) in the
event that the Executive’s Base Salary is being paid pursuant to Section 4.3(c)(ii),
for the period set forth therein. The Company shall pay the reimbursements on a
monthly basis in accordance with the Company’s normal payroll practices and
procedures.

     (d) As a condition precedent to the Executive’s right to receive the benefits set
forth in Section 4.3(c) hereof, the Executive agrees to execute a release of the Company
and its respective Affiliates, officers, directors, stockholders, employees, agents,
insurers, representatives and successors from and against any and all claims that the
Executive may have against any such Person (as defined in Section 5.4(f) hereof) relating
to the Executive’s employment by the Company and the termination thereof, in the form
attached hereto as Exhibit D, as such form may be amended from time to time to comply with
changes in law.

     (e) For purposes of this Agreement, the Executive would be entitled to terminate the
Executive’s employment for “Good Reason” if without the Executive’s prior written
consent:

     (i) the Company fails to comply with any material obligation imposed by this
Agreement;

     (ii) the Company effects a reduction in the Executive’s Base Salary, unless all
senior executives of the Company receive a substantially similar reduction in base
salary; or

     (iii) the Company requires the Executive to be based (excluding regular travel
responsibilities) at any office or location more than 75 miles outside of Hoffman
Estates, Illinois, provided that the Executive had previously relocated his
principal residence to the greater Chicago metropolitan area.

     (f) For purposes of this Agreement, “Cause” means the occurrence of any one or more of
the following events:

     (i) an act of fraud, embezzlement, theft or any other material violation of law
that occurs during or in the course of Executive’s employment with the Company;

     (ii) intentional damage to the Company’s assets;

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     (iii) intentional disclosure of the Company’s confidential information contrary
to the Company’s policies;

     (iv) material breach of Executive’s obligations under this Agreement;

     (v) intentional engagement in any activity which would constitute a breach of
Executive’s duty of loyalty or of your obligations under this Agreement;

     (vi) material breach of any of material the Company’s policy that has been
communicated to the Executive in writing;

     (vii) the willful and continued failure to substantially perform Executive’s
duties for the Company (other than as a result of incapacity due to physical or
mental illness); or

     (viii) willful conduct by Executive that is demonstrably and materially
injurious to the Company, monetarily or otherwise.

     For purposes of this Section 4.3(f), an act, or a failure to act, shall not be deemed
“willful” or “intentional” unless it is done, or omitted to be done, by Executive in bad
faith or without a reasonable belief that Executive’s action or omission was in the best
interest of the Company. Failure to meet performance standards or objectives, by itself,
does not constitute “Cause”.

     (g) Notwithstanding the other provisions of this Section 4.3, all payments due and
payable in accordance with this Section 4.3(c)(i) and (ii) that have not yet been paid to
Executive shall be reduced by an amount equal to any amounts that the Executive receives in
connection with any other employment or consulting arrangement during the applicable
severance period referenced herein. The Executive shall notify the Company in writing
within three (3) business days of accepting any new employment or consulting arrangement
that would be the subject of such offset.

     4.4 Termination For Cause, Voluntary Resignation Other Than For Good Reason or Election
Not to Extend the Term by the Executive.

     (a) (i) the Company may, upon action of the Board, terminate the employment of the
Executive (and the Employment Period) at any time for “Cause,” (ii) the Executive may
voluntarily resign other than for Good Reason and thereby terminate the Executive’s
employment (and the Employment Period) under this Agreement at any time upon not less than
thirty (30) days’ prior written notice or (iii) the Executive may provide a Notice of
Non-Renewal pursuant to Section 2 hereof, in which case the Executive’s employment will
terminate upon expiration of the Term.

     (b) Upon termination by the Company for Cause, by the Executive as the result of
resignation for other than for Good Reason, or by the Executive at the end of the Term
following a Notice of Non-Renewal provided by the Executive, the Executive shall be
entitled to receive all amounts of earned but unpaid Base Salary and benefits accrued and
vested through the date of such termination.

8

 

     (c) Before the Company may terminate the Executive for Cause pursuant to Section
4.4(a)(i), the Board shall deliver to the Executive a written notice of the Company’s
intent to terminate the Executive for Cause, and the Executive shall have been given a
reasonable opportunity to cure any such acts or omissions (which are susceptible of cure as
reasonably determined by the Board by majority vote thereof) within thirty (30) days after
the Executive’s receipt of such notice.

     (d) If the Executive’s employment terminates under this Section 4.4 prior to the first
anniversary of the Effective Date, the Executive shall be required to repay to the Company
100% of the relocation bonus in Section 3.3(b), and if such termination occurs on or after
the first anniversary of the Effective Date but prior to the second anniversary of the
Effective Date, the Executive shall be required to repay to the Company 50% of the
relocation bonus in Section 3.3(b).

     4.5 Resignation from Officer Positions. Upon the termination of the Executive’s
employment for any reason (unless otherwise agreed in writing by the Company and the Executive),
the Executive will be deemed to have resigned, without any further action by the Executive, from
any and all officer, director and/or director positions that the Executive, immediately prior to
such termination, (a) held with the Company or any of its Affiliates and (b) held with any other
entities at the direction of, or as a result of the Executive’s affiliation with, the Company or
any of its Affiliates. If for any reason this Section 4.5 is deemed to be insufficient to
effectuate such resignations, then Executive will, upon the Company’s request, execute any
documents or instruments that the Company may deem necessary or desirable to effectuate such
resignations.

     4.6 Section 409A of the Code. Notwithstanding anything to the contrary in this
Agreement, the parties mutually desire to avoid adverse tax consequences associated with the
application of Section 409A of the Code to this Agreement and agree to cooperate fully and take
appropriate reasonable actions that preserve to the Executive, to the maximum extent practical, the
full economic benefit of this Agreement while avoiding any such consequences under Section 409A of
the Code, including delaying payments and reforming the form of the Agreement if such action would
reduce or eliminate taxes and/or interest payable as a result of Section 409A of the Code. In this
regard, notwithstanding anything to the contrary in this Section 4, to the extent necessary to
comply with Section 409A of the Code, any payment required under this Section 4 shall be deferred
for a period of six (6) months, regardless of the circumstances giving rise to or the basis for
such payment.

5. Confidentiality, Work Product and Non-Competition and Non-Solicitation.

     5.1 Confidentiality.

     (a) In connection with the Executive’s employment with the Company, the Company
promises to provide the Executive with access to “Confidential Information” (as defined in
Section 5.4(d) hereof) in support of the Executive’s employment duties. The Executive
recognizes that the Company’s business interests require a confidential relationship
between the Company and the Executive and the fullest practical protection and confidential
treatment of all Confidential Information. At all times, both during and

9

 

after the Employment Period, the Executive shall not directly or indirectly: (i)
appropriate, download, print, copy, remove, use, disclose, divulge, communicate or
otherwise “Misappropriate” (as defined in Section 5.4(e) hereof), any Confidential
Information, including, without limitation, originals or copies of any Confidential
Information, in any media or format, except for the Company’s benefit within the course and
scope of the Executive’s employment or with the prior written consent of a majority of the
Board; or (ii) take or encourage any action that would circumvent, interfere with or
otherwise diminish the value or benefit of the Confidential Information to any of the
Company Parties (as defined in Section 5.4(b) hereof).

     (b) All Confidential Information, and all other information and property affecting or
relating to the business of the Company Parties within the Executive’s possession, custody
or control, regardless of form or format, shall remain, at all times, the property of the
respective Company Parties, the appropriation, use and/or disclosure of which is governed
and restricted by this Agreement.

     (c) The Executive acknowledges and agrees that:

     (i) the Executive occupies a unique position within the Company, and the
Executive is and will be intimately involved in the development and/or
implementation of Confidential Information;

     (ii) in the event the Executive breaches this Section 5.1 with respect to any
Confidential Information, such breach shall be deemed to be a Misappropriation of
such Confidential Information; and

     (iii) any Misappropriation of Confidential Information will result in immediate
and irreparable harm to the Company.

     (d) Upon receipt of any formal or informal request, by legal process or otherwise,
seeking the Executive’s direct or indirect disclosure or production of any Confidential
Information to any Person, the Executive shall promptly and timely notify the Company and
provide a description and, if applicable, hand deliver a copy of such request to the
Company. The Executive irrevocably nominates and appoints the Company as the Executive’s
true and lawful attorney-in-fact to act in the Executive’s name, place and stead to perform
any act that the Executive might perform to defend and protect against any disclosure of
Confidential Information.

     (e) At any time the Company may request, during or after the Employment Period, the
Executive shall deliver to the Company all originals and copies of Confidential Information
and all other information and property affecting or relating to the business of the Company
Parties within the Executive’s possession, custody or control, regardless of form or
format, including, without limitation any Confidential Information produced by the
Executive. Both during and after the Employment Period, the Company shall have the right
of reasonable access to review, inspect, copy and/or confiscate any Confidential
Information within the Executive’s possession, custody or control.

10

 

     (f) Upon termination or expiration of this Agreement, the Executive shall immediately
return to the Company all Confidential Information, and all other information and property
affecting or relating to the business of the Company Parties, within the Executive’s
possession, custody or control, regardless of form or format, without the necessity of a
prior Company request.

     (g) During the Employment Period, the Executive represents and agrees that the
Executive will not use or disclose any confidential or proprietary information or trade
secrets of others, including but not limited to former employers, and that the Executive
will not bring onto the premises of the Company or access such confidential or proprietary
information or trade secrets of such others, unless consented to in writing by said others,
and then only with the prior written authorization of the Company.

     5.2 Work Product/Intellectual Property.

     (a) Assignment. The Executive hereby assigns to the Company all right, title
and interest to all “Work Product” (as defined in Section 5.4(h) hereof) that (i) relates
to any of the Company Parties’ actual or anticipated business, research and development or
existing or future products or services, or (ii) is conceived, reduced to practice,
developed or made using any equipment, supplies, facilities, assets, information or
resources of any of the Company Parties (including, without limitation, any intellectual
property rights).

     (b) Disclosure. The Executive shall promptly disclose Work Product to the
Board and perform all actions reasonably requested by the Company (whether during or after
the Employment Period) to establish and confirm the ownership and proprietary interest of
any of the Company Parties in any Work Product (including, without limitation, the
execution of assignments, consents, powers of attorney, applications and other
instruments). The Executive shall not file any patent or copyright applications related to
any Work Product except with the written consent of a majority of the Board.

     5.3 Non-Competition and Non-Solicitation.

     (a) In consideration of the Confidential Information being provided to the Executive
as stated in Section 5.1 hereof, and other good and valuable new consideration as stated in
this Agreement, including, without limitation, employment and/or continued employment with
the Company, and the business relationships, Company goodwill, work experience, client,
customer and/or vendor relationships and other fruits of employment that the Executive will
have the opportunity to obtain, use and develop under this Agreement, the Executive agrees
to the restrictive covenants stated in this Section 5.3.

     (b) From the Effective Date until the end of the Restricted Period (as defined in
Section 5.4(g) hereof), the Executive agrees that the Executive will not, directly or
indirectly, on the Executive’s own behalf or on the behalf of any other Person, within the
United States of America or in any other country or territory in which the businesses of
the Company are conducted:

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     (i) engage in a Competing Business (as defined in Section 5.4(c) hereof),
including, without limitation, by owning, managing, operating, controlling, being
employed by, providing services as a consultant or independent contractor to or
participating in the ownership, management, operation or control of any Competing
Business;

     (ii) induce or attempt to induce any customer, vendor, supplier, licensor or
other Person in a business relationship with any Company Party, for or with which
the Executive or employees working under the Executive’s supervision had any direct
or indirect responsibility or contact during the Employment Period, (A) to do
business with a Competing Business or (B) to cease, restrict, terminate or otherwise
reduce business with the Company for the benefit of a Competing Business, regardless
of whether the Executive initiates contact; or

     (iii) (A) solicit, recruit, persuade, influence or induce, or attempt to
solicit, recruit, persuade, influence or induce anyone employed or otherwise
retained by any of the Company Parties (including any independent contractor or
consultant), to cease or leave their employment or contractual or consulting
relationship with any Company Party, regardless of whether the Executive initiates
contact for such purposes or (B) hire, employ or otherwise attempt to establish, for
any Person, any employment, agency, consulting, independent contractor or other
business relationship with any Person who is or was employed or otherwise retained
by any of the Company Parties (including any independent contractor or consultant).

     (c) The parties hereto acknowledge and agree that, notwithstanding anything in Section
5.3(b)(i) hereof, (i) the Executive may own or hold, solely as passive investments,
securities of Persons engaged in any business that would otherwise be included in Section
5.3(b)(i), as long as with respect to each such investment the securities held by the
Executive do not exceed five percent (5%) of the outstanding securities of such Person and
such securities are publicly traded and registered under Section 12 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and (ii) the Executive may
serve on the board of directors (or other comparable position) or as an officer of any
entity at the request of the Board; provided, however, that in the case of
investments otherwise permitted under clause (i) above, the Executive shall not be
permitted to, directly or indirectly, participate in, or attempt to influence, the
management, direction or policies of (other than through the exercise of any voting rights
held by the Executive in connection with such securities), or lend the Executive’s name to,
any such Person.

     (d) The Executive acknowledges that (i) the restrictive covenants contained in this
Section 5.3 hereof are ancillary to and part of an otherwise enforceable agreement, such
being the agreements concerning Confidential Information and other consideration as stated
in this Agreement, (ii) at the time that these restrictive covenants are made, the
limitations as to time, geographic scope and activity to be restrained, as described
herein, are reasonable and do not impose a greater restraint than necessary to

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     protect the good will and other legitimate business interests of the Company,
including without limitation, Confidential Information (including trade secrets), client,
customer and/or vendor relationships, client and/or customer goodwill and business
productivity, (iii) in the event of termination of the Executive’s employment, the
Executive’s experiences and capabilities are such that the Executive can obtain gainful
employment without violating this Agreement and without the Executive incurring undue
hardship, (iv) based on the relevant benefits and other new consideration provided for in
this Agreement, including, without limitation, the disclosure and use of Confidential
Information, the restrictive covenants of this Section 5.3, as applicable according to
their terms, shall remain in full force and effect even in the event of the Executive’s
involuntary termination from employment, with or without Cause and (v)the Executive has
carefully read this Agreement and has given careful consideration to the restraints imposed
upon the Executive by this Agreement and consents to the terms of the restrictive covenants
in this Section 5.3, with the knowledge that this Agreement may be terminated at any time
in accordance with the provisions hereof.

     5.4 Definitions. For purposes of this Agreement, the following terms shall have the
following meanings:

     (a) An “Affiliate” of any specified Person means any other Person, whether now
or hereafter existing, directly or indirectly controlling or controlled by, or under direct
or indirect common control with, such specified Person. For purposes hereof, “control” or
any other form thereof, when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” shall have meanings correlative to the foregoing.

     (b) “Company Parties” means the Company, and its direct and indirect parents,
subsidiaries and Affiliates, and their successors in interest.

     (c) “Competing Business” means any business that owns or operates a specialty
retail chain, which chain derives 15% or more of its revenue for the trailing 12 months
from the sale of costume jewelry or accessories targeted to girls or women.

     (d) Confidential Information.

     (i) Definition. “Confidential Information” means any and all
material, information, ideas, inventions, formulae, patterns, compilations,
programs, devices, methods, techniques, processes, know how, plans (marketing,
business, strategic, technical or otherwise), arrangements, pricing and other data
of or relating to any of the Company Parties (as well as their customers and/or
vendors) that is confidential, proprietary or trade secret (A) by its nature, (B)
based on how it is treated or designated by a Company Party, (C) because the
disclosure of which would have a material adverse effect on the business or planned
business of any of the Company Parties and/or (D) as a matter of law.

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     (ii) Exclusions. Confidential Information does not include material,
data, and/or information (A) that any Company Party has voluntarily placed in the
public domain, (B) that has been lawfully and independently developed and publicly
disclosed by third parties, (C) that constitutes the general non-specialized
knowledge and skills gained by the Executive during the Employment Period or (D)
that is otherwise in the public domain through lawful means; provided,
however, that the unauthorized appropriation, use or disclosure of
Confidential Information by the Executive, directly or indirectly, shall not affect
the protection and relief afforded by this Agreement regarding such information.

     (iii) Inclusions. Confidential Information includes, without
limitation, the following information (including without limitation, compilations or
collections of information) relating or belonging to any Company Party (as well as
their clients, customers and/or vendors) and created, prepared, accessed, used or
reviewed by the Executive during or after the Employment Period: (1) product and
manufacturing information, such as ingredients, combinations of ingredients and
manufacturing processes; (2) scientific and technical information, such as research
and development, tests and test results, formulae and formulations, studies and
analysis; (3) financial and cost information, such as operating and production
costs, costs of goods sold, costs of supplies and manufacturing materials,
non-public financial statements and reports, profit and loss information, margin
information and financial performance information; (4) customer related information,
such as customer related contracts, engagement and scope of work letters, proposals
and presentations, customer-related contacts, lists, identities and prospects,
practices, plans, histories, requirements and needs, price information and formulae
and information concerning client or customer products, services, businesses or
equipment specifications; (5) vendor and supplier related information, such as the
identities, practices, history or services of any vendors or suppliers and vendor or
supplier contacts; (6) sales, marketing and price information, such as marketing and
sales programs and related data, sales and marketing strategies and plans, sales and
marketing procedures and processes, pricing methods, practices and techniques and
pricing schedules and lists; (7) database, software and other computer related
information, such as computer programs, data, compilations of information and
records, software and computer files, presentation software and computer-stored or
backed-up information including, but not limited to, e-mails, databases, word
processed documents, spreadsheets, notes, schedules, task lists, images and video;
(8) employee-related information, such as lists or directories identifying
employees, representatives and contractors, and information regarding the
competencies (knowledge, skill, experience), compensation and needs of employees,
representatives and contractors and training methods; and (9) business- and
operation-related information, such as operating methods, procedures, techniques,
practices and processes, information about acquisitions, corporate or business
opportunities, information about partners and potential investors, strategies,
projections and related documents, contracts and licenses and business records,
files, equipment, notebooks, documents, memoranda, reports, notes, sample books,
correspondence, lists and other written and graphic business records.

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     (e) “Misappropriate”, or any form thereof, means:

     (i) the acquisition of any Confidential Information by a Person who knows or
has reason to know that the Confidential Information was acquired by theft, bribery,
misrepresentation, breach or inducement of a breach of a duty to maintain secrecy or
espionage through electronic or other means (each, an “Improper Means”); or

     (ii) the disclosure or use of any Confidential Information without the express
consent of the Company by a Person who (A) used Improper Means to acquire knowledge
of the Confidential Information (B) at the time of disclosure or use, knew or had
reason to know that his or her knowledge of the Confidential Information was (x)
derived from or through a Person who had utilized Improper Means to acquire it, (y)
acquired under circumstances giving rise to a duty to maintain its secrecy or limit
its use or (z) derived from or through a Person who owed a duty to the Company to
maintain its secrecy or limit its use or (C) before a material change of his or her
position, knew or had reason to know that it was Confidential Information and that
knowledge of it had been acquired by accident or mistake.

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

     (g) “Restricted Period” means the longer of (i) twelve (12) months after the
date of termination of employment (the Executive’s last day of work for the Company) or
(ii) the period during which the Executive is receiving payments from the Company pursuant
to Section 4 hereof.

     (h) “Work Product” means all patents and patent applications, all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings, reports,
creative works, discoveries, software, computer programs, modifications, enhancements,
know-how, formulations, concepts and ideas, and all similar or related information (in each
case whether or not patentable), all copyrights and copyrightable works, all trade secrets,
confidential information, and all other intellectual property and intellectual property
rights that are conceived, reduced to practice, developed or made by the Executive either
alone or with others in the course of employment with the Company (including employment
prior to the date of this Agreement).

     5.5 Remedies. Because the Executive’s services are unique and because the Executive
has access to Confidential Information, the Executive acknowledges and agrees that if the Executive
breaches any of the provisions of Section 5 hereof, the Company may suffer immediate and
irreparable harm for which monetary damages alone will not be a sufficient remedy. The restrictive
covenants stated in Section 5 hereof are without prejudice to the Company’s rights and causes of
action at law.

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     5.6 Interpretation; Severability.

     (a) The Executive has carefully considered the possible effects on the Executive of
the covenants not to compete, the confidentiality provisions and the other obligations
contained in this Agreement, and the Executive recognizes that the Company has made every
effort to limit the restrictions placed upon the Executive to those that are reasonable and
necessary to protect the Company’s legitimate business interests.

     (b) The Executive acknowledges and agrees that the restrictive covenants set forth in
this Agreement are reasonable and necessary in order to protect the Company’s valid
business interests. It is the intention of the parties hereto that the covenants,
provisions and agreements contained herein shall be enforceable to the fullest extent
allowed by law. If any covenant, provision or agreement contained herein is found by a
court having jurisdiction to be unreasonable in duration, scope or character of
restrictions, or otherwise to be unenforceable, such covenant, provision or agreement shall
not be rendered unenforceable thereby, but rather the duration, scope or character of
restrictions of such covenant, provision or agreement shall be deemed reduced or modified
with retroactive effect to render such covenant, provision or agreement reasonable or
otherwise enforceable (as the case may be), and such covenant, provision or agreement shall
be enforced as modified. If the court having jurisdiction will not review the covenant,
provision or agreement, the parties hereto shall mutually agree to a revision having an
effect as close as permitted by applicable law to the provision declared unenforceable.
The parties hereto agree that if a court having jurisdiction determines, despite the
express intent of the parties hereto, that any portion of the covenants, provisions or
agreements contained herein are not enforceable, the remaining covenants, provisions and
agreements herein shall be valid and enforceable. Moreover, to the extent that any
provision is declared unenforceable, the Company shall have any and all rights under
applicable statutes or common law to enforce its rights with respect to any and all
Confidential Information or unfair competition by the Executive.

6. Miscellaneous.

     6.1 Public Statements.

     (a) Media Nondisclosure. The Executive agrees that during the Employment
Period or at any time thereafter, except as may be authorized in writing by the Company,
the Executive will not directly or indirectly disclose or release to the Media any
information concerning or relating to any aspect of the Executive’s employment or
termination from employment with the Company and/or any aspect of any dispute that is the
subject of this Agreement. For the purposes of this Agreement, the term “Media”
includes, without limitation, any news organization, station, publication, show, website,
web log (blog), bulletin board, chat room and/or program (past, present and/or future),
whether published through the means of print, radio, television and/or the Internet or
otherwise, and any member, representative, agent and/or employee of the same.

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     (b) Non-Disparagement. The Executive agrees that during the Employment Period
or at any time thereafter, the Executive will not make any statements, comments or
communications in any form, oral, written or electronic to any Media or any customer,
client or supplier of the Company or any of its Affiliates, which would constitute libel,
slander or disparagement of the Company or any of its Affiliates, including, without
limitation, any such statements, comments or communications that criticize, ridicule or are
derogatory to the Company or any of its Affiliates; provided, however, that
the terms of this Section 6.1(b) shall not apply to communications between the Executive
and, as applicable, the Executive’s attorneys or other persons with whom communications
would be subject to a claim of privilege existing under common law, statute or rule of
procedure. The Executive further agrees that the Executive will not in any way solicit any
such statements, comments or communications from others.

     6.2 ARBITRATION. SUBJECT TO THE RIGHTS UNDER SECTION 6.3 HEREOF TO SEEK INJUNCTIVE OR
OTHER EQUITABLE RELIEF, BINDING ARBITRATION SHALL BE THE EXCLUSIVE REMEDY FOR ANY AND ALL DISPUTES,
CLAIMS OR CONTROVERSIES, WHETHER STATUTORY, CONTRACTUAL OR OTHERWISE, BETWEEN THE PARTIES HERETO
ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT BY OR TERMINATION FROM
THE COMPANY (INCLUDING, BUT NOT LIMITED TO, THE AMOUNT OF DAMAGES, OR THE CALCULATION OF ANY BONUS
OR OTHER AMOUNT OR BENEFIT DUE) (COLLECTIVELY, “DISPUTES”). THE PARTIES EACH WAIVE THE
RIGHT TO A JURY TRIAL AND WAIVE THE RIGHT TO ADJUDICATE THEIR DISPUTES UNDER THIS AGREEMENT OUTSIDE
THE ARBITRATION FORUM PROVIDED FOR IN THIS AGREEMENT, EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT.

     (a) Procedure Generally. The parties agree to submit the Dispute to a single
arbitrator selected from a panel of JAMS arbitrators. The arbitration will be governed by
the JAMS Comprehensive Arbitration Rules and Procedures in effect at the time the
arbitration is commenced, subject to the terms and modifications of this Agreement. If for
any reason JAMS cannot serve as the arbitration administrator or cannot fulfill the panel
requirements of the Arbitration Provision, the Company may select an alternative
arbitration administrator, such as AAA, to serve under the terms of this Agreement.

     (b) Arbitrator Selection. To select the arbitrator, the parties shall make
their respective strikes from a panel of former federal court judges and magistrates, to
the extent available from JAMS (the “First Panel”). If the parties cannot agree
upon an arbitrator from the First Panel or if such a panel is not available from JAMS, then
the parties will next make their respective strikes from a panel of former Illinois state
court trial and appellate judges, to the extent available from JAMS (the “Second
Panel”). Any arbitrators proposed for the First and Second Panels provided for in this
Section 6.2(b) must be available to serve in the Agreed Venue. If the parties cannot agree
upon an arbitrator from the Second Panel or if such a panel is not available from JAMS,
then the parties will next make their respective strikes from the panel of all other JAMS
arbitrators available to serve in the Agreed Venue.

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     (c) VENUE. THE PARTIES STIPULATE AND AGREE THAT THE EXCLUSIVE VENUE OF ANY
SUCH ARBITRATION PROCEEDING (AND OF ANY OTHER PROCEEDING, INCLUDING ANY COURT PROCEEDING,
UNDER THIS AGREEMENT) SHALL BE CHICAGO, ILLINOIS (THE “AGREED VENUE”).

     (d) Authority and Decision. The arbitrator shall have the authority to award
the same damages and other relief that a court could award. The arbitrator shall issue a
reasoned award explaining the decision and any damages awarded. The arbitrator’s decision
will be final and binding upon the parties and enforceable by a court of competent
jurisdiction. The parties will abide by and perform any award rendered by the arbitrator.
In rendering the award, the arbitrator shall state the reasons therefor, including (without
limitation) any computations of actual damages or offsets, if applicable.

     (e) Fees and Costs. In the event of arbitration under the terms of this
Agreement, the fees charged by JAMS or other arbitration administrator and the arbitrator
shall be borne by the parties equally. In addition, the parties shall each bear their own
costs, expenses and attorneys’ fees incurred in arbitration.

     (f) Limited Scope. The following are excluded from binding arbitration under
this Agreement: claims for workers’ compensation benefits or unemployment benefits;
replevin; and claims for which a binding arbitration agreement is invalid as a matter of
law.

     6.3 Injunctive Relief. The parties hereto may seek injunctive relief in arbitration;
provided, however, that as an exception to the arbitration agreement set forth in
Section 6.2 hereof, the parties, in addition to all other available remedies, shall each have the
right to initiate an action in any court of competent jurisdiction in order to request injunctive
or other equitable relief regarding the terms of Sections 5 or 6.2 hereof. The exclusive venue of
any such proceeding shall be in the Agreed Venue. The parties agree (a) to submit to the
jurisdiction of any competent court in the Agreed Venue, (b) to waive any and all defenses the
Executive may have on the grounds of lack of jurisdiction of such court and (c) that neither party
shall be required to post any bond, undertaking or other financial deposit or guarantee in seeking
or obtaining such equitable relief. Evidence adduced in any such proceeding for an injunction may
be used in arbitration as well. The existence of this right shall not preclude or otherwise limit
the applicability or exercise of any other rights and remedies that a party hereto may have at law
or in equity.

     6.4 Settlement of Existing Rights. In exchange for the other terms of this Agreement,
the Executive acknowledges and agrees that: (a) the Executive’s entry into this Agreement is a
condition of employment and/or continued employment with the Company, as applicable; (b) except as
otherwise provided herein, this Agreement will replace any existing employment agreement between
the parties and thereby act as a novation, if applicable; (c) the Executive is being provided with
access to Confidential Information, including, without limitation, proprietary trade secrets of one
or more Company Parties, to which the Executive has not previously had access; (d) all Company
inventions and intellectual property developed by the Executive during any past employment with the
Company and all goodwill developed with the Company’s clients,
customers and other business contacts by the Executive during any past employment with
Company, as applicable, is the exclusive property of the Company; and (e) all Confidential
Information and/or specialized training accessed, created, received or utilized by the Executive
during any past employment with Company, as applicable, will be subject to the restrictions on
Confidential Information described in this Agreement, whether previously so agreed or not.

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     6.5 Indemnification. The Executive shall be entitled from the Effective Date until
the end of the Employment Period in the capacity as an officer or director of the Company or any of
its subsidiaries to the benefit of the indemnification provisions contained in the By-Laws of the
Company or as a matter of law, whichever is greater. In addition, during the term of the
Executive’s employment and, where applicable under the terms of the relevant liability policy
thereafter, the Executive shall be covered under any directors’ and officers’ insurance policy
maintained by the Company.

     6.6 Post-Termination Assistance. During the Restricted Period, the Executive shall
cooperate, at the reasonable request of the Company (i) in the transition of any matter for which
the Executive had authority or responsibility during the Employment Period, or (ii) with respect to
any other matter involving the Company for which the Executive may be of assistance. The Executive
shall be entitled to reimbursement of any out-of-pocket expenses he incurs in providing such
assistance upon submission of documentation supporting such expenses.

     6.7 Entire Agreement; Waiver. This Agreement contains the entire agreement between
the Executive and the Company with respect to the subject matter hereof, and supersedes any and all
prior understandings or agreements, whether written or oral. No modification or addition hereto or
waiver or cancellation of any provision hereof shall be valid except by a writing signed by the
party to be charged therewith. No delay on the part of any party to this Agreement in exercising
any right or privilege provided hereunder or by law shall impair, prejudice or constitute a waiver
of such right or privilege.

     6.8 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois without regard to principles of conflict of laws.

     6.9 Successors and Assigns; Binding Agreement. The rights and obligations of the
parties under this Agreement shall be binding upon and inure to the benefit of the parties hereto
and their heirs, personal representatives, successors and permitted assigns. This Agreement is a
personal contract, and, except as specifically set forth herein, the rights and interests of the
Executive herein may not be sold, transferred, assigned, pledged or hypothecated by any party
without the prior written consent of the others. As used herein, the term “successor” as it
relates to the Company, shall include, but not be limited to, any successor by way of merger,
consolidation or sale of all or substantially all of such Person’s assets or equity interests.

     6.10 Representation by Counsel; Independent Judgment. Each of the parties hereto
acknowledges that (a) it or the Executive has read this Agreement in its entirety and understands
all of its terms and conditions, (b) it or the Executive has had the opportunity to consult with
any individuals of its or the Executive’s choice regarding its or the Executive’s agreement to the
provisions contained herein, including legal counsel of its or the Executive’s choice, and any
decision not to was the Executive’s or its alone and (c) it or the Executive is entering into this
Agreement of its or the Executive’s own free will, without coercion from any source, based
upon its or the Executive’s own independent judgment.

19

 

     6.11 Interpretation. The parties and their respective legal counsel actively
participated in the negotiation and drafting of this Agreement, and in the event of any ambiguity
or mistake herein, or any dispute among the parties with respect to the provisions hereto, no
provision of this Agreement shall be construed unfavorably against any of the parties on the ground
that the Executive, it, or the Executive’s or its counsel was the drafter thereof.

     6.12 Survival. The applicable provisions of Sections 4, 5 and 6 hereof shall survive
the termination of this Agreement.

     6.13 Notices. All notices and communications hereunder shall be in writing and shall
be deemed properly given and effective when received, if sent by facsimile or telecopy, or by
postage prepaid by registered or certified mail, return receipt requested, or by other delivery
service which provides evidence of delivery, as follows:

     If to the Company, to:

Claire’s Stores, Inc.

2400 W. Central Rd.

Hoffman Estates, IL 60192

Attention: General Counsel

     If to the Executive, to:

John A. Zimmermann

6229 Aberdeen Avenue

Dallas, TX 75230

     With a copy to:

Hal K. Gillespie

Gillespie, Rozen, Watsky & Jones, P.C.

3402 Oak Grove, Suite 200

Dallas, TX 75204

     or to such other address as one party may provide in writing to the other party from time to time.

     6.14 No Conflicts. The Executive represents and warrants to the Company that his
acceptance of employment and the performance of his duties for the Company will not conflict with
or result in a violation or breach of, or constitute a default under any contract, agreement or
understanding to which he is or was a party or of which he is aware and that there are no
restrictions, covenants, agreements or limitations on his right or ability to enter into and
perform the terms of this Agreement that have not or will not be waived prior to the Effective
Date.

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     6.15 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which together shall constitute one and the same
instrument. Facsimile transmission of any signed original document or retransmission of any
signed facsimile transmission will be deemed the same as delivery of an original. At the request
of any party, the parties will confirm facsimile transmission by signing a duplicate original
document.

     6.16 Captions. Paragraph headings are for convenience only and shall not be
considered a part of this Agreement.

     6.17 No Third Party Beneficiary Rights. Except as otherwise provided in this
Agreement, no entity shall have any right to enforce any provision of this Agreement, even if
indirectly benefited by it.

     6.18 Withholdings. Any payments provided for hereunder shall be paid net of any
applicable withholdings required under Federal, state or local law and any additional withholdings
to which Executive has agreed.

     IN WITNESS WHEREOF, the parties have duly executed this Agreement, intending it as a document
under seal, to be effective for all purposes as of the Effective Date.

	 	 	 	 	 
	 	CLAIRE’S BOUTIQUES, INC.

 	 
	 	By:  	/s/ Eugene S. Kahn
 	 
	 	 	Name:  	Eugene S. Kahn 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	/s/ John A. Zimmermann 	 
	 	Name:  	John A. Zimmermann 	 
	 	 	 
	 

21

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