Common use of Plan Implementation Clause in Contracts

Plan Implementation. New Money Investment On or prior to seven (7) days after the “first day” hearing, the Company, the Initial Consenting Creditors and the Sponsor shall execute the backstop commitment agreement on terms consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors (the “New Money Backstop Commitment Agreement”) pursuant to which the Initial Consenting Creditors and the Sponsor will backstop an investment in the Company, in the allocations set forth on Schedule I to the RSA, up to $575 million (the “New Money Investment”) comprised of (i) a $75 million new exit ABL revolver (the “New ABL Revolver”), (ii) $250 million of a new first lien exit term loan (the “New First Lien Term Loan”) and (iii) up to $250 million of preferred stock or equity interests of reorganized Claire’s (the “Preferred Equity Interests”). The Backstop Agreement shall further provide for the payment, on the Effective Date, of First Lien Fees and Expenses (as defined in the RSA) that are accrued but unpaid as of the Effective Date. As part of the solicitation of acceptances for the Plan, the Company shall commence a rights offering through which holders of First Lien Claims that are qualified institutional buyers and/or accredited investors (each, an “Eligible Holder”) will receive rights to participate, on a pro rata basis, in the New Money Investment less the Holdback Amount (defined below) (the “Rights Offering”). The Backstop Parties (defined below) will purchase any and all of the New Money Investment not subscribed in the Rights Offering. The amount of the New Money Investment each participant purchases through the Rights Offering and the Plan will be allocated as follows (as may be adjusted to account for the adjusted Preferred Investment Amount): (i) 13.0434782% to commitments under the New ABL Revolver; (ii) 43.4782609% to the purchase of notes issued under the New First Lien Term Loan; and (iii) 43.4782609% to the investment of the Preferred Investment Amount (defined below). Each holder of First Lien Claims that executes a joinder to the RSA on or prior to ten (10) business days after the Petition Date, and subsequently subscribes for their pro rata share of the Rights Offering (collectively, excluding the Backstop Parties, the “Supporting Parties”). Each Supporting Party shall receive its pro rata allocation of the following, where pro rata allocation is calculated by dividing the amount of such Supporting Party’s First Lien Claims by the total amount of First Lien Claims: (a) a premium equal to 3.5% of the maximum Preferred Investment Amount (defined below), or $8.75 million, (the “Preferred Commitment Premium”), which Preferred Commitment Premium shall be paid in additional Preferred Equity Interests issued to the Supporting Parties on the Effective Date; and (b) a premium equal to 1.5% of the total commitment amount of the New First Lien Term Loan, or $3.75 million (the “Term Commitment Premium” and together with the Preferred Commitment Premium, the “Commitment Premiums”), which Term Commitment Premium shall be paid in cash on the Effective Date. Proceeds of the New Money Investment, together with cash on hand, shall be used (i) to repay the DIP Facilities, the CLSIP Loan, the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Loan, the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Loan and the Gibraltar Intermediate Secured Term Loan due 2019, (ii) to fund the costs arising from the administration of the Debtors’ Chapter 11 Cases (including “emergence” costs), and (iii) for working capital requirements and general corporate purposes. New ABL Revolver Terms for the New ABL Revolver will be on terms consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors and shall provide that: • the New ABL Revolver shall be secured by a first lien on assets constituting ABL Priority Collateral (as defined in that certain [ABL] Intercreditor Agreement, dated as of September 20, 2016) and a second lien on all other assets with respect to the New First Lien Term Loan; and • the New ABL Revolver will (i) mature 4 years after the Effective Date, (ii) bear interest at L+350 bps with no floor, payable in cash quarterly, and (iii) include an undrawn commitment fee 0.75%.

Plan Implementation. New Money Investment On or prior to seven (7) days after the “first day” hearing, the Company, the Initial Consenting Creditors and the Sponsor shall execute the backstop commitment agreement on terms consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors (the “New Money Backstop Commitment Agreement”) pursuant to which the Initial Consenting Creditors and the Sponsor will backstop an investment in the Company, in the allocations set forth on Schedule I to the RSA, up to $575 million (the “New Money Investment”) comprised of (i) a $75 million new exit ABL revolver (the “New ABL Revolver”), (ii) $250 million of a new first lien exit term loan (the “New First Lien Term Loan”) and (iii) up to $250 million of preferred stock or equity interests of reorganized Claire’s (the “Preferred Equity Interests”). The Backstop Agreement shall further provide for the payment, on the Effective Date, of First Lien Fees and Expenses (as defined in the RSA) that are accrued but unpaid as of the Effective Date. As part of the solicitation of acceptances for the Plan, the Company shall commence a rights offering through which holders of First Lien Claims that are qualified institutional buyers and/or accredited investors (each, an “Eligible Holder”) will receive rights to participate, on a pro rata basis, in the New Money Investment less the Holdback Amount (defined below) (the “Rights Offering”). The Backstop Parties (defined below) will purchase any and all of the New Money Investment not subscribed in the Rights Offering. The amount of the New Money Investment each participant purchases through the Rights Offering and the Plan will be allocated as follows (as may be adjusted to account for the adjusted Preferred Investment Amount): (i) 13.0434782% to commitments under the New ABL Revolver; (ii) 43.4782609% to the purchase of notes issued under the New First Lien Term Loan; and (iii) 43.4782609% to the investment of the Preferred Investment Amount (defined below). Each holder of First Lien Claims that executes a joinder to the RSA on or prior to ten (10) business days after the Petition Date, and subsequently subscribes for their pro rata share of the Rights Offering (collectively, excluding the Backstop Parties, the “Supporting Parties”). Each Supporting Party shall receive its pro rata allocation of the following, where pro rata allocation is calculated by dividing the amount of such Supporting Party’s First Lien Claims by the total amount of First Lien Claims: : (a) a premium equal to 3.5% of the maximum Preferred Investment Amount (defined below), or $8.75 million, (the “Preferred Commitment Premium”), which Preferred Commitment Premium shall be paid in additional Preferred Equity Interests issued to the Supporting Parties on the Effective Date; and and (b) a premium equal to 1.5% of the total commitment amount of the New First Lien Term Loan, or $3.75 million (the “Term Commitment Premium” and together with the Preferred Commitment Premium, the “Commitment Premiums”), which Term Commitment Premium shall be paid in cash on the Effective Date. Proceeds of the New Money Investment, together with cash on hand, shall be used (i) to repay the DIP Facilities, the CLSIP Loan, the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Loan, the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Loan and the Gibraltar Intermediate Secured Term Loan due 2019, (ii) to fund the costs arising from the administration of the Debtors’ Chapter 11 Cases (including “emergence” costs), and (iii) for working capital requirements and general corporate purposes. New ABL Revolver Terms for the New ABL Revolver will be on terms consistent with this Term Sheet and otherwise reasonably acceptable to the Company and the Requisite Consenting Creditors and shall provide that: • the New ABL Revolver shall be secured by a first lien on assets constituting ABL Priority Collateral (as defined in that certain [ABL] Intercreditor Agreement, dated as of September 20, 2016) and a second lien on all other assets with respect to the New First Lien Term Loan; and • the New ABL Revolver will (i) mature 4 years after the Effective Date, (ii) bear interest at L+350 bps with no floor, payable in cash quarterly, and (iii) include an undrawn commitment fee 0.75%. New First Lien Term Loan Material terms for the New First Lien Term Loan include: The New First Lien Term Loan shall be secured by a first lien on all assets other than ABL Priority Collateral (including all foreign stock that may be pledged with no material tax consequences, and including at least 65% of the voting stock of top-tier foreign holding companies and 100% of the economic value of top tier foreign holding companies to the extent such value may be pledged without material adverse tax consequences) subject to customary exceptions and exclusions, and a second lien on assets constituting ABL Priority Collateral with respect to the New ABL Revolver. Additionally, the New First Lien Term Loan shall permit the company to incur up to $175 million of indebtedness senior in lien priority to the New First Lien Term Loan. The New First Lien Term Loan will (i) mature 20 years from the Effective Date and (ii) bear interest at L+725 bps with a 1.5% LIBOR floor per annum, payable in cash quarterly. The full principal amount of the New First Lien Term Loan will be due at maturity, and have no amortization.