EX-10.2 3 d548841dex102.htm EX-10.2 Execution Version BACKSTOP COMMITMENT AGREEMENT BY AND AMONG CLAIRE’S INC., CLAIRE’S STORES INC. AND THE BACKSTOP PARTIES HERETO Dated as of March 31, 2018
Exhibit 10.2
Execution Version
BY AND AMONG
CLAIRE’S INC.,
CLAIRE’S STORES INC.
AND
THE BACKSTOP PARTIES HERETO
Dated as of March 31, 2018
SECTION 1. | DEFINITIONS | 1 | ||||
SECTION 2. | NEW MONEY INVESTMENT | 9 | ||||
2.1 | Initial Subscription Amount; Rights Offering | 9 | ||||
2.2 | Backstop Commitment | 10 | ||||
2.3 | Closing Mechanics | 11 | ||||
2.4 | Premium Payments | 12 | ||||
2.5 | Rounding of Shares | 12 | ||||
2.6 | Taxes | 13 | ||||
2.7 | Replacement of Defaulted Backstop Commitments | 13 | ||||
2.8 | Parent Participation | 13 | ||||
SECTION 3. | REPRESENTATIONS AND WARRANTIES OF THE PARENT | 14 | ||||
3.1 | Organization and Qualification | 14 | ||||
3.2 | Corporate Power and Authority | 14 | ||||
3.3 | Execution and Delivery; Enforceability | 14 | ||||
3.4 | No Conflict | 15 | ||||
3.5 | Consents and Approvals | 15 | ||||
3.6 | Company SEC Documents | 15 | ||||
3.7 | Absence of Certain Changes | 16 | ||||
3.8 | No Violation; Compliance with Laws | 16 | ||||
3.9 | Legal Proceedings | 16 | ||||
3.10 | Labor Relations | 16 | ||||
3.11 | Intellectual Property | 16 | ||||
3.12 | Title to Real and Personal Property | 17 | ||||
3.13 | No Undisclosed Relationships | 17 | ||||
3.14 | Licenses and Permits | 17 | ||||
3.15 | Environmental | 18 | ||||
3.16 | Tax Returns | 18 | ||||
3.17 | Employee Benefit Plans | 19 | ||||
3.18 | Internal Control Over Financial Reporting | 20 | ||||
3.19 | Disclosure Controls and Procedures | 20 | ||||
3.20 | Material Contracts | 21 | ||||
3.21 | No Unlawful Payments | 21 | ||||
3.22 | Compliance with Money Laundering Laws | 21 | ||||
3.23 | Compliance with Sanctions Laws | 21 | ||||
3.24 | Investment Company Act | 21 | ||||
3.25 | Insurance | 22 | ||||
3.26 | Alternative Proposal | 22 | ||||
3.27 | Issuance; Valid Offering | 22 | ||||
3.28 | No Broker’s Fees | 22 | ||||
SECTION 4. | REPRESENTATIONS AND WARRANTIES OF THE BACKSTOP PARTIES | 22 | ||||
4.1 | Organization | 22 | ||||
4.2 | Organizational Power and Authority | 23 |
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4.3 | Execution and Delivery | 23 | ||||
4.4 | No Conflict | 23 | ||||
4.5 | Consents and Approvals | 23 | ||||
4.6 | Sophistication | 24 | ||||
4.7 | Securities Laws Compliance | 24 | ||||
4.8 | Purchase Intent | 24 | ||||
4.9 | Sufficiency of Funds | 25 | ||||
4.10 | Legend | 25 | ||||
SECTION 5. | ADDITIONAL COVENANTS | 25 | ||||
5.1 | Confirmation Order | 25 | ||||
5.2 | Commercially Reasonable Efforts | 25 | ||||
5.3 | Use of Proceeds | 26 | ||||
5.4 | First Lien Fees and Expenses | 26 | ||||
5.5 | Notification | 26 | ||||
5.6 | Conduct of the Business of Company | 26 | ||||
5.7 | New Money Investment Documents | 27 | ||||
5.8 | Access to Information | 27 | ||||
5.9 | Regulatory Approval | 27 | ||||
SECTION 6. | CONDITIONS TO THE BACKSTOP PARTIES’ OBLIGATIONS | 28 | ||||
6.1 | Representations and Warranties; Covenants | 28 | ||||
6.2 | Confirmation Order | 29 | ||||
6.3 | Conditions to Confirmation and Effectiveness | 29 | ||||
6.4 | Antitrust Approval | 29 | ||||
6.5 | Proceedings | 29 | ||||
6.6 | Material Adverse Change | 29 | ||||
SECTION 7. | CONDITIONS TO THE PARENT’S AND STORES’ OBLIGATIONS | 29 | ||||
7.1 | Representations and Warranties | 29 | ||||
7.2 | Confirmation Order | 30 | ||||
7.3 | Conditions to Effective Date | 30 | ||||
7.4 | Initial Subscription Amount; Backstop Commitment | 30 | ||||
7.5 | Antitrust Approval | 30 | ||||
7.6 | Rights Offering | 30 | ||||
7.7 | Proceedings | 30 | ||||
SECTION 8. | TERMINATION | 30 | ||||
8.1 | Termination by the Requisite Backstop Parties | 30 | ||||
8.2 | Termination by the Parent | 31 | ||||
8.3 | Mutual Termination; Automatic Termination | 31 | ||||
8.4 | Effect of Termination | 32 | ||||
8.5 | Breakup Fee | 32 | ||||
SECTION 9. | INDEMNIFICATION; EXCULPATION | 32 | ||||
9.1 | Indemnification | 32 |
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SECTION 10. | MISCELLANEOUS | 33 | ||||
10.1 | Arm’s Length Transaction | 33 | ||||
10.2 | Entire Agreement | 33 | ||||
10.3 | Amendment or Waiver | 33 | ||||
10.4 | Payments | 34 | ||||
10.5 | Survival | 34 | ||||
10.6 | Notices | 34 | ||||
10.7 | Headings | 35 | ||||
10.8 | Assignment; Severability | 35 | ||||
10.9 | No Third Party Beneficiaries | 35 | ||||
10.10 | Jury Trial, Governing Law and Dispute Resolution | 35 | ||||
10.11 | Currency | 36 | ||||
10.12 | Counterparts | 36 | ||||
10.13 | Specific Performance | 36 | ||||
10.14 | Representation by Counsel | 36 | ||||
10.15 | Settlement Discussions | 36 | ||||
10.16 | Other Interpretive Matters | 37 | ||||
10.17 | No Recourse | 37 | ||||
10.18 | Effectiveness | 37 | ||||
10.19 | Tax Forms | 38 |
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BACKSTOP COMMITMENT AGREEMENT (this “Agreement”), dated as of March 31, 2018 (the “Execution Date”), is by and among Claire’s Inc. (the “Parent”), Claire’s Stores, Inc. (“Stores”) and the parties identified on Schedule I hereto (each such party on Schedule I, as amended, modified, updated or supplemented pursuant to the terms hereof, a “Backstop Party” and, collectively, the “Backstop Parties”). Each of the Parent, Stores and the Backstop Parties is referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms not otherwise defined herein shall have the meaning set forth in the RSA (as defined below).
SECTION 1. DEFINITIONS. As used in this Agreement, the following terms shall have the following meanings:
“2019 1L Notes Indenture” means that certain Senior Secured First Lien Notes Indenture, dated as of February 28, 2012, between the Parent (the permitted successor to Claire’s Escrow II Corporation), as issuer, the guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A. (“Bank of New York”), as trustee and collateral agent, as amended, modified, or supplemented from time to time.
“2020 1L Notes Indenture” means that certain Senior Secured First Lien Notes Indenture, dated as of March 12, 2013, between the Company, as issuer, the guarantors party thereto, and Bank of New York, as trustee and collateral agent, as amended, modified, or supplemented from time to time.
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“ABL Percentage” means the quotient, expressed as a percentage, equal to: (a) the New ABL Revolver Amount, divided by (b) the sum of the New First Lien Term Loan Amount, plus the New ABL Revolver Amount, plus the New Preferred Equity Interest Investment Amount.
“Agreement” has the meaning assigned to it in the preamble hereto.
“Antitrust Authorities” means the United States Federal Trade Commission, the Antitrust Division of the United States Department of Justice, the attorneys general of the several states of the United States and any other Governmental Entity, whether domestic or foreign, having jurisdiction pursuant to the Antitrust Laws, and “Antitrust Authority” means any of them.
“Antitrust Laws” means the Xxxxxxx Act, the Xxxxxxx Act, the HSR Act, the Federal Trade Commission Act, and any other law, whether domestic or foreign, governing agreements in restraint of trade, monopolization, pre-merger notification, the lessening of competition through merger or acquisition or anti-competitive conduct, and any foreign investment laws.
“Applicable Consent” has the meaning assigned to it in Section 3.5.
“Backstop Amount” has the meaning assigned to it in Section 2.2(a).
“Backstop Commitment” has the meaning assigned to it in Section 2.2(b).
“Backstop Commitment Percentage” means, with respect to each Backstop Party, the percentage obtained by dividing the amount set forth opposite the name of such Backstop Party on Schedule I hereto by the sum of all such amounts for each Backstop Party set forth on such Schedule I, as such Schedule I may be amended, modified, updated or supplemented from time to time pursuant to Section 2.7 or Section 10.3 hereof.
“Backstop Notice” has the meaning assigned to it in Section 2.2(a).
“Backstop Parties” has the meaning assigned to it in the preamble hereto.
“Backstop Party Default” has the meaning assigned to it in Section 2.7.
“Backstop Party Professionals” means the First Lien Professionals, which shall include, (a) with the prior written consent of the Parent (such consent not to be unreasonably withheld or delayed), a restructuring consultant; and (b) any other professional advisors as may be retained from time to time by one or more of the Backstop Parties with the written consent of the Parent and the Requisite Backstop Parties.
“Backstop Put Premium” means, collectively, the New Preferred Equity Interests Backstop Put Premium and the New First Lien Term Loan Backstop Put Premium.
“Backstop Replacement Party” has the meaning assigned to it in Section 2.7.
“Backstop Replacement Period” has the meaning assigned to it in Section 2.7.
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“Breakup Fee” has the meaning assigned to it in Section 8.5.
“Closing” has the meaning assigned to it in Section 2.3(a).
“Commitment Outside Date” means September 14, 2018 or any date thereafter by agreement between the Requisite Backstop Parties and the Parent.
“Company” means the Parent and its Subsidiaries.
“Company Disclosure Schedules” means the disclosure schedules delivered by the Parent to the Backstop Parties prior to the Execution Date.
“Company Plan” means any employee pension benefit plan, as such term is defined in Section 3(2) of ERISA (other than a Multiemployer Plan), subject to the provisions of Title IV of ERISA or Section 412 or 430 of the Code or Section 302 of ERISA, and (i) sponsored or maintained (at the time of determination or at any time within the six years prior thereto) by any of the Debtors or any ERISA Affiliate, or with respect to which any such entity has any actual or contingent liability or obligation or (ii) in respect of which any of the Debtors or any ERISA Affiliate is (or, if such plan were terminated, could under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Company SEC Documents” means all of the reports, schedules, forms, statements and other documents (including exhibits and other information incorporated therein) filed with the SEC by Stores since January 28, 2017.
“Defaulting Backstop Party” has the meaning assigned to it in Section 2.7.
“Election Deadline” means the time and date of expiration of the period during which Eligible Parties can elect to participate in the Rights Offering as set forth in the New Money Investment Procedures, which date shall be set forth in the Disclosure Statement Order or such later date as the Debtors may specify with the consent of the Requisite Backstop Parties.
“Eligible Party” means each holder of First Lien Claims who gives certain Securities Act representations as set forth in the New Money Investment Procedures and is: (i) an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act; or (ii) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act that is also an “accredited investor” within the meaning of the Rule 501 of Regulation D under the Securities Act.
“Equity Percentage” means the quotient, expressed as a percentage, equal to: (a) the New Preferred Equity Interest Investment Amount, divided by (b) the sum of the New First Lien Term Loan Amount, plus the New ABL Revolver Amount, plus the New Preferred Equity Interest Investment Amount.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Company, is, or at any relevant time during the past six years was, treated as a single employer under any provision of Section 414 of the Code.
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“ERISA Event” means (a) any Reportable Event or the requirements of Section 4043(b) of ERISA apply with respect to a Company Plan; (b) any failure by any Company Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Company Plan, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Company Plan, the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Company Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the incurrence by any of the Debtors or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Company Plan, including the imposition of any lien in favor of the PBGC or any Company Plan or Multiemployer Plan; (e) a determination that any Company Plan is, or is expected to be, in “at-risk” status (within the meaning of Section 303 of ERISA or Section 430 of the Code); (f) the receipt by any of the Debtors or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Company Plan or to appoint a trustee to administer any Company Plan under Section 4042 of ERISA; (g) the incurrence by any of the Debtors or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Company Plan or Multiemployer Plan; (h) the receipt by any of the Debtors or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any of the Debtors or any ERISA Affiliate of any notice, concerning the impending imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, “insolvent” (within the meaning of Section 4245 of ERISA), or in “endangered” or “critical status” (within the meaning of Section 305 of ERISA or Section 432 of the Code); (i) the conditions for imposition of a Lien under Section 303(k) of ERISA or Section 430(k) of the Code shall have been met with respect to any Company Plan; (j) the adoption of an amendment to a Company Plan requiring the provision of security to such Company Plan pursuant to Section 307 of ERISA; (k) the assertion of a material claim (other than routine claims for benefits) against any Company Plan or the assets thereof, or against any of the Debtors or any of the ERISA Affiliates in connection with any Company Plan; or (l) receipt from the IRS of notice of the failure of any Company Plan (or any other employee benefit plan intended to be qualified under Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Company Plan to qualify for exemption from taxation under Section 501(a) of the Code.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Execution Date” has the meaning assigned to it in the preamble hereto.
“Filing Party” has the meaning assigned to it in Section 5.9(b).
“Governmental Entity” means any federal, national, supranational, foreign, state, provincial, local, county, municipal or other government, any governmental, regulatory or administrative authority, agency, department, bureau, board, commission or official or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority, or any court, tribunal, judicial or arbitral body.
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“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended from time to time.
“Indemnified Parties” means the Backstop Parties and each of their affiliates and each of their and their affiliates’ respective directors, managers, officers, principals, partners, members, equity holders (regardless of whether such interests are held directly or indirectly), trustees, controlling Persons, successors and assigns, agents, advisors, attorneys and representatives.
“Initial Backstop Parties” means each of the Backstop Parties party hereto and listed on Schedule I, in each case, as of the Execution Date.
“Initial Subscription Amount” has the meaning set forth in Section 2.1(a).
“Intellectual Property Rights” has the meaning assigned to it in Section 3.11.
“Investment Company Act” has the meaning assigned to it in Section 3.24.
“Investment Right” has the meaning assigned to it in Section 2.1(b).
“Joint Filing Party” has the meaning assigned to it in Section 5.9(c).
“Knowledge of the Company” shall mean the actual knowledge of Xxx Xxxxxxxx, Xxxxx X. Xxxxxxx and Xxxxxxx Xxxxxxx.
“Material Contracts” means all “plans of acquisition, reorganization, arrangement, liquidation or succession” and “material contracts” (which shall be determined by considering Parent and its Subsidiaries, taken as a whole) (as such terms are defined in Items 601(b)(2) and 601(b)(10) of Regulation S-K under the Exchange Act) to which any of the Debtors is a party.
“Money Laundering Laws” has the meaning assigned to it in Section 3.22.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which any of the Debtors or any ERISA Affiliate is making or accruing an obligation to make contributions, has within any of the preceding six plan years made or accrued an obligation to make contributions.
“New ABL Revolver” means a revolving credit facility in an aggregate principal amount of the New ABL Revolver Amount, which facility shall be funded by the proceeds from the New Money Investment. The principal terms of the New ABL Revolver shall be as set forth in the RSA, and shall be in form and substance reasonably acceptable to the Requisite Backstop Parties.
“New ABL Revolver Agreement” means that certain loan agreement evidencing the New ABL Revolver.
“New ABL Revolver Amount” means $75,000,000.00.
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“New First Lien Term Loan” means a first lien credit facility in an aggregate principal amount of the New First Lien Term Loan Amount, which facility shall be funded by the proceeds of the New Money Investment. The principal terms of the New First Lien Term Loan shall be consistent with those set forth in the RSA, or otherwise in form and substance reasonably acceptable to the Requisite Backstop Parties.
“New First Lien Term Loan Agreement” means that certain loan agreement evidencing the New First Lien Term Loan.
“New First Lien Term Loan Amount” means $250,000,000.00.
“New First Lien Term Loan Backstop Put Premium” means an aggregate premium of $8,750,000, which represents 3.5% of the amount of the New First Lien Term Loan Amount.
“New First Lien Term Loan Commitment Premium” means an aggregate premium of $3,750,000, which represents 1.5% of the amount of the New First Lien Term Loan Amount.
“New Money Investment” means, collectively, the investment by the Backstop Parties, the Supporting Parties and/or such other Eligible Parties in the Rights Offering for the New Preferred Equity Interests, the New First Lien Term Loan and the New ABL Revolver.
“New Money Investment Amount” means the aggregate dollar amount equal to the New Preferred Equity Interests Investment Amount, plus the New First Lien Term Loan Amount, plus the New ABL Revolver Amount.
“New Money Investment Documents” means, collectively, all related agreements, documents, or instruments in connection with the New Money Investment, the Rights Offering, and this Agreement, which shall be (i) in form and substance materially consistent with this Agreement and the Plan and otherwise (ii) in form and substance reasonably acceptable to the Requisite Backstop Parties and the Parent.
“New Money Investment Procedures” means the procedures for consummating the New Money Investment, including the Rights Offering, including the exhibits and annexes thereto and all amendments, supplements changes, and modifications thereto, which procedures may be included in the Plan and shall be filed with the Bankruptcy Court no later than April 9, 2018 and shall be in form and substance reasonably acceptable to the Requisite Backstop Parties and the Debtors.
“New Preferred Equity Interests Backstop Put Premium” means an aggregate commitment premium of $17,500,000, which represents 7.0% of the maximum New Preferred Equity Interests Investment Amount.
“New Preferred Equity Interests Commitment Premium” means an aggregate commitment premium of $8,750,000, which represents 3.5% of the maximum New Preferred Equity Interests Investment Amount.
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“New Preferred Equity Interests” means 400,000 shares of Preferred Equity Interests to be issued by Reorganized Claire’s on the Effective Date in connection with the implementation of, and as authorized by, the Plan, plus such additional shares of Preferred Equity Interests to be issued pursuant to this Agreement for payment of Premiums as contemplated by Section 2.4.
“New Preferred Equity Interests Investment Amount” means an amount equal to the Preferred Investment Amount.
“Parent” has the meaning assigned to it in the preamble.
“Petition Date” has the meaning assigned to it in the Recitals hereto.
“Preferred Equity Interests” means the preferred equity interests of Reorganized Claire’s, the stated value per share of which shall be the Preferred Equity Interests Stated Value.
“Preferred Equity Interests Stated Value” means $1,000.00 per share.
“Premium” and “Premiums” each have the meaning set forth in Section 2.4(c).
“Pro Rata Allocation” means, with respect to each holder of First Lien Claims, the fraction equal to (a) the amount of such holder’s allowed First Lien Claims as of the Voting Record Date divided by (b) the total amount of allowed First Lien Claims.
“Qualified Affiliate” means, with respect to any Backstop Party, any investment fund, account or other investment vehicle that is controlled, managed, advised or sub-advised by such Backstop Party or if such Backstop Party is an investment fund, account or other investment vehicle, the Person that controls, manages, advises or sub-advises such Backstop Party.
“Remaining Backstop Parties” has the meaning assigned to it in Section 2.7.
“Reorganized Claire’s” means reorganized Claire’s Inc. or any successors thereto by merger, consolidation, conversion or otherwise, on or after the Effective Date, including any new entity formed pursuant to the restructuring transactions contemplated by the Plan to directly or indirectly acquire all or substantially all of the assets or equity of the Company.
“Reportable Event” means any reportable event as defined in Section 4043(c) of ERISA or the regulations issued thereunder, other than those events as to which the 30 day notice period referred to in Section 4043(c) of ERISA has been waived, with respect to a Company Plan.
“Requisite Backstop Parties” means the Requisite Consenting Creditors (excluding, for purposes of determining thereof, any Initial Consenting Creditor that is a Defaulting Backstop Party).
“Rights Offering” has the meaning set forth in Section 2.1(b).
“Rights Offering Amount” has the meaning set forth in Section 2.1(b).
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“Rights Offering Price” means, in respect of each share of New Preferred Equity Interests, $625.00 per share.
“Rights Offering Procedures” has the meaning assigned to it in Section 2.1(b).
“RSA” has the meaning assigned to it in the Recitals hereto.
“SEC” means the U.S. Securities and Exchange Commission.
“Secured Term Loan” means that certain Term Loan Credit Agreement, dated as of September 20, 2016, by and among the Parent, as borrower, the guarantors party thereto, the lenders party thereto and Wilmington Trust, National Association, as administrative agent and collateral agent, as amended, supplemented or otherwise modified from time to time.
“Securities Act” means the Securities Act of 1933, as amended.
“Shortfall Notice” has the meaning assigned to it in Section 2.7.
“Stores” has the meaning assigned to it in the Preamble.
“Subscription Agent” means the entity, reasonably acceptable to the Requisite Backstop Parties (such consent to be promptly and timely given and not unreasonably withheld), engaged by the Company to administer the New Money Investment and the Rights Offering in accordance with the New Money Investment Procedures.
“Subscription Deadline” means the date by which the Eligible Parties must elect to participate in the Rights Offering pursuant to the Rights Offering Procedures.
“Subsidiaries” means the direct and indirect wholly-owned subsidiaries of Parent.
“Supporting Party” means each holder of First Lien Claims (other than the Backstop Parties) that executes a joinder to the RSA in the form attached to the RSA and delivers such executed joinder to the Parent and the Backstop Party Professionals on or prior to ten (10) Business Days following the Petition Date.
“Supporting Party Pro Rata Share” means, with respect to each Supporting Party, the fraction equal to (a) the amount of such holder’s First Lien Claims as of April 2, 2018 divided by (b) the total amount of First Lien Claims.
“Tax Forms” has the meaning assigned to it in Section 10.19.
“Term Percentage” means the quotient, expressed as a percentage, equal to: (a) the New First Lien Term Loan Amount, divided by (b) the sum of the New First Lien Term Loan Amount, plus the New ABL Revolver Amount, plus the New Preferred Equity Interest Investment Amount.
“Unfunded Backstop Commitment” has the meaning assigned in Section 2.7.
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“Unsubscribed Amount” means the amount of the Rights Offering Amount not elected to be duly purchased by the Eligible Parties on or prior to the Election Deadline in accordance with the New Money Investment Procedures.
“Voting Record Date” means the date established as the voting record date in the Disclosure Statement Order.
SECTION 2. NEW MONEY INVESTMENT.
2.1 Initial Subscription Amount; Rights Offering.
(a) Subject to the terms and conditions hereof, each Backstop Party hereby irrevocably subscribes for and purchases (on a several and not a joint basis), on the Effective Date, its Backstop Commitment Percentage of fifty percent (50.00%) of the New Money Investment Amount (such Backstop Party’s “Initial Subscription Amount”). With respect to each Backstop Party, (x) the Term Percentage of the aggregate amount for which such Backstop Party subscribed pursuant to this Section 2.1(a) shall be allocated to the loans to be provided under the New First Lien Term Loan Agreement, (y) the ABL Percentage of the aggregate amount for which such Backstop Party subscribed pursuant to this Section 2.1(a) shall be allocated to commitments under the New ABL Revolver, and (z) the Equity Percentage of the aggregate amount for which such Backstop Party subscribed pursuant to this Section 2.1(a) shall be allocated to the purchase of shares of New Preferred Equity Interests at a price per share equal to the Rights Offering Price. The rights and obligations in respect of the Initial Subscription Amount (the “Initial Subscription Right”) may not be sold, transferred, or assigned, provided that each Backstop Party may assign its Initial Subscription Right (or portion thereof) to a Qualified Affiliate of such Backstop Party which executes a joinder to this Agreement pursuant to which such Qualified Affiliate shall agree in writing to be bound by the representations, warranties, covenants and obligations of such transferring Backstop Party under this Agreement and the RSA, and shall make the representations set forth in Section 4 hereof as of the date of such transfer as if it was a Backstop Party. In such event, the transferring Backstop Party shall remain fully obligated for its Initial Subscription Right (including any portion thereof transferred). Not less than three (3) Business Days prior to the Effective Date, such Backstop Party (or its permitted transferee) shall deliver by wire transfer in immediately available funds its Initial Subscription Amount to a segregated account designated by the Parent in the Rights Offering Procedures (as defined below).
(b) Pursuant to the Plan and the procedures governing the Rights Offering (the “Rights Offering Procedures”) and such other terms and conditions set forth in the New Money Investment Documents and consistent with this Agreement, the Parent or its applicable Subsidiary or the Subscription Agent on behalf of the Parent or such applicable Subsidiary, shall conduct a rights offering for the purpose of funding or committing to fund, as applicable, fifty percent (50.00%) of the New Money Investment Amount (the “Rights Offering Amount”, and such rights offering, the “Rights Offering”). On the date on which the Parent or its applicable Subsidiary is required to commence solicitation pursuant to the Disclosure Statement Order, the Parent or such applicable Subsidiary or the
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Subscription Agent on behalf of the Parent or such applicable Subsidiary, shall send to each holder of First Lien Claims, a notice and subscription form. Each Eligible Party shall have the right in the Rights Offering to subscribe for (on a several and not a joint basis) up to its Pro Rata Allocation of the Rights Offering Amount (the “Investment Right”). With respect to each Eligible Party that exercises its Investment Right, (x) the Term Percentage of the aggregate amount for which such Eligible Party subscribed pursuant to the Investment Right shall be allocated to the purchase of loans to be provided under the New First Lien Term Loan, (y) the ABL Percentage of the aggregate amount for which such Eligible Party subscribed pursuant to the Investment Right shall be allocated to commitments under the New ABL Revolver, and (z) the Equity Percentage of the aggregate amount for which such Eligible Party subscribed pursuant to the Investment Right shall be allocated to the purchase of shares of New Preferred Equity Interests at price per share equal to the Rights Offering Price. The Investment Right may not be sold, transferred, or assigned; provided that each Backstop Party may assign its Investment Right (or portion thereof) to a Qualified Affiliate of such Backstop Party which executes a joinder to this Agreement pursuant to which such Qualified Affiliate shall agree in writing to be bound by the representations, warranties, covenants and obligations of such transferring Backstop Party under this Agreement and the RSA, and shall make the representations set forth in Section 4 hereof as of the date of such transfer as if it was a Backstop Party. In such event, the transferring Backstop Party shall remain fully obligated for that amount of the Investment Right for which it or the transferee has properly exercised.
(c) To exercise its Investment Right, each Eligible Party shall, prior to the date and time the Rights Offering expires, as set forth in the Rights Offering Procedures, (i) complete and submit the duly executed New Money Investment Documents in accordance with the New Money Investment Procedures (including such subscription form referenced above and any other documents required by the Rights Offering Procedures) and (ii) deliver by wire transfer in immediately available funds such Eligible Party’s Rights Offering Amount for which it has properly subscribed allocated to New First Lien Term Loans and the purchase of shares of New Preferred Equity Interests to a segregated account designated by the Parent or Subscription Agent in the Rights Offering Procedures. The closing of the Rights Offering will occur on the Effective Date contemporaneously with substantial consummation of the Plan.
(a) The Parent agrees to give, or instruct the Subscription Agent to give, each Backstop Party, no later than seven (7) Business Days prior to the Effective Date, a (i) written notice (the “Backstop Notice”) by overnight mail, e-mail or by electronic facsimile transmission, setting forth (A) the aggregate amount of the Rights Offering Amount for which Eligible Parties have subscribed in the Rights Offering, (B) the Unsubscribed Amount, and (C) the amount equal to such Backstop Party’s Backstop Commitment Percentage multiplied by the Unsubscribed Amount (such Backstop Party’s “Backstop Amount”) which calculations shall be made in consultation with the Backstop Party Professionals; provided that the Backstop Parties may seek an upward or downward adjustment of the Backstop Amounts if such calculations are inaccurate and (ii) a
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subscription form to be completed by each Backstop Party to facilitate such Backstop Party’s subscriptions pursuant the rights set forth in this Section 2. The Parent or its applicable Subsidiary shall promptly provide, and/or shall instruct the Subscription Agent to provide, such written backup and documentation prepared by the Parent, the Subsidiaries and/or the Subscription Agent, as applicable, in connection with such calculations as any Backstop Party may reasonably request.
(b) Subject to and in accordance with the terms and conditions set forth herein, each Backstop Party hereby commits, on behalf of itself and no other Backstop Party, to subscribe for its Pro Rata Allocation in the Rights Offering and to purchase its Backstop Amount (the “Backstop Commitment”). The Backstop Commitment may not be sold, transferred, or assigned, provided that each Backstop Party, not later than the date that is four (4) Business Days prior to the Effective Date, may assign its Backstop Commitment (or portion thereof) to (i) a Qualified Affiliate of such Backstop Party which executes a joinder to this Agreement pursuant to which such Qualified Affiliate shall agree in writing to be bound by the representations, warranties, covenants and obligations of such transferring Backstop Party under this Agreement and the RSA, shall make the representations set forth in Section 4 hereof as of the date of such transfer as if it was a Backstop Party or (ii) another Backstop Party upon written notice to the Parent setting forth the amount of the Backstop Commitment to be transferred and the name of the transferee Backstop Party. In each case, the transferring Backstop Party shall remain fully obligated for its Backstop Commitment. Not less than three (3) Business Days prior to the Effective Date, such Backstop Party (or its permitted transferee) shall deliver by wire transfer in immediately available funds its Backstop Commitment allocated to New First Lien Term Loan and the purchase of shares of New Preferred Equity Interests to a segregated account designated by the Parent in the Rights Offering Procedures.
(a) The closing of the New Money Investment (the “Closing”) is conditioned upon consummation of the Plan. The Closing will occur on the Effective Date contemporaneously with the substantial consummation of the Plan and subject to the other terms and conditions set forth in this Agreement. No later than the date that is three (3) Business days prior to Effective Date, each Backstop Party shall complete and submit the New Money Investment Documents in accordance with the New Money Investment Procedures, and any other documentation deemed necessary or advisable by the Company if so reasonably required, in exchange for delivery by the Parent and/or the applicable Subsidiary, to each Backstop Party, of such certificate, documents or instruments described in Section 2.3(b) below.
(b) Subject to and in accordance with the terms and conditions set forth herein, Parent and the applicable Subsidiaries shall (i) deliver to each Backstop Party such certificates, documents or instruments required to be delivered by the Parent in connection with the consummation of the funding of the New First Lien Term Loan and the New ABL Revolver by the New First Lien Term Loan Agreement or the New ABL Revolver Agreement, as applicable, (ii) to the extent certificated, deliver to each Backstop Party certificates representing the New Preferred Equity Interests and (iii) pay the Premiums as set forth in Section 2.4.
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(a) As consideration of each Backstop Party’s commitment to purchase its Backstop Amount, whether or not called upon, Parent or the applicable Subsidiary, shall pay, or cause to be paid to each Backstop Party, (i) such Backstop Party’s Backstop Commitment Percentage of (A) the New First Lien Term Loan Commitment Premium and (B) the New First Lien Term Loan Backstop Put Premium, in each case, in cash and (ii) such Backstop Party’s Backstop Commitment Percentage of (A) the New Preferred Equity Interests Commitment Premium and (B) the New Preferred Equity Interests Backstop Put Premium, in each case, by issuing a number of shares of New Preferred Equity Interests to such Backstop Party equal to such Backstop Party’s Backstop Commitment Percentage of the New Preferred Equity Interests Commitment Premium and New Preferred Equity Interests Backstop Put Premium divided by the Preferred Equity Interests Stated Value.
(b) In connection with the New Money Investment and Rights Offering, subject to the Company’s payment under Section 2.4(a), each Backstop Party shall pay, or at the request of the Requisite Backstop Parties, the Parent shall pay, or cause to be paid on behalf of such Backstop Party (and to the extent so paid by Parent, the amount otherwise payable to such Backstop Party under Section 2.4(a) shall be correspondingly reduced) on the Effective Date, to each Supporting Party that is not a Backstop Party, such Backstop Party’s Backstop Commitment Percentage of (i) such Supporting Party’s Pro Rata Share of the New First Lien Term Loan Commitment Premium, in cash and (ii) such Supporting Party’s Pro Rata Share of the New Preferred Equity Interests Commitment Premium, by delivery to such Supporting Party of a number of shares of New Preferred Equity Interests equal to such Backstop Party’s Backstop Commitment Percentage of such Supporting Party’s Pro Rata Share of the New Preferred Equity Interests Commitment Premium divided by the Preferred Equity Interests Stated Value.
(c) Each of the New First Lien Term Loan Backstop Put Premium, New First Lien Term Loan Commitment Premium, New Preferred Equity Interests Backstop Put Premium and New Preferred Equity Interests Commitment Premium, payable pursuant to this Section 2.4 (each such premium, a “Premium” and collectively, the “Premiums”), with respect to each Backstop Party and Supporting Party, shall be fully vested upon the Execution Date, nonrefundable and non-avoidable upon entry of the Confirmation Order and shall be payable upon the Effective Date, provided that no portion of any such Premium shall be payable to a Defaulting Backstop Party in the event of a Backstop Party Default. The Premiums shall, subject to entry of the Confirmation Order, constitute allowed administrative expenses of the Debtors’ estates under Sections 503(b) and 507 of the Bankruptcy Code with the priority provided by Section 503(b)(1) of the Bankruptcy Code.
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solicitation and sale of securities in the Rights Offering and New Money Investment to be exempt from registration pursuant to Regulation D of the Securities Act. In the event of any such transfer or rights offering, Parent, in its capacity as a Backstop Party, shall have no further obligations with respect to such transferred Initial Subscription Right, Investment Right and Backstop Commitment from and after the date of such transfer or the expiration of such rights offering.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PARENT.
Except as set forth in the Company Disclosure Schedules and any Company SEC Documents, Parent represents and warrants, on behalf of itself and each of the Subsidiaries, jointly and severally, to each Backstop Party, the following:
3.2 Corporate Power and Authority.
(a) Subject to entry of the Confirmation Order providing for assumption of this Agreement by the Parent, each of the Parent and Stores has the requisite corporate power and authority to consummate the transactions contemplated herein. Subject to the entry of the Confirmation Order and consummation of the Plan, as applicable, the execution and delivery of this Agreement and the Definitive Documentation, the consummation of the transactions contemplated hereby and thereby have been or will be duly authorized by all requisite corporate action on behalf of the Parent, and no other corporate proceedings on the part of the Parent or Stores are or will be necessary to authorize this Agreement or to consummate the transactions contemplated hereby.
(b) Notwithstanding the foregoing, the Parent makes no express or implied representations or warranties, on behalf of itself or the other Subsidiaries, with respect to actions (including in the foregoing) to be undertaken by Reorganized Claire’s, which such actions shall be governed by the Plan.
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under the Definitive Documentation will constitute the valid and legally binding obligations of the Parent and each of the Subsidiaries, in each case, to the extent party thereto, enforceable against the Parent and each of the Subsidiaries, in each case, to the extent party thereto, in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to creditor’s rights generally and subject to general principles of equity.
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(collectively, “Intellectual Property Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person, (b) to the Knowledge of the Company, the operation of the business of the Company as is currently conducted, is not infringing upon, misappropriating or otherwise violating any valid Intellectual Property Rights of any Person, and (c) no written claim or litigation regarding any of the foregoing is pending as of the Execution Date or, to the Knowledge of the Company, threatened in writing.
3.12 Title to Real and Personal Property.
(a) Leased Real Property. The Company is in compliance with all obligations under all leases to which it is a party that will not be rejected in the Chapter 11 Cases except as disclosed in Section 3.12(b)(ii) of the Company Disclosure Schedules or where the failure to comply would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change, and neither the Parent nor any Subsidiary has received written notice of any good faith claim asserting that such leases are not in full force and effect, except leases in respect of which the failure to be in full force and effect would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change. Each of the Parent and its Subsidiaries enjoys peaceful and undisturbed possession under all such leases, other than leases in respect of which the failure to enjoy peaceful and undisturbed possession would not reasonably be expected to materially interfere with its ability to conduct its business as currently conducted or have, individually or in the aggregate, a Material Adverse Change.
3.13 No Undisclosed Relationships. Other than contracts or other direct or indirect relationships between or among any of the Subsidiaries, there are no contracts or other direct or indirect relationships existing as of the Execution Date between or among any of the Subsidiaries, on the one hand, and any director, officer or greater than five percent (5%) stockholder of the Parent, on the other hand, that is required by the Exchange Act to be described in the filings with the SEC by the Parent and that is not so described, except for the transactions contemplated by this Agreement. Any contract existing as of the Execution Date between or among the Parent, on the one hand, and any director, officer or greater than five percent (5%) stockholder of any of the Subsidiaries, on the other hand, is filed as an exhibit to, or incorporated by reference as indicated in, the Annual Report on Form 10-K for the year ended January 28, 2017, as amended, or any other Company SEC Document filed since January 29, 2017 and prior to the Execution Date.
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(a) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change, (i) the Company has filed or caused to be filed all U.S. federal, state, provincial, local and non-U.S. tax returns required to have been filed by it and (ii) taken as a whole, each such Tax return is true and correct;
(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change, the Company has timely paid or caused to be timely paid all taxes shown to be due and payable by it on the returns referred to in clause (a) and all other taxes or assessments (or made adequate provision (in accordance with
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GAAP) for the payment of all taxes due) with respect to all periods or portions thereof ending on or before the Execution Date (except taxes or assessments that are being contested in good faith by appropriate proceedings and for which the Company (as the case may be) has set aside on its books adequate reserves in accordance with GAAP or with respect to the Subsidiaries only, except to the extent the non-payment thereof is permitted or required by the Bankruptcy Code), which taxes, if not paid or adequately provided for, would reasonably be expected to be material to the Company taken as a whole; and
(c) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change, as of the Execution Date, with respect to the Company, other than in connection with the Chapter 11 Cases and other than taxes or assessments that are being contested in good faith and are not expected to result in significant negative adjustments that would be material to the Company taken as a whole, (i) no claims have been asserted in writing with respect to any taxes, (ii) no presently effective waivers or extensions of statutes of limitation with respect to taxes have been given or requested and (iii) no tax returns are being examined by, and no written notification of intention to examine has been received from, the IRS or any other Governmental Entity.
(a) Except for the filing and pendency of the Chapter 11 Cases or otherwise as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change: (i) each Company Plan, if any, is in compliance with the applicable provisions of ERISA and the Code; (ii) no Reportable Event has occurred during the past six years (or is reasonably likely to occur); (iii) no ERISA Event has occurred or is reasonably expected to occur; (iv) none of the Parent nor its Subsidiaries has engaged in a “prohibited transaction” (as defined in Section 406 of ERISA and Section 4975 of the Code) in connection with any employee pension benefit plan (as defined in Section 3(2) of ERISA) that would subject the Company or any of its Subsidiaries to Tax; and (v) no employee welfare plan (as defined in Section 3(1) of ERISA) maintained or contributed to by the Parent or any of the Subsidiaries provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA).
(b) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change, there are no pending, or to the Knowledge of the Company, threatened claims, sanctions, actions or lawsuits, asserted or instituted against any Company Plan or any Person as fiduciary or sponsor of any Company Plan, in each case other than claims for benefits in the normal course.
(c) Within the last six years, no Company Plan has been terminated, whether or not in a “standard termination” as that term is used in Section 4041(b)(1) of ERISA, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change.
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(d) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change, (i)all compensation and benefit arrangements of the Company comply and have complied in both form and operation with their terms and all applicable laws and legal requirements, and (ii) the Company does not have any obligation to provide any individual with a “gross up” or similar payment in respect of any taxes that may become payable under Sections 409A or 4999 of the Code.
(e) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change, all liabilities (including all employer contributions and payments required to have been made by any of the Subsidiaries) under or with respect to any compensation or benefit arrangement of any of the Subsidiaries have been properly accounted for in the Company’s financial statements in accordance with GAAP.
(f) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change, (i) the Company is currently in compliance with all laws and legal requirements in respect of personnel, employment and employment practices; (ii) all service providers of the Company are correctly classified as employees, independent contractors, or otherwise for all purposes (including any applicable tax and employment policies or law); and (iii) the Company has not and are not engaged in any unfair labor practice.
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3.26 Alternative Proposal. From March 19, 2018 to the Execution Date, the Company has not taken any action to solicit, initiate, encourage, negotiate, or assist the submission or development of an Alternative Proposal except as permitted by Section 5(a) of the RSA.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BACKSTOP PARTIES.
Each Backstop Party (other than Parent) represents and warrants, as to itself and no other Backstop Party, to Parent that the following statements are true, correct, and complete:
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4.6 Sophistication. Such Backstop Party (i) is a sophisticated investor with respect to the transactions described in this Agreement with sufficient knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of owning and investing in securities (including any securities that may be issued in connection with the transactions contemplated by the Plan), in making an informed decision with respect thereto and has made its own analysis and decision to enter into this Agreement, (ii) is: (A) an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act; or (B) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act that is also an “accredited investor” within the meaning of the Rule 501 of Regulation D under the Securities Act, and (iii) with respect to any New Preferred Equity Investment that may be acquired under the Plan or pursuant to this Agreement or in the Rights Offering, is not acquiring such new equity with a view to a distribution in violation of applicable securities laws. Such Backstop Party understands that the New Preferred Equity Interests are being offered and sold to such Backstop Party in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and such Backstop Party’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Backstop Party set forth herein in order to determine the availability of such exemptions and the eligibility of such Backstop Party to acquire the New Preferred Equity Interests. Such Backstop Party understands and is able to bear any economic risks associated with the New Preferred Equity Interests (including the necessity of holding the New Preferred Equity Interests for an indefinite period of time) and is able to afford a loss of its investment in the New Preferred Stock. Except for the representations and warranties expressly set forth in this Agreement, such Backstop Party has independently evaluated the merits and risks of its decision to enter into this Agreement and disclaims reliance on any representations or warranties, either express or implied, by or on behalf of the Company. Such Backstop Party acknowledges that it has been afforded the opportunity to ask questions and receive answers concerning the Company and to obtain additional information that it has requested to verify the accuracy of the information contained herein.
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SECTION 5. ADDITIONAL COVENANTS.
5.2 Commercially Reasonable Efforts.
(a) Without in any way limiting any other respective obligation of the Parent or any Backstop Party in this Agreement or the RSA (including Parent’s right to solicit, develop, negotiate and enter into any Payout Event Proposal), each Party shall use (and each of the Parent and Stores shall cause the Subsidiaries and their representatives to use) commercially reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, reasonably necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement and the Plan, including, but not limited to, using commercially reasonable efforts in:
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(i) timely preparing and filing all documentation reasonably necessary to effect all necessary notices, reports and other filings of such Person and to obtain as promptly as practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party or Governmental Entity;
(ii) defending any Legal Proceedings in any way challenging (A) this Agreement, the Plan or the Definitive Documentation, (B) the Confirmation Order or (C) the consummation of the transactions contemplated hereby and thereby, including seeking to have any stay or temporary restraining order entered by any Governmental Entity vacated or reversed; and
(iii) working together in good faith to finalize the Reorganized Claire’s organizational documents, the Definitive Documentation and all other documents relating thereto for timely inclusion in the Plan and filing with the Bankruptcy Court.
(b) Each of the Parent and Stores shall cause each of its Subsidiaries, whether a Party to this Agreement or not, to comply with the terms of this Agreement.
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(a) Each Party agrees to use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary to consummate and make effective the transactions contemplated by this Agreement, the Plan and the Definitive Documentation, including (i) if applicable, filing, or causing to be filed, the Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by this Agreement with the Antitrust Division of the United States Department of Justice and the United States Federal Trade Commission and any filings (or, if required by any Antitrust Authority, any drafts thereof) under any other Antitrust Laws that are necessary to consummate and make effective the transactions contemplated by this Agreement as soon as reasonably practicable after the commencement of the Rights Offering (and with respect to any filings required pursuant to the HSR Act, if any, no later than five (5) Business Days following the date of the commencement of the Rights Offering) and (ii) promptly furnishing any documents or information reasonably requested by any Antitrust Authority.
(b) The Company and each Backstop Party subject to an obligation pursuant to the Antitrust Laws to notify any transaction contemplated by this Agreement, the Plan or the Definitive Documentation that has notified the Company in writing of such obligation (each such Backstop Party, a “Filing Party”) agree to reasonably cooperate with
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each other as to the appropriate time of filing such notification and its content. The Company and each Filing Party shall, to the extent permitted by applicable law: (i) promptly notify each other of, and if in writing, furnish each other with copies of (or, in the case of material oral communications, advise each other orally of) any material communications from or with an Antitrust Authority; (ii) not participate in any meeting with an Antitrust Authority unless it consults with each other Filing Party and the Company, as applicable, in advance and, to the extent permitted by the Antitrust Authority and applicable law, give each other Filing Party and the Company, as applicable, a reasonable opportunity to attend and participate thereat; (iii) furnish each other Filing Party and the Company, as applicable, with copies of all material correspondence and communications between such Filing Party or the Company and the Antitrust Authority; (iv) furnish each other Filing Party with such necessary information and reasonable assistance as may be reasonably necessary in connection with the preparation of necessary filings or submission of information to the Antitrust Authority; and (v) not withdraw its filing, if any, under the HSR Act without the prior written consent of the Backstop Parties and the Company.
(c) Should a Filing Party be subject to an obligation under the Antitrust Laws to jointly notify with one or more other Filing Parties (each, a “Joint Filing Party”) any transaction contemplated by this Agreement, the Plan or the Definitive Documentation, such Joint Filing Party shall promptly notify each other Joint Filing Party of, and if in writing, furnish each other Joint Filing Party with copies of (or, in the case of material oral communications, advise each other Joint Filing Party orally of) any communications from or with an Antitrust Authority.
(d) The Company and each Filing Party shall use their reasonable best efforts to obtain all authorizations, approvals, consents, or clearances under any applicable Antitrust Laws or to cause the termination or expiration of all applicable waiting periods under any Antitrust Laws in connection with the transactions contemplated by this Agreement at the earliest possible date after the date of filing. The communications contemplated by this Section 5.9 may be made by the Company or a Filing Party on an outside counsel-only basis or subject to other agreed upon confidentiality safeguards. The obligations in this Section 5.9 shall not apply to filings, correspondence, communications or meetings with Antitrust Authorities unrelated to the transactions contemplated by this Agreement, the Plan or the Definitive Documentation.
SECTION 6. CONDITIONS TO THE BACKSTOP PARTIES’ OBLIGATIONS.
The obligations of each of the Backstop Parties to consummate the transactions contemplated hereby pursuant to this Agreement on the Effective Date shall be subject to the satisfaction at or prior to the Effective Date of each of the following conditions, any one or more of which may be waived in writing by the Requisite Backstop Parties:
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as of such date); and (b) the Parent shall have performed and complied in all material respects with all agreements and covenants required by this Agreement or the RSA to be performed by the Parent on or prior to the Effective Date or such earlier date as may be applicable (in each case, without regard to any obligations of Parent in its capacity as a Backstop Party). At the Closing, the Company shall deliver (or cause to be delivered) to the Backstop Parties an officer’s certificate, dated as of the Effective Date, duly executed by an authorized officer of the Company (in his or her capacity as such and not in his or her individual capacity), relating to the satisfaction of the conditions to the Backstop Parties’ obligations set for in this Section 6.1.
6.6 Material Adverse Change. Since the Execution Date, there has been no Material Adverse Change.
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(a) the Bankruptcy Court has not entered the Disclosure Statement Order on or prior to seventy-five (75) calendar days after the Petition Date;
(b) any material breach of any representation, warranty, covenant or other agreement of this Agreement by the Company, which has not been cured within fifteen (15) Business Days of written notice of such breach from the Requisite Backstop Parties to the Parent;
(c) the Effective Date has not occurred on or before the Commitment Outside Date, subject to any extension pursuant to the terms hereof;
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(d) an order converting all of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code is entered by the Bankruptcy Court;
(e) any court has entered a final, non-appealable judgment or order declaring this Agreement or any material portion hereof to be unenforceable; or
(f) the Company enters into a definitive agreement to consummate, or consummates, an Alternative Proposal.
(a) any material breach of any representation, warranty, covenant or other agreement of this Agreement by any of the Backstop Parties other than Parent which results in the conditions to the obligations of the Parent, Stores or Parent’s applicable Subsidiary under Section 6 not being satisfied and such breach has not been cured on or before the later of (i) fifteen (15) Business Days of written notice of such breach from the Parent to the Requisite Backstop Parties and (ii) the date on which the Confirmation Order is entered;
(b) the Effective Date has not occurred on or before October 14, 2018, subject to any extension pursuant to the terms hereof;
(c) an order converting all of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code is entered by the Bankruptcy Court;
(d) the board of directors of any Debtor at any time determines in good faith that continued performance under this Agreement would be inconsistent with its fiduciary duties;
(e) any court has entered a final, non-appealable judgment or order declaring this Agreement or any material portion hereof to be unenforceable; or
(f) the issuance by any the entry of an order dismissing all of the Debtors’ Chapter 11 Cases.
8.3 Mutual Termination; Automatic Termination.
(a) This Agreement may be terminated immediately by the mutual written consent of the Parent and the Requisite Backstop Parties.
(b) This Agreement shall terminate upon a termination of the RSA pursuant to the terms thereof.
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SECTION 9. INDEMNIFICATION; EXCULPATION.
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(a) | If to the Company, to: |
Claire’s Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
E-mail Address: Xxxxxxx.Xxxxxxx@Xxxxxxx.xxx
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxx X. Xxxxxxx
Xxxx Xxxx
Xxxx Xxxxxxx Xxxx
Facsimile: (000) 000 0000
E-mail Address: xxx.xxxxxxx@xxxx.xxx
xxxx.xxxx@xxxx.xxx
xxxx.xxxx@xxxx.xxx
(b) | If to a Backstop Party, to the address set forth beneath such Backstop Party’s signature block. |
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
00
Xxx Xxxx, XX 00000
xxxxxxxx@xxxxxxx.xxx
xxxxxxx@xxxxxxx.xxx
xxxxxxxxx@xxxxxxx.xxx
xxxxxxxxxx@xxxxxxx.xxx
Attention: Xxxxxxx Xxxxxxx, Esq.
Xxxxx Xxxxxx, Esq.
Xxxx Xxxxxxxx, Esq.
Xxxxxxx Xxxxxxxxx, Esq.
and
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
xxxxxxxxxxx@xxxxxxxxx.xxx
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
10.10 Jury Trial, Governing Law and Dispute Resolution.
(a) The Parties waive all rights to trial by jury in any jurisdiction in any action, suit, or proceeding brought to resolve any dispute between or among the Parties arising out of this Agreement, whether sounding in contract, tort or otherwise.
(b) This Agreement shall be governed by and construed in accordance with the Bankruptcy Code and the laws of the State of New York, without regard to any conflicts of law provision to the extent the same would require the application of the law of any other jurisdiction. By its execution and delivery of this Agreement, each Party irrevocably
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and unconditionally agrees for itself that, subject to Section 10.10(c), any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in any state or federal court of competent jurisdiction in New York County, State of New York, and by execution and delivery of this Agreement, each of the Parties hereby: (i) irrevocably accepts and submits itself to the nonexclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding; and (ii) waives any objection to laying venue in any such action, suit or proceeding.
(c) Notwithstanding the foregoing, if the Chapter 11 Cases are commenced, nothing in Sections 10.10(a)-10.10(b) shall limit the authority of the Bankruptcy Court to hear any matter related to or arising out of this Agreement, and each Party irrevocably and unconditionally consents to the jurisdiction and venue of the Bankruptcy Court to hear and determine such matters during the pendency of the Chapter 11 Cases.
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10.16 Other Interpretive Matters.
(a) In the event of and to the extent of a conflict between the RSA and this Agreement, the RSA shall control in all respects provided that, notwithstanding anything to the contrary set forth in the RSA, for purposes thereof, Schedule I hereto shall be Schedule I to the RSA.
(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply: (b) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded and, if the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day; (c) any reference in this Agreement to $ shall mean U.S. dollars; (d) all exhibits and schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein and any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall be defined as set forth in this Agreement; (e) words imparting the singular number only shall include the plural and vice versa; (f) the words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires; (g) the word “including” or any variation thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it; (h) the division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement; and (i) all references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.
(a) This Agreement shall be effective and binding upon each Backstop Party immediately upon such Backstop Party’s execution and delivery of its signature page to the Parent.
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(b) This Agreement shall be effective and binding upon the Parent immediately upon the Parent’s execution and delivery of its signature page to each Backstop Party and entry of the Confirmation Order providing for the assumption of this Agreement.
[No further text appears; signature pages follow]
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CLAIRE’S INC. | ||
By: | /s/ Xxxxxxx X. Xxxxxxx | |
Name: | Xxxxxxx X. Xxxxxxx | |
Title: | Senior Vice President and General Counsel | |
CLAIRE’S STORES INC. | ||
By: | /s/ Xxxxxxx X. Xxxxxxx | |
Name: | Xxxxxxx X. Xxxxxxx | |
Title: | Senior Vice President and General Counsel |
[Backstop Commitment Agreement]
[BACKSTOP PARTY] |
By: |
| |
Name: | ||
Title: |
[Backstop Commitment Agreement]
Schedule I
BACKSTOP PARTIES
Backstop Party | Backstop Commitment Percentage |
Sched II - 1